Tiburon entrepreneur, author and business school professor, Jon Fisher, outlines his strategy for startup success in the Wed Nov 11, 2009 ‘All About FINANCE’ special supplement to the Ark Newspaper. Fisher describes how traditional models have changed from startup to IPO, the difficulties involved, and offers a smarter faster route to financial success.

In a side article Fisher relates his success in forecasting economic downturns and turnarounds and predicts upcoming employment, housing starts, and economic performance.

The Ark Newspaper can be purchased at:
Boardwalk Market 1550 Tiburon Blvd.
Newsstands:
The Ark Newspaper office 1550 Tiburon Blvd.
Next to Caffe Acri and Guaymas at Ferry Terminal
The Cove Shopping Center next to Blockbuster Video
Outside Strawberry Deli in Strawberry Village south of In’n'Out Burger

www.thearknewspaper.com
jonbfisher.blogspot.com

Read more about author Jon Fisher and his book ‘Strategic Entrepreneurism: Shattering the Start-Up Entrepreneurial Myths’ on his blog jonbfisher.blogspot.com . It can be purchased at Amazon along with the kindle version.

Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. I think paying these people on a market appreciating from March 2009 until now is the equivalent of restructuring an insolvent company by slashing its product prices by 50% and then doubling the commission paid on each sale.

Entrepreneurs disappear if they don’t correct mistakes. A lot of us went away in the last recession because we built crappy companies. Financiers are fading and are going to further fade because they don’t correct mistakes. They’re going to disappear because more entrepreneurs will refuse to deal with them in every investment category. Consider the current bonus packages as severance over the long term.

The financiers have ensured there is no difference between -gambling- the wagering of money or something of material value on an event with an uncertain outcome and the trading or exchange of the underlying asset itself -a derivative- when traders enter into an agreement to exchange cash or assets over time based on the underlying asset.

In May, 2008 the National Association for Business Economics consensus was unemployment would reach 5.3% in 2008 and 5.6% in 2009. My forecast at the same time was unemployment would reach 9% by April, 2009 http://tinyurl.com/yju73ft Now the NABE forecast is unemployment to hit 10% during the last 3 months of this year, and stay there through the first quarter of 2010. By the end of next year, it’s only expected to fall back down to 9.5%. My forecast on August 5th, 2009 is unemployment will peak at 10.4% within the next few quarters (by February ’09) and fall to 8% by the end of 2010 http://tinyurl.com/mwpszg

I respect Steve Wynn’s accomplishments but this statement on the Rush Limbaugh show is off the mark. WYNN: Government has never increased the standard of living of one single human being in civilization’s history. For some reason that simple truth has evaded everybody. The only thing that creates an increased standard of living is giving someone a job, the demand for their labor — whether it’s you and I, Chris, or anybody else. The people that are paying the price for this juggernaut of federal spending are the middle class and the working class of America.

My response is the recent lead from Time Magazine: Don’t think the billions in government subsidies for automobiles are all flowing to Detroit. The U.S. Department of Energy (DOE) is ready to loan nearly $1 billion to Tesla Motors and Fisker Automotive, two fledgling automakers with deep roots in Silicon Valley and Southern California.

I quit Twitter tonight after accumulating enough followers and analysis to make for an acceptable sample (>1000, ~50 hrs). It was nice to block my last pornographic related follower. My analysis showed that <5% of followers viewed correspondence (picture views, blog posts) that I attributed to my dullness as well as the fact that it’s not possible for a user to actually follow everything from >few hundred users per day. Even if someone following 10,000 users is unemployed and addicted how many posts can be read? I followed zero. The alarming part is I found ~50% of my followers were inactive (no posts or no posts in months) and a good many of those looked like fake users (including no pictures, descriptions).

This was a big waste of time that I will make up shorting the entire web 2.0 category if any manage to complete an IPO.

An earnings surprise is when the reported earnings differ from the consensus forecasts. If the difference is positive it is called a positive surprise. Oracle Corp, the largest enterprise software company in the world, had earnings surprises of 0.0%, +9.4%, +4.5% and 0.0% in its last four quarters reported on Yahoo Finance –perhaps the most tumultuous economic environment in the history of man. ConocoPhillips (COP), involved in exploration and production of oil and gas around the world (while the price of oil completely collapsed) as well as dozens of other hugely complex things, had earnings surprises of +8.5%, +5.8%, +30.0%, +14.1% in its last four quarters. California revenue is already 5.3 percent less than assumed in the $85 billion Budget passed 10 Weeks ago.

In April 2009, 20th Century Fox confirmed that the sequel, now tentatively called Wall Street 2 was still in development. The film will focus on Gordon Gekko, recently released from prison, and re-entering a much more chaotic financial world than the one he once oversaw.

It’s 7 times in a generation that financial explosions have profoundly changed our lives including the current crisis as well as, Asia, Mexican and Latin American crises, LTCM, the S&Ls and Internet companies with no revenue trading at $100/share. I wonder how many of these financial executives played a role in more than one of these explosions? There are some at the top who played a role in most of them.

Policy response to financial explosions is always the same. Sarbanes Oxley policy response proved more harmful to the economy than the Enrons it was supposed to protect us against because IPOs became more difficult to complete by an order of magnitude. Current policy response in the form of debt and gigantic increases in government bureaucracy will end up being more harmful to the economy than the current economic crisis and that’s not so difficult to envision.

Financial executives aren’t evil. They just keep winning doing what they’re doing more or less unchecked. It might be a primal and cathartic experience watching Oliver Stone portray one financial executive rebuild after getting what he deserved.

“The labor market will take years to heal, according to the latest WSJ forecasting survey.” I think economists got unemployment wrong on the way up and are now getting it wrong on the way down. Unemployment has quickly peaked and declined after every bottom in housing starts in every severe recession. Unemployment has also spiked after every significant decline in housing starts in every severe recession. There is an inverse correlation of housing starts and unemployment in severe recessions. I’m an entrepreneur not an economist by training but we lose our companies if the forecasting is off while economists and members of the administration simply ‘revise’.

http://fora.tv/2009/08/05/Entrepreneurism_Begin_With_The_End_In_Mind_Jon_Fisher#Rebounding_Housing_Market_Signals_Peak_of_Unemployment

An acquirer confirming the buyout price has changed is called a retrade. It is likely not a renegotiation without reason rather it happens when something new is discovered in due diligence. Of course sellers can say every business has blemishes when viewed up close and buyers can always argue assumptions have changed for whatever reason. Sellers should always disclose everything up front and sell through imperfections rather than concealing them. If the seller is confronted with a purely opportunistic buyer in the exclusivity period (i.e. the finish line), best for the seller to communicate the retrade was forecasted and best for the seller to agree to a fraction of the retrade price –a rounding error for a symbolic gesture as the buyer can always walk. If the buyer demands the full retrade price, even when confronted with a dispassionate seller willing to make a gesture, the seller should walk.

They gave me an Entrepreneur Of The Year award and they gave me a teaching gig. Do entrepreneurs need MBAs?

I wanted to be a musician until I came to my senses and realized how low the odds of success were. Unfortunately, the odds are stacked against Entrepreneurs too. For every 100 start-up ventures every year, 98 of us will never raise enough money to get off the ground. Out of the remaining two ventures that do manage to get start-up money, the odds are 90 percent that we will fail despite any amount of funding we may receive.

Why is “Nature or nurture” always the center of this discussion as it is in this worthless Economist piece http://tinyurl.com/ydu46wq reading like the thousand before it “that entrepreneurship may actually be in the blood—more to do with genes than classroom experience. All of which invites the question—does an entrepreneur really need a business-school education?”

I think entrepreneurs need mentors and Starbucks and pianos to play.
We need fantastic families and colleagues and running shoes.
We need to know about leadership and persistence and strategy.
Most importantly, we need to be in the right place at the right time.
Oh yeah, we need encouragement and capital.

Of course we need MBAs! We need all the help we can get!