Spicer Matthews » Bussiness Concepts

The New Age Business Man / Woman

Spicer — Wed, 09 Jun 2010 19:56:33 +0000

Something that has been on my mind for a while now is; What does the new age business person looks like? As more and more consumer dollars are being spend online and less and less spent in person on the streets, how does this affect the first time entrepreneur? Really great companies have been built by people with simple resumes. I see in many ways it is becoming harder and harder for a first time entrepreneur to break ground on their dream because they have to do business on the web.

It use to just take someone that was willing to work long hard hours and maybe some start up capital to build a truly profitable business. Whatever business the entrepreneur was going to go into they did not have to have 20 years of experience working in the industry, however in many cases that helped. I have a close friend who went to college and graduated with a business degree. Other than odd college jobs this friend did not have much of a resume. He knew one thing; he did not want to work for “the man”, and he was willing to work his butt of to make it happen. After much research he raised a small amount of capital and went into the fast food business. Today he has grown the business rather successfully. All this friend had was a passion and a good head on his shoulders.

The New Skill Set Needed

The above example is getting harder and harder with the move to the web. To launch even a basic business you often have to surround yourself with domain experts in all sorts of different niches. If you want to compete on the web. You need to hire a designer, web programmer, mobile programmer, sysadmin, web marketer, experts on understanding your market, and more. You can not just sit on a busy street count the people going by to understand your market. You can not just lease a space and open your doors. You have to surround yourself with domain experts that often are not cheap. So a good head on your shoulders and some start up capital turns into a bunch of people with good heads on their shoulders and tons of capital.

How Do We Solve The Problem?

The problem I want to solve; Is how do we move the world to the web but keep the “all you need is a dollar and a dream” way of business alive? I know there is not a simple answer and as the Facebook generation morphs into business people they will already be hitting the streets with a leg up on my generation and older generations, but I would like to find better ways to bridge the gap.

As a side note, I realize this is a very general topic. I realize there are many case studies of the web making live easy for first time entrepreneurs. However, looking around most of the successful web companies are started by people with tech backgrounds. I want to find better ways for non-tech people to start great businesses without tons of money.

Stealing Is Ok! Might Even Make You Rich

Spicer — Wed, 03 Mar 2010 02:35:06 +0000

Paul Wagner, (CEO of Forkfly), sent me this YouTube video today of Steve Jobs talking about how they build products. He outright says he looks around at what others are doing and shamelessly steals them. Apple then takes the stolen ideas and puts their own twist on the product often makes it much much better.

Through my past client work, and now through my work with startups I am constantly running into people that want to reinvent the wheel. They want to start from the ground up as if there are no great ideas out there to steal. In the web world I am very very confident that if you are trying to build something there is an idea you can steal and make better. I think every project should start with finding an example to build from. I don’t believe in just trying to build something without a stolen idea as the foundation.

Also, this video reminds me of something else from my client work days. I had many clients approach me with a level of urgency, “If we do not get this product live in 30 days we have lost our window and someone will beat us to the market”. Apple, has beaten no one to market. In fact they are always the last ones to come to market. They sit back and wait and learn from everyone else then come to market with something better than everyone else.

Real Estate Vs. Da Stock Market – Part #2

Spicer — Tue, 23 Feb 2010 18:09:32 +0000

From my first post (Real Estate Vs. Da Stock Market – Part #1) many people contacted me and told me that they disagreed with me. The stock market and the Real Estate market were not the same. Many people expressed that they liked Real Estate, (and made it their “thing”), because they had far more control over the investment. You can pick your tenants, you can pick your lender, you can remodel, and so on. While in the stock market you have no control unless you have the capital to be a major share holder. All you have is the ability to cast your vote in a share holder meeting. While this is true, in fact you do not have much control over the direction of the company you own stock in, you have control over if you own the asset or not. In terms of personal wealth, this is way more powerful than than the direct control you have with Real Estate. Having the ability to liquidate your ownership in an asset within seconds is very powerful. When managing your assets their is two parts; growing your assets, and protecting your assets.

Wise investors can spot a downturn coming, such as the one in late 2007. No one really knows how bad a downturn is really going to be, but a wise investor should know when to shift from capital appreciation mode to capital protection mode. Below are the things you can do to protect your stock and real estate assets in a downturn.

Protecting Your Stock Portfolio

Sell your stock: If you think we are going to have a down turn, sell your stock holdings and return to cash until there is more clarity about what is happening in the economy.
Hedge you portfolio: Add some short positions to protect against declines.
Buy options: Unlike Real Estate it is very easy to purchase an insurance policy against a decline in your stock value. This is called a put option. For a small fee you can purchase a put option that will protect against a decline in your stock holdings.

Protecting Your Real Estate

Sell: First thing you can do is put your property on the market. You have to make sure you have enough equity to pay the selling costs and you have to make sure you can find a buyer. If you are scared enough to sell your property there most likely are not many buyers out there.
Lock In Your Tenants: Get rid of the risky tenants, and replace them with good tenants, (the ones with good stable jobs), on longer term leases.
Start Building A Reserve Fund: When owning Real Estate you need to be doing this anyway but you should start adding more to the reserves to help cover longer periods of loss rent.

When a downturn is coming, within seconds I can protect my stock assets, and within weeks (and maybe not at all) I can protect my Real Estate assets. One thing I am not mentioning here is a down turn in the stock market can be hard and fast, while a down turn in a real estate market will be slower giving you more time. What I am saying here, is use the different strengths to protect your net worth to the fullest.

I will close this posting off with a personal example. In late January 2007, I realized (through indicators in the stock market, not the Real Estate market), that the world was about ready to slow right down. I quickly moved my stock holdings to cash, and began some hedging. I also put much of my Real Estate on the market. Within seconds I protected my stock asset class, and began the process of protecting my Real Estate assets. The bad news was I was unable to sell my Real Estate. After sometime, my properties dropped in value below my loan amounts which meant I could not sell the property, without doing a short sale (where the bank agrees to take less to settle your loan). You might say you had tenants so who cares, and the tenants were paying the mortgage. While this was true in some cases but what really happened was it became increasingly harder to find tenants. My vacancy rates were raising and rents began to drop. Within 8 months of the economy going upside down, I was left with Real Estate I could not sell because the value dropped below my loan value, and they were not cash flow positive because rents had gone down and vacancy rates increased.

In this real example lets look at the positions my assets were in at the end of 2008. I had a Real Estate portfolio that had more debt than value, and it was cash flow negative (which means I was keeping the Real Estate bills paid with other income). Now, lets look at the stock portfolio. Since I sold all my stocks I was sitting on a pile of cash. While this cash did not increase in value throughout this time period it did not go down in value nor did it cost me anything to hold on to it. In my case I used some of the cash to keep my Real Estate afloat. Had I been 100% in Real Estate there would be a good chance I would have had to file bankruptcy because I did not have the cash from the stock sales to subsidize my Real Estate.

By paying attention to the stock market I was able to see early indicators of the economy going upside down, and I was able to protect my overall portfolio of assets far better than if I had been in all Real Estate. While the direct control of Real Estate has it clear advantages, do not discount the power of being able to liquidate your assets on a moments notice. Just having the simple ability to liquidate can outweigh the hands on nature of Real Estate.

Real Estate Vs. Da Stock Market – Part 1

Spicer — Thu, 11 Feb 2010 18:18:04 +0000

One of the things that drives me nuts, is when I hear people say “Real Estate is my thing”, or “Real Estate is what I am into”. It is not a drug it is an investment! You buy Real Estate, (as an investment), for it to go up in value and maybe collect rent. Hmmm, that sounds just like buying a stock, and the rent would be the dividend (or even a stock buy back). Real Estate, (from an investment standpoint), is not a way of life. It is not something you are into. It is not “your thing”. It is 100% an investment. So many people, particularly young people, don’t get that. With this post I am kicking off a series of blog postings talking about the importance of understanding all markets not just the one “you are into”.

First of all lets clear somethings up. When I say Real Estate investment I am not talking about your home, or a vacation home. Those have personal emotional aspects; you need a home to live in and you love staying at your ski condo on the weekends. I label these assets as personal property, there is a luxury element you may or may not be paying up for. I am talking about the rental property you purchase, to collect rent, or even flip.

Second thing I want to clear up, I am giving general statements and rough numbers in this blog series. With any investment there is always another side, another stat, another point of view. I get that. This is what makes markets if we all thought the same way no one would buy or sell anything. This is just one man’s view. I hope you can share you view points in the comments below.

Lastly, I am not talk to the people that do this for a living. If you are a Real Estate Developer, or a hedge fund manager you have built a business around a particular asset class. While I think every point I am going to make applies 100% to you as well you can make a business case against some of my statements and I might agree with you.

Now, that we have that stuff out of the way lets look at what it takes to buy property.

You have to identify an area that you would like to invest in.
You have have to set some bounds, (I can afford X, and it must produce Y in rent….).
You have to start reviewing all the properties in the area. Might even hire a broker to show you around and give you his or her thoughts.
Then you find a property you like and you start diving deep into it. Doing way more homework on this particular property than any other one you reviewed.
If it passes all the tests, you buy it (often with a little help from your bank).
Now, you start working on your thesis. Fix it up, get tenants, collect rent, whatever else.
You keep it up until it is time to sell and take your profits. Investment over.

Now, lets take a look at what goes into a stock investment.

You identify the sector you would like to purchase (tech, banks, retail….).
You set your bounds (how much you want to spend, dividend, PE, and so on….).
You start reviewing all the companies in that sector. Might even hire a broker or pay an analyst to help you.
You pick the stock you think you might want to buy. You then go in and do tons more homework just to make sure.
If your stock passes the test you buy it, (you can even buy on margin like you would with a real estate loan).
Now, you watch your stock. Daily, weekly, monthly; You continue to review it to make sure your reason for buying it still holds true, and you are still collecting the dividend you purchased it for.
When the time comes you sell it and take your profits. Investment over.

Is it just me or are those two processes nearly the same? They both have about the same set of interactions. You really need the same skill sets to purchase either a stock or an investment property. You need to understand the markets, you need to understand financials, you need to understand risk, you need to have continued management over your investment. I am going to make the case in a later blog posting that I believe you are a fool if you purchase an investment property or a stock without fully understanding the other market. I am also going to make a case that you are a fool if you do not have exposure to both asset classes in your portfolio. I don’t mean to be calling people fools but I have studied these differences to death and am an active investor in both asset classes and now I am preaching my thoughts . More to come soon!

Apple, Why Are You Becoming Microsoft?

Spicer — Wed, 03 Feb 2010 07:00:41 +0000

Apple, I want to love you, I really do. I’ve even put up with your high prices because your designs are sleek, your user interfaces are nice on the eyes, and you’ve been on the front-lines of technology advancement on the behalf of users. At least, you were.

I’m not so sure anymore. There’s no doubt that the iPhone is one of the most innovative devices of the last decade, but the same cannot be said for the antiquated App Store.

The approval process to get your newly designed app is ridiculous. Apps are not only filtered for content, but in many cases, it takes weeks to get approval for your app to be download by eager customers. And why?

In today’s market of fast-paced and ever-growing e-commerce, being forced to tailor your business model on the requirements of a single channel makes no sense.

Working within The Cloud, the only limitations are the network’s capacity to deliver enough bandwidth to users, something they’ve been able to do as the market for 3G and 4G accounts have explode in the last few years.

If anything, Apple is limiting what you, the consumer and business person, can make and purchase by controlling and focusing so much attention to the App Store. Perhaps it’s just another case of absolute power corrupting absolutely.

There are far more advantages to operating inside The Cloud, but there is less revenue in it for Apple. Like Microsoft in the early 1990s, the company seems to be controlling what people can develop so that they can capitalize on being the only game in town. And although there were open-source operating systems like Linux available, if not enough people know about the alternatives, those alternatives do not reach their full potential.

If Apple promoted its hardware and OS as being the most user friendly in The Cloud, they would draw attention away from a revenue stream reportedly worth about $45 million. While that number is substantial, it doesn’t seem like it’s most cost effective strategy for anyone, including Apple.

Apple claims to have reviewed over 200,000 applications in a year, 20% of which are not approved on their first pass, and only 10% that keep user retention. That hardly seems worth the effort for company whose net worth hovers around $150 billion.

Hopefully Apple will come to its senses soon and focus on the core principles that made it the juggernaught it is today: secure, easy to use, basic programs that allow users to work in a productive environment with the best tools.

If not, as they continue to try and keep total control over every aspect of personal and business computing, they’ll find themselves far behind the competition.

Take The Bull By Its Horn

Spicer — Sun, 17 Jan 2010 18:53:19 +0000

Something that has been frustrating me more than anything in the last year. With the slower economy I have been able to spend more time just talking to people; strangers, family, friends, and just about anyone else that has something to say. Being a business person the conversation often heads down the path of success and how to achieve it, but so many people I talk to don’t want it bad enough. They would rather talk about it then do it. I am not just talking about building a business. I am talking about getting a job if they are unemployed, upgrading your current job, or starting a business.

When the economy tanked in 2008 I more or less lost my job. Every project I was working on dried up and went away. I like 10% of America right now I did not have the ability to collect unemployment, so I had to make a big shift in how I as going to support my self almost over night. Luckily, I was ready and the shift was something I was able to make quickly. I will get to what helped me in my shift in a second, but first a little rant. I have talked to so many people that are on unemployment and they are doing nothing with their lives. They talk about how they want to use this time to better themselves. They talk about the businesses they are going to build during this time. They talk about the personal brand building they are going to do to help them upgrade their employment when they go back to work, but they spend a great deal of time sitting on their ass playing video games or something.

Just Get Off Your Butt And Start Building

The key to bettering yourself in this context is to just get working on you goal and never quit, and more importantly never discount anything. Every little aspect about what you are doing maters. For example; I tell a lot of people looking for a job or looking to upgrade there job to start building their Internet personal brand. Start a blog, upgrade your Facebook page, start a Linkedin page, heck start tweeting. I hear over and over again; “That stuff does not matter in my industry”, “The people looking at my resume don’t know what a computer is”, “Yeah that would be nice but there are better things for me to do”. I am officially calling each one of you out on this. You got 90 year old grandmas on facebook, you are living in a cave if you have never Googled someone, and lastly how does it hurt? This is one little example of something you should be working on late at night to help in your building process. This a way better use of your time then trying to get to the next level on what ever your video game of the week is.

Most importantly, how does it hurt (I will say it again)? If you build an amazing web life and your future employer, investor, customer never reads it how does it hurt? You got a few less hours a week playing video games? Our lives are moving to the web. I promise you in a few years you will be giving urls to future employers instead of paper resumes or emailed pdf copies. Why would I review a one page bulleted list of how cool you are when I can go to your personal sites and find out who you really are; can you write, do you spend more time talking about how drunk you were last night or do you really reflect on the issues of your industry?

Don’t Discount Anything, Learn/Do It All

Don’t discount any aspect of what your goal might be. I talk to so many people about how they want to start investing in Real Estate, and then I start talking to them about the stock market, or banking industry. 9 times out of 10 I get “I do not know anything about that stuff nor do I care I just want to focus on Real Estate”. WTF!!!! What the hell do you think Real Estate is? It is an investment and there are so many factors about that investment. The stock market, the banking industry, politics, employment rates, and so all really drive that industry. The people I talk to that realize that Real Estate revolves around these things tend to tell me they can not control it so they just ignore it. Maybe in some cases you really can not control it like you could control the details of a purchase of a new investment property but I believe you should truly understand the external factors so you can make worthwhile decisions and therefore studying these things are important. It just blows my mind that people shut down when they are working towards a goal of building something. Why would you shut anything down. I say you want to work on and absorb all aspects of what you are trying to build.

This posting sort of went all over the place, but the main point is, if you are trying to build a better future for yourself take the bull by its horns. Work night and day towards your goal, even if what ever you are studying or creating seems worthless do it anyway. Anything you do or study you should ask your self one question, “If I do this will it hurt my goal in anyway, or if I study this and learn this will it hurt my goal in anyway”. If you answer yes to either question don’t do it, but I find it hard to believe there is much out there you would consider that could hurt your goals. Never stop pushing towards your goals and never discount any aspect of your goals, and that is how I continue to keep doors opening for me

Dush-Bag Or Brillant, I Say Brillant

Spicer — Thu, 19 Nov 2009 04:55:57 +0000

So I continue to not be sure if I am in Gary Vaynerchuk’s camp or not yet. He is too new. Will he be a voice and a business leader in 2020? I don’t know. I sure hope so. The problem and at the same time the driving force of Gary is the first thing everyone says is wow that guy is a “Dush-Bag”, but yet they keep listening. We are so instilled not to like someone like that, but yet this new world is changing our social norms. Yeah he comes on strong. Yeah he has a bit of a know-it-all fashion to him. I feel the same way about Steve Jobs, Larry Ellison, and Donald Trump. Would you call anyone of those guys Dush-Bags now? All those guys have built empires. Gary has a long ways to go before he will be next to those guys, but the thing is he is very much like those guys. He gets it!!! He sees how the marketing world is changing. He see the power of content. He see the power of self branding. He also understands hard work. If you believe in him or not right now it does not matter, but if you do not realize this guy has a amazing view of business and one route you can travel with it, your a fool. Until I get to meet Gary, or until I can publicly trade his stock (that is when the truth comes out), I will continue to keep my Dush-Bag flag radar on, but will truly admire him as a business person.

I just watched the video below. This guy is dead on when it come to social media. Everyone that is interested in how the world is changing should watch this video.

What I Admire In A Good CEO

Spicer — Wed, 18 Nov 2009 16:53:13 +0000

I Am A CEO Stalker

I have to admit, I am a CEO stalker. Not in the creepy sit outside their house kinda of way. However, I must admin I did drive by Warren Buffet’s office and house a few time. When I say I am a stalker I am more of an admirer. I am someone that loves getting inside the mind of a great CEO (or CEO type person). I read as much as I can about them, I watch all the interviews, I track the performance of their companies and more. Some CEO’s are very hard to follow and some are very easy to follow. Some are more out spoken and some value their privacy. Some of the CEO’s I love to follow are Warren Buffet, Bill Gates, Jamie Dimon, Jason Fried, David Heinemeier Hansson, T Boone Pickens, Brad Feld, Jason Mendelson, Jim Cramer, Jack Welch, Tony Hsieh, Gary Vaynerchuk, George Soros, Jeff Bezos, Steve Jobs and many more. I mention all of these guys because they are all over the board. Not one of these guys are the same in any one way. Some are really successful and fame found them, some have become famous just telling you they are successful (and clearly they are but we might not have known had they not told us), some of these guys have been very successful using themselves as marketing objects to push their wares. Every one of these guys and many more are worth studying and understanding. They are wired in a very special way.

The Know-It-All CEO

Today, I found myself day dreaming about how do I personally filter these guys. When any person speaks you have to filter what they say. How can I tell who is pumping their wares and who is speaking from the heart? How can I tell who is really an expert on the topic or just had a few lucky turns in life? Nowadays everyone is some sort of expert, thanks to the Internet. One things keeps standing out when I watch, read, and listen to these guys talk. Some of these guys will outright tell you what you should be doing in sort of a know-it-all fashion. Sometimes when you are so entrenched in a topic you do become a know-it-all because you very likely might be. Years of experience does make you a know-it-all in certain topics. I do not mean that as a put down, but I feel so many CEO types just stop after they got their first break. I believe that is a mistake. If a CEO made a few correct choices, and was successful their no dummy but I would not add them to my list of truly great CEO’s.

The Long Time Great CEO

I feel the truly great CEO’s are not know-it-all’s, they a great processors of information. They truly believe they can not know it all. There is always more information to process. The less know-it-all CEO’s will not answer questions directly. They might give you some big picture guiding principal, but they will also explain the factors that contribute to the question you are asking. A great CEO in my view, might not know the correct answer but knows all the possible inputs and knows all the possible outputs. A great CEO is a sponge of knowledge. I believe a great CEO can take all the soaked up knowledge and process it in a case study type fashion and make a decision. So many CEO’s got lucky and made a few great decisions that got them where they are today. The great ones just use that first few lucky decisions as another input stream and continue to seek out other input streams as well.

The CEO’s I admire most have a very wide range of interest, and work every day to soak up more and more knowledge where ever it comes from. They see experience as just another form of knowledge. A great CEO is as interested in talking to you as you are in talking to them. They realize they have something to learn from everyone. The real power is the ability process input and determine the best outcome. Not live on the wave of past success.

I Think I Am Going To Buy Crush It By Gary Vaynerchuck

Spicer — Thu, 22 Oct 2009 01:37:35 +0000

I just watched a great interview of Gary Vaynerchuk by Rick Turoczy (@turoczy) at his blog Silicon Florist. I watch Gary a bunch on the internet but unlike many things I see seek out I have never drank the Gary Vaynerchuk Kool Aid. Often when I find a blog or some great site I get all hyped up on it and visit the site everyday. I have always been a random passer by’er of http://tv.winelibrary.com so I never really understood why everyone was getting all jazzed on his new book CurshIt.

Lately my twitter client has been blowing up with talk about CrushIt. Had no idea it was about how Gary built his business. I thought it was more talk about wine. When it comes to wine I either like it or I don’t. No idea how to classify it or talk all classy about it. So now I am interested. I am purchasing the book. I look forward to reading it. Maybe it will make the “Spicer Matthews Must Read List” (coming soon to a blog near you).

Ideas Have No Value!! Get Over It!!

Spicer — Sat, 03 Oct 2009 00:08:33 +0000

So I have been around the block a few times. I have been involved with big well funded, well organized companies and I have been involved with just a few guys and an idea type companies. More often than I would like I run into people that have an idea, sometimes even a good idea. So many times all they have is an idea. No money or resources to execute the idea. I would like to make it very clear, IDEAS HAVE NO VALUE!!!

People often approach me and want me to partner with them on getting their idea off the ground. If I am even interested in the idea I will outline what I can do for the company/product, I will outline what I think the idea person should do, and I will outline ownership of the idea/product/company. Nine times out of ten people will be floored that I want equal ownership or expect them to do work. I have heard more times than I would like “But there is value in the idea”. So many people have come to me with the concept of giving me like 10% of their company or product in exchange for me doing all the work. Business partnerships are more a function of risk. In a business partnership if there is not risk on both sides there is no partnership. This is called “skin in the game”.

Partnerships are based on two things; time & money! You got money, I got time; lets partner (risk on both sides). We can put a value to both and move forward. There is zero value in an idea. You do not get any extra ownership or less risk for coming up with an idea, so anyone reading this with that concept get over it now!! The value of your business/product is the money you have to build it and the talent/time you have to execute it.