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What the Future may Bring?
(Business Student Association, Alberta School of Business Keynote Speech given at the Deloitte Energize Your Future conference, Saturday September 21, 2013, Shaw Centre , Edmonton Alberta by Bruce M Firestone)
What is the one thing we know is infinite? Cosmos? Time? No. Ideas.
Start counting 0, 1, 2, 3, 4, 5… Tell me when you’re done
What happens when something is in infinite supply? Price –> 0
If you had to start a new enterprise today, what would you choose to start with? A great idea? An investment by rich Uncle Buck of $3 million? A fantastic partner? An awesome website? Launch clients? Answer: launch clients.
Chris Rock said, “LeBron is rich but the man who signs his paycheck is wealthy.”
If you are 6’8”, weigh 250 lbs, have a 44 inch vertical, you too can earn $17.8m in the NBA and add $42m in endorsements.
But you can’t bank on being rich but you can plan to be wealthy!
Wealth is renewable. Wealth means you have control over an asset, franchise or concession that produces regular, repeatable income. Let me repeat that: wealth means you have control over an asset, franchise or concession that produces regular, repeatable income.
I ask students, “Who wants to learn how to get rich quick?” Always a few who raise their hands. Sorry, can’t help you with that.
I teach people how to get wealthy, S L O W.
How do I do that? We build world-leading business models.
LooseButton.com delivers luxe boxes, thousands of them, 1/month to a mainly female audience who pay them $10 to $12 a month for the box which contains samplers from L’Oreal, Moroccan Oil, Dermalogica, etc. Pretty standard biz model so far.
Here’s where it gets cool—they get their luxe box content for FREE. Their suppliers want to get their products inside luxe box so they can get access to LooseButton’s audience.
Wait, it gets better. L’Oreal/Moroccan Oil/Dermalogica pay LooseButton a rights fee to be in the mix.
It gets even better! G+M, People Magazine etc pay LB $8 to send luxe boxes to their customers as incentives to renew their subscriptions.
Imagine a biz model where not only clients pay you but suppliers do too and even your marketing is a negative cost! They get paid on three sides of their model!
Ray Cayen and Aditya Shah, 2 engineers from Waterloo, started LooseButton. What do they know about cosmetics? 0 What do they know about collecting metrics and analytics? A lot. Solved a pain point for the industry—giving out samplers in Holt Renfrew or Neiman Marcus yields 0, zip info on potential customers/product acceptance.
Every user creates a profile—age, gender, education, address, occupation and provides huge amount of feedback.
One thing missing from their biz Model? A social layer.
Arthur C Clark who was both an engineer and a sci-fi writer wrote a book (Childhood’s End) in 1953 that predicted the end of long distance charges by the beginning of the 21st century. The Internet, the browser, email, Instant Messaging and shortly thereafter Skype, Facebook and Twitter came just on time to make Arthur’s prediction come true.
We live in Marshal McLuhan’s global village thanks to marvelous young developers like Swede Niklas Zennström, who developed Kazaa and Skype, Biz Stone, co-founder of Twitter and, of course, Mark Zuckerberg at Facebook.
I love what these kids have done. What a world they have created!
I have a twitter account, Goog+, Facebook, pinterest, 500px (image sharing site), tumblr blog, two wordpress blogs, a linkedin profile, youtube channels, Facebook pages, stupeflix movie maker channel, Instagram, Dropbox account.
I must be the only guy on the planet to have a We Heart It account.
Who said? “We live in a cynical world, a cynical, cynical world, and we work in a business of tough competitors.” Jerry Maguire played by Tom Cruise in Cameron Crowe’s 1996 film of the same name.
When I was in the 20s, the world’s population was around 3bn. And approximately 20% worked in a recognizably modern economy. So it was me competing with around 600m people.
Today, it’s a world of 7bn and around 60% work in a modern economy. So it’s you against 4.2bn.
But here’s the good news—thanks to Gen Y, you can also sell to 4.2bn so while it’s more competitive, your opportunities are HUMONGOUS.
And you can communicate with all those people for FREE. WOWZA!
So LB’s customers are creating their own YT videos that get as many as 10,000 views. LB has to integrate fans/follows/followers into their biz model. Why?
Because competitors can reverse engineer your product/service but not so easily duplicate your biz model.
What made Apple the biggest (by capitalization) tech co on the planet? Macs? iPod? iPad? No, it was the iPhone.
Not really the iPhone either. It was the iPhone biz model. Instead of selling a cell phone like the old Motorola Razr for 200 bucks, a one time event, Apple sells iPhones for $500 and CMRR (Committed Monthly Recurring Revenue) streams made up of a share of carrier monthly subscriber fees, app sales, ad revenues, iBooks, iTunes, rights fees, search fees, etc.
Steve Jobs, former Apple boss, and Sam Palmisano, former IBM CEO, spent 40% (!) of their time on biz models.
Former student, Daniel Beauchamp, sums it up best, “People can copy what you are doing but not what you are thinking about doing next.”
What’s next for LB? How about a pharma/health box or a man packs box or a nutrition/foodie box? That’s why they called it LooseButton not Luxe Box so they could enter new verticals… Buttons connect things. LB connects customers with suppliers and marketers.
So if you create a highly differentiated value proposition and a terrific biz model with amazing integration of the Internet allowing you to reverse out a lot of the work to clients and suppliers, if you can self capitalize the biz so you end up owning it not some VCs or Angel investors, if you can use guerrilla marketing/social media to connect with customers cost effectively and if you can create a vibrant community around your new enterprise, product or service, you are well on your way to creating sustainable wealth for your enterprise, yourself, your family and your other stakeholders.
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Former student Jennifer Schweers worked in banking cuz her parents wanted her to…She got laid off in the financial meltdown of 2008/09. Told her parents she wanted to become an entrepreneur/a wedding photographer. They laughed. They said she didn’t even have enough money for the equipment. Hurt her feelings.
Scweersey, the new entrepreneur
But wait. She’d taken a course with Prof Bruce. She knew all about bootstrapping.
Jen spent $500 on FB ads—girls who changed their status from single to engaged and live in Vancity or Victoria saw an ad for urban lens photography.
She took deposits—50% upfront and bought all the equipment she needed. So successful she was able to buy a new downtown Vancouver condo less than 2 years later. Thanks Mark!
If you have cashflow today, you will get financing not the other way round. So start with launch clients!
If you are going to be an intrapreneur, learn the skill set of an entrepreneur—great biz model, lotsa launch clients, cheap/effective guerrilla marketing, self-capitalize, do everything in parallel, passionate, creative, focused, ready to adapt…it’ll get you prompted faster.
Tariq comes forward to his boss with a proposal for a new product. It’ll take 2 years of R&D and $10m to develop. Hailey comes forward with competing product—also requires 2 years of development and $10m but she’s lined up 3 launch clients who’ll each contribute $2.5m upfront and take first 6 months of production. Whose product or service gets green lighted and who gets the next promotion? Tariq or Hailey?
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“To live through an impossible situation, you don’t need the reflexes of a Grand Prix driver, the muscles of a Hercules, the mind of an Einstein. You simply need to know what to do,” Anthony Greenbank, The Book of Survival.
If you have a mental map of the way the world works, you can do thought experiments like Einstein. Canucks think that Brits or Yanks are better than us. Inferiority holds us back. Confidence, that’s what we all need more of…
People need People
Did anyone see the film Into the Wild? It was directed by Sean Penn and starred Emile Hirsch playing true life Christopher McCandless who went into the hinterlands of Alaska to live life close to nature. He died there—cut off from a return to civilization by raging floodwaters. He starved to death not realizing that just a few klicks in the other direction was a wire rope bridge hunters used to get out during floods. Without skill sharing and a mentor/a partner to verbalize good (and bad) ideas to, we are all dead.
Give People a Reason to Believe
People are most alive when they feel they are part of something bigger than themselves. It’s a shame that for most people they hark back to high school days or their college days when last they felt like this.
Buying a Business
How I got my start. Out of the $350k I needed, I put $10k down and like Lloyd Christmas and Harry Dunne (played by Jim Carrey and Jeff Daniels in the 1994 film Dumb and Dumber) I would owe them the rest. Where’d I get the $10k? Borrowed that from CIBC.
1025 Merivale Road
Part of the asset mix. Big problem? 1 tenant ending 25 year lease at $1.67 per sf per yr. Turn problem into opportunity. Sub-divide space into Macs Milk/Active Components/Douvris Martial Arts at $12, $6.50 and $5.50 per sf per yr. Sell plaza for $1.1m, pay off sellers 3 years early.
Get a Mentor
According to a 2011 SV report, tech startups that have a mentor, set goals and are held accountable, grow 7x (!) faster than those that don’t*. Murray Thompson mentored me in my 20s.
(* Startup Genome Report 01, Max Marmer, Bjoern Lasse Herrmann, Ron Berman, 2011. Full report: https://t.co/xxcxvu0. Excerpt: https://www.eqjournal.org/Startup_Genome_Report-page-5-annotated.jpg.
Get a Life Coach
Former NFL superstar wide receiver Terrell Owens has had a life coach for the last two years. He says it has made a huge difference in his life and, if he had had a life coach during his playing days, it would probably have made him a better player too. Everyone needs a co-active life coach to help them find their way through an increasingly complex professional world and personal life.
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What does the future promise?
Pet3r, the first Quantum Entity
Ellen Interacting with her Media Wall
Nina—motocross racing/guitar-playing/rave attending/mediatronic programming/quantum data strategist/church-going/coffee house owning/half Hopi princess/rock n roll girl from Cal living in Texas w/ fluent French and some Swedish living in a time (2089) when all seems lost except hope (Quantum Entity | The Successors)
Knock, Knock. Who’s there? Dunno. Dunno who? Dunno the future
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Bring Back the Senators
That was our rallying cry. This was a team that last played in the NHL in 1933 before pressure from the Great Depression forced a move to St Louis where they played for a year before folding. I was asked why use that old name? Well, after Montreal and Toronto, who has won the most Stanley Cups? It’s the Sens with 9 (last one in 1927).
A Simple Plan
Our real estate company went from getting $18 per sf per yr for our space to $6. Move up food chain. Buy 600 acres at $12k per acre. Put a NHL team and a NHL-calibre arena in the middle. Drive up values to $112k per acre. Sell extra 500 acres. Make a profit of $50m. Put that in Brinks trucks. Take to Park Avenue. Give money to NHL. Get NHL franchise. This is typical entrepreneur-style thinking—each project is, in effect, self funded.
What went Wrong?
Everything. We needed three things from Ontario—1. priority review and approval of rezoning to allow us to build the Palladium (now Canadian Tire Centre), 2. private money buys franchise/builds new arena (this is not another SKY Dome where Ontario lost $450 million) but province builds new Palladium interchange at a cost of $30 million, 3. premier to come to Palm Beach in December and tell NHL that Ontario is a great place to invest in. Chain smoking, deal making liberal premier David Peterson says, “Yes” to all three requests then calls a summer election, two and a half years early, which he loses via nearly perfect vote splitting to Bob Rae and the NDP. I said to my team, “Don’t worry, jobs are just as important to the NDP as Libs.” No word from Bob in September or October. On November 29th just seven days before NHL’s winter meeting, Mr Rae writes me a letter.
Persistence
We held a news conference. We made Mr Rae’s letter public knowing that if we don’t, they would. Everyone expected we would fold but we had collected 15,000 PRNs (season ticket registrations at $25 each) from the public, we had 500 corporate sponsors at $500 each and 31 original corporate partners at $15k each as well as bought lands for $7.2 million and spent another $2 million on the bid itself—there was no going back. We told the folks in Ottawa and the news media that we would go to Palm Beach, win a franchise and then beat our own government at the OMB where all the appointees were appointed by Libs or PCs.
Turning Disadvantages into Advantages
Mr Rae and his inner cabinet were asked by the Hamilton caucus to torpedo Ottawa’s bid. NDP was very strong in Hamilton Wentworth but had only one member of the legislature in Ottawa—Evelyn Gigantes who called the Palladium “a playpen for the rich.” Then Edmonton Oilers owner Peter Pocklington later said, “I’ll be damned if we should let some socialist premier tell us where to put our teams.” Hamilton bidder Ron Joyce held forth that they already had an NHL-calibre arena in Copps Coliseum but in fact Gino Rossetti (architect for the Palace of Auburn Hills where the Detroit Pistons play and the Palladium) had revolutionized stadium design so not having yet built an arena turned into an Ottawa advantage.
Media Focus
We were competing not only against Hamilton but also St Petersburg, Tampa, Houston, Milwaukee, Seattle, Portland… The Ottawa Citizen planned to go (an in fact did) with headline… “The Winners are Milwaukee and Seattle.”
Lydia Leeder’s Call
“It’s like Canada versus Russia in 1972!” Now that’s pressure.
Adversary
“Mr Firestone, there’s just one thing I want to say: you will never, ever get a team in Ottawa.”
Breakfast
Phil Esposito and Bruce Firestone lobbying Board of Governors next morning. Where are the other bidders?
Pressure Mounts
Bruce goes for a job. On his return, one of his staff says, “The NHL has made a decision.” “What decision?” “I don’t know.”
Basement of the Breakers Hotel
“It doesn’t look good. If we have lost, we’ll thank the NHL and then hold our own press conference.”
The NHL is Pleased and Proud to Announce
The NHL is pleased and proud to announce that conditional memberships have been awarded to the cities of Ottawa… and Tampa.”
What was the Vote?
“What was the vote, John?” “It was unanimous.
Bruce Firestone and NHL President John Ziegler
A Strange Call
Three weeks later, Bruce gets a telephone call.
Trust
They don’t actually give NHL franchises to cities; they give them to people.
Florida Governor
The Florida Governor calls Phil to congratulate him. In Ontario, the Sens get a lawsuit from their provincial government.
At the OMB
2 and ½ days on the stand. The offer that Bruce makes against all advice.
Lessons Learned?
Trust is the no. 1 thing in life. That to get anywhere in life, requires passion and commitment. S/he who loses her/his temper first, loses. It’s bootstrapped entrepreneurs for the most part who are shaping a sustainable future for communities across the planet.
Questions about Hockey:
1. It’s a question that a lot of entrepreneurs are asked. Why you? And what made you think of founding an NHL team in Ottawa.
2. How can anyone really know what to do in a difficult situation especially if it’s the first time they’ve ever faced it?
3. If you were to do it again, what would you do differently?
4. What was the best hockey advice you ever got?
5. How are the Sens going to do this year and who is better—the Sens, Leafs or Habs?
6. What was the lowest point in your effort to Bring Back the Senators?
7. You were the leader of the Bring Back the Sens effort. What makes a good leader?
Questions about Business:
8. What is more risky? Being an entrepreneur or getting a job.
9. Once you become an entrepreneur, can you go back to working for someone else?
10. How important is a never-before-tried idea to starting your own business?
11. How can people become more creative?
12. Most people prefer marketing to sales. How can you take the fear out of sales?
13. Why do most banks only lend money to people who don’t need it?
14. When is the right time to go after VC or Angel funding?
15. Why shouldn’t an entrepreneur build a business to flip it? When’s the right time to cash in?
16. Can you tell us about one piece of guerrilla marketing you did that worked?
17. Why is a brand so important?
18. Would you recommend a partnership to found a new enterprise?
19. If a young person doesn’t have money what else can they bring to startups?
20. How much of any business decision is analysis, how much is based on intuition?
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Courses by Professor Bruce M Firestone
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Nell, Ellen Brooks and Damien Bell
From Quantum Entity | we are all ONE
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When young physicist and engineer Damien Bell and his business partner, fabulous Ellen Brooks, unleash both a revolutionary communications platform and a contemporaneous new life form called Quantum Entities on an unsuspecting world, they unwittingly change the very nature of the economic and political system of their mid-21st century world. Together, as they build a new globe-spanning, ultra-fast growing tech enterprise that begins to get away from them––they inevitably come into conflict with entrenched business and political interests.
READ THE TRILOGY: https://www.brucemfirestone.com/quantum-entity/
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Ottawa Senators and Bruce Firestone, Founder
(Seated front row, centre)
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