Who moved my purse?

I am sure many of you have read the book titled "who moved my cheese". Well today we are going to talk briefly about the purse, and who moved it.

Your customer is your purse; they are your money/income. Your product is not your money, it is your cost - it is a liability until you get it our of the door and get someone to pay for it. Therefore, if your customer is your purse, it is really important that you know how to make sure your purse is always fat and always with you, regardless of how much you take from it.

1. Understanding your customer is like getting to know the purse

You have to know how and where the purse is in order to get to it. You have to really understand your customer; and when I say customer I mean those who had paid for your goods, not some prospects with no buying experience from you. Understand how they look like (male or female); what do they do (housewive, working mom,  professionals, loafers); what is their characteristic (teenager, middle aged and grumpy etc); which segment do they belong to; where do they normally hang out, work or live; what do they like to do; what is their problem; what are their needs. You have to know the purse because if you lose it you need to know how to find it back.

2. In most cases you misplaced your own purse

You do this when you change your 'delivery channel' to your customers. For example, moving from direct selling to in-store selling or online sales. In this case, your direct selling purse is left behind somewhere and you are now holding an in-store purse. Most of the time you will be wondering why is the purse empty, no customers, when in fact you are holding a new purse- the fat direct selling wallet is left behind. You have moved your own customers, you moved your purse.

Therefore, the point is whenever you are expanding, check if you are moving onto a new purse and if so, make sure the connection to the old purse is maintained in the same momentum as before while you work to build the new purse. It will be hard work at first but if you plan properly and accordingly, you will achieve success and avoid the unnecessary frustration and angst.

3. Put a string on your purse

Pareto rule states that 80% of your income will come from 20% of your customers. Always, always have means to keep in touch with your customers, old and new. This is like having a string to your wallet. If you are a cleaning company, send them and email or sms every thursday asking if they need house cleaning. If you are a cake company, a week before someone's birthday, send their friend a message suggesting cakes (you can get it from facebook nowadays or some other ways). And always make sure that the customer can get 'in touch' with you easily, either through web or otherwise.

This is a case of building customer loyalty, retaining them from competitors- those people who want to steal your purse.  Remember, first there is customer acquisition and then retention. Acquisition is much harder than retention but the result from retained clients is many times higher than customer acquisition. Retained customers not only will keep buying from you, they would refer other customers to you - doing the customer acquisition job for free. Therefore, keep the string to your purse strong.

Work smart people

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The Author is the principal of ElixirEducate- a training house for Smart Entrepreneur Training Series. He was an international investment banker, corporate financier and now serial entrepreneur and business coach. You can find more information on ElixirEducate at their facebook page, here.  And be a facebook friend  of Yazdi . Please share this information to your entrepreneur friend who may benefit from this post. Thank you.

Dilema usahawan melayu

I wanted to write this in Bahasa Melayu but the ideas were  flowing in English, so please bear with me for a while. I will make  a translated version soon. Tapi saya akan selitkan penerangan dalam  bahasa melayu sekiranya the 'point' itu lebih bermakna dalam bahasa melayu.

Whenever I refer to Pengusaha Melayu, I am not referring to any individual entrepreneur, but the community and the majority as a whole. As this is my opinions, readers are free to disagree and I welcome comments.

I intend to write as frankly as possible, hence I apologise if the manner goes against our grain as Malays. Have not doubt though that I am writing this because I love the Malays and Malaysia.  I believe that Malaysia would be free from this bickering, project jostling, distrust, suspicions and prejudice if everyone have equal skill, knowledge and resourcefulness to succeed in entrepreneurship.

1.  No depth in entrepreneurship knowledge    

Orang melayu tidak mempunyai sejarah peniagaan yang mendalam, tidak sedalam sesetengah bangsa yang lain. This is a fact.  The majority of Malays have little knowledge and skills of entrepreneurship. The culture of entrepreneurship was not there - hence the NEP  (we will talk how this backfired). We do not, as a community, have a long history of entrepreneurship culture.    But there is hope.  In recent years, the rise of Malaysian entrepreneurs are getting more imminent; with the women leading the rise in mass entrepreneurship, in terms of numbers. The pasar malam and bazars also helped spur the growth of usahawan melayu. But because of the lack of knowledge, very few were able to lift their enterprise above the small/petty trader level. Many would be quick to blame lack of capital and government support.  
I disagree.  We lack knowledge and community support.  Now that we know how to make a business in a small way, we must learn how to make a business in a big way - they are different models.  And we need effective business networking that is both wide and deep. But rather than depending on the network for projects, we should use the network to generate ideas and collaborate.    

2. The effort to empower the Malay Entrepreneur backfired    

The government tried to create entrepreneurs by giving them projects. It backfired because most of these people who received the projects became 'handout-managers' not entrepreneurs. It also created a mindset that the only way to make it big, and fast is by getting government project.   Very little of those that who received the projects actually use the profit to build and own resources; to be part of the value chain. And that caused many malay entrepreneurs  to lack dept in their area of expertise. On top of that, the absence from the value chain weakens the community.    


3. To much focus on politics, to little focus on  real power    

Orang Melayu ni bijak. Orang melayu dulu dulu pun bijak. Mereka mengeluarkan pepatah "Menang Sorak Kampung Tergadai". This is another dilema of the Malay Entrepreneur.  Because of item 2 above, most tend to  think that real wealth are really in projects from governments. We then focus too much on politics. We support people who can supposedly get us closer to getting the multi million dollar projects. Granted that some succeeded this way but the number is so small and the number of those who expended their time and money and failed are much more.   Real entrepreneurs have products and is a part of the value chain. They actually produces things, regardless it being kerepek, baju kebaya, spare parts, cranes, cement and what not. Entrepreneurs are part of value chain, they control the resources. And the lesser the time, energy, effort and ideas an entrepreneur devote on politics, the more they have to devote on acquiring and building value - resources. Lobbying, getting multi million dollar project and swiftly handing it wholesomely to the sub-contractor is not entrepreneurship - it is handout-management.    


 4. Many forgot about the empowerment of faith     

I always say this,  "ramai yang percaya kewujudan dan keesaan Allah, tapi tak ramai yang yakin, have faith in the ability and the power of Allah to direct change in their lives on this earth." Memang Allah suruh kita berusaha tetapi dia mengatakan dia yang menetukan and ALLAH KNOWS BEST! Allah's ability to know and his knowledge transcends even our ability to think how knowledgeable Allah is - because we use our HUMAN brain to imagine.     Ramai yang meletakkan rezeki tu kepada boss, kepada syarikat, kepada projek dan kepada produk. "I kena lobby orang ni betul betul, baru dapat projek, baru dapat duit" I have heard that so many times. That is wrong and weakens an entrepreneur as he is now placing his faith of wealth to that lobbyist and project, willing to break the laws and compromise integrity in order to achieve that goal. Don't get me wrong, lobbying is okay, so long as you do it the right way - by making sure your products and services have the values that meets the needs of the consumer; that you ensure success; that you will deliver the project in satisfactory form. 

Yes, I almost hear, "Get real Yazdi, you have to grease the palm to get the job". I say, it will be that way if you think that way. Your business will be as how you wish for it. Anthony Robbins once said "Life will give you what you ask of it". If all the malay entrepreneurs puts their faith in Allah's ability and finality to determine fortune, they will not be afraid nor intimidated by  the need to compromise integrity in their business. And when you are not afraid, have no fear of the worldly obstacles, then you become the ultimate entrepreneur - liberated, creative and urgent.

From homemade to the world

J.P Dejoria is an entrepreneur I admire. He built a hair care products business from $700 to now making over $1 billion per annum.

"After his discharge, a brief marriage left young J.P. alone to raise his son as a single parent.  Times went from bad to worse.  “It was one of the most frightening times in my life,” says DeJoria.  “I was homeless twice, mainly because I was too proud to ask anybody for help.  In my early twenties, when it was just me and my son, we had no place to live.  I used to go out and collect Coke bottles at night, then cash them in at the corner drugstore for two to five cents.  We lived on a very simple diet of rice, potatoes, lettuce, cereal, canned soup, and macaroni and cheese, but we managed.”

He took on a variety of odd jobs to make ends meet from pumping gas and repairing bicycles, to selling encyclopedias door-to-door, then copy machines, and even insurance.  As luck would have it, he was offered an entry-level marketing position with Time magazine.  Before long, he found himself the Los Angeles circulation manager, well on the way to his next brush with fate.  By 1971, he went to work for Redken Laboratories, then the leading professional hair salon product company in the U.S.  Within 18 months, he was promoted to national manager overseeing their schools and chain salons, eagerly learning everything there was to know about the business.

Then in 1980, DeJoria jumped at the chance to join forces with longtime friend, and famed hair designer, Paul Mitchel.  Neither had much in the way of material wealth at the time, but they managed to scrape together $700 to initially bankroll the company with Paul doing the hair shows, and J.P. overseeing all the sales, marketing, administration, and everything else.  The rest is, as they say, history.

Today, DeJoria heads the multi-million dollar hair empire of John Paul Mitchell Systems with annual retail sales well over $800 million, offering more than 90 products sold in 105,000 hair salons throughout the U.S. and in 75 countries abroad. When not working to expand the JPM brand, JP travels the globe with wife, Eloise and son, John Anthony as stuards of the planet


I will give the link to the website of the above at the bottom of of this article.

I would like to share one thing about him with you, especially ladies making homebased products.

When J.P started, he went door to door of saloons, trying to get them to buy his product and recommend it to the patrons of the saloons. It was tough because his product was unknown and there were a host of branded items on the shelf at the time. But he persisted and eventually managed to get a few saloon to use his products.

In the Malaysian context, there are many entrepreneurs who invented foodstuff and have homemade business. The products are made with passion, affection and determination. The reasons are varied, some because the producers themselves are housewives or women trying to assist the family - working passionately to make sure the product is good; some simply love their mom's recipe. In the end, just like J.P, you have a good product.

Then some would appoint agents to sell these products, either on direct selling basis or opening up stalls at marketplace and bazaar. These are your channels (for those who attended the Money-First Business Model). Just like J.P, he has his saloon.

But what J.P did next was amazing. He promised his saloon that he will NEVER sell his product directly to the consumer. It will always be and only be sold to saloon. It will never be on the shelf of supermarket or pharmacies. If the consumer wants to buy, they can buy it only at the saloon. This means that J.P would only get rich if the saloon gets rich. And the saloons appreciated that. They began to promote J.P's products more based on this premise and the rest is history.

The idea that I want to throw is this. Remember who made you the first profit. If it is the agents, appreciate them and don't undercut them. Appreciate your partner and your partner will appreciate you. Some of us would be tempted at the prospect of selling to the big supermarkets directly to the customers. We THINK there would be better margin there. But we forget  that not only it is a different model (which we are not familiar with), it can result in us losing focus on the partners and team that was printing money for us.


I am not saying going big with the supermarket consignment is not the way, I am just saying that there is another way to grow. And the growth path for your home-made biscuits is different than Nestle. You follow Nestle's path to the supermarket without the resources and business model Nestle use, you can lose the shirt on your back.


Work Smart People
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The Author is the principal of ElixirEducate- a training house for Smart Entrepreneur Training Series. He was an international investment banker, corporate financier and now serial entrepreneur and business coach. You can find more information on ElixirEducate at their facebook page, here.  And be a facebook friend  of Yazdi

J. P Dejoria Article

More on lady entrepreneurs in Malaysia

I came across this study by a few university experts, titled


"Improving Women Entrepreneurs in Small and Medium Enterprises in Malaysia: Policy Recommendations
Wendy, Ming-Yen, Teoh, Multimedia University, Malacca, Malaysia, myteoh@mmu.edu.my
Siong-Choy, Chong, Putra International College, Malacca, Malaysia, scchong@iputra.edu.my"


And I was intrigued by their observation on the lack of training which is depriving these entrepreneurs to grow and excel.  I am checking online with actual entrepreneurs through facebook and would be interested to find out their feedback. If you would like to give your input, you may answer the facebook poll here. Anyway, here is what the article said:


"Education, Training and Counselling, and Growth of Women Entrepreneurs
The combined impact of globalisation, changing patterns of trade, and evolving technologies such as
ICT call for skills that women entrepreneurs on the continent do not for a large part possess, as many
more women than men lack the requisite level of education and training, including business and technical skills and entrepreneurship training. 


Nevertheless, women are often disadvantaged in terms of access to training. They are often unaware
of training opportunities and are less likely to be able to afford the cost of training provided by the
private sector (and subsidisation of training is limited by the willingness of donors to support this).
According to a report by the International Labour Office, African Development Bank and Private
Sector Department [26], even if women could afford to pay for the training, they have difficulty in
travelling to central locations to participate in training programmes, and quite often cannot afford
time away from their enterprises and family responsibilities to attend weeklong programmes – even assuming their husbands give them permission to be away from home. In fact, some husbands often
object to training offered by men in certain countries.
 
In addition, most entrepreneurship training programmes is too general in scope and does not offer a growth strategy orientation. Many of them focused on the start-up process with very limited effort on the part of the training providers with regard to doing any post-training follow-up. In addition, women tend not to use supporting government programmes [34] including the training programmes provided. This might be a problem pertinent to Malaysian women entrepreneurs as generally there is a lack of entrepreneurship training and skills development in Malaysia where most women entrepreneurs acquired their skills and experience through their family members, friends and previous experiences [3]. Efforts are thus needed to increase the level of awareness among women entrepreneurs of existing training opportunities."


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The Author is the principal of ElixirEducate - a Smart Entrepreneur training house. He was an international investment banker, corporate financier and now a serial entrepreneur as well as a business coach. You can find more information on ElixirEducate at their facebook page, here.  And you can also be a facebook friend. Yazdi welcomes any questions (you just need to message him on facebook) that you may have regarding your business and will reply to your questions as soon as possible.

How my auntie expanded her business and lost everything

I have two aunties who, being Kelantanese, sell jewelries, real jewelries gold and diamonds.  They had this business since I was very young. They were not in this business together; each was on her own. And they were doing this since I was very small, like at least 25 years ago. Let’s call them Mak Ae and Mak Bee (Codenames – have to because they are still my auntie, nanti nak jumpa masa raya…)

Mak Ae, started much earlier than Mak Bee, and her business were much bigger. However, they both have the same modus operandi, same business model. They purchase the jewelries and sell them to buyers on installments, with reasonable profit margin. Their target consumers are also the same, mostly teachers, government servants and entreprewives (a term I coined to refer to housewives who are entrepreneurs). They would have small gatherings at their homes or at the client’s house. It is exactly like selling Tupperware, but instead of containers, it was gold jewelries, bracelet, necklace and the works.

Their business progressed well over the years, growing steadily as demand continued to increase. Their business model provided the ideal solution to the customers who want to have the jewelries as both investment and adornment. The installment method allows the customers to secure the investment and enjoy the benefits that they otherwise couldn’t with their limited income.

Business went so well and both of them made a lot of money. They made so much that Mak Ae decided to be another Habib and opened up a jewelry shop. Mak Bee decided that she would stick to her ways. Mak Ae obviously thought that by opening up a jewelry shop, she would make more money. The shop was opened and Mak Ae hired her son to manage the business. Everyone had a grand day at the opening and hopes were running high! This is going to be the money making machine.

Mak Ae’s business swiftly dived! It was a disaster and she had to close the shop after only 5 months opening the shop (true story!). They were at a good location in the city and they were selling jewelries just like any other jewelers in town. And these jewels are excellent products; they were GOLD and sold with installments too. And Mak Ae had so many years of experience (at least 20 year if I remember correctly).

I was so young at that time I could not understand it completely but it was a big issue then. Everybody was dumbstruck and could not figure out why.  But now I know why.

Mak Ae was focused on the quality of her product and service. She did not know that she was moving to a new business model. She did not know that it is not her products that brought her money; it was her business model. Her original direct selling model had all the elements for her customers, the needs of the customers were met, the delivery channel was perfect and all the other seven business model elements were working fine.

When she opened up her shop, it was a new business model and the elements of the new business model are not the same as the previous one. By not understanding her new model, she spend too much too early and ran out of cash. Her old customers’ needs were no longer being satisfied so they did not buy from her shop.

She could have saved her millions opening up her jewelry shop, even more likely to be very successful with her shop, if only she knew that profit comes from business model- not product alone. A business model is a complete system of getting the product to the consumers and getting PAID. If she had learned about her new business model, she could plan her actions accordingly and employ the correct methods to satisfy each element of the business model. She would know how to target the new customers and what do they need. She would also know how to plan her resources accordingly. By learning about business model, she would have made millions.

My Auntie Bee? She still giving out the BEST duit raya until today!

NOTE: Elements of Business Model

1.    Customer

2.    Value Proposition (Product and Service)

3.    Delivery Channel

4.    Relationship with Customer

5.    Revenue Stream

6.    Key Resources

7.    Key Activities

8.    Key Partners

9.    Cost Structure

The Author is the principal of ElixirEducate- a Smart Entrepreneur training house. He was an international investment banker, corporate financier and was involved in raising a total of over RM1 billion during his tenure. You can find more information on ElixirEducate at their facebook page, here.  And be a facebook friend

The Art of Getting Funded

They say you need money to make money. Well those are the people who makes lemonade when they are given lemons.  But Smart Entrepreneurs makes a helicopter when life give them lemons, so to speak.

While you Smart Entrepreneurs out there are resourceful, you would undoubtedly need resources to propel your business forward. And more often than not, you need cash. you need cash to hire that smart and hardworking employees to do your marketing for you, you need money to purchase more stock so that you can sell more, you need that extra sewing machine, you need money to grow your business and make more money, hopefully.

I am a clear advocate of cash-last method of doing business, where creativity and resourcefulness are more important than the resources itself (money, time, energy etc). With creativity and resourcefulness, you can find that extra time, that extra energy, that extra money.  But when it comes with money, you cannot run away from its culture and structure.

Getting funded has its culture and structure, especially with investors and banks - it is an art. Funders are everywhere, from family and friends to financial institutions and private investors. The key is knowing what they want and how they want it so that they will give their money to you.

Different investors behave differently. Angle Investors looks for passion and works on empathy and gut feeling. They need simple and clear business model as well as their exit strategy and upside. Done right, they would not be as hard when the business fails to deliver. If you do deliver, Angle Investor will own a large chunk of your company though.

Financial Institutions and such wants form and structure. Since the decision makers are committees and people, they need to be certain of key areas - mostly to cover their ass and job. Your multi-million dollar ideas are worth much less to them compared to secured contracts, unlike the angle investors. They want business plans and the works. But they are less heavy on the equity side, preferring solid repayment instead. Here you can make more return as you get to keep more of your business.

Initial Public Offerings are huge and you can get millions based on ideas and compliance. It is not rocket science but you still need a professional investment banker to advise you.

Different businesses requires different type of investors at different stage in their life, getting the wrong investors at the wrong time could prove to be distressing and at times fatal (for the business). Choose your funder carefully.

Work Smart People

The Author is the principal of ElixirEducate- a Smart Entrepreneur training house. He was an international investment banker, corporate financier and was involved in raising a total of over RM1 billion during his tenure. You can find more information on ElixirEducate at their facebook page, here.


You might also want to give the seminar below a chance:

Upcoming Boardroom Seminar

The rise of lady entreprenuers in Malaysia

What do you call a women entrepreneur? Entrepreneuress? Lady entrepreneur?

Call them by what you like but they are fast becoming a force to be reckoned with in the economy. Not that they never were, but now they are more visible now. Especially in my beloved country, Malaysia.

I guess I have noticed this a long time ago but never had the urge to really look into it,  to study this phenomenon. My mom and dad are both teachers and despite my dad being a few levels up from my mom throughout their careers, my mom is always the one with the extra cash; it came from her clandestine jewelry-pay-by-installment business. (What can you say? it is in her blood. At one stage, my siblings and I were made by her to sell 'budu' from our house - well the business provided the much needed supplement to care for six of my siblings as well as my uncles and aunties that my parents took under their care. Praise to the Almighty, we all turned out pretty well in life).

Like I said, I observed that this natural enterprising skill getting more and more prevalent among women since I was very young and now the Facebook and Blogs are inundated with online purveyors sellling tudung, scrafs, imitation handbags, trinkets and many more undertaken by YOUNG female entrepreneurs. But I never had the urge to look deep into it until my seminar on Smart Entrepreneurship last Sunday.

At the seminar there was this wonderful lady that exudes confidence and anyone could tell that she is a seasoned entrepreneur the moment she walked into any room. Let's call her Puan Zam (because I did not ask for her permission yet). Anyway,  after a short chat with her, it confirms and validates my intuition that the womenfolk are fast rising and filling up the entrepreneurship room. And they are filling up the important parts, the value chain.

Some of them work from home and some have a few businesses running. They run as fast any businessmen, as creative and as resilient. They appear more optimistic and leans more on the positive sides of any situation. It may be difficult for me to admit this, but they are cool. They seem to handle failures and rejections, that are aplenty in entrepreneurship, much better than some men that I know. They seem to be quite tough.

They are more humble and their propensity to learn is immense. They soak up information and knowledge like a sponge; fast turning those information into skills. No longer are them the quietest in the class. They are at the front and speaking up.

And they have a GREAT support system. A genuine support system that aims and deliver assistance. That alone is the most powerful weapon for any entrepreneur. They have clusters, they meet regularly and they keep the clusters disciplined and urgent - actions oriented. I guess this is the benefit of MLM and Direct Selling businesses that have mushroomed in the country for the last couple of decades; and it was embraced, almost 80%, by women. This business gave them structure.

Well I guess, being a man, I feel duty-bound to find some form of credit to us menfolks. Some of it must be due to us, men (please take this part as more of a jest than anything):
1. They are tougher and handle failures and problems better because many other men (not us, others) have given their wives and girlfriends problems at home. With the children in tow, and moral pressure from the society, women are more often than not forced to face the problems provided by these men (not us, some other men). To face the husband (problem) at home day in day out. Some men (not us, others) would rather leave the house than face the problem. Sad but true (for others, not you readers)

2. The cluster and structure is also a by-product of the above. They bond together as they console each other in dealing with the problems. Their cluster are therefore a bond created by trust and the intention of improving their situation. Unlike women, whenever men have their clusters, usually it is up to no good, hehe. Unless it is in the mosque, even that could give the wife headache at times.

Anyway, that is my observation. Women entrepreneurs are a force to be reckoned with very soon and I congratulate them as I congratulate my mom.

NOTE
The Author is the principal of ElixirEducate is a Smart Entrepreneur training house. You can find more information on ElixirEducate and their upcoming seminars on
http://www.facebook.com/pages/ElixirEducate/136633746433836  . You would find other useful entrepreneurial tips too.

Start-up

Startup. What is a startup.

Well, startup is generally a new venture or enterprise, initiated to undertake business actions with the hope that it will generate value. Please note here that I use the word 'value' instead of profit/money or such reference. This is because for social entrepreneur, profit is not the main game, change and impact are.

Anyway, I have been doing a lot of research on business start-up and what I found out was startling!

1. Almost 90% of start-up failed in the sense that they did not measure up to the business plan built for it. (My experience: True)
2. In almost all start-up you have to make changes to your original plan (My experience: True again)
3. Because of fear of failure many people fail to start their businesses, and that is a shame because many of the fears are based on assumptions and unfounded.
4. People make start-up more difficult that it actually is: No capital, No idea, No office, No staff bla, bla bla.
5. People give embarrassment to much credit, way too much.
6. People tend to discuss start-up with co-workers, who is equally blind with the start-up business. The case of the blind leading the blind.
7. A lot of start-up are blind-startup (without going through a professional coach or sometimes even basic research). They ended up making basic mistakes
8. Successful start up must be lean, agile and resilient. The brightest and smartest do not necessarily survive drastic environmental changes, those who adapts would.
9. Thick business plans may get you an MBA, but in the the real world, if you cannot put your business plan and model on one sheet of paper you are in trouble.
10. Existing education system fails to prepare a lot of entrepreneurs for the real world.

Work smart today, people.

First mover advantage or disadvantage

I stumbled upon an interesting article on whether one should be an entrepreneur or not. It was placed in the Star Newspaper written by a regular columnist.  The first paragraph reads:

To be or not to be ... an entrepreneur

ON YOUR OWN By TAN THIAM HOCK

MY big aunt once told me that I should be very proud of myself because I built a business from nothing.
I told her I would have gladly exchanged places with my cousins who went straight into their big family business upon graduation and became major corporate players by the age of 30. I spent 10 years of my life looking aimlessly for that one Big Idea that will instantaneously transform my business life. I never did find one.

I will give you the link to the article at the end of this posting.

I gathered from the article that the columnist tried to warn (and rightly so) of the hardship an entrepreneur had to endure and the disappointment he had to face. And one of it is the absence of that one big idea. He then went on to state that not a single one of Malaysia's success story came from one big [original] idea.

Well, the thing is, we must realise that there is no real first mover advantage. Creating something original does not equate to money. Best example is Thomas Edison; the genius invented electricity but was never rich by it. The one big idea, original it may be, bringing along the first mover advantage is not only elusive, but could prove to be unprofitable.

However, it is very valuable. Value does not equate just profit. It includes many other things, like the durian parties, flexibility and freedom of time, time with the kids, the positive impact your customers had when dealing with your novel products, changing their lives forever. Entrepreneurship done right, while might not be profitable is certainly valuable. Just ask the social entrepreneurs.

And entrepreneurs must realize and accept that improving on the status quo is innovation. It is also part of the entrepreneurial trade. There is no shame or wrong in improving others and certainly not exclusive to Malaysian too. Just look at Google (predecessor yahoo, Aol search), Facebook (predecessor MYspace, Friendster) and a host of other entrepreneurs' success stories.

So to aspiring entrepreneurs out there, the question of whether you should be an entrepreneur should be phrased as "whether you want the opportunity to be amazing". Plan your way ahead and be creative - if you find the need to borrow from Along , YOU ARE NOT READY YET. Otherwise, go forth and prosper (and don't forget to pray too, you need all the help you can get).

Work smart everyone.

http://biz.thestar.com.my/news/story.asp?file=/2011/10/15/business/9677356&sec=business

Compete, not envy

This would sound a lot catchier in Malay "Bersaing, jangan berdengki".

In our lives as entrepreneurs, massive luck and fortune would most of the time miss us altogether, only to hit our dear friends and foes smack in the face. They were landed with the multi million dollar job and you are left with none. No luck getting some from your foe and sometimes your friends decided to keep it all to themselves.

I must admit, that feeling of disappointment can sometimes lead to envy and jealousy. And that is wrong.

One of the key elements of a Smart Entrepreneur is creativity. Creativity is so essential to Smart Entrepreneurs today that not having one is like driving a car without the rubber tyre. Yes, the car could move forward but it will be very noisy and painfully slow. On certain terrain, it would just spin uselessly in the sand, leaving the car static.

And nothing kills creativity like envy and jealousy. It is a sickness of the heart and blocks the mind. Envy would lead you to focus on him or her rather than you, your situation and your goal. Envy would occupy your time in finding faults with the other person, how he may have bribed, how bad his products really are, how unfair and stupid the world is.

To be creative, the mind and heart must be focused at the situation that needs to be solved, resolved and improved. That would be you, your situation and your goals. Only when you have all your faculty focused at yourself could ideas start building up; on making you, your product and your enterprise better. The world would look much much bigger and promising; the path to success much clearer.

So next time someone you know, love or hate received a windfall of good fortune, say "Congratulations!" and mean it. Then move on to make your own event that would merit such exclamation. It may not be as big an event as theirs, but it will be a position that is a whole lot better than your present situation. By doing that, by improving yourself, you have been enterprising - you have done amazing!

Work smart people!  

When equal is not equitable amongst founders

Hello world.

In this maiden post, I would like to discuss a common yet not much discussed  issue regarding equity split at the beginning of an enterprise or venture.

This is a very touchy subject, especially to us Asian. This touches on trust and the perceived ability of the partners and founders to be equitable, to be fair and honest to each other. Many would simply decide on an arbitrary figure, say 50:50, especially amongst friends, later to fail miserably and friends become foes. Not all, but many.

Sometimes we are so caught up with the idea, the excitement of projected profits the opportunities and possibilities. It made us very optimistic, abundantly confident that the partnership is rock solid and equal is equity. 

This is indeed a very difficult subject to discuss between partners or prospective partners. Especially if the partners are friends.  Many of us would feel extremely awkward and uncomfortable when it comes to discussing money and wealth and splitting it up, especially when we have not even embarked on our journey. While we do not want to be seen as being greedy, we equally do not wish to be taken advantage of; but the taboo of discussing money upfront is such a taboo. So, many ended agreeing on whatever was first suggested, without giving it much thought on the implications later. To disagree and negotiate feel so unnatural and untrustworthy.

But if partners cannot sit down and thrash over this hard issue early on in the venture, what hope does the partnership looks like when actual money starts coming in and there are actual values/ringgit/dollars assigned to those percentages. It could be $50 or $50 million. The equal split suddenly does not very equitable as each partners feels that have put in more value into the venture.

Well, equal is not equity. Different partners brings different values to the table, before and after the incorporation. Resorting to cash injection as the sole determinant is erroneous as it excludes intellectual property and a host of other non-tangible assets.

Having said that, there is not fixed formula on equity split. It is an art, not science. However, there are some methods applied by many, including Vesting, Stock Options and others.You can get some answers here too.

Sometimes it is also worth getting a professional to step in and assist you in coming to a conclusion. It is much easier to keep a friendship when you have a third party to blame (needless to say, the third party gets paid well for this).