Avoid Business Plan Mistakes

"I spend a lot of my time studying business plans from entrepreneurs looking for investment. Many are impressive but some are ghastly. Among the worst offences are:

"Aggressive confidentiality clauses and an obsession with non-disclosure agreements...

"Overly technical documents...

"Lack of focus...

"Preposterous valuations...

"Biographies. These should be honest and full. They are perhaps the single most important part of the entire proposal. I really want to know the owners and individuals who will make the thing happen. Vague or overly concise CVs make me suspicious...

"The numbers. This is the critical stuff. The funding requirement, the estimated returns, the cash flow projections: these must be attractive and sufficiently ambitious to be worthwhile...

"The competition. All capable entrepreneurs know their competition well. If they say they have none, they are fooling themselves...

"Huge appendices and too many spreadsheets...

"Getting someone else to write it...

"Make sure it can be e-mailed...

"Unbelievable margins, profits and returns..."

Read more in this article by investor Luke Johnson.

Beyond Machine Age Thinking

"In her book Organization Theory: Modern, Symbolic, and Postmodern Perspectives, Mary Jo Hatch provides an introduction to general systems theory that is useful in thinking about organizations. She makes a point worthy of repeating: The use of lower level models is problematic when applied to higher level systems. Thus, the language of simple machines creates blind spots when used as a metaphor for human or social systems; human systems are infinitely more complex and dynamic. In other words, it can be counterproductive to treat a complex dynamic social system like a simple machine.

"Noted management scholar Russell Ackoff puts it another way. He asserts that we are in the process of leaving the machine age that had roots in the Renaissance and came into favor through the industrialization of society. In that era the machine metaphor became the predominant wayof looking at organizations. The universe was envisioned by thinkers such as Isaac Newton, as having the characteristics of a big clock. The workings of the clock could be understood through the process of analysis and the analytical method.

"Analysis involves taking apart something of interest, trying to understand the behavior of its parts, and then assembling the understanding of the parts into an understanding of the whole. According to Ackoff, “One simple relationship—cause and effect—was sufficient to explain all relationships.” Much machine-age thinking remains with us today; however, there are alternatives.

"Systems Thinking
"Systems, like the human body, have parts, and the parts affect the performance of the whole. All of the parts are interdependent. The liver interacts with and affects other internal organs—the brain, heart, kidneys, etc. You can study the parts singly, but because of the interactions, it doesn’t make much practical sense to stop there. Understanding of the system cannot depend on analysis alone. The key to understanding is, therefore, synthesis.

"The systems approach is to:
• Identify a system. After all, not all things are systems. Some systems are simple and predictable, while others are complex and dynamic. Most human social systems are the latter.
• Explain the behavior or properties of the whole system. This focus on the whole is the process of synthesis. Ackoff says that analysis looks into things while synthesis looks out of things.
• Explain the behavior or properties of the thing to be explained in terms of the role(s) or function(s) of the whole.

"The systems thinker retains focus on the system as a whole, and the analysis in step three (the third bullet) is always in terms of the overall purpose of the system."

Read more in this article by Col. George E. Reed from which the foregoing was quoted.


A Street Named Tree

Suburbia is where the developer bulldozes out the trees, then names the streets after them.
- Bill Vaughan

From Quotes of the Day - The Quotations Page as it appears on my Google home page today.


Electronic Signatures in a Nutshell

"ESIGN, the federal law, does not preempt a state’s laws dealing with electronic signatures... Most companies may design a national electronic signature process, without having to contend with significant state variations in the electronic signature process...

"ESIGN states that a signature may not be denied legal effect solely because it is in electronic form. ESIGN does not give preferential treatment to electronic signatures. Consequently, an electronic signature can be challenged for all the other reasons that a wet signature can be challenged, such as the incapacity of the person signing, mistake, fraud, duress, and forgery. ESIGN does not require anyone to use or accept an electronic signature or record...

Under ESIGN (or the applicable state law) an electronic signature can be as simple or complex as:

• Clicking “I Agree;”
• Saying into a recording device, “I Agree;”
• Digital signature using PKI technology;
• Using a peripheral device that records an image of one’s signature; or
• Other ways using an electronic sound, symbol, or process attached to or logically associated with the document or record, which is executed or adopted by a person with the intent to sign.

"Verifications and acknowledgments required by law to be in writing, such as certain notices in financial transactions, may be provided and obtained in electronic form under ESIGN in certain circumstances. ESIGN essentially provides that if a law requires a disclosure to be provided by a certain method that includes acknowledgment of receipt, that disclosure may be given electronically if, and only if, the electronic method for providing that disclosure also includes a process or method for capturing electronically an acknowledgment...

"Failure to comply with the ESIGN disclosure requirements does not render void or voidable the underlying transaction (for example, the application for insurance or the insurance policy ultimately issued), but could subject the company to regulatory sanctions for failing to provide the required disclosures (such as the replacement notice) in accordance with applicable law. There may also be civil remedies available to consumers if the disclosures are deemed to have not been given effectively...

"[With certain exceptions,] ESIGN allows an archived electronic record to satisfy applicable statutory requirements that a contract or other document be retained “in writing,” if the electronic record is maintained in a form capable of being retrieved by all parties for later reference. In addition, ESIGN recognizes that records of a transaction (whether completed electronically or not) may be archived exclusively through electronic means, but failure to archive the records in a way that allows the record to be accurately reproduced could result in the unenforceability of the agreement represented by the electronic record and regulatory sanctions for failing to maintain the proper records...

"The 5-point approach examines a proposed electronic signature and electronic delivery process from the following perspectives:

1. Authentication Risk
This is the risk that the electronic signature obtained is from a forger, not from the actual person whose name is associated with the electronic signature...

2. Repudiation Risk
This is the risk that a document bearing a person’s signature is altered after the document is signed electronically and the person repudiates the contents of the document bearing his or her signature...

3. Compliance Risk
This is the risk that the rules and regulations governing such a transaction, such as regulation requiring certain consumer disclosures to be provided by a certain stage in the transaction, are not satisfied...

4. Adoption Risk
This is the risk that the e-process takes longer than the traditional process or is not as convenient as the traditional process and consequently, adoption of the process is slow...

5. Relative Risk
...For most electronic signature and e-delivery processes, the goal will be to have the transaction, on the whole, be no riskier than the current processes..."

Read more in this article by Patrick J. Hatfield (Lord, Bissell & Brook LLP), from which the foregoing is quoted.


Columbus was First

So contended the Honorable Michael Musmanno, the colorful, outspoken, controversial judge, Congressman and author, who died, fittingly, on Columbus Day in 1968. Mussmanno is buried in Arlington Cemetery almost directly across the road from the eternal flame of the grave of John F. Kennedy.

The Michael A. Musmanno collection at Duquesne University contains the personal papers and library of the man.

"Among the many highlights of his career were the campaign to abolish the Coal & Iron Police,(a private police force maintained by the coal companies for the purpose of strike breaking), legislation to end the Sunday Blue Laws, a defense lawyer in the Sacco & Vanzetti trial, a presiding judge at the Nuremburg war crime trials, and appearing as a witness for the prosecution in the case against Adolf Eichman...

"One of the highlights of the collection is the transcripts of Musmanno's personal interviews of the Hitler intimates. Other noteable features are the transcripts of the Einsatzgruppen Nuremberg trial and the Adolf Eichmann war crimes trial. Musmanno was also the author of a number of books including, Ten Days to Die, which recounted Hitler's last days and was later made into a motion picture, and Black Fury a novel about a coal miner struggling with the hardships of the mines and the brutality of the Coal and Iron Police. He was also a zealous defender of Columbus discovering America and supported his claims in the book Columbus Was First."

Musmanno penned blistering and sometimes hysterical dissenting opinions as a jurist. His dissent in the Pennsylvania Supreme Court obscenity case regarding the book, The Tropic of Cancer, is a classic. The majority opinion failed to find the book obscene within the meaning of the First Amendment. Justice Musmanno disagreed:

The decision of the Majority of the Court in this case has dealt a staggering blow to the forces of morality, decency and human dignity in the Commonwealth of Pennsylvania. If, by this decision, a thousand rattlesnakes had been let loose, they could not do as much damage to the well-being of the people of this state as the unleashing of all the scorpions and vermin of immorality swarming out of that volume of degeneracy called the "Tropic of Cancer." Policemen, hunters, constables and foresters could easily and quickly kill a thousand rattlesnakes but the lice, lizards, maggots and gangrenous roaches scurrying out from beneath the covers of the "Tropic of Cancer" will enter into the playground, the study desks, the cloistered confines of children and immature minds to eat away moral resistance and wreak damage and harm which may blight countless lives for years and decades to come.
As this post from Moleskin Notebook observes "That's just the introductory paragraph, it only gets better." The opinion continues and concludes:
[Henry Miller's Tropic of Cancer] is not a book. It is a cesspool, an open sewer, a pit of putrefaction, a slimy gathering of all that is rotten in the debris of human depravity. And in the center of all this waste and stench, besmearing himself with its foulest defilement, splashes, leaps, cavorts and wallows a bifurcated specimen that responds to the name of Henry Miller. One wonders how the human species could have produced so lecherous, blasphemous, disgusting and amoral a human being as Henry Miller. One wonders why he is received in polite society. ... From Pittsburgh to Philadelphia, from Dan to Beersheba, and from the ramparts of the Bible to Samuel Eliot Morison's Oxford History of the American People, I dissent.
The opinion can be found at Commonweatlh v. Robin, 421 Pa. 70 (Pa. 1966).

Musmanno loved Columbus, but he didn't care for jazz music, as noted in this The Volokh Conspiracy post, quoting another of his dissenting opinions:
In the eyes and ears of many people, including the writer of this opinion, a juke box confined to ‘jazz’ records may be a nuisance. It robs the air of sweet silence, it substitutes for the gentle concord of stillness the wailings of the so-called ‘blues singer,’ the whinings of foggy saxophones, the screeching of untuned fiddles, the blasts of head-splitting horns, and the battering of earshattering drums. It makes a mockery of music, it replaces harmony with cacophony, tonality with discord, and peace with annoyance.
Quite a character. Happy Columbus Day.

Five Characteristics of Effective Leaders

"In the opening address to the [2002] Möbius conference Kim Clark, Dean of Harvard Business School, spoke about leadership with a small "l"—the sort of leadership that is needed in every organization to both serve and inspire our communities, businesses, and lives. 'We live in really remarkable times,' he said, stressing there remains 'a lot of optimism amidst all this turbulence.' Below, his advice on first-rate leadership.

"1. Integrity. We need leaders with strong values grounded in a commitment to a life that is whole and consistent with the things they believe. They should take personal responsibility for their actions and be honest with others, and with themselves.

"2. Energy. Leaders who energize and inspire other people make everyone around them better—not by administering, but by ministering.

"3. Inspiration. Trust and confidence are vital, but it is a leader's responsibility to help create a vision of what is possible. They should inspire others to see the greatness that is within them.

"4. Wisdom. Leaders need to be teachers. They must see beyond the horizon and understand the principles that underlie success. It is necessary to be a great communicator and teach in deed.

"5. Courage. Leaders have to do hard things. They have to have standards and make tough decisions that might make them unpopular, and do the right thing though the wrong thing is easier. Courage is hard, but it can be developed."

Read more in this HBS Working Knowledge article.

Can Spirituality Drive Success?

"Executives from a wide range of industries trooped to Harvard Business School to discuss how their spirituality helps them be powerful leaders... The conference explored issues of leadership, values, and spirituality in business...

"According to Ricardo Levy, chairman of Catalytica Energy Systems, executives are trained for action—contemplation is not part of their rulebook. In his own career, however, he discovered the need for spiritual guidance in crucial decisions, especially those that affect other people such as employees, he said. Levy's guidelines are:

-Quiet the mind.
-Reach deep inside. Go beyond the ego to hear the inner voice.
-Don't fear ambiguity; rest in the unknown. "This is the most difficult piece," Levy admitted. "We're not Comfortable unless we see the path."
-Stay humble in the face of temptation and power. "Being humble is a key issue. It's good for a leader to be reminded of the intoxication of power."

Asked by a member of the audience for his definition of success, Levy said, 'I'd rather use the word fulfillment. Success is a metric; you never have enough. But only you can define fulfillment. We as individuals are the only judges.'

"...Gregory Slayton (HBS MBA '90), chairman of ClickAction Inc., said... the value he most often uses at work is the Golden Rule, the principle that people should do unto others as they would have others do unto them. For example, when layoffs were necessary, he was upfront and honest with employees about what was happening and why..."

Read more in this HBS Working Knowledge

Bikes of Burden

You haven't seen real traffic until you've witnessed Vietnam's seemingly haphazard road rules and chaos. With few cars and more than 5 million motorbikes in the main cities, the bikes transport everything and everyone. "One of the main reasons for this enormous variety lies in the obsession with fresh ingredients for every meal," says photographer and Vietnam resident Hans Kemp. Kemp includes some of his best clicks in his new book, "Bikes of Burden," photos from which are available at this ABC News site.

Still Running

My namesake, septuagenarian, fellow Lackawanna County Pennsylvania native, and as far as I know not my relative, Tony Cerminaro is still running marathons, even in yesterday's heat. The Scranton Times-Tribune reports:

For Tony Cerminaro, this year's running of the Steamtown Marathon meant a lot to him for several reasons.

For the 71-year old, it was a marathon that he almost missed.

Recently, Cerminaro underwent a prostate-specific antigen (PSA) test. The test measures the amount of PSAs in a person's blood. A high level of PSAs is considered a possible symptom for prostate cancer.

"The doctor found that my levels were high, so I stopped training for three weeks," Cerminaro said. When I went back for an exam, my levels were back to normal."

Once his PSA levels decreased, Cerminaro slowly began to work out and get back into running condition.

"I don't like to take time off from training," Cerminaro said. "But I have to listen to the doctor."

Cerminaro won his age group, the Men's 70 and up race with a time of 3:26:35, finishing 218th overall. It was the 12th consecutive time that Cerminaro won his age group title.

According to Cerminaro, the warm and humid conditions became a hinderance during the race.

"At times, I was having a difficult time catching my breath," Cerminaro said. "I also never pour water on my head to cool down, but I was doing that today."

Despite the elements, Cerminaro was pleased with the result.

"Considering the weather, I really did better than I thought that I would do," Cerminaro said. "I'm really happy with the way I ran today."

Another reason that Cerminaro wanted to race on Sunday was it marked the 60th marathon the Jermyn resident has participated in.

"With knowing that this would be my 60th marathon, I had to run in this race."
Cerminaro is a former age-group Boston Marathon champion, awarded the title in 1997 after the initially declared champion was found not to have actually completed the race. See Two Disqualified From Boston Marathon - New York Times


My Journey to Kathmandu

To view a Google earth version of the entire trip of which this journey is a part, visit acerminaro - ChinaTibetNepalThailandTrip2007

After crossing the Peace Bridge of the Friendship Highway linking Nepal and Tibet, we arrive at the rugged border town of Kodari Nepal. Making arrangements for a jeep trip to Kathmandu proves an interesting adventure in itself, as local boys bargain with each other and drivers for commissions, promising to us a ride as soon as the "driver" returns from Tibet. We finally secure a jeep and set out for Kathmandu.

The descent from the Tibetan plateau to Kodari is like falling off a brown, barren cliff and landing in a lush green forest, complete with waterfalls and more treacherous winding roads.

The rewards for continuing the descent on the road to Kathmandu include many small farming outposts set like gems in the greenery.

We are transported from the sublime to the ridiculous, through the crazy Kathmandu traffic choked with small cars, bicycles, motorbikes and the acrid fumes that go with them. We arrive in the Thamel tourist area, with its narrow, crowed, colorful alleys - a virtual "Disneyland for backpackers".

Booking a room in the laid-back Kathmandu Guest House, we relax in the tranquil garden before continuing our sightseeing journey.

With our Lonely Planet tour book in hand we take the scenic walking tour arriving at the Kathmandu Durbar Square, one of seven groups of monuments and buildings designated as Kathmandu Valley UNESCO World Heritage sites. Others include the Buddhist stupas of Swayambunath and Boudhanath, and the Hindu temple of Pashupati, which we will visit.

Next day we walk from Thamel across the Bagmati river to Swayambunath, also know as the "monkey" temple in honor of its cavorting simian residents. We climb the "365" steps up a forested hill for a breathtaking view of the Kathmandu Valley from this important Buddhist shrine. For more, see this sacredsites page

Next, we're off to Boudhanath, transfixed by the ever vigilant "Buddha Eves" reminding us to stay on the true path in life. Boudhanath is another holy Buddhist site. Its platform is a massive mandala and it contains the largest spherical stupa in Nepal.

A short walk from Boudhanath takes us to the mysterious Pashupatinath Hindu temple, regarded as the most sacred temple of Shiva (Pashupati) in the world. Thousands of pilgrims from all over the globe, particularly from Nepal and India pay homage in this temple everyday. "Shivaratri" or night of lord Shiva is an especially important day in this temple when tens of thousands of people throng here for the annual celebration.

Before leaving Kathmandu, we stop at the oasis of calm and beauty that is the "Garden of Dreams," also known at the "Keshar Mahal Palace and Gardens" and the "Garden of the Six Seasons." The garden is a prominent architectural example of Nepal's Rana period, with its mixture of western and oriental elements, and the adjacent neo-classical Palace.

The complex was built in the 1920s by Keshar Shumshere Rana, the third son of the Rana ruler in power at that time. His gardens abounded with all kinds of plants - not only from Nepal but also from Australia and Europe. The name 'Garden of the Six Seasons' reflects the six seasons prevailing in southern Asia : spring, early summer, summer monsoon, early autumn, late autumn and winter. Each of these seasons was represented with its own pavilion. Only three of the pavilions remain. The site has been and is being restored by Ecohimal.

More photos from my trip are available at Journey to Nepal, my photoset on Flickr

Top Ten Management Concepts

The 12manage Global Top-10 is a measurement of the popularity of management concepts over time. The organizational approaches are listed in order, number 1 being the method currently most in vogue.

1. Five Competitive Forces Porter
2. 14 Principles of Management Fayol
3. Marketing Mix McCarthy
4. Mind Mapping
5. BCG Matrix
6. Competitive Advantage Porter
7. SWOT Analysis
8. Diamond Model Porter
9. 7S Framework McKinsey
10. Balanced Scorecard Kaplan Norton

From www.12manage.com.


Check Credit Card Receipts for FACTA Violations

"The Fair and Accurate Credit Transactions Act ("FACTA") ... has spawned more than 250 federal class-action lawsuits ... Section 1681c(g)(1) of the FCRA, part of the FACTA enactment, provides that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction." This aspect of FACTA was phased in over time to allow large and small businesses to conform to the requirements and update the cash registers in service. The requirement was fully phased in as of December 4, 2006. Since then, the class-action lawsuits have come fast and furious...

If your company has not been sued for a FACTA violation, you still need to act. Conduct an audit of the receipts issued to customers to ensure that all stores comply with FACTA. If any potential violation is noted, correct it immediately. Also, to avoid future unknown liability, monitor the decisions related to FACTA to determine whether there are any changes regarding the statute's interpretation. With that, your company will be able to immediately correct any "new" violations found to exist under the law.

If your company has been sued, act immediately to come into compliance with FACTA. Simultaneously, obtain legal counsel to help you explore the various defenses available to minimize the potential exposure your company may face. Otherwise, a simple receipt error could lead to enormous expense..."

Read more in this Jones Day article from Mondaq.

Strategic Partnerships Work - Sometimes

"Northwestern's Kellogg School of Business has a web site called 'Kellogg Insights' that posts research done by their professors. They recently highlighted a study called 'Compete or Cooperate - Choosing the Right Commercialization Strategy as a Technology Start-Up'. The study authors investigated the commercializaton strategies of 118 start-up companies across 5 economic sectors. They found that cooperation is a good strategy for start-ups when one or more of three conditions exist for the start-up:

1) The firm has a high degree of control over its intellectual property rights
2) The firm enjoys low deal transaction costs
3) There is a high sunk cost requirement for the firm to compete in its industry ..."

Read more in this Small Biz Labs post from which the foregoing was quoted.

Tools and Templates for Entrepreneurs

"Entrepreneurship is vision and values but ... it's also tools and templates. These are those practical agreements, models, checklists, samples, worksheets, and other items so vital to the day-to-day operation and success of your company. The monthly Collections provide them by topic-and we keep track of how much attention they get. Listed here are the tools and templates most viewed by your fellow entrepreneurs from September 2006 to September 2007 on the Kaufmann eVenturing site.