Chysler on Crack

Everyone thought Hyundai was crazy. A 100,000 mile powertrain warranty was completely unprecedented. That crazy marketing scheme combined with a confidence in the quality of their vehicles (as well as actually creating a quality vehicle), helped push an obscure Korean car company into a legitimate player in the automotive industry that years later other car companies had no choice but to follow.

Now the slightly less obscure American car company, Chrysler, has upped the ante. A lifetime powertrain warranty. According to the Detroit News, this will take place on their 2007 and 2008 gas powered cars. The only catch is the warranty is only available to original owner or leases of the vehicle. According to Chrysler the car has to be inspected every 5 years and the average car owner gets a different car every 5 years, which would void the warranty.

My opinion: Bad Move. Penny pinchers and cheapos the world over will be grabbing up these cars in hopes of purchasing their final car. I think that 5 year trade up will change with this warranty. Maybe this is a good move though. Cerberus is in this to make money, not neccesarily cars. This crazy move could boost sales for the next 5 years making Chrysler an industry leader. They sell and dump the problem on an over zealous new buyer to inherit the unsuspecting years of what I can only imagine as debt.

One small step…

According to the Detroit Free Press, Mascoma, a Boston based alternative fuel company has secured a deal to move to Michigan. The announcement was made with excitement by both CEO of Mascoma Bruce Jamerson, as well as Michigan’s governor Jennifer Granholm on Thursday. Granholm for some time has been leading the way in trying to make Michigan a leader in alternative energy to support the struggling economy left broken by the auto industry. “This is a sector that Michigan can lead the nation in” Granholm stated.

Mascoma, unlike many ethanol producing companies, is using trees and timber waste to produce ethanol in a world where corn is king. Jamerson, who himself is a Michigan native, stated “This is really cutting edge.” But alas, tree huggers don’t fret, according to the forestry department the trees will be well managed and replenished to preserve the environment.

Could this be Michigan’s new major industry? Hopefully not. I don’t see anything wrong with Michigan being a leader in biofuel, but the old one trick pony economy is outdated (I thought we would have learned that in the coal mining days). While this advancement can be beneficial to the state, hopefully it will be in attracting more businesses to the area with innovative ideas and last but most important great people and great cultures.

Sold!

Robert Kiyosaki, America’s favorite rich dad, says he’s often asked how to raise money by people, according to a recent article in Entrepreneur magazine. Time and time again he tells them they need to sell. According to the article, Kiyosaki deferred his dream of becoming an entrepreneur after coming out of the Marines for 4 years while pursing sales training at Xerox.

Kiyosaki realizes that many people hate the idea of sales. There are too many stereotypes to list that usually go along with sales people, and sadly most of them are not too flattering. For this reason many people avoid selling at all or convince themselves their jobs don’t require sales. Kiyosaki boldly interrupts by saying, “Entrepreneurs can’t afford this luxury.” He goes on to describe how his rich dad told him that there are 3 types of people entrepreneurs need to sell to: employees, customers, and investors. And there are three sources of income: employees, customers and investors. He wraps up the article by drilling in that selling is the most important skill of an entrepreneur.

Interestingly enough, I agree. This article in no way came as a shock to me. Maybe only possibly a shock that it even needed to be written at all. I strongly believe that the ability to sell and network are hands down the most important skills any entrepreneur can have. I’m open to argument, but unless you argue leadership I won’t even hear you. Leadership in my opinion is a close third, but only because if you can’t sell you won’t even have people to lead. And if you can’t network good luck finding good people skilled enough to be worth leading.

MEDC and Me

According to Crain’s Detroit, on May 1, Crain’s had a roundtable meeting with the Michigan Economic Development Corp. (MEDC). In the meeting there were CEO’s and Presidents from small businesses from industries ranging from publishing to IT and they were all there to talk about supporting entrepreneurship.

According to Crain’s Detroit, The MEDC is in strong support of entrepreneurship in the state for a variety of reasons right now. Two major reasons are: over 50% of Michigan workers are employed by small business and well over 90% of all job growth is through small business currently. The MEDC,  much like most of Michigan is realizing the state can no longer depend on the Big three to do much more than take a big #2 on the city, according to John Hughes (who sadly was not quoted in the article).

A big issue that came up in the round table discussion was a lack of bank funding. The article discussed how 50 years ago the bank would lend money to small business and if they went up and smoke, the bank could take that matches that started the fire and any other assets the business had such as machinery and heavy equipment. Now if a company goes up in smoke, their assets pretty much go the same route. With much of the focus of modern business being on information and service rather than production.

  

$100 million for me?!…Sort of

According to Crain’s Detroit, Detroit Renaissance Inc. has announced a $100 million entrepreneurship fund up and available by the first quarter of 2008. According to the article it will be a fund for venture capitalist to support their investments. The funds will be focused at South East Michigan, but will be available throughout the entire state.  This fund is partly in place because many venture capitalist firms have complained that sources of funds such as universities have ignored Michigan VC’s and put money into many out of state firms. According to the article currently less than .5% of all U.S. VC money is spent in Michigan based business.  All and all I think this is an interesting development. Upon first reading the headline I thought a VC firm was offering 100 million to local businesses. Interestingly enough it is a fund of funds, as the article calls it. I was weary of that as I first dove into the explanation, but upon further evaluation I think it makes since for Detroit Renaissance to know its role and not to try to be a VC firm if it’s not, but to direct the money to VC firms that do know what they’re doing.  

Bruce Bruce

Talk about a born business man. Bruce Schwartz is, “that guy.” His father was a pool hustler turned salesman. While Bruce became a real life hustler turned In-House Realty CEO. Finding opportunity after opportunity and using his social network and streets smarts to his advantage every step of the way.

Bruce is a true serial entrepreneur. His laundry list of businesses sounded like a couple pages out of mobster’s rolodex. From a gambling hotline to construction and even a little arcade game services he’s had a piece of nearly all the mafia related businesses short of hired hand (at least I hope).  Bruce never stopped seeking out opportunities. His continued pursuit of business exploits even after complete destruction is what impressed me most about Bruce. His gambling hotline was put out of business by an uprising in credit card fraud and his construction business self imploded after too much demand after a hurricane.

 The more and more I write about this guy the more and more I’d love to see a movie about him. It’s strange, Bruce didn’t seem overly charismatic or shockingly impressive, but he’s one of those guys if you were to sit down with I could guarantee you he has some stories to tell that could keep your attention for hours.

There is no Box

I liked Bill Emerson. As of yet I hadn’t had much of an opportunity to come in contact with Bill or even hear much of him (other than the fictional birthday party for his daughter I was dooped into), but meeting with him was interesting. Having met with most of the top leaders in Quicken Loans it was nice to finally meet with the CEO. Bill had a strong yet humble veiw of leadership. He saw leadership as a role in which to serve people. I’ve heard many leaders say this before, but with Bill it seemed as though he actually believed in this service form of leadership.

As he spoke on leadership he explained in order to lead others you have to lead yourself. I think this is vital in business. Too many times people don’t set goals for their business because they aren’t used to setting goals for themselves. Too many times people don’t manage their business well because they don’t manage their personal lives well. Bill mentioned that we had to have a core belief system in being a leader and being successful and I believe that as well is one of those things that translate from the personal to the business.

A great piece of advice Bill gave was to get new prospects to tell you their goals and then explain your goals to them and then it’s vital to have them explain how they fit in with your goals. This way they confirm that they are on board and conversely you can see where they want to be in your organization. Another piece of advice Bill gave was to “under promise and over deliver” (I’m not sure if I’ve heard that one yet, but it sounds good ; ).

Bill had great nuggets of knowledge, being a guy who admits to love sayings he left us with some great ones to live by. Zig win everyone else zags. That’s an idea I’m taking to heart in my ideas for internet based businesses. He also said start each day asking yourself where can I have the most impact, interestingly my mentor gave similar advice a few weeks back. It’ s interesting that so many strings again and again keep getting pulled from people who don’t have that great of a connection to one another. There is no secert sauce, it seems almost more like a the kool-aid but one I’m glad I’m getting a sip of.

Small Plates; Big Vision

It was strange. As Todd Stern spoke he reminded me a lot of myself growing up. He spoke of doing yard work in the neighborhood at a young age and knowing what an entrepreneur was and wanting to be one long before anyone his age had gone beyond wanting to be a doctor or a fireman. I had all but forgotten that in elementary school I had been the same way. It was only somewhere in middle school that counselors, teachers and peers all but convinced me that picking a ”career” was a must.  It wasn’t until high school that the entrepreneur passion came back for me. Oddly, in a similar way it went with Todd. He began working for small quick serve food establishments and was trusted with the responsibility to manage the establishment a much younger age than typical.

Todd continued to stay in the industry and work his way up. From dishwasher to general manager he had the opportunity to work the restaurant industry from top to bottom. He was good at his jobs and was being paid well, but had to pursue his dream and open small plates. Despite construction outside his establishment for years, he was able to create a profitable business with over a million in revenue. 

Two other things I saw Todd and I had were what we see as important aspects of business development: A strong vision and strong networking skills. Beyond this Todd had lots of great advice to give. Similar to Dan Gilbert and many of the other speakers we’ve had he believes in creating a great environment for employees. And to create opportunity within the company for people to move up is vital to employee retention.

He also had two very unique pieces of advice that I hadn’t heard before but were great. The first was to create a list of things that excite us about the city. He mentioned this in response to a question Andrew had on how to convince outside businesses to team up with us to do things in the city. The other piece of advice that I think was the best advice he gave was not to grow too quickly. Through all the speakers I had heard this is something I don’t recall hearing. In the world of seemingly overnight success and dot com explosions like Facebook and You Tube the idea of not growing until the company has key people in place that can support the business is something I think I have overlooked. All and all, Todd was great and so was his lunch.  

Quicken-to-Go

The Detroit News reports, Quicken Loans plans to move to Detroit. Long term, it’s good that thousands of workers will be coming down to the city. Those are thousands of people who may have at one time or another had a bad image of Detroit begin to see Detroit as what it really is. A big city with a lot to offer, and like any other city, that means both good and bad.

The Detroit News reports the deal will be over $200 million. Kwame Kilpatrick welcomes Dan Gilbert and Quicken Loans with open arms. The city, as well as the state, are doing what they can to secure the deal. Gilbert hopes many more will follow and states “big” things are to come.

One thing the article didn’t mention is the effects on Livonia and Troy. What about the cities that have supported and embraced Quicken for years? These city governments have made sure that it was easy for Quicken to operate there and are will lose out on a lot of traffic. And what about the local dry cleaners and diners that depend on hundreds of Quicken workers coming in day in and day out? I guess there’s room for them to follow. Who’s coming with me?

http://www.detnews.com/apps/pbcs.dll/article?AID=2007707060360