Category: smallbiz

Credit + Access, a Marley fable (aka access to credit)

There are two memorable moments (among oh-so many) in the 2012 documentary, Marley. The two that my mind/heart/soul has linked are from two very different phases of Bob Marley’s life and career. He certainly lived as a musician, but I was reminded how he was and is a spiritual figure and global icon for love, nonviolence, and freedom. Freedom of nations, of people, and of our souls. Now, for the two moments, which have to do with credit.

#1 — As Bob, Peter Tosh and Bunny Wailer are first embarking as an independent three-man band in Kingston of the early 1960s, the documentary recounts the story, told by a distant cousin, of how Bob went to see some of his extended family asking for some support or a loan. The Wailers wanted/needed the capital to buy a car that they could use to independently distribute to clubs, and radio stations across Kingston. Yet, the white Marleys wanted nothing to do with this mulatto son of one of their deceased members. (note: I had not known that Bob had a white father, nevermind one who was so much older than his mother, until watching the movie) Despite their tremendous wealth and plenty of assets that would have made a car loan an insignificant amount, Bob was turned away from the Marley Construction Company empty-handed. The Wailers had to find other means to distribute their newly recorded singles.

#2 — Years later, Bob is cash rich. So much so, that when a Zimbabwean delegation visit him to ask him to perform at their independence concert and ceremony in 1980, Marley is keen. So eager to do so that he/the band cover all of the $80,000 in 1980 dollars (which is approximately $208,888 in 2010 dollars) to ship their instruments and sound equipment from Kingston to Harare.

The Zimbabwean delegation did not have the cash. But that did not stop the Wailers from being at a national liberation concert on the Mother Continent. It is ironic and tragic to see a much younger Robert Mugabe, circa 1980, proclaiming freedom, independence and democracy; how much can change in three decades.

The ensuing concert and historic occasion — of Zimbabwe’s independence and of a free Bob Marley and the Wailers concert for a newly independent nation, that is no longer colonized, and no longer Rhodesia — is also an instance of spiritual transcendence. At least, that is how it seems to me, witnessing history through the movie’s storytelling.

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The trajectory of Bob, who is one of the rare humans who is on a first name (or single names) basis with much of the globe (along with Madiba, Evita or Barack), was marked by his access to capital, and to the other means of production. Those means of production being land, labor and capital. The Wailers’ rise within Jamaica’s domestic music scene took longer because of the bottlenecks and constraints that a young, independent band faced.

Conversely, the people of Zimbabwe would not have had the enduring joy of Bob’s only live performance in 1980, had he been cash poor or debt-strapped.

I am inspired by the story of how even a global phenomenon such as the Wailers faced obstacles such as lacking a car, and the gasoline to distribute their music. The status quo had wanted to control the distribution, release and promotion of Kingston’s musical acts. Much like the 20th Century industry titans who want to impede the innovative people, ideas and companies that nurture the creative destruction today that will hasten the demise of the old ideas of yesteryear, and yester-century.

Ultimately, limited and constrained access to capital is a norm in our economy (and in capitalism). Too few lending dollars provided to small ventures and enterprising individuals. As a result, a bias towards that results in any loans considered being lent to the bigger entities who can either point to previous financial records or who already have the assets that serve as collateral. As a result, those with existing assets have the access to capital. Capital that makes it much easier to grow, or experiment on a new idea. Ideas that can be business or cultural and art ventures such as The Wailers.

Some may suggest that the status quo demands that musicians or entrepreneurs have to show grit, hustle and finesse needed to persevere. Yet, an uneven playing field means that the very subjective nature of lending is not done evenly. It is subjective because lending is, after all, one person making a subjective decision about another person. Instances where a new venture may not have the financial records to demonstrate the return, or safety of such an investment. The current set-up squashes dreams and aspirations when capital is so hard to come by. When the pools of who has access continue to be so dependent on the Old Boy Network.

some of the new normal

The New Normal means a few things, and in economic terms:

  1. those with mortgages, are likely underwater.
  2. exorbitant debt burdens for recent college students, both graduates and those who did not get a degree.
  3. social services cut, and a political paralysis and un-will to raise taxes.

In the nonprofit industry:

  1. money flows have changed.
  2. the support of individuals is tantamount.
  3. having 90% of revenue come from foundation grants is no-more. or a luxurious oddity.
  4. raising money is a 12-month, 365-day endeavor.
  5. programs need to run at cost, either covered by participant fees or with clear sense of where sponsorship and subsidization will come from. general support funding is not a long-term option.

 

3 questions when exiting

Got this three-part advice in my inbox this morning — To ask these three questions:
1) Can you tell me what happened for you?
2) What could I have done differently?
3) What do you need to feel complete?

[source: Heart of Business, by Mark Silver]

This third one stumps me as I cannot fathom how to answer it in an exiting conversation. Though, I am keen to learn and experience it in the realm of interpersonal relations.

poetry in a mission statement?

a friend is launching a new nonprofit. some guidance that i gleaned online:

1. it can’t be said much more simply than this:

A Mission Statement should be a one-sentence, clear, concise statement that says who the agency is (the name, that it is a nonprofit, and what type of agency it is), what it does, for whom and where. Period.

2. to distinguish between a Mission Statement and a Vision Statement:

Vision
What are the values or beliefs that inform your work?
What would you ultimately hope to accomplish as a result of your efforts?

Mission
How do you plan to work toward this broad vision? For whose specific benefit does the organization exist?

    3. then to think of a mission statement as poetry:

    On a concrete level, how can we apply the craftsmanship of poetry to mission statements? Think carefully about each word of your mission statement, about the range of denotations and connotations it carries, and about the effect it will have on readers. As you write or revise, consider your mission statement a poem, that is, a carefully-worded piece in which every syllable holds meaning. Interpreting an existing mission statement as a poem can provide meaningful insight into your organization’s purpose and approach.

    On a “positioning statement” that is speaks to the value of your nonprofit:

    a one to three (only if they’re short) sentence statement that conveys what your org does for whom to uniquely solve an urgent need—the  value that your org delivers. Here’s a list of key components your positioning statement should  convey:

    • Who you are
    • What business you’re in
    • For whom (what people do you serve)
    • What’s needed by the market you serve
    • What’s different about how you do your work
    • What unique benefit is derived from your programs, services and/or products?

    Mobile phones v. credit card cos.

    One thing i’ll say for “the dismal science” of economics — i love it’s ability to embrace and witness aspects of destruction and disruption. That it is what it is, and not cling to the past such that it blurs the ability to be today. In this spirit, I appreciated the following post (h/t nakedcapitalism) this morning for a dose of some creative destruction:

    The [AT&T and Verizon] partnership, which also includes Deutsche Telekom AG unit T-Mobile USA, may work with Discover Financial Services and Barclays Plc to test a system at stores in Atlanta and three other U.S. cities that would let a consumer pay with the contactless wave of a smartphone….
    The service, similar to those already available in Japan, Turkey and the U.K., would use contactless technology to complete purchases in stores. They’d be processed through Discover’s payments network, currently the fourth-biggest behind Visa, MasterCard and American Express Co. Barclays would be the bank helping to manage the accounts, said the people, who requested anonymity because of confidentiality agreements.

    Because, really who wouldn’t want to watch some titans of Vzon and the behemoth formerly known as BabyBells go at Visa and Mastercard. Just for the sake of storytelling, it is fascinating to observe a moment where Verizon is an underdog. And is willing to risk failure by going after the bread-and-butter niche of the Plastic.
    And the post closes with this ringer from Crone Consulting:

    “A mobile device is online, real-time interactivity that changes the customer relationship,” he said. “A card is dumb.”

    FYI, who is Crone? According to the LLC’s homepage:

    for nearly 30 years, Crone Consulting, LLC, helps companies unlock the power of electronic payments to create strategic advantage in the financial services marketplace.

    And, if you are unfamiliar with the phrase of “creative destruction” here is how wikipedia summarizes it:

    an economic theory of innovation and progress…. In Capitalism, Socialism and Democracy, Schumpeter popularized and used the term to describe the process of transformation that accompanies radical innovation.

    Freelance as racken

    I am sharing a set of thoughts that drives my sense of the multi-faceted promises of freelancing. Informed inlarge part by the concept of “racken” in MPollan’s _Omnivores Dilemma_. Racken is ‘rabbit + chicken.’ it is accomplished (by Joel Salatin in OmniDilemma) by building an unorthodox rabbit coop. Rabbit urine and feces fall onto sawdust or hay that chickens then peck through seeking worms. It results in more resources and less waste by constructing a different way of interacting. Simple solution, yet profound shift.

    From my vantage, I’m convinced there’s ways that with coordination (and less control/controlling of others) we can —
    … work better (more effectively)
    … see more realized
    … with more people
    … contributing their small piece(s)
    … with less isolation
    … thus, being more (free) and less (burdened, stressed, over-committed).

    I use the term ‘coordination’ more often. As it requires unlearning the ways of work we have been traditionally instructed. We have to unlearn in order to ask for help; to admit the limits of our knowledge. These have been molded to suggest weakness, incompetence or lack of commitment.

    What a venture wants …

    I came across the site for Seattle firm Second Avenue Partners yesterday (after reading site of WA State Senate candidate Eric Liu). Their synopsis of what  business plan ought to answer includes:

    Consider the following questions:
    Is your company bringing a new technology-based product or service to market?
    Is your company at the “seed” or first stages (i.e. raising less than $10 Million)?
    Is your company headquartered in the Pacific Northwest United States?
    Will your company offer 40%-60% compound annual returns on Second Avenue Partner’s’ money?
    Are there multiple exit strategies for your company?

    A different lens than the one-page business plan format/formula.

    Appropriate reading as counterpoint to the Duration of Unemployment graphs from CalculatedRisk blog. Oh, that and Donald Peck article in the Atlantic on ‘How Jobless Era will transform America.’