Seth Godin spoke yesterday in Salt Lake City and I had my first opportunity to hear him give a live talk.  Sure I’ve heard him speak before: while narrating his audio book Tribes, while speaking on the Marketing Over Coffee pod cast twice, and of course, I’ve certainly seen him on YouTube.  Part of me expected to hear a lot of what I’ve heard before from Godin.  But surprisingly, Godin’s live presentation yesterday was certainly NOT more of what I’ve heard from him before.  In fact, the presentation was so powerful that I both laughed and cried, as if I was watching a great movie.

Why did I laugh?  Godin puts together a slide show presentation to go along with his talk. The funny photos he chose for the slide show take some of the seriousness out of the very serious subject matter at the center of his talk.  These photos capture the unexpected things and people in life that catch you off guard and make you snicker.

But I did say I cried too, and why did I cry? I cried because of the reality check that Seth’s talk gave to me and to most of the other 600 people that attended the event.  The reality check was at the heart of the talk and had to do with the new economy that is right before our eyes.

What are some of the implications of this new “digital age” in terms of your job or your business? Will your job become automated or just eliminated altogether?

Having followed the traditional, educational path myself, by pursuing a Graduate Degree from a prestigious school, I too have had to swallow the fact that the old rules no longer apply.

You are probably wondering, ‘who is this Seth Godin guy and what kinds of things was he talking about?’  Some of the main concepts of Seth Godin’s talk yesterday were the following:

• Replaceable people versus irreplaceable people in the job market.
• Getting and keeping a good job used to be about “not” talking too loudly or “not” standing out.  Nowadays if you don’t stand out and don’t talk too loudly you’re dispensable or replaceable.
• The individual has more power than ever before in history to create something amazing because of the infinite reach of the internet.  Before the internet, you could blame a publisher if your didn’t make it as an author or you could blame the music industry if you didn’t make it as a musician.  Now you have no excuse.

These were just some of the concepts from Seth Godin’s presentation yesterday, as there were just too many good ones to count.  If you don’t know who this guy is yet, I encourage you to get your hands on at least these three books from Seth Godin:

1. Purple Cow
2. Tribes
3. Linchpin (just released!)

Godin’s books will change the way you think about your “job” today and your “job” in the future.  He will change the way you think about your business too.  Read all of his books if you can, but the three I’ve listed above are, in my opinion, the “must reads” by Seth Godin.  Ironically, I wrote a post on the blog one year ago yesterday that referenced Godin. The title of the post was, “How Can Small Business Best Survive Recession.” Check it out if you haven’t read it.

If you are already familiar with Godin’s work, what are your thoughts on the three concepts I’ve listed above? I’d love to hear from you.

Posted by Corey Curwick on February 13, 2010

But who are these companies that are standing out?  And which of these companies would you invest in if you had a chance?

The companies that come to mind first are Facebook, Yelp, and Rackspace. This is just the tip of the iceberg. As more and more consumers search online for products and services, it is essential to look for companies that push the edge in innovative ideas in this rapidly growing, online marketplace.

Demand Media, a company that I discovered back in November, is an example of this.  As fresh, online content becomes the driver of search results on the web, this new company stands in line to take advantage of this opportunity. Kind of like a content “factory,”  as described in November’s Wired magazine.

And then what about online reviews? Forget about Yelp, even though it’s a darn good business model, and think about review software in general. A recent article, “Even Bad Reviews Boost Sales,” appeared in Fortune Small Business and highlights the growth of reviews on the web. An excerpt from the article,

“Online reviews have been spreading ever since Amazon.com (AMZN, Fortune 500) pioneered them in 1997. Consumers are becoming used to searching for reviews when they shop online. Internet shoppers rank reviews as the most desired feature of a Web site, according to a recent survey by Forrester Research.”

Forsee Results, one small example from the FSB article, provides customer satisfaction survey software to websites.

What other sectors of the tech industry will experience massive growth in 2010?  A recent article in TechCrunch called, “The Top Ten IPO Candidates For 2010” will certainly get you thinking about these growing sectors.

Are there any other companies, tech or otherwise, that you will be keeping your eye on in 2010? Please share.

Posted by Corey Curwick on December 24, 2009

 “The creation or distribution of products or services intended for a global or transregional market, but customized to suit local laws or culture.”

 In business school, the term glocalization was used as liberally in core business courses as it was in marketing courses.  But is this widely-used strategy as effective as it used to be? Vijay Govindarajan, Director of the Center for Global Leadership at the Tuck School of Business, says no. 

 On a recent Harvard Business School podcast, Vijay suggests that many multinational companies will have to ditch the strategy of glocalization and replace it with a new strategy that will be more effective in our current and future economy. This strategy he calls, “reverse innovation.”

 In a Harvard Business Review article titled, “How GE Is Disrupting Itself,” this new strategy is described as being the new game that multinationals have to play if they want to survive in the 21^st Century. 

 But what exactly is “reverse innovation?”  The HBR article summarized it best by saying,

“For decades, GE has sold modified Western products to emerging markets. Now, to preempt the emerging giants, it’s trying the reverse. With glocalization, companies develop great products at home and then distribute them worldwide, with some adaptations to local conditions.”

 For many multinationals, product innovation is centralized in the U.S., while products are then modified for local markets all over the world.  This strategy won’t be easy to replace but, if it is indeed becoming obsolete, multinationals need to begin to experiment with it.  For many multinational companies, the change in business models means that local “growth teams” will replace the centralized model of decision-making and resources.

 To read more on this trend of reverse innovation, also check out Business Week’s March feature, “Game Changing Ideas for Business.”

 What are your thoughts? I am particularly curious to see what my fellow Thunderbirds think about reverse innovation. Have you seen changes in your own multinational companies? Please share your observations if any.

 Also, to read what others said on this topic, check out a Harvard Business blog post on this topic at: http://blogs.harvardbusiness.org/hbr/hbr-now/2009/09/is-reverse-innovation-like-dis.html

 (See below a brief except from the Harvard Business School article discussed in this post).

 Thanks…..!

 Posted by Corey Curwick on October 31, 2009

Excerpt from HBR Article, “How GE Is Disrupting Itself:”

In May 2009, General Electric announced that over the next six years it would spend $3 billion to create at least 100 health-care innovations that would substantially lower costs, increase access, and improve quality. Two products it highlighted at the time—a $1,000 handheld electrocardiogram device and a portable, PC-based ultrasound machine that sells for as little as $15,000—are revolutionary, and not just because of their small size and low price. They’re also extraordinary because they originally were developed for markets in emerging economies (the ECG device for rural India and the ultrasound machine for rural China) and are now being sold in the United States, where they’re pioneering new uses for such machines.

We call the process used to develop the two machines and take them global reverse innovation, because it’s the opposite of the glocalization approach that many industrial-goods manufacturers based in rich countries have employed for decades. With glocalization, companies develop great products at home and then distribute them worldwide, with some adaptations to local conditions. It allows multinationals to make the optimal trade-off between the global scale so crucial to minimizing costs and the local customization required to maximize market share. Glocalization worked fine in an era when rich countries accounted for the vast majority of the market and other countries didn’t offer much opportunity. But those days are over—thanks to the rapid development of populous countries like China and India and the slowing growth of wealthy nations.

GE badly needs innovations like the low-cost ECG and ultrasound machines, not only to expand beyond high-end segments in places like China and India but also to preempt local companies in those countries—the emerging giants—from creating similar products and then using them to disrupt GE in rich countries. To put it bluntly: If GE’s businesses are to survive and prosper in the next decade, they must become as adept at reverse innovation as they are at glocalization. Success in developing countries is a prerequisite for continued vitality in developed ones.

The problem is that there are deep conflicts between glocalization and reverse innovation. And the company can’t simply replace the first with the second, because glocalization will continue to dominate strategy for the foreseeable future. The two models need to do more than coexist; they need to cooperate. This is a heck of a lot easier said than done since the centralized, product-focused structures and practices that have made multinationals so successful at glocalization actually get in the way of reverse innovation, which requires a decentralized, local-market focus.

Almost all the people and resources dedicated to reverse innovation efforts must be based and managed in the local market. These local growth teams need to have P&L responsibility; the power to decide which products to develop for their markets and how to make, sell, and service them; and the right to draw from the company’s global resources. Once products have proven themselves in emerging markets, they must be taken global, which may involve pioneering radically new applications, establishing lower price points, and even using the innovations to cannibalize higher-margin products in rich countries. All of those approaches are antithetical to the glocalization model. This article aims to share what GE has learned in trying to overcome that conflict.

Why Reverse Innovation Is So Important

Glocalization is so dominant today because it has delivered. Largely because of glocalization, GE’s revenues outside the United States soared from $4.8 billion, or 19% of total revenues, in 1980, to $97 billion, or more than half of the total, in 2008.

The model came to prominence when opportunities in today’s emerging markets were pretty limited—when their economies had yet to take off and their middle or low-end customer segments didn’t exist. Therefore, it made sense for multinational manufacturers to simply offer them modifications of products for developed countries. Initially, GE, like other multinationals, was satisfied with the 15% to 20% growth rates its businesses enjoyed in developing countries, thanks to glocalization.

Then in September 2001 one of the coauthors of this piece, Jeff Immelt, who had just become GE’s CEO, set a goal: to greatly accelerate organic growth at the company and become less dependent on acquisitions. This made people question many things that had been taken for granted, including the glocalization strategy, which limited the company to skimming the top of emerging markets. A rigorous analysis of GE’s health-care, power-generation, and power-distribution businesses showed that if they took full advantage of opportunities that glocalization had ignored in heavily populated places like China and India, they could grow two to three times faster there. But to do that, they’d have to develop innovative new products that met the specific needs and budgets of customers in those markets. That realization, in turn, led GE executives to question two core tenets of glocalization……….(Copyright © 2009 Harvard Business School Publishing Corporation. All rights reserved).

The term “Chimerica,” Ferguson explains, comes from the economies of the two countries being so “intertwined” that they essentially became “one economy.”  Thus the ‘marriage’ analogy. With China’s international reserves totaling $2.1 trillion, 70% of these are in dollar-denominated securities.  But the Chinese aren’t going to stop buying dollars, Ferguson says. If they do, their currency will inevitably appreciate against the dollar and further hurt exports.

But what would be the result of the “divorce” that Ferguson refers to between the two countries?  Ferguson hints that a “cold war” may be on the horizon and a “strategic rivalry” between the two economic superpowers.  All of this is probably obvious to most of you, however, Ferguson did highlight some pretty eye-opening facts in the article.  Take a look at the article and please, post your comments. I’d be curious to see what your thoughts are about the fate of “Chimerica.”

Posted by Corey Curwick on October 6, 2009

These days, it’s hard to imagine a world without discount internet sites where product is sold at a deep, deep discount off of its retail price.  These aren’t just auction sites either, but rather sites where product is simply dumped, regardless of its origin.  For example, a shirt that retails for ninety dollars in the store, my fiancée recently found on the internet for $10 plus shipping.

Will retail as we know it die, as the popularity of these discount websites continues to grow?

I think the answer is probably no. Retail will never completely die, people still need to go and try on wedding dresses and wander aimlessly around shopping malls. However, I do think that the big days of retail are officially over. As consumers become more savvy online, there will be more tire kickers.  And this trend will just grow and grow.

Brick and mortar retail giants, unless they dramatically alter their business models and their distribution models, are doomed. As shareholders flee the space and banks stop funding commercial retail, the giants will certainly fall.  We’ve seen both Circuit City and Best Buy slowly crumble. What other big box names will follow?

Any opinions on the future of retail as we know it?

Posted by Corey Curwick on September 19, 2009

According to a recent article in Inc. magazine, “A Buyer’s Market,” the median sale price for a private company fell by nearly 30 percent last year.  This is no surprise, with dwindling revenues across the board from the recession, and the rapid implications of a completely New Economy.

This represents a tremendous opportunity for those who are looking to buy a business or acquire a competitor.  Cash rich companies, who have found themselves in dying or just slowing industries, are snatching up their competitors at deep discounts.

The scarcity of credit is also pushing down prices. Businesses that no longer have access to easy credit, are dumping their businesses for pennies on the dollar.  This then forces other sellers to lower their prices. In this way, buying a business is a bit like buying a house.  Recent comparable sales can have tremendous influence on the sales price of comparable assets.

The drying up of the credit markets has also forced both buyers and sellers to get super creative in how they structure the deal.  Buyers are more commonly using “earn-outs,” to structure an acquisition.  In this scenario, the seller of the business stays “in the game” with the business for a set period of time, and thus takes a percentage of the agreed upon sales price from future revenues.  I think an earn-out is a smart move, particularly with the rapid pace of economic changes we are experiencing.  A business that made a profit for the last ten years, may not make a profit in the next two, if its business model or industry are now obsolete.  With an “earn-out,” the new business owner passes on some of this systematic risk to the former business owner.

Any comments about the plummeting prices in this asset class? Or, is anyone currently looking to acquire a competitor?

If you are curious about business valuations, I recommend taking a look at the article referenced in this blog post.

Please leave any additional thoughts & ideas!

Posted by Corey Curwick on August 30, 2009

Some of the most obvious industries are accounting services, green construction, and energy. In fact, energy was the “fastest-growing industry among privately-held companies with a median four-year growth rate of 287.5 percent.”

Software as a Service and Education Technology are two more industries that are listed as some of the fastest growing.

Take a quick peek at the online slideshow and I’d like to hear some of your comments. Are there any other businesses you can think of that could thrive in the current economy?

Jay’s newest article in the September Issue of FSB is called, Get Tough – You Need a Thick Skin to Make it in Business.  In the article he writes,

“Entrepreneurs tend to start out young and naïve, but sooner or later we all toughen up to survive.”

He gives examples of having to “get tough” in different areas of business including human resources and relationships with vendors and customers.  I think all of us, whether entrepreneur, business owner, or business executive, have had to toughen up.  Whether it’s a failed business plan or just poor execution, many of us have grown harder after our own disappointments in business.

Shortly after finishing my post-graduate degree, I remember feeling so optimistic and ready to go any direction.  After going through a few disappointments of my own, I am way less trusting and way more likely to challenge all assumptions in business.

I liked this article because it sparks a conversation between business owners, entrepreneurs, and execs.  How have you personally been toughened up by your own experiences in business? Please add your comments below.

Posted by Corey Curwick on August 16, 2009

I found a recent article by Ben Levisohn in Businessweek that provided some interesting thoughts and assertions on this particular question.

The author discusses how the economic collapse spurred a surge in supply, some $600 million bbls over the actual demand.  Because this surge in supply has been stemmed, the market is beginning to rebalance itself. If the market continues to rebalance, the price of oil will settle at around $75 a barrel.

Any thoughts as to the direction the price of oil is going? Are you an oil investor or are you a consumer with no investment interests in oil? Please include this in your commentary.

Posted by Corey Curwick at 9:27 PM MST on July 26, 2009

The smartest real estate investors not only made their money during this sharp upturn in the cycle from 1997 to 2006, but are also making money during the downturn.  This small minority of investors sold off their holdings at super inflated values right before the crash in 2007.  They are now rebuilding their real estate portfolios with deeply discounted or distressed assets; and making money when they purchase!

I met with a potential client today who mentioned, with an intriguing twinkle in his eye, that he has lived through multiple real estate cycles.  With 40 years of investing in real estate, he laughed when I asked him to share his thoughts on the cycle we’re in.  I was grateful to hear the confidence in his voice when he said that we would see the end of the downturn by this time next year or shortly thereafter.

I’m personally looking forward to the next upturn in the real estate cycle, but I’m actually more excited about the next downturn. Like so many other novice real estate investors, I wasn’t experienced enough to be poised for the opportunities that are being presented in the current downturn.

Any other thoughts or ideas on real estate cycles anyone out there would like to share?  Because my own knowledge of previous cycles is so limited, I would enjoy a dialogue on this topic.  Please share.

Posted by Corey Curwick on July 19, 2009