Have a PB4L (Personal Business for Life)?
(Originally appeared in the Ottawa Business Journal, Oct. 2009)
For the last few years, I have become increasingly certain that people in the 21st Century may need what I can only call a Personal Business. There are so many changes going on in the local, national and global economy and so many things can and do go wrong, that it might not be a bad idea after all to have a fallback position.
Maybe we should each have one micro business that we hang onto for life; that never gets shared with anyone, where we take no partners and never pledge it to a Bank for a loan and, thus, have something that is uniquely ours that we can fall back on in troubled times. As my late father, Professor O. J. Firestone would have said: “You need an iron reserve.”
A PB4L does not include things like the guy who tells you: “I can show you how to make a million dollars! Just send me ONE dollar, and I will tell you how.” And, of course, the answer is: “Get a million fools to each send you a dollar to tell them how to…”
They have to be real businesses. One way to find inspiration I think would be to go get a copy (from your library) of the Encyclopedia Britannica and look for ideas from the 1930s. Say, for example, making high end paper for socialites and demanding persons who want acid-free paper to preserve their writings. Who knows what you might find there.
Let me share with you an example. A few years ago, Ryan North, a former student of mine and an IT professional, started Qwantz.com in the learn-by-doing part of Entrepreneurialist Culture, one of the courses I teach. Qwantz.com is an online dinosaur comic strip.
The only problem Ryan had was that he couldn’t draw. Like most entrepreneurs, he turned a weakness into a strength. His comic strip has six panels with three dino characters—all images are taken from free, publicly available clip art. The key is that the panels and characters NEVER change. They are the same, day-to-day.
What changes is the dialogue between the characters—T-Rex is a large, stumbling, know-nothing and chauvinistic loud mouth. The other two characters are: Dromiceiomimis (the tan coloured dino in the middle panel) and Utahraptor (the orange one), the latter two are loving, warm, smart and wise. From this somewhat inauspicious start, Ryan has become an internationally known writer who creates and self-publishes the only daily comic strip with images that never move or change. It is the subtlety of the dialogue that creates interest and a strangely compelling read that becomes more interesting the more you read it.
It doesn’t hurt that Ryan is brilliant and quirky. Here is T-Rex’s take on entrepreneurship:
Ryan’s daily routine is to get up and answer his fan mail for about an hour. Mixed in are requests for merchandise. That is one of Ryan’s revenue streams. He sells a ton of t-shirts and, wisely, he handles the money while outsourcing fulfillment.
After an hour or so, he turns his mind to the comic of the day. By noon, he’s done and ready for the rest of his day. He travels widely, does appearances at comic conventions where he signs copies of his books (such as Your Whole Family is Made of Meat) and had time to fool around developing an advertising engine (Project Wonderful) that was profitable within ten days of its launch. He makes a ton of money and has a wonderful life.
Ryan in a Tree
Ryan started Qwantz.com with less than $100. His marketing budget was around $20. He bought the domain name poo.ca and put up cardboard cutouts of T-Rex around the University with this domain name on it and nothing else. Students started checking out the mysterious site and got hooked on his comic.
(If you type in poo.ca it still resolves to the Qwantz.com URL. The comic has been continually published since Feb 1, 2003. Revenue streams include: merchandise, appearance fees, book sales, Project Wonderful ads.)
Now a PB4L is not just a fallback position. It can be a contributor to pulling people out of poverty in LDCs around the world. It was not government Five Year Plans that brought India and China out of poverty—it was the unleashing of the entrepreneur class in those countries that did it.
Professor Bruce M. Firestone, Entrepreneur-in-Residence, Telfer School of Management, University of Ottawa; Executive Director, Exploriem.org; Founder, Ottawa Senators; Real Estate Broker and Mortgage Broker Email: firstname.lastname@example.org Blog: http://www.eqjournalblog.com/ Twitter: http://twitter.com/ProfBruce
Postscript: If you would like to read more about the concept of PB4L, you can download a Word Doc on the subject from our server at: http://dramatispersonae.org/PB4LPersonalBusinessForLifeCEEDSpeechOct2009.doc. It is available as a Word Doc so you can quote from the article or use it in a responsible fashion as required. The only thing we would ask is that you quote the source.
Postscript 2: subsequent to writing this I added another example (http://www.eqjournalblog.com/?p=2012) to the PB4L folklore. I repeat it here as well:
I collect stories about Personal Businesses for Life (PB4L) for this blog and also for my students because they can learn a great deal from people who have already bootstrapped an enterprise, made it successful and kept ownership of it—away from Banks, VCs, Angel investors, angry creditors, partners, ex-spouses, what have you.
I have told my students that a good source of ideas for PB4Ls might be to visit their local Libraries and look at old copies of the Encyclopedia Britannica. I would recommend pre-World War II and even pre-World War I vintage encyclopedias—what they are looking for are ‘ancient’ crafts that they can reuse and recycle.
Former snowboarder, Aaron Draplin, created a $1 million per annum business based on an old recipe—authentically crafted, offset printed sets of Field Notes.
Field Notes Nostalgia
I am an inveterate note taker and the nostalgic look and feel of their website and product really appeal to me. See: http://fieldnotesbrand.com/. Their tagline, taken from one of their ancestors, is too precious for words: “I am not writing it down to remember it later, I’m writing it down to remember it now.”
There is a lot of truth in this—I don’t care what anyone says, there is something quite different between writing something down using pen and paper versus recording it on your tablet, say. Many authors over the years have told me that they produce a completely different style of writing if they eschew a computer (or for that matter a typewriter) and write a novel by hand. No one does that anymore and it shows.
When we designed the Palladium (now called Scotiabank Place), you NEVER saw the architects of record (Gino Rossetti and his son, Matt) without their Field Notes and Sketch Pads. I asked Matt why, with all the CAD software he has access to, he still used his sketch pad. He told me: “Here’s why: I can create much more complex, much more graceful architecture, much faster, with my sketch pad than with a computer. It is much too confining.”
I still haven’t found any better way to control a business, even large businesses, than through the daily making of lists of things to do. I insist that people around me do that. Folks I know who use their smartphones or PCs to control their calendars and to-do lists are much less accurate and productive, I am sure of it.
This is not to say that I don’t love the tools we have available to us today. I am on record as saying: “I’m like the Scarecrow in the Wizard of Oz: I have half a brain. My computer is the other half.” So this post is not an argument against technology, just its misuse.
To survive today, you need to be innovative as well as productive and I think Field Notes or just a simple pad of paper can still help you with all of that.
Now Draplin and his partner, designer Jim Coudal, sell these 3” x 5” books for $9.95 in sets of three. They have developed numerous sales channels including their website, attendance at agricultural fairs and 250 retailers who have to apply to be accepted into their network. This reverse snobbery works for them—these retailers have to prove that they buy-in to their philosophy which includes: authenticity, “Made in the USA”, use of local materials, a heightened sense of the importance and central mission of design and fashion, transparency, and nostalgia for community values of days gone by. Their clients go out of their way to suggest to them which retailers might qualify…
They bootstrapped the firm—no VC money. Their marketing is based on video documentaries they produced for an online community that focuses on the Founders’ experiences with the development of Field Notes as well as those of their suppliers, retailers and customers—they understand that they work within a business ecosystem that nourishes them and that they, in turn, embrace by involving them in the whole, evolving story of Field Notes. Customers can post examples of how they use Field Notes and learn from each other’s experiences with the notebooks.
Now let me tell you a story about Jeff Cavanagh from Thomas Cavanagh Construction.
A few years ago, I asked him: “Hey, Jeff, do you have a Blackberry?”
“No, Bruce, I got me a Strawberry instead.”
“What’s a Strawberry? I haven’t heard of a smart phone called the ‘Strawberry’.”
“Well, it’s this here little black, pocket-sized notebook of mine where I write down all the things I gotta do with this little pencil.”
“But don’t you miss not having email, your calendar and a bunch of apps on your cell phone?”
“Nope. Look at it this way. Let’s you and me suppose that Sir Alexander Graham Bell had invented email instead of the telephone, that his patent in 1876 was for email not voice communications. OKAY?”
“Let’s further assume that voice did not become possible until Tim Berners-Lee invented the Web in 1991. So we reverse the order of invention, OK?”
“Then imagine the conversation you and I might be having today. It might go something like this: ‘Did you see this new fangled thing that just came out—it’s called a tell-a-phone. You can get someone on the other end and you can actually hear what they are saying. You can pick up nuances in their voices, you can laugh together, you can plan together, you can negotiate and you can do it all in real time. It’s almost as good as being there.
‘No more waiting, sometimes days, for someone to answer your email. No more misunderstanding stuff just because you were trying to be funny or sarcastic and it fell flat in yer email.
‘Or suppose you need something done urgently, you can actually get some action by impressing upon someone the importance of what you are saying by raising or lowering your voice—people are good at picking up tonality on the tell-a-phone…’”
There is a lot of wisdom in this. The best way to do things might just be a bit old fashioned—like having F2F meetings, like writing things down, like making phone calls. Clearly, Draplin and Coudal have found something special that people want and, by combining it with modern marketing and distribution, they have created lasting value for themselves and their families.
It will be hard to knock off Field Notes, not because you can’t create a nice looking notebook too but because you can’t (easily) recreate their dedicated community of suppliers, retailers, customers who have also become friends/fans and followers and who have together formed a bond around the themes that the Founders have woven together into a compelling story.
Postscript: More recently, I have come to realize that another potential source for PB4Ls might be public companies (or, for that matter, any established enterprise) that are discarding under performing assets. A friend of mine (I’ll call him Tony) picked up a 180,000 sq. ft. building in Kanata, ON from a Boston-based firm that was retrenching. It came with six acres of vacant land.
Tony turned the building into a mini-office and mini-storage place and started generating cash within months. The vacant land alone is worth more than the price he got the mini-portfolio for.
The whole deal was accretive to Tony because: a) he got the firm that was essentially dumping these assets to give him a Seller Take Back mortgage for basically the whole of the purchase price and b) they left behind so much office furniture and equipment that he was able to sell it for more than his down payment. Tony has turned this opportunity into a PB4L.
There is another opportunity that I am aware of (as of Dec. 2010): Bombardier is basically dumping part of its real estate portfolio in Milford ON (near Kingston). There is a 160,000 sq. ft. building there that they used to use for (train) engine maintenance and it has a vast hall with 38 foot ceilings. I visited it in October. All it needs is someone with a soupçon of creativity to convert it into a PB4L.
Bombardier is selling it for around $15 per sq ft. It would cost at least $120 per sq. ft. to build today and, in fact, you might pay more in annual rent in a place like Ottawa than you can buy it for. Plus, who knows? Maybe Bombardier would take back some financing on it just to get it off its books.
The practical uses for it? Maybe storage (because of its high ceilings, you can stack a lot of stuff there.) Maybe a film studio. Maybe a recycling centre. Who know? Just add an entrepreneur and stir…
Another possible source for PB4Ls could be people who are about to retire or would like to retire. A good source of opportunities would be to get in touch with folks like Sunbelt Business Brokers. These guys get a ton of action; they pre-qualify firms before they go up for sale. My friend Greg Kells at SBB always seems to have his finger on a huge number of businesses for sale in just about any sector you can think of.
Sources: Financial Post, December 6, 2010 story by Deborah L. Cohen: “Social media gives old medium new life”.