The History of Creating Value

The History of Creating Value, from Jeff Watson

April 29, 2013 | Leave a Comment


I really enjoyed this article “The History of Creating Value“. It has a great timeline showing how people made money through the ages. Stefan Jovanovich writes:

Warrior — “We can plunder grower’s food for the King”. Actually, not. Food is grown and taxed under the King’s authority so that the King can afford a standing army that picks fights with other standing armies.

Craftsman — “If we make things and found cities, warriors won’t get us.” Kings need palaces and priests need temples and they are sure as hell not going to be stuck out in the boonies.

Skipping forward…

Oil Driller — “since industrialists need to feed cars, oil” . Oil was used first for illumination, then for furnaces (both for direct heat and for steam), and only then for gasoline, which begins its history because the Russian oil production has created a kerosene glut.

Corporate Executive — “cars made large factories into corporations” – So this is why the East India Company and the Pennsylvania Railroad are really outliers.

Ms. Vital is the new winner of the Historicity Prize and is entitled to a full case of scuppernog.

Gibbons Burke writes:

The underlying thrust of this timeline is to argue that being a startup founder is the route to wealth and value creation today. Which is a great idea, and in line with Distributist economic organization, which holds that the main problem with capitalism is not when you have too many capitalists, but too few. The more owners there are in the society, the better.

But while the idea is a good one, the reality is that the road to wealth proposed by these startup evangelists is not to found and create a company which will provide a way to generate value for the owner over his lifetime, but to come up with a novel idea, develop it to the point where it has a proprietary advantage, and sell it to some corporate behemoth who has decided it it easier and much less risky to outsource its research and development to masses of proles living the startup dream. When one emerges with a good idea, simply snap it up and bring it into the corporate umbrella, and either monetize it and develop it further, or kill it because of the disruptive threat it poses to the existing herd of corporate cash cows.

The History of Creating Value

Anna Vital  /  April 24, 2013

At this point in history, startup entrepreneurship has become the fastest way to create value, and thus the fastest way to move upward in life. But this opportunity is unlike other opportunities humans had in history. Here is how you could create value before:
The Hunter Age. After hunter-gatherers became growers and herders, some people realized that it is faster and easier to go take other people’s crops and cattle than grow your own. War became popular. And wealth got a bad reputation. Read more of this post

Sun Yat-sen portrait up on Tiananmen Square for May Day

Sun Yat-sen portrait up on Tiananmen Square for May Day

2013-05-01 03:42:19 GMT2013-05-01 11:42:19(Beijing Time)

A portrait of Dr. Sun Yat Sen, a revered revolutionary leader who played a pivotal role in overthrowing imperial rule in China, is now up on Tiananmen Square for the May Day holiday.


Warren Buffett’s Analogy About About Boobs And Porn Shop Operators Is Just Brilliant

Warren Buffett’s Analogy About About Boobs And Porn Shop Operators Is Just Brilliant

Sam Ro | Apr. 30, 2013, 10:02 PM | 6,067 |

This week is the annual shareholder meeting for Berkshire Hathaway, the gigantic conglomerate run by billionaire Warren Buffett.

Buffett has a way of explaining complicated finance topics so that they’re fun and understandable.

Carleton English of Belus Capital Advisors points us to this gem of a quote from 2008 where he takes a jab at private equity.

Someone had asked the Oracle of Omaha why people sell their companies to him instead of private equity firms.  This is the type of question that you might hear later this week.  Here’s Buffett’s response: “You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever. Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.”

According to Bloomberg, Buffett delivered this doozy during some Q&A with a 300 executives in Toronto. He’s basically explaining that there is more than one way for a company to get to a certain market value. Private equity often involves a lot of debt, a lot of cuts, and usually a lot of risk before a company is turned around and sold back on the market. Berkshire and Buffett, on the other hand, often take a more passive approach.  Typically, Buffett seeks out what he considers to be undervalued, yet well run companies.  And then he just waits for them to get to their intrinsic values. Anyways, we hope this weekend’s events in Omaha yield some more great quotes.

Warren Buffett Says Sell to Me, Not `Porn Shop,’ as Growth Dips

By Richard Teitelbaum – Jun 25, 2008

June 25 (Bloomberg) — Warren Buffett is in Toronto, fielding questions from a crowd of 300 executives. One asks what makes people want to sell their companies to him.

The Berkshire Hathaway Inc. chief executive officer replies that he tells a prospective seller to think of the company as a work of art.

“You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever,” he says at the February meeting. “Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.” Read more of this post

The Ozery brothers, who have expanded Pita Break into their market into the U.S. and come up with new product lines, say innovation is in the company’s DNA

Ozery’s Pita Break makes healthy eating its bread and butter

Denise Deveau | 13/04/30 | Last Updated: 13/04/30 2:53 PM ET


Alon Ozery’s success story started out in a small neighbourhood sandwich shop in Toronto. Within 15 years, he grew his fledgling bakery operation into the renowned Ozery’s Pita Break brand. After numerous expansions, he and his brother Guy continue to introduce new flatbread and snack products to a market hungry for healthy baked goods. In 2010, the brothers decided it was time to take the biggest leap of faith since the business started. Not only did they invest in doubling production capacity, they made their first serious efforts to expand into the U.S. market in earnest. Mr. Ozery says throughout the growth and upheaval, the key to success was staying true to the brand’s quality standards.

Read more of this post

Don’t fear the fire: Why entrepreneurs need all the criticism they can get

Don’t fear the fire: Why entrepreneurs need all the criticism they can get

Rick Spence | 13/04/29 8:54 AM ET
Last week, I took part in a business event in Peterborough, Ont., called Bears’ Lair. As you might guess, it’s a Dragons’ Den type format where entrepreneurs compete to win prizes for making the most compelling pitch for their business.

Sponsored by the local Workforce Development Board and organized by three dynamic women entrepreneurs, Bears’ Lair was done right. The competition started in January with 25 entrepreneurs entering on Facebook, and ended in April with four finalists facing off in front of a panel of four judges and 150 boisterous fans. The winner received $5,000 in cash and $20,000 in products and services from various sponsors, which included office equipment, advertising credits, Web development, Internet marketing coaching, accounting services and even fashion consultation. That the runners-up also won a number of free services showed the generosity of Peterborough’s business community.

But this event got me thinking: Why bears? Why dragons? Why do we associate entrepreneur pitch-offs with such violent concepts? “If you don’t win, you’ll be eaten by bears. Or consumed in dragon fire.” This doesn’t happen to aspiring singers (they become “Idols”) or apprentices (after being fired by Donald, they go home in a limo).

Still, I think there’s good reason for adopting this carnivorous imagery. Entrepreneurs deserve it. Read more of this post

How to Influence People with Your Ideas

How to Influence People with Your Ideas

by John Butman  |  11:00 AM April 30, 2013

One of my young clients, let’s call her Julie, is on a mission. Julie has an idea, one that has been gestating in her mind for quite some time, but now she realizes that for her idea to have any impact at all she will have to “go public” with it. Julie believes there are countless intelligent, talented but disadvantaged kids who, for a variety of reasons, have been shut out of traditional educational pathways and are therefore at risk of never achieving their full potential. Her idea, which she is passionate about, is to help these forgotten kids realize their potential by offering them practical guidance for achieving their goals and dreams. She has done some public speaking on the topic to educational groups and associations, and her ideas have been featured in various content venues, but now she wants to crank it up a level. She wants to start a movement.

She asked me: What do I have to do to get my idea out there? Should I blog and tweet? Write a book? Conduct a survey? Try for TEDx? Lead a seminar? In what combination? In what order? In essence, Julie wants to become what I call an “idea entrepreneur” — a person who builds a coordinated effort around a deeply-felt idea with the goal of achieving influence, affecting how people think and behave, and thus making some change in an organization or system. Aspiring idea entrepreneurs are everywhere: in businesses, classrooms, and communities of all kinds, all over the world. Maybe you know one. Maybe you are one. But you don’t have a massive influence-creation machine behind you (few people do) and you wonder how to get your idea heard above all the others competing for attention. How do you proceed?

You have to take your idea public, which means entering the “ideaplex” — that glamorous, treacherous place where videos go viral, TED stardom beckons, a thousand new authors publish each day, and think shops like IDEO make a business of idea generation. Julie’s inclinations were right. She would certainly need to do plenty of blogging, tweeting, surveying, speaking — the works. But none of these would be totally effective without answering the following questions, too:

1. What is my purpose? People are driven to go public for all kinds of reasons, from the thirst for fame and fortune to the dream of leading a crusade. Those who gain genuine, long-lasting influence are the ones who want to create positive change for other people. So ask yourself: Why am I doing this? Idea entrepreneur Cesar Millan (he has built quite an empire around his ideas including books, tv shows, DVDs and merchandise) is a dog behavioralist (“the dog whisperer”), but his deeper motive is to reduce maltreatment of animals — and kids — in our society.  Read more of this post

Tensions in Korea could freeze electronics manufacturing: IHS; South Korea owns half of all DRAM, two-thirds of NAND flash and 70 per cent of tablet display production

Tensions in Korea could freeze electronics manufacturing: IHS

South Korea owns half of all DRAM, two-thirds of NAND flash and 70 per cent of tablet display production.

Adam Bender (Computerworld), 01 May, 2013 10:43

If war comes to the Korean peninsula, there will be “chaos” for the global electronics supply chain, according to an IHS analyst. “Any type of manufacturing disruption of six months would prevent the shipment of hundreds of millions of mobile phones and tens of millions of PCs and media tablets,” warned IHS analyst Mike Howard. IHS views that “such a major conflagration and disruption” is “unlikely,” but said the industry should be prepared for the worst, given escalating tensions in the region.

“South Korea now plays a more important role than ever in the global electronics business,” said Howard. Read more of this post

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