Entrepreneurship

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My wife and I both have many close family members in South Carolina, so the recent flood has been on our minds recently.

My first thoughts are with all of those affected by the flood.  

Relevant to this blog, the flood also reminds me of one of the opening passages in Conscious Capitalism by Whole Food’s co-CEO John Mackey. In that passage, Mackey recalls the massive flood in Austin, TX in 1981. At that time, Whole Foods only had one store, and the flood filled that store with eight feet of water. Whole Foods had loses of $400,000 and no savings and no insurance.

Mackey notes that “there was no way for [Whole Foods] to recover with [its] own resources” and then:

  • “[a] wonderfully unexpected thing happened: dozens of our customers and neighbors started showing up at the store….Over the next few weeks, dozens and dozens of our customers kept coming in to help us clean up and fix the store…It wasn’t just our customers who helped us. There was an avalanche of support from our other stakeholders as well [such as suppliers extending credit and deferring payment]. . . . It is humbling to think about what would

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I recently learned, via e-mail, that Albany Law School has a number of open positions that may interest our readers. The positions, and links to the postings, are provided below:

As I earlier noted, I participated in a continuing legal education program at The University of Tennessee College of Law last Friday on the basics of crowdfunding.  My partners in crime for the last hour of the event were two folks from Chattanooga, Tennessee (yes, home of the famous choo choo) who have been involved in crowdfunding efforts for local businesses.  One used crowdfunding to finance a change in the location of a business; the other used crowdfunding to gauge interest in his business concept and raise seed capital.  They described their businesses and financing efforts in the second segment of the program (after a foundational hour on crowdfunding from me). 

The business location change was for The Camp House, a coffeehouse owned and operated as part of The Mission Chattanooga, a local church.  Private events, including music performances, also take place at the venue.  The Camp House raised over $32,000 through a crowdfunding campaign on Causeway.  Matt Busby, Director of The Camp House, educated us on donation crowdfunding through a non-profit platform.

The new business concept and capital raise was for Treetop Hideaways (a/k/a, The Treehouse Project), a business that designed, built, and rents time…

For many businesses a good online reputation can significantly increase revenue.

Kashmir Hill, who I know from my time in NYC, has done some interesting reporting on businesses buying a good online reputation.

Earlier this week Kashmir posted the results of her undercover investigation into the problem of fake reviews, followers, and friends. When asking questions as a journalist, those selling online reviews insisted they only did real reviews on products they actually tested.

Kashmir then created a make-believe mobile karaoke business, Freakin’ Awesome Karaoke Express (a/k/a F.A.K.E), and found how easy it was to artificially inflate one’s online reputation. She writes:

For $5, I could get 200 Facebook fans, or 6,000 Twitter followers, or I could get @SMExpertsBiz to tweet about the truck to the account’s 26,000 Twitter fans. A Lincoln could get me a Facebook review, a Google review, an Amazon review, or, less easily, a Yelp review.

All of this for a fake business that the reviewers had, obviously, never frequented. Some of the purchased fake reviews were surprisingly specific. In a time when many of us rely on online reviews, at least in part, this was a sobering story. It was somewhat encouraging, however…

Transactions: The Tennessee Journal of Business Law is sponsoring a continuing legal education program on the afternoon of Friday, September 18 entitled “Crowdfunding: The Basics.”  If you will be in or near Knoxville at the end of next week (maybe because you’re arriving early for a certain football game on Saturday night versus Western Carolina . . . ), come on over and check it out.  I am presenting for the introductory session.  The second session will feature entrepreneurs from two local (Chattanooga-based) crowdfunded social enterprises, and the third session will be a discussion among the three of us about successful and unsuccessful crowdfunding efforts.  

I am excited to be able to participate in this program with local entrepreneurs and have the opportunity to talk to them about the future of crowdfunding.  I will post important out-takes from the program in the future. I assume there will be a number of them . . . .

Babson College has posted their Global Entrepreneurship Monitor (“GEM”) Reports for 2014 (one global, one for the U.S.), available here.

The reports are valuable resources and should be read in full, but below are a few, selected quotes from the executive summary of the US GEM Report.

  • “The United States consistently exhibits among the highest entrepreneurship rates in the developed world. At 14% of the U.S. working age population, entrepreneurship levels edged upward in 2014 to reach the highest level in the 16 years GEM has assessed this activity. This represents approximately 24 million Americans starting or running new businesses. An additional 14 million people were estimated to be running established businesses.”
  • “36% of U.S. entrepreneurs operate in the business service sector, which is generally associated with knowledge and service-based businesses.”
  • “15% of entrepreneurs state that 25% or more of their customers come from outside the United States. This shows an increase over 11% reported in 2013, but it is still lower than 21% reported, on average, in the other innovation-driven economies.”
  • “29% of Americans personally know an entrepreneur; this measure has generally followed a downward path since 2001, when 43% indicated this affiliation.”
  • “Women’s entrepreneurship in the United

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We here in Tennessee took a strong interest in the decision in Obergefell v. Hodges, since one of the cases being decided was from Tennessee (Tanco v. Haslam). We at The University of Tennessee were especially interested. The plaintiffs in the Tanco case are University of Tennessee faculty members at the College of Veterinary Medicine, located on our adjacent sister campus (for The University of Tennessee Institute of Agriculture) here in Knoxville. As East Tennessee awaited the Supreme Court’s decision–and in the aftermath of the opinion’s release, the press sought for and found many angles on the case.

Of interest to me, as a business lawyer, was the interaction of the case with local business–existing and potential. As with most things, there were (and are) two sides to this coin. Locally, and nationally, both have gotten some play. For opportunistic business lawyers, both sides present advisory possibilities.

Some press time was spent on what I call the “Sweet Cakes” issue (covered by blogs as well as the traditional press, with my favorite law coverage coming from Eugene Volokh over at The Volokh Conspiracy, including this post). Sweet Cakes is, of course, the now-famous family-owned-and-run Oregon wedding…

Last week I attended a panel discussion with angel investors and venture capitalists hosted by Refresh Miami. Almost two hundred entrepreneurs and tech professionals attended the summer startup series to learn the inside scoop on fundraising from panelists Ed Boland, Principal Scout Ventures; Stony Baptiste, Co-Founder & Principal, Urban.Us, Venture Fund; Brad Liff, Founder & CEO, Fitting Room Social, Private Equity Expert; and (the smartest person under 30 I have ever met) Herwig Konings, Co-Founder & CEO of Accredify, Crowd Funding Expert. Because I was typing so fast on my iPhone, I didn’t have time to attribute my notes to the speakers. Therefore, in no particular order, here are the nuggets I managed to glean from the panel.

1) In the seed stage, it’s more than an idea but less than a business. If it’s before true market validation you are in the seed round. At the early stage, there has been some form of validation, but the business is not yet sustainable. Everything else beyond that is the growth stage.

2) The friend and family round is typically the first $50-75,000. Angels come in the early stage and typically invest up to $500,000.

3)…

As a semi-closeted (now “out,” I guess) foodie* and as a lover of “things Brazilian” (including Havaianas flip-flops and Veja sneakers, as well as churrascarias and caipirinhas), I read with interest a recent electronic newsletter headline about a thriving Brazilian chef.  I clicked through to the article.  I loved it even more than I had thought I would.

The article tells the story of an emergent Brazilian chef and restauranteur, Rodrigo Oliveira, and his flagship establishment (Mocotó), as promised.  That was great.  But that was not all.  The piece also told the story of a business run using a “holistic business model.”

Today, Oliveira focuses on his employees as much as his customers. . . .  Oliveira pays for his employees’ part-time education. And their kids’ health care. And daily jiujitsu and yoga classes in the room he built upstairs. It’s a rarely encountered, holistic business model that contributes to his restaurant’s roaring success. . . .

 . . . 

Beneath the street level they’re boring out new dormitories for employees, for a quick nap and shower between jiujitsu, work and class. . . .

He also seems to be attentive to the greater local community beyond his customers…

Ladyvolslogo

As some readers may recall, I posted twice back in November about The University of Tennessee, Knoxville’s decision to drop the Lady Vols moniker and mark from all women’s sports teams at UTK other than women’s basketball.  The first post primarily wondered about university counsel’s consideration of trademark abandonment in the rebranding effort.  The second post unpacked some additional issues raised by the first post and addressed some readers’ and friends’ concerns about my stance opposing the rebranding.

Interestingly, adverse reactions to the branding change, which is effective on July 1 (the beginning of the new academic year at UTK), have not died down since those original posts.  Letters from concerned citizens have been published in the local paper, and the paper even published a recent news article documenting some of the back-and-forth between Lady Vol fans and the campus administration. [Ed. Note: this article may be protected by a firewall.]  I have followed all of this with some interest.  

Honestly, part of me just cannot wait for the university to drop the mark altogether so that I can start using it to mass merchandise retro Lady Vols t-shirts, hats, and other merch.  Entrepreneurial pipe dream?  Maybe.  But…