Muhammad Yunus

Muhammad Yunus is the Founder of Grameen Bank. Years ago when I was looking for successful banks Grameen topped the list. Yunus was a traditional economist in Bangladesh who while training young students got the spark for a greater idea. The third of fourteen children, he grew up in Bengal with a passion for education. He believed this would prevent him from a life of poverty that suffocates that part of the world. He came running back to his roots with a plan of micro financing. He became a man of resource and refreshment in sustaining small business owners. Formed in 1983, Grameen Bank has one of the greatest success rates in loan repayment in the world. There are now close to 20,00 staff members, and branches around the globe. Yunus is inspiring because he has an intense but simple methodology. He selects businesses and individuals that have a passion, and a drive, and only need the money. He loans to people who can lead a village, a community into enterprising focus. He has defined microcredit, and made a solid branding from the beginning. He did not create a company steeped in preventing poverty and then shy away from substance once it worked. He has maintained a working system that keeps spreading. He has since resigned as Managing Director of the bank, yet he is still the beacon of hope in those communities that think of their next meal every day. He reminds the western world what the marketplace can really look like. Defining success for people who never dreamed of it, and holding onto integrity for people who may have forgotten. 

Courtesy of Elizabeth Moody

Steve Blank and Carl Schramm

Steve Blank, hailing from New York City, moved from being an entrepreneur to teaching entrepreneurship to both undergraduate and graduate students at U.C. Berkeley, Stanford University, Columbia University and the Joint Berkeley/Columbia Executive MBA program. After 21 years in 8 high technology companies, he retired in 1999. Steve Blank co-founded his last company, E.piphany, in his living room in 1996. His other startups include two semiconductor companies, Zilog and MIPS Computers, a workstation company Convergent Technologies, a consulting stint for a graphics hardware/software spinout Pixar, a supercomputer firm, Ardent, a computer peripheral supplier, SuperMac, a military intelligence systems supplier, ESL and a video game company, Rocket Science Games. [cited from: http://steveblank.com/about/]

In 2009, he was awarded the Stanford University Undergraduate Teaching Award in the department of Management Science and Engineering. The same year, the San Jose Mercury News listed him as one of the 10 Influencers in Silicon Valley. In 2010, he was awarded the Earl F. Cheit Outstanding Teaching Award at U.C. Berkeley Haas School of Business. In 2012 the Harvard Business Review listed him as one of the “Masters of Innovation.” [cited from: http://steveblank.com/about/]

Steve's view on "the business plan" is quite interesting. In his blog post "No One Wins In Business Plan Competitions" he touches on the controversial subject, stating that A business plan is the execution document that large companies write when planning product-line extensions where customer, market and product features are known. The plan describes the execution strategy for addressing these “knowns.” A startup is not executing a series of knowns. Steve Blank does admit that business plans are still quite useful. According to Steve, "The writing exercise forces you to think through all parts of your business. Putting together the financial model forces you to think about how to build a profitable business."

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Carl Schramm, a PhD economist and past President and CEO of the Ewing Marion Kauffman Foundation, is in great demand, sits on boards and manages his personal angel investments. He shared interesting views on entrepreneurship and the business plan. He points out characteristics of an entrepreneur:

• They are an outsider, they ask the hard questions, and press leaders on the “why” around status quo.
• They think in terms of disruption, and are often thought to be disruptive by the change-averse.
• They see things differently, considering untraditional forces that others didn’t see.
• They are often competent in a completely different field than the field they are working in.
• They are very widely read, and know lots of facts and information that makes thinking richer.
• They have worked in multiple places in the world.
• They have worked in a startup.
• They have worked in a job they didn’t like.
• They have worked in multiple industries.

In his view toward the business plan, he feels that it rarely makes sense to write a business plan, nor does it make any real sense to manage from it. Carl’s point is it is never the case that the formal path mapped out in a business plan is the real path that a business takes to success. As soon as the plan is done, it is out of date. So, why write business plans at all? Stick to the minimal – what is the product, who’s going to buy it, why need it, and how you are going to build and deliver it based on what you know. It only needs to be one page.

Instead of spending time writing a business plan, get on with making the business. Carl shared that in all the investments in start-ups he’s made, he has not read a single business plan. For Carl, to invest in a new business, his measure is the person, not the business plan.

courtesy of Jackie Lynch

Successful Trading with an Algo Part 3

The point where an algo becomes interesting is when you see you have got something. The pics below shows the stats to a simple basic ES algo I have been using for a long time. It can be the finished algo or just a starting point for more improvements.


All the FloBot students get it and can then use it as is or adapt it to their needs. All it does is identify the trend and trades the pullbacks.

These results are for the period from the end of February until Friday this year. The algo covers 7am until 9pm London time = 2am until 4pm New York time. It is set on a profit of 1 ES point or $50. All entries are LIMIT entries and the backtesting requires that price pass through the limit by at least one tick. Slippage is not a real factor due to the fact it is the ES and the majority of stops would be elected without that problem.


This algo is good to go as it is for me.
$15,000 profit for 1 contract after commissions
Drawdown of less than $2,000
88.87% Win Rate
Over 1,000 trades sample size


But OK, you want to make more money than these stats or to increase the average trade amount or other stat.


What can you do?


Firstly, look at the times of day that there are losing trades. Is there a pattern?


Next, look at the losing trades. Is there a filter that is DYNAMIC (adjusts itself with market changes) that filters out losers?


Then, look how you can increase the 1 ES point $50 target using DYNAMIC exits.


The requirement, after you've done all the work and due diligence, is to leave the algo alone and let it do it's thing.

INDIEpendence Day Blog Fest Starts Today

It's time! The INDIEpendence Day Blog Fest celebration extravaganza has officially begun! This is your chance to meet some great new Indie authors (remember - you won't see any Indelibles on these lists since this a pay-it-forward event!) and maybe even win some prizes.  What could be better than that?

But before you go off hopping to the over-70 participating blogs, take a moment to read this super-fun riff on the famed Independence Day speech created by David Adams (with some minor tweaking to make it better fit our purposes).  :)

"Good morning. Good morning. In less than an hour, bloggers from here will join others from around the world, and you will be launching the largest blog postings in the history of publishing. Publishing: that word should have new meaning for all of us today. We can't be consumed by our petty differences any more. We will be united in our common interest. Perhaps it's fate that today is the 4th of July, and you will once again be writing for our freedom. Not from 1-stars, rip-off books, or piracy, but from obscurity. We're fighting for our right to write, to exist, and should we win the day, the 4th of July will no longer be known as an American holiday, but as the day when Indie authors declared in one voice, 'We will not go quietly into the night! We will not vanish without a fight! We're going to write on, we're going to survive.' Today we celebrate our INDIEpendence day!"

Now, go forth and meet some Indies! And, to our American friends, have a safe & happy 4th of July as we celebrate America and her heroes.

 

Writing Your Coffee Shop Business Plan is Worth Beans!

If you fail to plan, you plan to fail. Simple, short and to the point.

People ask quite often of the importance of a business plan when starting a coffee shop. My response is always a statistic: Most businesses fail within the first year due to lack of planning but coffee shops have a higher failure rate due to their nature. If you don't have anything to plan your course by, how can you move forward? Any business vision is blurry without a written plan.

Your plan takes time to write now, but it's designed to help you avoid costly mistakes later. The true value of creating a business plan for your endeavor is not the finished product, but in the process of writing it.

Experience has taught me that while planning to open a coffee shop, templates and generic plans will not help you much except for the typical form the plan should follow so be very careful. You need to make yours unique, and as coffee shop friendly and specific as possible.

When I wrote my original business plan I read and studied quite a few versions of them on the internet, and picked out sections I liked best. I rewrote it until I was satisfied and then gave it to my banker. He said it was the best business plan he had ever seen. So I put the plan to use and opened my coffee shop, and made lots of mistakes!

My banker loved it but he was not a small business person, nor anyone that was familiar with coffee shop operations. Had I wrote the plan realistically and pertaining specifically to a coffee shop I'd have avoided a bad location, incorrect demographics, lack of capital, and a lot of other mistakes.

You have to be realistic with your prospective numbers and in many ways you have to get creative, especially with marketing. The specialty coffee business is unlike a lot of other food service businesses because of its nature. Writing your coffee shop business plan will force you to think about your business in a way that you will always have to think about it: it's unique.

And just because you open your shop and may be open for a year doesn't mean you can put the plan away. You should always be tweaking it. Trust me you will always be a business person and thinking about what you can do different and new. Things change, markets change and trends change so your business has to change as well to adapt. Otherwise, you will be closed before you know it.

It bears repeating: If you fail to plan, you plan to fail. It's as simple as that! Be sure you have a specific business plan when starting a coffee shop. Your plan won't be worth beans otherwise!

NEW AGE LPTA: IS BUYING IN ILLEGAL?

Yes, it's the new age of lowest price, technically acceptable (LPTA) government contracting.  Specifications may be written to the lowest common denominator so that marginally qualified contractors can join in the bidding war.  This is like the advertised, sealed bidding of old (except then the qualification barriers were higher).  It's also akin to reverse auctions except there is only one shot at being low and contractors are not looking at each other's prices.

So, the complaints of underbidding costs are already coming in.  Is buying in illegal?  That question was answered 40 years ago, but we may need to be reminded of the answer.

FAR 3.501 defines "buying in" as submitting an offer below anticipated costs, expecting to increase the price after award through changes or to receive follow on contracts designed to recover losses incurred on the buy-in contract.  Sound familiar?

Buying in, although it may decrease competition or result in poor contract performance, is not illegal.  But the onus is on the contracting officer to make sure buying-in losses are not recovered through the pricing of change orders or follow on contracts.

The regulation says the contracting officer "must" take appropriate action and "should minimize the opportunity" for buying in.  The only   way this effectively can be done is through proper contract administration practices designed to review carefully all alleged changes.

Note that the buying in regulation is located in the FAR subpart dealing with improper business practices.  In our opinion, buying in raises substantial questions about the integrity of the contractor, and hence its responsibility.  So, although the practice of buying in is not itself illegal, the contracting officer is not without effective ways to discourage the practice.

bill@spriggslawgroup.com        http://www.spriggslawgroup.com/
                                                  http://spriggsconsultingservices.com/

WRITING THE REA: THEORIES OF RECOVERY

What needs to be included in the request for equitable adjustment (REA) is one thing (see our previous blog posting).  Understanding the theories of recovery is quite another.  We are talking here about "constructive" changes, that is acts or omissions of the government which are breaches of the contract, but which are called constructive changes where a unilateral changes clause is included in the contract (that's in all government contracts except commercial item contracts -- and it will be read into the contract by operation of law if its not included).

Constructive changes are not formal changes.  If you receive a formal change or are entitled to an equitable adjustment under another clause such as the stop work order clause, you do not need to concern yourself with these theories of recovery.

The four main categories of constructive changes are:  1) contract interpretation; 2) breach of warranty of the specifications; 3) breach of the duties of noninterference, cooperation, communication and disclosure of vital information (known as superior knowledge); and acceleration.

Most disputes arise over differing contract language interpretations.  We've written in other blog postings about the rules of contract interpretation (our most popular blogs so far).  The contractor may submit its REA if it believes its interpretation is the only reasonable one or even if the language is not obviously ambiguous (if it was obvious, the contractor has assumed the risk).

The government warrants that its specifications will be free from errors, conflicts, omissions and that they will not be commercially or practicably impossible to perform.  If the contractor encounters a problem with the specifications which was not obvious at time of bidding, it may seek relief.  Impossibility is almost impossible to prove.  More on that later.

The REA also can be based on the government's interference with and failure to cooperate and communicate with the contractor and its failure to disclose information vital to performance (also known popularly as "superior knowledge"). There is an implied obligation in every contract, read into the contract by operation of law, that the government will do "whatever is reasonably necessary on its part to enable the contract to perform."

An acceleration occurs if the contractor 1) encounters an excusable cause of delay or nonperformance, 2) provides timely and complete notice to the government of the excusable cause of delay and 3) the government either actually or constructively orders the contractor to meet the original schedule notwithstanding the excusable cause of delay.  An excusable cause of delay is anything covered by the default termination clause including acts or omissions of the government in its contractual capacity (other constructive changes).

Although the facts about what the contract required and how those requirements were changed come first, placing those facts in the proper context of a theory of recovery comes second.

Postscript:  In the new age of LPTA, we expect to see contractors trying to use the changes clause to increase the low prices they have to bid to get the job.

bill@spriggslawgroup.com      http://www.spriggslawgroup.com/
                                               http://spriggsconsultingservices.com/