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No Money & Late Start: Go for It!
By Shlomo Maital
The International New York Times’ Dealbook section today (June 3) tells about Ron Rudzin, who worked in the furniture business from the age of 16, becoming VP of national sales for a sofa company. When he left Jennifer Furniture, he decided to start his own business. His vision: Sell American-made high-quality coil-based mattresses online, for a fraction of the cost of the price retailers charged for store-based brands.
Saatva means “truth” in Sanskrit. It became profitable after its first three months, in 2010. Sales were $2 m. in 2011, and $76 million in 2015. In 2018 Rudzin projects sales of $275 million.
What do we learn? First, becoming an entrepreneur can be done as a second career, after a long first career. That way, you start a business with substantial domain knowledge and contacts, which very young entrepreneurs often lack.
Second – bootstrap. Rudzin took $350,000 of his own money, wrote a business plan in 2007 and began to form his online mattress company.
“People who raise money, rather than be self-funded, tend to spend wildly because it’s other people’s money and they throw a bunch of stuff on the wall and see what sticks. I don’t do it that way,” Rudzin said. “I might go a little slower but in the end I believe I win.” It took him from 2007 and a business plan to 2010 to launch. Slow and steady wins the race.
Bootstrap, and start late. It’s possible, because chances are, when you retire, you can scrape together a not-insignificant sum of savings. Start late, because when you do, you will know a lot more about the industry in which you want to be an entrepreneur. You can spend 20-30 years just identifying a need and an opportunity and validating it.
Rudzin’s company provides full service – experts install the mattress, a service that buyers love. He knew this was key, because of his industry experience. Not everyone would have that insight.
Boostrapping enables you to retain control of your destiny. When you use VC funding, after initial, A and B rounds, the founder often has his shares so diluted that the VC controls the Board – and can fire the founder and boot him out. This has happened a lot. It even happened to Steve Jobs.
People in the future are going to live a lot longer. So we seniors should consider entrepreneurship as a possibility for a 2nd or 3rd career. Gray-haired entrepreneurs can change the world, even if they use canes and hearing aids.
“Middle” Universities: You’re in Trouble
By Shlomo Maital
Brand name “Middle” Local Univ
Universities Universities
At a recent gathering of some of my former students, I heard an exceptionally interesting talk by one of them, now a senior executive at an on-line university.
His point: many universities are asleep. They face growing stiff competition from on-line courses, which are meeting students’ needs far better. The age of ‘industrial grade’ education, one size fits all, standard program, standard diploma, standard degree, is nearing its end.
Students want specific skills, and according to Forbes Magazine, 80 per cent of MBA programs THINK they provide those skills, but 80 per cent of MBA students believe that they do not. The skills including: critical thinking, ability to analyze complex situations, decision-making and active listening.
In future, we will need more knowledge workers, higher productivity, but governments are spending less and less on education (in the U.S. student loans impose usurious interest, up to 11 per cent, and unlike mortgages, they cannot be escaped). More and more, employers want proof of key workforce skills, not empty credentials like diplomas or degrees that are evidence only of the ability to pay high tuition and pass exams.
So, watch for on-line courses offering specific skills (e.g. on Coursera, a highly popular course teaches how to create applications for Android devices). Look for older workers to take those courses, as part of lifelong learning and skill rejuvenation. And warns the speaker, watch out if you’re a university “in the middle”, i.e. not a brand name, like Yale or Stanford or MIT, and not a purely local university, conveniently nearby its students. In the middle, universities like Arizona State U., may be in trouble – offering neither the advantage of brand name nor close-by geography.
In future all higher education will be a complex blend of conventional classroom courses and on-line courses. The universities that prepare best and fastest for this development will come out ahead. But most of them seem to be asleep.
TIMnovate 