November 24, 2008

Fortune of Reversals

Rick GibsonFirst, talk about the Economy….Let’s call it a ‘fortune of reversals’

First it was housing, banking, and insurance. Now, retail and automotive. Not a good time to have big stores, big shelves and lots of goods from manufacturers who want to get paid. With the credit crunch, big ticket item sales are near impossible, everyone clobbered but the category leaders… i.e. Circuit City and Linens ‘n Things have been slammed. If smart, Walmart, Target and Costco will find ways to get by. Next, it’s clogging auto dealers who sit with big inventories. No one’s buying a car that doesn’t need one right away. I hear 2009 autos are sitting in the ports waiting for 2008 autos on the lots to clear out. Not going to happen this year. And it’s no solution to throw money at them, the big-3 need to change big-time. They need some kind of structured re-organization. If we as citizens must invest in them to keep the entire Midwest economy from crashing, the big-3 must find a way to make better cars, have fewer dealers, and dump their legacy obligations. Sorry, I think big unions (more mouths to feed), big stores and big inventories should be jettisoned. And I say, down with expensive marketing plans, good products should sell themselves!

My travels

This week, I hit Flagstaff (think Grand Canyon) and Tempe (mainstreet for ASU). First, we dedicated the new Northern Arizona Center for Emerging Technologies and AZ Governor Janet Napolitano cut the ribbon of this new 10,000 square foot incubator, which by the way, is already filled with ten awesome technology companies (more about these companies next time). Later that day, the new Northern Arizona Angels group met at the ultra beautiful Pine Canyon Golf Club. Investor presentations were made by Protein Genomics (they make skin), Norchem Drug Testing (like they say, drug testing), Density Investments (new age green building), Ambature and Visible Energy (making sense of energy).

Spressions

“Be careful what you wish for”… remember when we longed to get rid of our biggest problems: high gas prices and the Iraq war? Don’t you wish we were back there now?

Accordion to me…This week’s advice to entrepreneurs

Looking to fund your company? Wherever you are, there are probably angel investor groups in your region. While November and December may be shot, if you have a killer company, you should apply to the angel group(s) in your area and then, others nearby too. [ look at their directory at http://www.angelcapitalassociation.org/ ] Get some professional advice, know your domain, make sure your company can exploit its unfair competitive advantage, and know your true valuation boundaries. Concentrate on proving the details on how your sales will be brought in. Very few companies know enough how they will get their sales. And…don’t talk about fast exits or IPO’s. Of course you are open to the right liquidity event, but right now, no one knows when, how and where. Ah, but you must be ready and wise. Got an idea or something you need help on? rick@hotventures.com




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