Entrepreneur YOU!

Grandmother: Grand Matriarch and Depression Era Entrepreneur in Detroit

Posted in Uncategorized by Robert Lindsay Thompson on January 22, 2011

Selling pies out of a wagon

Not my grandmother, but it is representational

My Grandmother was abandoned by her husband during the depression with two daughters in Detroit, Michigan.

Other than collecting scraps of rubber and metal, she got by by selling pies out of the back of a wagon to factory workers. Eventually, she bought a piece of land and literally built (brick by brick) a restaurant that catered to the nearby automotive industry on 8 mile road. It was opened 24 hours a day, 7 days a week. It never closed. Eventually they even lost the key to the front door.

My Great grandmother baked, my grandmother ran things, my mother waitressed and I hung out; occasionally providing entertainment/nuisances by twisting to the tunes of Chubby Checker or asking too many questions of the adults. Although my grandmother only had an 8th grade education, she was an astute business women. She expanded the restaurant into a catering service. She handled all the big three auto makers; Ford, Chrysler & GM. Further, she invested her earnings in real estate, buying, fixing-up and renting out houses.

Although she ultimately sold her restaurant, she continued catering to a choice clientele well into her 80’s. She kept her mind sharp by working crossword puzzles. She was the grand matriarch our family and a profound example of entrepreneurship. First born out of a necessity to survive and provide for her loved ones, her determination, iron will, and resourcefulness forged a business that was able to thrive during hard times.

I grew up in Motown in the 50's

Again, not my grandmothers restaurant, but representational

Perhaps what it takes to be a successful entrepreneur is different in the information age, than it was during the industrial age. Maybe the capacity to innovate, adapt quickly, be tech savvy, stay “connected” are the most important things now. But I wonder.

I meet many people who seem to think that just because they have a “good idea” that that somehow automatically entitles them to entrepreneurial success! After I built a $25 million dollar motion picture studio and pioneered an entire region north of L.A. for the entertainment industry, I would meet (or hear about) many people who would boast, “I thought of that!” As if the credit for my venture, wrought by an incredible amount of hard work and risk, should somehow be accrued to them.

It’s a long, long way from idea… or even talent… to entrepreneurial success. Even in the information age, i would pick tenacity before talent, a hard worker over a narcissistic “genius”, a street smart veteran over an MBA educated neophyte any day. Although, maybe, some people are just plain lucky. Even so, I’ll go with Thomas Jefferson who said, “the harder I work, the luckier i get.”

Decision Matrix: A mathematical model to maximize profitability

Posted in Uncategorized by Robert Lindsay Thompson on January 5, 2011

Simple Mathematical Matrix for Evaluating Opportunity

I recently created a simple mathematical matrix for evaluating which money making opportunities would be the best to invest my time, talents and energy into in 2011.  I am a strong believer that intuition, passion and purpose should be the ultimate guiding forces.  However, there is a place for analytical tools as well.  I will assume you, the reader, has a basic working knowledge of Ms Excel.

For those who are interested, you can access and copy this spreadsheet at Google docs: Decision Matrix.  If you have any questions or problems, just let me know.

First of all, I listed 7 or 8 money making options under each of two general categories.  1. Current business  2. Prospective business(es).   Then beside each of the 16 options I listed my decision criteria:

  • a. Upside (high case) $$.
  • b. Downside (low case) $$.
  • c. Overall Odds ( likelihood of success; ie generating $$, expressed as a percentage).
  • d. Interest.  (personal passion index from 1-10)
  • e. Formula: derived from averaging upside and downside (a+b/2), times overall odds (*c), multiplied by my interest level (divided by the dollar range – number of zeros; thus d/10000 because of 5-6 figure potential was the $$ range of my prospects +1

Therefore the overall formula is expressed thus in Ms Excel: =(C4+D4/2)*E4*(F4/10000)+1. The formula creates a value expressed in 1.xx that will help you evaluate the best money making opportunities available to you from the options you list.  Further calculations can help you estimate the range of money you are likely to generate.

To do this, first I summed the list 16 prospects thusly: sum column “a” (upside), sum column “b” (downside) and average column “c” (odds).  Averaging the upside total (a) and the downside total (b) multiplied by the average odds will give you an idea of the range of money you will generate IF you were to pursue ALL your listed options.  However, this is unlikely.  However this creates a good baseline for comparison.

Then choose the best couple of options from your list (remember the 80/20 rule).  Of my 16, i chose 4.  Then run the same calculations on these choices: upside (a), downside (b) times average odds (c).  What I discovered is that – because the potential $$ and odds were higher on my 4 choices then the 16… the resultant total potential $$ was higher on the 4, then it was on the 16!  I would have a greater shot at making money investing my time, talents and energy in 4 things than I would at 16!

In addition, I came up with a reasonable estimate of the $$ i am likely to generate given the pursuit of my chosen options.  It also gave me a list of options I may want to invest myself in that may not bring the highest earning potential, but are things I can do “on the side” that i have a high interest in/passion for.  Keeping in mind that i can’t depend upon them as a main stay of my income.  Hope this helps.

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