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Archive for October 9th, 2008

Adding Features to Products Can Create Blockbuster Opportunities

Thursday, October 9th, 2008

by: Geoff Ficke

I have written in the past about the huge commercial opportunities afforded divergent products and inventions, as opposed to convergent features added to existing products. Divergent products are truly groundbreaking, destructive, disruptive breakthroughs. However, very few truly innovative divergent technologies are invented and make it successfully into the marketplace.

The original light bulb, the phonograph, the radio and the steam engine are examples of innovations that set the standards in their respective product categories and are still in use today. The inventors of these needed items enjoyed great riches and fame. We know the names of Edison, Fulton, Sarnoff, Marconi and many others because of the total market penetration that their inventions achieved.

Convergent products build on the already formed base of existing technologies. Adding a clock to a radio is a useful improvement. This type of embellishment can be extremely valuable. Typically, however, the convergent inventor is not rewarded, or as greatly revered as the initial inventor of the divergent platform product. Nevertheless, there are exponentially more opportunities for entrepreneurs and inventors to capitalize on their convergent creativity.

Consider the ubiquitous lead pencil. The original lead pencil was first created in England in 1564. Actually, the pencil was made possible by the discovery of graphite in Northern England. The pencil utilized graphite, not lead. Over many years, mined graphite was manipulated to varying thickness and hardness, allowing pencils to be sold offering degrees of performance.

This was the state of the pencil for almost three centuries. In 1858, Hyman Lipman of Philadelphia perfected and patented the eraser pencil. Lipman’s novel feature was to add a groove in the top of the wood barrel of the pencil and glue on a piece of soft rubber. Until his invention, erasers were blocks of unrefined gum rubber. The simple convenience of combining the eraser with the pencil made the new eraser pencil commercially interesting.

Hyman Lipman sold his patent and technology for $100,000. In 1858 this was a fortune. Lipman had taken a 300-year old commodity product and simply mated it with a pre-cut, glued gum eraser. The combination made him rich and is still used worldwide to this day. Inventors should keep Hyman Lipman and convergent product features in mind as they create their product improvements.

My product development firm reviews hundreds of new product and invention submissions every year. Like everyone, we are most keen to discover the next divergent product: paper clip, lead pencil or light bulb. After thousands of submissions we have seen only a few truly divergent offerings.

Product features that improve existing technologies, offer fresh benefits or fill unanswered needs are always needed. We counsel entrepreneurs to build their ideas around the following: a Unique Selling Proposition. Another way to say this is to build your product to fill an identifiable niche in the marketplace. In every huge product category there are small, under served niches. Attack these holes with creativity and convergent ideas will be hugely rewarded. Remember Hyman Lipman as you continue your endeavours.

Bootstrapping Your Way to Success

Thursday, October 9th, 2008

by: Geoff Ficke

There is no more accurate American descriptive phrase of the rags to riches success then: “He pulled himself up by his bootstraps”. The pioneers, backwoodsmen, cowboys, whalers and other prototypical American hero classes all possessed an air of courage, self-reliance, and belief that they could beat the odds. They are wonderful samples of entrepreneurs at the most elemental level.

My favorite method of starting a business, launching a product or service is the old fashioned, do it myself, Bootstrapping. The ability to bootstrap a startup eliminates so many of the hurdles normally confronting the entrepreneur. Raising money, building inventory, dependence on support from others and assembling fixed overheads is mitigated when you bootstrap your new venture.

My first two startups were both completely bootstrapped. I had no outside investors, no on hand inventory: my home was my office, factory and warehouse. I made a product prototype, only one. That was all I could afford, but I made sure it was production quality.

Then I hit the road. I made presentations to department store buyers, non-stop in geographic loops from my home in Cincinnati. After four weeks of presentations and living in cheap motels, and a few nights sleeping in the car, I returned with a fist full of purchase orders. I then took the orders to New York, along with my business plan: everything buttoned down and detailed, for presentation to factors.

A factor is a financial firm that extends working capital to companies based on history, experience and assets. I had none of these. But I did have a unique product, a polished plan and strategy, passion and PURCHASE ORDERS from major department stores. MY first appointment was with Walter Heller, Inc. I walked away with a contract from Walter Heller, Inc. that day.

They agreed to advance me 85% of the face amount of my purchase orders.

The balance would be remitted to me, less factoring fees, when the invoices were paid. Basically Walter Heller, Inc. became my investment bank. I immediately had the monies to build inventory, organize fulfillment and business systems. I had pre-arranged for contract filling of the product so I was able to comfortably fulfill my obligations as per the purchase orders. My association with Walter Heller, Inc. continued until I sold the business. After selling my company, I went right back to Walter Heller, Inc. with my next venture.

Bootstrapping allowed me to avoid so many of the pitfalls faced by entrepreneurs, but the gamble had a price. I was on my own, totally self reliant, having no safety net and free to succeed or fail based on my efforts alone. I was afraid. My wife was a basket case. I had resigned from an executive position with a great salary, bonus, company car and expense account. We were blessed with a second child at the time. We were building a new home. Nevertheless, I was driven and would never have forgiven myself if I had not tried.

As I looked at all options for launching my product, I kept seeing potholes and hurdles that I wanted to avoid. I did not want a partner. I did not want to give up much, if any equity. I needed to build inventory and did not have the necessary funds without taking a partner or investor. Speed was essential, as I had a strong first to market advantage, if I got to market quickly. Just the due diligence process in securing investment monies, with no guarantee of successfully being funded, would jeopardize my first mover edge.

I took stock of my limited assets, my excellent, well-vetted product, and the usual chorus of NO and “Prove It’”, and decided that my only course was to bootstrap. I am amazed that more entrepreneurs do not take this eminently doable path. The reason I believe this is not more common is fear. Fear of selling. Fear of being out on a limb alone. A more traditional fund raising approach involves collaboration: team decisions and the ability to layoff blame if failure occurs.

Here is another example of bootstrapping and a unique Business Model applied to an old style, very low margin retail category.

Sam Pack is a Chinese immigrant to America. English is his second language, self-taught. He worked as a repairman and became an avid student of the American lifestyle, consumer desires and tastes. Sam saved every dollar possible hoping to achieve his dream of opening his own business.

When he had a small amount of capital, he rented a small shop in a Florida strip center, the kind of old, tired venue endemic to every city in the country.

He then bought used, second-hand appliances and reconditioned the small inventory he assembled. He was the salesman, he had no sales experience and his English was dicey, technician, deliveryman and installer. But Sam was a student of the market and had recognized an opportunity: at once delivery and installation. After a purchase was made, Sam would load his truck, make the delivery and install the unit. While gone from his shop he would leave humorous signs detailing his whereabouts and his unique policy. After the job was complete he rushed back to his shop and was ready to go again, 7days a week, 12 hours a day.

Appliance Direct, Sam Pack’s store name, provided an answer to one of the appliance industry’s most vexing problems: scheduling delivery times and charges. Industry studies show that consumers hate not being certain of a reasonable delivery window. Working people typically have to schedule Saturday delivery and there are a lot better things to do on a Saturday than wait for the truck to arrive. Stores have light weekday delivery with heavy Saturday demand. Sam found a niche and leveraged it into a classic American success.

People loved Sam’s service and low-ball delivery charges. Sam began to add staff, and grew. Today Appliances Direct is the largest seller of appliances in the state of Florida with 22 stores. Maytag, GE, Whirlpool and Amana are among the brands selling to Sam on a direct basis, no more used units. In addition, Sam Pack has become famous as an entrepreneur, and for starring in very funny commercials making fun of himself and detailing his love of appliances and America.

This Chinese immigrant in less than one generation has become a multi-millionaire, providing people a service they appreciate and pricing that the big box stores can not touch. If Sam Pack could do it, anyone should be able to give it a go.

Eric Hoffer – The Obstacles We Face Daily Present Our Greatest Opportunities

Thursday, October 9th, 2008

by: Geoff Ficke

As a young, struggling college student in the 1960’s I became entranced with the life, philosophy and writings of the great American thinker Eric Hoffer. Hoffer’s life story was almost mystical, his thinking so lucid and the concepts he presented were so fresh that I could not get enough of this great mans ideas. Only now do I fully realize how my adherence, to the thoughts of Mr. Hoffer have positively affected my professional life to this very day.

Eric Hoffer was born in Germany. His family immigrated to America when he was a toddler. He could read English and German fluently by the age of five. His earliest years were spent in poverty, living in tenements in New York City. He lost his sight at the age of seven after a fall that ultimately took the life of his mother. Inexplicably, at the age of 15 his sight returned.

This gift of the return of his eyesight stoked a voracious desire in Hoffer to read everything he could lay his hands on. He was completely without formal education and yet he was one of the most studied, learned men of the 2oth century.

Hoffer spent most of his life living in farm camps in California, working as a longshoreman and finally in a one room flat in the Tenderloin neighborhood of San Francisco. His first book, “The True Believer”, was an immediate classic and stamped him as a most original thinker. “The True Believer” is Hoffer’s observations on mass movements and fanaticism. Nazism, Communism, socialism, and early religious movements were topics that this classic book examined and critiqued with scrupulous research and poignant observations.

Owing to a life lived mostly in poverty; Hoffer’s comments on the human condition are particularly astute. Hoffer’s life was full of obstacles: blindness, loss of his parents at an early age, growing up in a new country without access to education, a lifetime of manual labor and subsistence wages. And yet, this self-educated man has left an indelible mark on all that have read his writings and consider his brilliant thoughts on a wide range of cultural, philosophical and political topics.

As a student reading “The True Believer”, I did not realize the lasting effect it would have on my life. Hoffer observed that the struggle to survive, at its most elemental, offered the best promise of a lifetime of fulfillment. The man who must work, must harvest, must create is most satisfied. Man with plenty has too much time too reflect, regret and criticize.

I have been a serial entrepreneur all of my working life. Currently I work with small businesses, inventors, and entrepreneur’s to commercialize new product ideas. Each of these individuals and company’s possess an unintended compliance with one of Eric Hoffer’s most prescient observations: “It still holds true that man is most uniquely human when he turns obstacles into opportunities”.

Every time a new technology, product or service is commercially successful an opportunity has overcome an obstacle that the inventor has identified, analyzed and conquered. The world becomes a bit more comfortable, more beautiful, healthier, or a bit safer as a result. It is hard wired into all successful entrepreneur’s that there are answers to problems that others can not identify or address.

For the last 40 years, I have read and re-read “The True Believer” more times than I can count. I don’t think there is another book that I have ever fully re-read. Each time I pick up this amazing work I learn something new, fresh perspectives and concepts that I can apply to my personal and professional life.

Obstacles represent opportunity. Identifying problems and needs is the first step necessary to providing answers that commercially benefit consumers. As Eric Hoffer so correctly observed, we are “most uniquely human when we turn obstacles into opportunities”.

…and We Want the Government to Do What?

Thursday, October 9th, 2008

by: Geoff Ficke

I am always amazed when I see well educated, seemingly worldly people make themselves look and sound silly by promoting ever more aggressive expansion of government. We are currently in our national election cycle, admittedly the silly season for politicians. This year, however, the “nanny state” prescriptions on offer seem particularly vacuous.

The one absolute I KNOW about government is this: Government is not in business to solve problems, government is in business to institutionalize problems!

Bureaucracies evolve to protect and expand their turf. All start with claims of the highest purpose. The perceived need to address some element of life that has been under-regulated or policed will be assigned to a phalanx of bureaucrats and we, the public, will be able to sleep much better as a result.

Think about this fact and ask yourself: Where has a bureaucracy ever settled a problem, cured an injustice, or efficiently functioned.

Private enterprises, churches, charities and entrepreneurs live in a competitive maelstrom. They adapt to market realities or they die. Look at the original Dow Jones Industrial Average members from the early 20th century and ask, “where are they now”? General Motors, Ford Motor Company and Chrysler, behemoth international concerns, are in a real struggle for survival. Their conduct of affairs and changing business models will determine if they go the way of Montgomery Ward, Sharper Image, Wang Computer, American Motors and Bell and Howell and float off into that corporate graveyard in the sky.

The reason we enjoy the most advanced economic lifestyle in history is precisely because private enterprises can, and do fail. Not, however, government agencies and bureaucracies. They simply grow, bigger, fatter, more sluggish and flaccid. This relentless growth is accompanied by the continual whaling for more. More bureaucrats, more funding, more rules; just give us more and this time we will get the job done.

The economy is currently experiencing a cyclical softening. A study of economic history indicates that we go through something akin to this every seven or eight years. When the economy slows, tax receipts logically slow as well. What we get from government at all levels is the familiar bromide: “We are cut to the bone”!

No we are not. There is no government agency that can find the bone. The waste, fraud, program duplication, over-staffing and lack of productivity endemic in government at all levels is simply stupendous.

The government enjoys a monopoly in the running of mail delivery through the Post Office. It ain’t called snail mail for no reason. The service requires a subsidy each and every fiscal year to cover losses. If it were a business, it would be gone.

Marvin Runyan was the Postmaster General for President Jimmy Carter. The business model for what would become Federal Express was in the process of raising venture capital funding during his tenure. When asked about the concept of overnight package delivery from anywhere, to anywhere, with guaranteed next day delivery, Mr. Runyan commented: “It can’t be done”.

The perfect metaphor for government bureaucracy: “It can’t be done”!

The government must subsidize billions of dollars of losses each year for Amtrak. Passport processing is a national embarrassment. Medicare fraud is reported and confirmed to the tune of tens of billions of dollars each year. IRS computer systems, after massive spending, are archaic. The list of waste, corruption and ineptitude in government, at all levels is astounding.

We have a $9 trillion national current accounts debt. Far worse, we have a debt for Social Security and Medicare of somewhere (nobody can really calculate this accurately) north of $50 trillion! For a fraction of this level of mismanagement, managers of private enterprises are put in jail.

Whenever a city announces a public investment in building sports stadiums or museums you can count on the fact that the edifice will come in late and over budget. The same with any road project. The “Big Dig” in Boston, or the Los Angeles subway, were classic examples of incompetence and mismanagement.

Recently I visited my old parochial high school. While speaking with the Principal I noticed students unloading a truck and taking used desks into the school building. I commented about the desks, “where did they come from”?

His reply: a neighboring public high school received a grant that they used to purchase new desks. “They offered them to us, or they would be thrown away. We will get another 20 years use out of them”. Maybe this is just one small anecdotal instance, but multiply this by millions of such irresponsible decisions and the harm done to our economy, and to taxpayers, is simply too stupendous to calculate.

Why is there no outrage? In fact, we experience the antithesis of outrage: we vote the bums back in, election cycle after election cycle. Each political party, all candidates, every year promise more of what any blind man can see does not work.

There is a simple cure (it will never happen, though). No person who receives a government check should be allowed to vote. Government employees, program beneficiaries, contractors or lobbyists should never be able to vote for a politician who has the ability to promise a financial benefit paid for with other peoples money. This is bribery in its simplest form.

Since it will never happen, how about this for a dose of common sense: Simply vote for the politician promising the smallest government. The idea that the government can successfully nationalize oil companies, or manage our medical system is ludicrous. There is no evidence that government operated bureaucracies at any level will be examples of good operative governance.

Proponents of these hare brained schemes are too stupid to be entrusted with such power. They, and their acolytes, should simply be asked: “What have you ever successfully managed”? Common sense is in monumentally short supply when evaluating the real performance of local, state and national government agencies. To fund evermore waste, fraud and corruption flies in the face of everything that we empirically know actually goes on in this cesspool.

How Henry Ford’s Invention Inadvertently Caused the Depression

Thursday, October 9th, 2008

by: Geoff Ficke

In early 20th century America the vast majority of people living in rural areas eked out a living in agriculture. Farms were small, often sharecropped. The planting and harvesting was labor intensive and horses provided the only source of energy for mechanized tilling. The vagaries of weather and drought have always made farming difficult. Crops were mainly grown for consumption by the farmer’s family, with any extra produce bartered for needed goods.

We are all aware of the history of Henry Ford and his invention of the production line to mass-produce Model-T’s. Ford did not invent the automobile, he simply invented a method to produce cars in mass volumes and make them available for virtually anyone wishing to purchase a horse-less carriage. He also revolutionized the agriculture business with totally unforeseen consequences.

The Ford Motor Company was always seeking new avenues of distribution and business opportunities. Ford had grown up in then-rural Michigan and was immersed in the farm world of the age. In the 1920’s Ford introduced the first mass-produced farm tractor, the Fordson. The machine sold for under $400 and revolutionized farming. It quickly became cheaper and less costly to own and maintain a Fordson tractor than a horse.

Farmers quickly gravitated to the Fordson tractor. Crop yield per acre expanded exponentially. Farmers produced so much crop yield per acre that by the middle of the 1920’s we were growing far more food than the country could consume. Prices plummeted. The need for day laborers declined precipitously and rural unemployment exploded.

The collapse of crop prices, unemployment, and the Great Plains drought were significant contributors to the start of the Great Depression. The Fordson was an amazing improvement in the productivity and ability of farmers to lead more comfortable lifestyles. However, the “Law of Unintended Consequences” reared its ugly head in this instance. The creative disruption caused by this product was thrust on a market that could not adjust efficiently or quickly to its significance.

We have a seemingly similar situation occurring today. We constantly read headlines about the dying manufacturing sector in the United States. Politicians love to visit deserted factories and decry the decline of manufacturing in a wide range of formerly profitable industries. And yet, manufacturing in America is setting records for volumes produced, shipped and invoiced. How can this dichotomy exist?

As with the Fordson tractors 1920’s introduction to farmers, today’s manufacturing has evolved dramatically and created disruptive technologies. Robots, software, customized computer models, computer assisted design and modern communications mean that we produce ever more sophisticated products, in greater volumes, and at lower prices, while needing fewer workers per unit of production. The workers that are needed today require better education, and skills than the production line workers of yore.

When I was growing up in an industrial area of America in the 1960’s many of my contemporaries went to work with their fathers at the local mill or factory. These were overwhelmingly union jobs. Each of my buddies at that time thought they would be employed for life like their fathers had been. It has worked out that none are where they started, not one.

The displacement is as painful today as it was on the farm of the 1920’s. However, the benefits to society accruing from modern manufacturing technologies and systems, just like the advances in farming owing to mechanization, cannot be denied. Only the Luddites of the 19th century and there modern adherents believe life is not more comfortable today and more people have more access to more goods and services at lower prices that at any time in history.

Change is hard and often inconvenient. We live during an age of massive change unlike any time in history. The understanding of and acceptance of modern realities insure that most people will benefit from advances in technology. Those that do not want to change and accept the new order of things will be left behind.

Henry Ford did not sell the Fordson tractor to instigate the Great Depression. The product was a small, inadvertent contributing factor. The inability of markets of that day to allocate resources and find markets for the massive increases in crops harvested was a systemic failure. Today, we manufacture products that are consumed quickly and create the thirst for more inventions and technologically advances. We are all better off as a result.

The 4000 Year Old Egyptian Mystery That Teaches to This Day

Thursday, October 9th, 2008

by: Geoff Ficke

One of the great entertainment values available to almost anyone with a cable television service is the History Channel. The volume and quality of wonderfully instructive and entertaining programming on offer is amazing. I have never watched a reality show, or a celebrity dancing display, but I rarely miss the exciting offerings of the History Channel.

Recently the channel has been immersed in the subject of Egyptian antiquities. The pharaohs, the pyramids, the Sphinx, sun temples, the Colossus of Rhoads and the Nile are beautifully described and narrated in an exciting, easy to understand presentation. After viewing programming on each topic, I ask myself a simple question: how did the Egyptians do it?

I am not alone in asking this question. There is no agreement among archaeologists and historians on how the ancient Egyptians accomplished the grand scale of building and creativity that is still on display to this day. The pyramids are particularly vexing as a construction puzzle.

The pharaoh’s built the pyramids both as tombs for their entry into the after-life, and as visible statements of their greatness. As one pharaoh completed a pyramid and died, his successor, if young enough, immediately began to build an even larger, more visible pyramid. The placement of these massive edifices on the Giza plateau, their alignment with the sun and other monuments and the sheer scale of building that commenced almost 5000 years ago is astounding.

The pyramids were the tallest structures in the world until the birth of the modern skyscraper. For almost four thousand years nothing approaching their grand scale was built anywhere in the world. Without power tools to quarry stone, the combustion engine to move materials across the desert, cranes to leverage heavy materials to great height and electronic communications to co-ordinate logistics, these ancient builders created stunning works that stun and excite to this day. How did they do it?

There are many theories but no definitive answers to this question. Using massive manpower, primitive tools and the design techniques that were amazingly efficient and accurate, they achieved near miraculous levels of perfection. That the pyramids stand and amaze us still is testament to the genius of the ancient Egyptians. Is there a lesson here for modern man?

Let’s just discuss United States infrastructure. We have the world’s largest network of roads, bridges, airports, rail lines, waterways and ports. Most of this system was built over the last 150 years. Politicians and bureaucrats tell us that our infrastructure is failing and requires massive investments (taxes) to repair and enhance the system.

These same government types are responsible for maintaining these physical assets. They assess user fees, taxes, permits, license fees and special assessments ostensibly to cover the cost of maintenance of this invaluable infrastructure. The simple performance of regular scheduled maintenance would greatly reduce the physical decline of this plant that is so essential to commerce and transport. And yet, maintenance is deferred, supposedly dedicated infrastructure tax monies co-mingled with general revenues and we hear the constant whine that government funding is “cut to the bone”.

Any infrastructure project in 21st century America will be held hostage by bureaucrats. Impact studies, environmental impact statements, committee reviews, permits, licensing, bonding, prevailing wage laws, lawsuits from concerned citizen groups and sheer bungling will ham string building progress. The Great Northern Railway was completed with private investment in 4 ½ years, using manpower, mules and dynamite in the 19th century. In my hometown there are simple paving projects that take that long to complete, and they will need to be rebuilt in a few years. The bed and rails of the Great Northern are still in use.

The World Trade Center is the most sterling example of our inability to proceed in a timely manner on a needed, important and psychologically crucial project. Seven years after the terrorist attack that brought these towers down, and transformed lifestyles: the site is still a hole in the ground. This is a national embarrassment that is symbolic of the perception (unfounded) that we have lost our national will to take risks and explore.

The ancient Egyptians built structures that have survived for 5000 years. They used the assets on hand at that time and created works that are tribute to the human capacity for work and creativity. The 2000 year-old Roman aqueduct and the Appian Way are still in use today. There is absolutely no reason that we need to replace and rebuild roads, schools and dams every few decades.

Utilizing the best modern materials and modern technologies should enable us to build and design for the very, very long haul. We need to create with the perspective that every structure will become a statement about contemporary Americans, our spirit and our strength. We need to stop building and thinking as a throw away society. The Egyptian’s, and most ancient societies would be amazed at our attitudes about the monuments and edifices we build and do not appreciate enough to build well.

It’s Time to “Just Say No More” to Intrusive Abusive Government

Thursday, October 9th, 2008

by: Geoff Ficke

A fitting metaphor for the young 21st century, and the ever-increasing intrusiveness of government at all levels, is this weeks news stories detailing the total lack of progress in rebuilding the World Trade Center. This is the cherry on top of the proverbial bitter bureaucratic sundae. Is this the America of yore? What has happened to us?

Utilizing the relatively primitive construction techniques of the Depression era, the Empire State Building was conceived and constructed in 410 days. Men were hungry and desperate at that time. Government, pre-New Deal, was much smaller at all levels. The State of New York and government of New York City were willing partners in seeing this important symbol of progress rise as a statement against the pessimism so rampant in the early-1930’s. They both put the interest of the public ahead of entrenched bureaucratic concerns.

The Empire State Building is one of the world’s great buildings, a tourist attraction since the day it opened and a symbol of the greatness of New York City and the United States. The construction of this landmark building was so steadfast that it absorbed a direct hit from an airliner during World War 2 with virtually no damage. It remained open for business.

The building is praised in song, on stage and has been the setting for many popular films. A visit to the building today still amazes. The building is fully functional, productive and ever elegant in its timeless art deco classic styling. Unless modern bureaucracy injects it’s ugly rapacious tentacles, the Empire State Building will be used and enjoyed for many more generations.

Other massive projects of that era are equally as impressive. The Carew Tower in Cincinnati, the Hoover Dam, Boulder City, NV, the Golden Gate Bridge, hundreds of water control projects, sanitation systems, dams, airports and ports were built in blazing fashion. Essentially the infrastructure of the country was built in record time during the first 1/3 of the 20th century. By today’s standards, using relatively inferior materials and technology, the performance of our great grandfathers and grandmothers was positively scintillating. What is going on today?

During the 1950’s President Eisenhower proposed, conceived and began construction of the Interstate Highway System. Over 40,000 miles of bridges, highways, interchanges and tunnels were designed and built across this huge country. The system took about 30 years too fully complete. It was the largest road construction project in history, the largest since the Roman’s connected the vast lands of their conquered empire with their amazing road system.

Nevertheless, today we need to continually widen, expand, and redesign the Interstate Highway system to efficiently handle ever-increasing volumes of traffic. And yet we see very little progress. “Orange Barrels” are a symbol of our bureaucratic malaise. We see lots of barrels along our roadways, but we see not much movement on any public works road project for mile, after mile, after mile, year after year, after year. Sunny weather does not seem to illicit any more production that nasty weather days.

I live in the Cincinnati area. The major transportation corridor is the I-75 Brent Spence Bridge crossing the Ohio River into Kentucky. The bridge is a relic. There are no shoulders, the lanes do not meet regulation width, there are always wrecks, breakdowns and it is structurally dangerous. Every politician, bureaucrat and citizen knows and agrees it must be replaced. It is the key link between Michigan and Florida for commercial truckers and travelers.

However, there is no consensus on if, where, when and how to finance the replacement-bridge and get it built. The permit process (hello bureaucracy) is ever changing, and that has been embellished by the Environmental Protection Agency (Federal and State) demanding ever-more studies of air quality. Neighborhood groups claiming historic status for old railroad terminals and faux local lore add another layer of hurdles to jump.

All of this, and much more, mean that there is no timetable to start the construction. Three more years of study will be needed. Another 10 years of construction are anticipated, if the studies do not reveal the need for more studies. And the cost, who knows! All we really know is that the bridge will cost bunches more in the future than it would today, or better five years ago.

The World Trade Center, as noted in the recent new updates, has seen anticipated construction costs expand to $15 billion. But because of the latest delays, the cost is probably now closer to $18 billion, but as always with bureaucracy no one really knows (remember Boston’s “The Big Dig”).

Almost seven years after the horrible destruction of the twin towers it is still mostly a hole in the ground.

What does this say about us? How have we so lost our way? We need nuclear power plants, oil refineries, alternative energy sources, infrastructure replacement and enhancement and new transportation systems. We all know we need to address these things. And yet, we can’t because we largely hamstring ourselves with layer upon layer of bureaucracy, rules, regulations, licensing requirements, permit processes, etc. etc.

Our grandparents and parents have left us a bountiful lifestyle that was created by the toil and grit of their labors. The more we have the more we seem to take our plenty for granted. We don’t want a power plant anywhere near us. But, we certainly want heat in the winter, cool in the hot summer and plenty of power to ramp up our myriad appliances whenever we wish to enjoy their benefits. No drilling for oil, offshore, onshore, or in a remote mosquito infested northern bog where no animal or man goes! But, we sure want oil for our cars and natural gas for our homes in quantity and preferably cheap! We can’t have it both ways.

The Indonesians, the Chinese, Indians and eastern Europeans have not inherited our bounty. They are creating theirs as we diddle here. The are building dams, roads, power plants, harvesting minerals and building infrastructure at a record pace. Their growing middle classes realize that sacrifice, hard work and vision are needed to advance in a competitive world. They will, and are doing what it takes to succeed.

When will Americans return to the ways of thinking that made this country great? We were the world’s builders. President Kennedy said we would put a man on the moon in the 1960’s-AND WE DID! President Teddy Roosevelt said we would build the Panama Canal when the French could not—AND WE DID! President Reagan said we would end Communism—AND WE DID! Thomas Edison said he would light the world—AND HE DID! Henry Ford said every man should be able to afford and own a personal automobile—AND THEY DID!

With attitude adjustment, and realization that centrally planned government has no answers, just more self-indulgent meddling in our affairs, we can begin to right our listing ship. It is up to each of us to pull our weight. Read a little history and remember that our patrimony has gifted us with much. We have a duty to begin acting in the real spirit of America once again.

Energy Independence? Yes We Can!

Thursday, October 9th, 2008

by: Geoff Ficke

My Company routinely reviews more than 600 new product ideas, concepts, prototypes and models during most years. During a soft economy, such as today’s, we see even more as people become more desperate to chase a dream. Pursuit of the “American Dream” almost always involves entrepreneurial activity.

During this business cycle we have been inundated with a slew of energy related offerings. Fuel enhancement products, internal combustion engine accessories, a replacement for the catalytic converter, a device that guarantees 50 miles per gallon fuel efficiency for any size car, and many more equally sure to succeed products are being shopped. Of course, these types of technology enhancements are rarely successful. They are usually only reality in the mind of the beholder. The required demonstration of product performance is always near perfection, just a bit more time, money or research is required to make the contraption commercially viable.

While most of these “inventions” are of the goofy sort, we do take a good bit of satisfaction that so much creativity and effort are being thrown at what is obviously one of the world’s key issues: the future availability of energy. Despite a raft of political types whining that we can never be energy independent, the amount of industry being deployed by the average American inventor to address the problem is quite encouraging. The native optimism of Americans that any problem can be solved puts a lie to the negativity being sold by a wide swath of the political left, the environmental activists and the always present “Luddites” seeking to return us to hunter/gatherer ways.

One of our presidential aspirants loves to chant the mantra “Yes We Can!”

I agree, “Yes We Can!” We can be energy independent if the sorghum sipping, brie munching, sandal wearing, tree house living dreamers and schemers for a world without industry get out of the way. That a vocal minority of zealots, with fanatical religious zeal have bottled up the pursuit of American energy independence is amazing. Why have we allowed this to happen?

The world is full of tens of millions of cars, trucks, locomotives, boats and airplanes that ALL operate on fossil fuels. That we will simply toss all of these assets overnight and replace them with twig sipping jungle juice green machinery is ridiculous. We need all forms of energy to be developed and commercially made viable. Solar, wind, flora and fauna of all types offer great potential. However, despite years of research and subsidies they are not currently feasible for more than a tiny fraction of our energy requirements. Even then, there are unwanted by-products to their implementation (Ethanol is exhibit 1).

We need, and we have, vast stores of fossil fuels. Oil, coal, nuclear, tar shale and natural gas are known to exist in huge quantities in our offshore waters and inside our borders. Hopefully the entrepreneurial class that we work with will produce a 21st Century Thomas Edison and an alternative, clean, cheap, unlimited energy source will be discovered and exploited for the benefit of all. Until that occurs, we need to use every resource we have and be open to current geo-political realities that make energy independence so important.

We absolutely need to become more fuel-efficient. And yet, even if all cars got 60 miles per gallon of fuel, we would still need access to sources of fossil fuel. Batteries might, and almost surely will become perfected that provide the mobility, endurance and cost effectiveness that is required for modern transport. But they are not yet available! These batteries, when market ready, will require huge amounts of added supplies of electricity. This will entail more power plants. These plants run on coal—or nuclear power. They will need to be built and fueled by these sources of energy.

I live in an area of the country where wind is highly irregular and sun even more so. Wind and sun are free, but if not available on a regular basis they are not to be counted on for more that a fraction of our energy needs. In areas of the country where wind and solar are more viable they are NIMBY’ed (Not in My Back Yard), often by the same people so vocal about “living green”.

Major energy producing companies are spending billions of dollars seeking answers, alternative and enhanced reclamation techniques, to access more sources of energy. They have a vested interest to do so. That is great news. Their profit motive insures that the every stone will be overturned as they seek to solve this crucial dilemma that faces all of us.

They believe they can, that is why they put their capital and corporate resources at risk. Inventors and entrepreneurs of all stripes believe they can solve the problem as well. Many members of the public, based on readily available data, believe that we can be energy independent. They want us to pursue every avenue available to insure future generations enjoy prosperity, freedom and mobility as we have.

It is only the glass half-empty crowd, bureaucrats and politicians that never solve problems, that say we can’t become free of imported energy. It will take a coming together, a new Manhattan Project, with all sides freshly open to all sources of supply and sources that might be deemed less preferable than a utopian “Nirvana-esque” solution. Green is good. Fossil fuels are essential. New technologies are desirable and being researched. We must aggressively seek answers from all of these options, even the ones that some might deem less than desirable.

Measurement of Time is One of History’s Important Achievements

Thursday, October 9th, 2008

by: Geoff Ficke

In the modern world we take for granted the availability of innumerable sources providing accurate measurements of time. Telling current time is so readily available that we have lost sight of the profound importance of knowing time, to the hour and minute. For most of human history accurately measuring time was irrelevant. There was no need for watches; clocks, clock radios or digital time reads on car dashboards.

Until the flowering of the industrial age in the second half of the 19th century most people worked in small plot agriculture. All over the world people scratched out a living farming and herding small plots and flocks. Very few people ventured more than several miles from their place of birth in their whole lifetimes. Time was told by the change of seasons and the planting and harvest cycles. Nothing else was needed to provide measurements of time.

The ancients used sundials in numerous forms for crude time measurement. Shade, rain, and cloudy days made the sundial unreliable. The Egyptians invented an advanced Water Clock. The device used a drip system that raised a float tied to a pointer. This system was relatively accurate in measuring hours, but not minutes.

The clock as we know it first appeared in Europe in the 14th century. The clock was made operable by the creation of the “verge escapement”. This gear engaged a set of teeth that powered an hour hand. There was no measurement of seconds or minutes. The hour hand was accurate within one to two hours each day. The inventor of this initial timepiece is unknown.

Something more precise was essential if technology was to advance. In 1657 a Dutch astronomer, Christiaan Huygens was credited with inventing the first accurate time keeping device that included the credible measurement of time by the minute. This advance was crucial in many fields. Navigators required accurate time measurement to compute longitude. All scientific experimentation requires accurate measurement of time.

For the common man, working on a farm, or as a village cobbler, or baker, accurate measurement of time was still of little importance. The railroad, more than any other advancement, was responsible for the rapid introduction and implementation of a universally recognized schedule of times. This schedule required accurate devices to register local time.

Railroads needed to load and offload passengers and freight at pre-appointed times and places along their lengthy route systems. Travelers and shippers needed to accurately know when trains would arrive and depart in order to be ready to board passenger cars and load shipping cars with goods. Before the growth of railroads there was little necessity for the measurement of time in minutes. It was enough for almost any human to simply know that it was 3:00 PM, plus or minus any number of minutes. However, if the train was scheduled to arrive at 3:10 PM in Leeds, England, or Dodge City, Kansas, and depart at 3:35 PM, the public needed to be able to connect within that precise window of time if they were to be able to utilize the trains many services. This required the mass production of clocks and personal timepieces.

Today we are fully wired by time. Our lives are an endless series of activities attuned to specific times. Our Saturday tennis match, doctor appointments, restaurant reservations, conference calls and NFL games are occurrences that we participate in at specific times. We need to know time to the minute and our modern environment has time accurately on display virtually every where we look. We take this simplest of conveniences for granted.

The settling of the International Time Line at Greenwich, England (Greenwich Mean Time) enables to world to be divided into time zones. We know that different parts of the world are in one of 24 separate time zones and all commercial activity finds rhythm from this practical division of geography into these agreed time zones. The rubber plantation foreman in Nigeria knows exactly when the product manager will be available in Akron, Ohio because of this internationally employed system of measuring time. The modern world could not efficiently operate if the ancients had not begun the quest for accurately measuring the hours of each day.

Industries Pioneered by Immigrants Prove America Still World’s Center for Opportunity

Thursday, October 9th, 2008

by Geoff Ficke

My first job after service in the Marine Corps was with the Revlon Cosmetic Company. Revlon was founded by the iconic business man and fashion arbiter of the day, Charles Revson. The business in the 1940's, 1950's and 1960's was totally identified with Mr. Revson; his lavish lifestyle, marriages, famous temper and hugely successful product launches were regularly trumpeted by the business press of the day.

Charles Revson was a visionary. He was exceedingly difficult to work for, almost impossible to please and volcanic in his temperament. And yet, his employees were amazingly loyal and to this day there is a fraternity of old colleagues who stay in touch and regularly reminisce about the old days working for the “Old Man”. As tough as he was to work for, he was nevertheless exceedingly generous to those who could stick it out and help build his dream franchise.

Revlon was the first cosmetic conglomerate, completely dominating the fine department store sales channel. Etherea, Bill Blass, Norell, Charlie, Ultima II and the eponymous Revlon brands sold briskly to fashionable women all over the world. In those days you could not find Revlon products in drug stores or mass merchandisers. Mr. Revson preached the trilogy for his product's placement: space, location, and demonstration. This meant premium position in prime department store real estate with a well-trained beauty advisor ready to assist consumers.

Mr. Revson was a second-generation Jewish immigrant. He was one of many such immigrants (first or second generation) that created the modern cosmetic industry. Helena Rubenstein, George Barrie (Faberge), Francois Coty, Germaine Monteil, and Max Factor all launched cosmetic brands that enjoyed great international success. Amazingly, after the death of each of these pioneers, their Companies suffered from a lack of entrepreneurial creativity and suffered dramatic declines.

Each of these visionary entrepreneurs found in America the ingredients to create a stew that could only be cooked in this country. The opportunity to succeed, or fail, with creativity, hard work, courage and the ability to recognize and leverage market opportunities was, and is, uniquely American. Mr. Revson often said that he could never have created such an enterprise in his family's native Poland and loved and revered America until the day he died.

The movie business greatly parallels the developmental history of the cosmetic industry. Sam Goldwyn, Harry Cohn, the Warner Brothers, Carl Laemmle and Mack Sennett came to this country with nothing and built the great studios, developed the star system and created product distribution channels that are largely still used today. These creative giants made major contributions to America by entertaining fans, promoting the star system, and generating thousands of jobs and support industries where none had previously existed.

Today, we see many instances where immigrants have found this country to provide the perfect amalgam of resources, talent, technical support and educational opportunity to base and launch a new enterprise. Sun Microsystems, JDS Uniphase, Google and Yahoo are just a smattering of famous tech company names that owe their existence in part to an immigrant founder. Biotechnology, medical technologies, engineering, finance and banking are industries that are heavily populated with successful entrepreneurs from Asia, Europe and Israel. America, and the world, is a better place for their contributions.

Immigrants, both legally and illegally, make super human efforts to get to America, and for a great reason. This is still the land of opportunity for those willing to work, take risk and pursue their goals and dreams. Polls tell us that Americans are dispirited, the country is on the wrong track and needs a new direction. As an American, I am embarrassed. Just being born in this country is a winning lottery ticket. People all over the world know this and many will do anything, even risk their lives, to get inside our borders.

Chinese immigrants have created a wonderful tradition of successfully building laundry and restaurant businesses in America. Koreans are amazingly prosperous green grocers. Vietnamese own thousands of independent liquor stores. The Cambodian immigrants dominate the doughnut shop business on the West Coast. Pakistani immigrants own a significant percentage of the convenience stores in the country. Indian ownership of roadside inns and hotels at virtually every highway interchange is famously detailed. Mexican owned Mexican restaurants are everywhere and native Americans flock to them.

These immigrant groups come to this country for the obvious opportunity that exists every day and every where. Opportunity that native Americans claim no longer exists. These immigrants network, work long hours, plan, learn an industry and save the seed money necessary to bootstrap their start-up businesses. The same steps that Charles Revson, Isaac Singer, Levi Strauss, Sam Goldwyn and countless other immigrant entrepreneurs took to launch their enterprises are now being undertaken by this new wave of immigrant entrepreneurs, and it could only be accomplished in America.

The immigrant presence in America, their participation in our economy and their enjoyment of the freedoms unique to America validate the fertility of our economic system. They also greatly benefit all of us by their enterprising efforts. There has never been a better time to be an entrepreneur and never a better place than America in 2008. Now we need native Americans to realize that the glass is way more than half full. Immigrants already know this.