Tag Archives: Entrepreneurship

eBay and Economics

My first job was definitely of the untraditional type.  I was having a conversation with my best friend and my father about our childhood jobs, and I remember listening to them talk about working for a catering service and grocery store while I tried my hand at eBay.  As we each shared our experiences, I found myself thinking about how eBay is pure economics.  Of course, that was an obvious thought, I mean, eBay is a marketplace that connects vendors and consumers of ‘stuff’ over the internet, but when I took a minute to let this thought percolate, it certainly upholds basic economic principles.

I had known about eBay for some time; my father was an intense Power Seller in the early 2000s when the unique auction house was in its prime, selling Ugg boots and Nike Shox at ridiculous profit margins.  I can recall those early Saturday morning runs to the shoe stores to purchase several pairs of the infamous boots and watching him meticulously write descriptions for each product.  I didn’t fully understand the total operation of being a seller until I re-opened my father’s account in my sophomore year of high school.  I realized my spending habits were greatly exceeding my allowance, but I didn’t want to have to work somewhere or for someone (its a millennial thing, I guess).  I didn’t know much, so I decided to sell what I knew would make money, which was what my dad sold.  I, along with my brother, sold newly released/limited edition  Nike shoes, backpacks, and Starbucks mugs.  We didn’t make a killing, like my dad, but we always managed to have a decent amount of cash in our pockets–and it definitely didn’t hurt my resume when applying to colleges.  Looking back on these experiences, with some acquired knowledge about economics and finance, I’m better understanding the principles with which my business functioned.

Over the next several days, I will be looking at eBay through an economic lens examining technology, incentives, rationales, and utility.

Maxwell

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When Life Gives You Lemons…Teach Children

One of the major programs that is integral to the George Washington University School of Business is Lemonade Day.  The program is designed to immerse first year business students (myself) in an environment with elementary school children where we literally teach them the proper tools necessary to make a lemonade stand.  The idea is that by learning about budgeting, accounting, profit and marketing, these fourth through eight graders will acquire the necessary tools to create and run a successful stand for the official Lemonade Day D.C.  This program, which was actually introduced to the metropolitan area by a current School of Business student, is exactly the type of development I was referring to in my Dare to Dream post where I stressed the importance of programs that foster out nation’s young entrepreneurial minds.  This past month, I was fortunate enough to try my hand at teaching these very principles.

I traveled to Roots Public Charter School, which educates first through eighth graders. The trek was about thirty to forty-five minutes in which I recognized absolutely nothing; this is either a testament to how insular GW is or to how little I get out. I expected to have children anxiously waiting for our arrival. I can remember how enamored I was with older kids at that age, so I was sure these children would be similar. I thought the students would be eager to learn about the primary business principles necessary to run a successful lemonade stand, and I certainly believed they would be willing to let me teach them.  I was wrong, no doubt.

For starters, Roots is a tiny little school off the corner of a busy street. As I walked in, my immediate thought was how little funding the school must have. Not to say the school could not provide for its students, but the classroom seemed to double as a cafeteria/ recreational space and it was cramped.  Furthermore, the primarily African American students appeared to have no real interests in the fact that several college students were standing before them.  They continued to giggle and play around like any elementary school kids would do, and realistically, I should have expected this.  Knowing myself, a reserved and shy character, I knew handling these kids and keeping them on task would be a bit difficult.

When we were introduced to the array of students, it was not clear whether they had known we were coming or had prepared for our arrival. About six tables were set up throughout the room.  We helped the students grab chairs from the closet and we proceeded to form small groups so each of us could teach the lessons to a more intimate audience.  Fortunately, I sat down with two students, Jalaw and Nikai, both fourth graders who were very much interested in the project.

Jalaw and Nikai were great. Like any fourth grader, when I mentioned the idea of a lemonade stand, their imaginations went one thousand miles per hour thinking of creative themes and designs for their storefront (Nikai wanted to make the lemon on their poster look like a diamond). Their eagerness and excitement definitely helped me because it made my job of asking them questions a lot easier. It was not hard to get them thinking about logistics, supplies, budgeting, etc. because I made the ideas tangible and relevant.

For example, when talking about logistics, Nikai wanted to know how much their lemonade should cost. I didn’t answer, I asked the question right back.  He said, “Well, last time I had a lemonade stand we charged people three dollars and I made a lot of money.” While I tried to remain encouraging and positive, I attempted to steer him away from that price, as it was clearly too high given the amount of cups they were trying to sell. Instead, because they had been talking about playing music at their lemonade stand, I told them this, “Let’s put it like this: Who do you plan to sell to? Probably every day people like you and me, right? Especially if you’re going to be selling lemonade outside of a library, do you think normal people are going to pay such a high price for lemonade? If Jay Z came walking down the street, then I’d be with you guys…we could probably charge him $100,000 for lemonade!” By relating a business principle to something they could easily grasp and easily resonate with, they were able to laugh and understand that their price would most likely be too high. This made my time maneuvering in and out of topics much easier and a lot more entertaining.

The best part about Lemonade Day, though, was how I could see the light bulbs turning on in their heads. This was evident with Jalaw. As I continued to teach the two, the way Jalaw was picking up on things that I was saying and then responding back with relevant questions of his own suggested that the wheels in his head were turning. When we reached the point to talk about profit, I did not have to go through it with them step-by-step because Jalaw was working through it by himself with the information we created together. This was reward enough for my Lemonade Day experience. I realized (A) that any person can grasp these principles given the right opportunities, and (B) my skill of being a developer is real. As I taught Jalaw and Nikai, I realized that I do enjoy bringing out the potential in others. I created a stimulating and challenging environment for someone and I saw him improve because of it. If I received nothing else from Lemonade Day, at least I know I want to have more gratifying feelings similar to that.

I cannot stress enough the importance of this program.  While it was definitely a foreign experience for me and the rest of the students, I believe it had a greater, more lasting effect on the children.  I can remember back to my middle school days in which I attended a private school.  We didn’t have any programs that gave us a hands-on experience with any real-life scenarios, like business.  Honestly, I had no idea what budgeting was, but clearly, how hard could it have been to learn?  Jalaw and Nikai now have a head start on thousands of kids across the United States.  They had the opportunity to practice these important aspects of the business world early on and now their wildest aspirations of making a soda company and t-shirt line are more real than when I was ten years old and dreaming of creating a newspaper.  Imagination is a powerful tool that should always be accessible no matter what age, but when it is paired with knowledge the combination is creatively destructive.  Kids like Jalaw and Nikai, who can dream while remaining pragmatic, are the future of our nation’s innovation and financial prosperity.

By the way, the two surpassed their financial goal by making $149.

Maxwell

 

Lammily: Challenging the Perception of Beauty

Societies’ perception of beauty is completely based on a false reality that is perpetuated by television, the fashion industry, and even the dolls our children play with today.  The debate over this issue, this craze, has long been discussed; however, little has changed.  Each year we can count on watching “Angels” seductively walk down a runway which promotes borderline unhealthy physiques that women all across the world painstakingly try to achieve.  Every time we walk into a toy store we can count on seeing the iconic Barbie doll, an idealized, yet implausibly, shaped blonde figurine which millions of girls and boys have grown up with. Nickolay Lamm, creator of Lammily , has finally challenged these surreal desires.

Lamm, a Pittsburgh based artist and researcher, has begged the question: What if fashion dolls were made using standard human body proportions?  Provided by the CDC, Lamm has used the average body measurements of a nineteen year old women to generate a 3D digital prototype of a doll he hopes to produce.

Just two days ago, Lamm used Crowdtilt to garner crowd-sourced funding for his venture.  His target amount to cover the costs of manufacturing was $95,000.  Today, he has succeeded this goal by over $100,000 with twenty-nine days left in the first round of financing.

Lamm has been lauded for his previous work by Buzzfeed, Business Insider, Huffington Post, and many more news outlets.  The USA Today featured Lammily just yesterday.  Lamm’s ability to ask the unthought of questions and then visualize the answers in artistic renderings is the reason why Lammily is so innovative.  In our terms, Lamm is an entrepreneur.  A clear void in the fashion doll market was apparent and he has created a way to effectively exploit it.

I would also like to comment on his use of crowd-funding, a brilliant idea in my opinion.  Rather than trying to meet with investors to back his project, which we know can often lead to failure, he opened Lammily up to the public for support.  This suggests (A) his confidence and the market potential for the fashion doll, and (B) his understanding of the intended retail audience.  I do not think crowd-sourcing works for every entrepreneur, as it is necessary that your product receives the proper amount of attention for such a decision to pay off.  With that being said though, I believe this way of financing is an under-utilized option within the entrepreneurial community.

Nickolay Lamm and Lammily are prime examples of why entrepreneurs and innovation are integral parts of our society.  Lammily challenges a convention that, frankly, is unattainable while creating a new socially progressive alternative.  This is what pushes boundaries.  This is how new paradigms are created.  Congratulations on a wonderfully thought out product.

Maxwell

WTF is a Bitcoin?

Over the past several months, following the discovery of Silk Road, I’ve been hearing a lot about Bitcoins, the online currency.  For those of you who don’t know what Silk Road is, long story short, an inconspicuous man named, Ross William Ulbricht, was arrested by the FBI in early October for allegedly running an illegal online marketplace which housed everything from hitmen to illegal drugs.  According to reports, the market place is responsible for over $28 million in consumer transactions, the catch though, its all anonymous.  If you are interested about this former underground cyber network, I encourage you to check out this synopsis by USA Today .

Having been a pretty obscure and widespread news story, I feel as though a lot of people, including myself, don’t exactly know what a Bitcoin is.  I did some research so I could make this digestible post for you all.

A Bitcoin is not physical currency.  It was created in 2009 by pseudonymous developer Satoshi Nakamoto, as an online and anonymous currency.  It is not monitored or controlled by any federal entities, like the US Federal Reserve or the Federal Deposit Insurance Corporation, which means money invested in Bitcoin is at risk of being lost pending any major crashes in the volatile market.

Since Bitcoins are only online, they are created, or found, through a process called “mining” in which computer users attempt to solve mathematical algorithms related to the current number of Bitcoins.  The actual number of Bitcoins to be in circulation is fixed.  The Bitcoin Foundation claims that there can only be 21 million Bitcoins at a time; in circulation right now are about 12.3 million.  Don’t take this post and run with this whole idea of mining for Bitcoins, though.  The process takes up a large amount of space on a computer and special programs are utilized to complete the mining.

Currently, Bitcoin is a legal monetary system. It is a viable alternative for some because of its privacy, much like cash, and because it is unregulated by the government, those cynics and independent ‘stick-it-to-the-man’ hipster types can truly be autonomous with their finances.

CoinYe
Kanye West inspired Bitcoin

Right now, Bitcoin is hot.  Just last month a new Bitcoin company created their form of crypto-currency around rapper, Kanye West, calling it CoinYe.  Unfortunately, due to an ensuing legal battle with the rapper, Coinye has abandoned their project.  As a young investor or as someone who is looking for a ‘get rich quick’ scheme, I can see the allure of Bitcoin.  According to BlockChain , the market for Bitcoins was soaring over $900 USD until it took a tumble to a little over $500 earlier this month.  These fluctuations are not unfamiliar in this market.  You can see on the graph how many spikes and dips occurred over the past couple of months.  For now, Bitcoin is a mysterious novelty that continues to grow in popularity and infamy each and everyday.  As a young and prospective investor myself, I am wary of its volatility.  Perhaps one day it can become a stable and consistently profitable market.

Maxwell

Dare to Dream

Unemployment fell to 6.7% in December from 7% in November, according to the Bureau of Labor Statistics.  This was an unexpected drop since the current model anticipated unemployment to remain steady around 7%.  This major (I’m considering .3% to be major when you think about the thousands of people who are now employed) reduction created roughly 74,000 new jobs; however, it is still below the 200,000 mark which economists had forecasted for this period.

On the other hand, Gallup Inc. has measured the current employment rate at 42.9% with their simplified Payroll-to-Population statistic, which measures the unemployment rate as a percent of adults in full-time jobs as a percentage of the total U.S. adult population.   This number dropped from November’s percentage of 43.7%, making it the lowest number Gallup has measured since March of 2011.

Is this cause for concern?  According to the Bureau, the improvement is good, but I feel as though our nation is lacking something, some je ne sais quoi, to propel our industries and businesses further.  We owe it to the millions of people who have stopped searching for jobs, to keep pushing for economic development.  Do you know what people all across the United States are concerned about?  According to Jim Clifton, CEO of Gallup Inc., its having a good job.

About three weeks ago, the freshmen in The George Washington University School of Business’s First Year Development Program had the opportunity to listen to Mr. Clifton speak about the importance of entrepreneurship.  According to his blog post, which he posted the following day, 400,000 small businesses and start-ups are being created annually, while 470,000 are failing annually.  Up until 2008, start-ups outpaced business failures by about 100,000 per year, but within the past six years that number has turned negative.  Due to the volatile market and foggy future of businesses, I think entrepreneurs are wary and more reluctant than ever to try their hand at owning their own businesses.  This is unfortunate because 50% of all jobs are in the small business sector, and according to the Small Business Administration, 65% of all new good jobs are created by them.

Despite these disappointing statistics, I would agree with Mr. Clifton in that now is the time to be taking chances on small businesses.  President Obama in his State of the Union address said, “We know that the nation that goes all-in on innovation today will own the global economy tomorrow.”  While I agree with this sentiment, what’s innovation without a sound business plan and business leader?

This is where entrepreneurs and business students come in to play; we need you.  The United States needs not only the Steve Wozniaks, but the Steve Jobs of the world to take innovative ideas and sculpt strong strategies and team members around them, so that they can be successfully integrated into our households.  And moreover, this will push our bounds as a society and also serve as a catalyst for our economic activity to spark employment growth.  Business is no longer purely about the bottom-line, this is how entrepreneurs and students can directly affect the wellbeing of others.

My message to you young and talented business hopefuls: do not be afraid to imagine.  Think about how many silly ideas you had as a child.  I remember one specific, crazy invention that I had when I was little, it was called the Triple Tasker.  What was made out of cardboard was a contraption (really just three square openings) that would allow the user to carry three different items in one awkward, compartmentalized big box.  While this was clearly not a practical idea, I wasn’t afraid to let my mind wander and think of obscure things.  Dream big.  If you want to create the next Nike, set out and do it.  Create a strategy, go to school, gather the proper people to help you and keep fighting for your goals.  It is you people who are creative and have a strong passion for turning products and services into money machines that will propel our economy to a $17 trillion GDP to a $30 trillion GDP.

To the policy makers and current business leaders: help our young entrepreneurs and business leaders accomplish their goals.  Target these young hopefuls early and develop their strengths and skills at an early age so that their potential can be maximized.  I implore you, for our future and economic health is dependent on the youth who dream and learn the biggest.

Maxwell

Jay Z: Maturity

Albeit a somewhat disappointing evening for the fans of Roc Nation and Jay Z, as Hova came away with one Grammy, we did get to see the music industry’s most powerful couple show us how to truly rock a stage…so I guess it wasn’t all that bad.

Congratulations to Macklemore and Ryan Lewis for their album, The Heist, winning Rap Album of the Year.  Jay Z still has the most platinum albums out of any solo artist to ever perform, yes, more than Elvis, so stick that in your pipe and smoke it, Ben Haggerty (AKA Macklemore).

I digress, without further adieu, I present to you the final part of my research behind hip hop’s biggest brand: the maturation of Shawn Carter.

At the point of maturity, a veteran firm has achieved a certain amount of name recognition, their sales require less effort, the business produces a reliable stream of cash, and intensive marketing or redevelopment may be needed to increase or maintain market position.  Picture Jay Z as a mature firm.  He is no longer an artist trying to find his place in the industry, but rather a mogul who runs his own record label (Roc Nation) and has the most albums to go platinum as a solo artist.  It is safe to say that he has attained such a position where not much he does is considered a failure.  With that being said though, how does he maintain his level of success as his career progresses?  Enter, Beyoncé.

“In terms of the entertainment industry, it’s the biggest merger you could possibly imagine,” (Bloomberg, 188).  In 2008, Jay Z and mega-star in her own right, Beyoncé Knowles, were married.  On a strictly financial basis, this could be considered a business transaction, a merger, where two brands came together to form a joint venture to achieve profits greater than they could have dreamed of on their own (according to Forbes, the Carter Family is the highest earning celebrity couple).  When thinking about Jay Z’s upside, the marriage provides different financial opportunities.  For example, in 2004, while Beyoncé and Jay Z were dating, Carter invested $10 million into beauty company, Carol’s Daughter (“Carol’s Daughter Poised for Growth,” Julie Naughton).  Would former drug dealer turned rapper have invested in such a company if it were not for Beyoncé?  Beyoncé offers Jay Z a new fan base, “We exchange audiences,” Jay Z says (Bloomberg, 198), but more than that a female perspective of investment opportunities.  It is understandable that Jay Z wouldn’t be interested in investing in a company that is geared toward African American women, but with his relationship with Beyoncé, who’s a global icon in her own right, those doors are now open to the rapper.  Beyoncé is an asset to Jay Z, and like a mature company, she can be used to rebrand and recreate the image of Jay Z.  Moreover, with the birth of their daughter, Blue Ivy, Jay Z is now perceived as more than just an entertainer, but a father and a family man; I hear the sound of doors being opened and lots of money coming in.  A merger/marriage benefits both joining entities because it creates new avenues for their global brands to travel and reach the millions of people who’ve yet to be touched by their business savvy.

As previously mentioned, at the pinnacle of a business career name recognition, effortless sales, and a steady stream of revenue have been acquired.  However, another aspect of such a point is that business leaders or firms attempt to give back or, teach those who have not been as fortunate, the tools to attain such success.  Many corporations and companies, like Starbucks and Nike, have established foundations to improve the quality of life for a specific demographic of people or to address issues that pertain to the scope of their industry.  Jay Z, too, has a foundation.  Carter and his mother, Gloria Carter, founded the Shawn Carter Foundation in 2002.  It was established because, according to Jay Z in the interview with Steven Forbes and Warren Buffet, “such a small thing changed my life, right? A sixth-grade teacher said, ‘You know what, you’re kind of smart.’ And I believed her.”  Carter understands that not everyone can be as lucky as he has been thus far in life.  Not everyone can “bet it all” on the music industry and try to be successful without any formal education.  The Foundation stresses the need for higher education in order to explore and develop one’s mind.  Such efforts cannot be attempted if the resources and finances are not available, though.  The Shawn Carter Foundation has grown with Carter as he has succeeded financially during his music career.  According to the foundation’s website, they have awarded over $1.3 million to students so they could pursue higher learning.  Jay Z’s tool to success is intellect and a different understanding of the world around him; he recognizes that education is needed to reach such points.

Another philanthropic way, in which Jay Z gives back, is through his current lifestyle company, Roc Nation.  Roc Nation is primarily a record label, but it recently began representing professional athletes.  It is different from other representation companies because it focuses on the development, cultivation and continued support of its clients.  In an interview with BBC Radio’s Zane Lowe, Jay Z talks about how his new sports management division of the company alters the current industry.  It is no secret that the sports industry dwarfs the music industry in terms of revenue.  Players are being paid millions upon millions of dollars, but they aren’t receiving the support they need to maintain their wealth for the years to come after their playing days.  The average playing career in the NFL is three to four years, and shortly after that players end up broke.  Carter says, “Now they (current sports agents) have to wake up and go to work.  They’ve spent fifteen, twenty years just sitting back and collecting the check, now they have to see how their [client’s] mama doing and if his mental situation is where it needs to be.”  Jay Z understands that he stands less to gain from his clients than they stand to gain from him.  For Jay Z it is more than the profits.  With Roc Nation and Roc Nation sports, he wants to promote financial literacy, so that young and highly successful people can be secure in the future when they no longer have the ability to produce at profitable levels.  Despite the company being a business, its principle is purely philanthropic, and socially conscious.

Jay Z had to lay the groundwork himself as a young and unproven artist.  It was he who sold his tracks out of his car, along with business partner Damon Dash, and it was he who founded his own label, Roc-A-Fella Records, in order to distribute his music on a larger scale.  Jay Z the entrepreneur invested the money, time, and energy to promote himself as a brand, and when that wasn’t enough he sought out bigger record labels to help with his production.  Through consistent output of music and innovation in the way Jay Z could profit from his brand, he has achieved a respected and revered status in the industry.  He has the attention and command of his listeners, and when his name is attached to some new product or some new album they respond.  This suggests that there is a pattern to success no matter what the industry or profession.  Jay Z’s physical journey to fame and wealth was quite different than that of others who have attained the same position, but the characteristics and genius behind them are very much the same.

Shawn Carter is needed, not just for pop-culture, but also for Black America.  We need a beacon of hope and of prominence where we can look to as a rubric for success.  In Jay Z’s own words, “We want to be looked at as a real solid company.  Not a good black company, but a good company ‘cause there’s a difference,” (“Jigga Man Jay Z Gets Down With Vibe”).  Jay Z is driven and determined to attain a spot in society that black Americans do not see everyday, and he’s doing it for us.  I, too, used to be a part of the group that thought rappers were selfish, stupid and materialistic ignoramuses.  Before I knew anything about Jay Z, he was grouped with such artists.  I don’t know if the hip-hop genre will ever distance itself from that notion, but I believe Jay Z has made a distinct decision to be a different example of African American identity.  Rap is poetry.  The rhymes and subliminal messages are beautiful, and when artists are straightforward with their messages the art form loses a bit of its appeal.  If you look deep enough at all aspects of Jay Z’s career, his message and desire of becoming an influential figure which the African American people can look towards is evident.

Thanks for listening.

Maxwell