Having read Schumpeter’s views about innovations and inventions in the area of small and large enterprises in the past few days, it was next to impossible for me to not take note of the innovative genius of Sean O’Connor (who in 2001 owned a San Francisco club, Thee Parkside). With the downfall of the dot com bubble, the entrepreneur decided to focus his attention to cheaper food items and stumbled upon the idea of selling pan cake mix in pressurize cans and even got it patented in 2005. The concept was such a success that in 2008 his “Batter Blaster” grossed $15 million in revenue. The product is also retailed through Costco (Costco, Fortune 500) and Whole Foods, (WFMI, Fortune 500).
This example further highlights the theory that small enterprises are better equipped to introduce new technology or ideas as compared to their larger counterparts who proceed with any new innovation ONLY when the larger market appears assured. Sometimes it’s advantageous to start with a small market segment and build up a brand name through word of mouth and then expand. Empirical studies show that this rarely happens in the larger firms as their production structure is not very flexible owing to their economies of scale.
(source: CnnMoney.com/SmallBusiness2009)
Sunday, January 24, 2010
Sunday, January 10, 2010
Understanding Small Enterprise Finance
Having started summer school, (more due to my dismal performance in the previous semester than anything else), I actually love every minute of it now (without any compulsion i.e,).It might have something to do with the Prof I reckon (dote on his teachings) and also on the paper I was given, "small enterprise finance". Doing my research to comprehend better the idea of small enterprises, I stumbled upon the Neoclassical Economic concept of Marginal Change. To make it short and simple for my "non finance" friends, I just wanted to share the beauty of the way the base of small business finance is explained by 3 veterans:
They infer that Finance is a well developed body of idea based on the neoclassical economic principles, three of which act as its backbone.
1. Time is money:
This concept coined by Fisher explains the time value of money in terms of compound interest, discount rate and the likes, which can further be developed mathematically to support areas like project appraisal and so on.
2. Don't put all your eggs in one basket:
The idea behind surrendering the eggs to not one but several baskets (the ingenious thought of Markowitz) was actually the lesson on diversification, which now is generalized into the Capital Asset Pricing Model or CAPM.
3. You can't fool all the people all of the time:
Modigliani and Miller discovered the all so obvious but less thought of fact, that in the presence of perfect competition and profit maximization and zero individual influence on price, it was nearly impossible to have market efficiency and arbitrage.
while the assumptions (the food and fodder for economics) may turn out to be otherwise at times, the fact remains that they DO constitute a very strong base to the theories that have the impeccable ability of great predictions!
They infer that Finance is a well developed body of idea based on the neoclassical economic principles, three of which act as its backbone.
1. Time is money:
This concept coined by Fisher explains the time value of money in terms of compound interest, discount rate and the likes, which can further be developed mathematically to support areas like project appraisal and so on.
2. Don't put all your eggs in one basket:
The idea behind surrendering the eggs to not one but several baskets (the ingenious thought of Markowitz) was actually the lesson on diversification, which now is generalized into the Capital Asset Pricing Model or CAPM.
3. You can't fool all the people all of the time:
Modigliani and Miller discovered the all so obvious but less thought of fact, that in the presence of perfect competition and profit maximization and zero individual influence on price, it was nearly impossible to have market efficiency and arbitrage.
while the assumptions (the food and fodder for economics) may turn out to be otherwise at times, the fact remains that they DO constitute a very strong base to the theories that have the impeccable ability of great predictions!
Tuesday, January 5, 2010
Where are my twenties going?
That's the question everyone seems to be asking around me. Not to mention that everyone I ask the question to either counter-questions me or says ,' If only I knew'. Why the sudden need for everyone to know where their lives are headed? I mean, did we care where life was going when we were 10? No. Did we care where life was going when we were 17? No. It only hits hard at when we hit that despicable number - Twenty. Then everyone's suddenly talking utter tosh about climate change and marriage and turning relationships long-term and money and investing and blah, blah, blah... If you ask me, it doesn't even matter. None of us know what's going to happen anyway.
The only thing I know is this - if I waste all my time worrying in my twenties, I'm going to be doing something worse when in my thirties.
REGRETTING.
Now that's something I don't ever ever want to be doing.
...all credit to Nida :)
As weird as it gets...
I must say the article on CNN on "The Dumbest Moments in Business 2009 made for an interesting read.
My (two) personal favorites from there included Goldman Sachs CEO Lloyd Blankfein going over the board confessing to 'a Times of London reporter that he was just a banker "doing God's work.".... For $43 million a year'....:D thanks to David Ellis for delivering this good news to us all..
Next on the list would be the desperate effort by All Nippon Airways to unburden the Boeing 777 of certain unwanted load (in this case,stuff in the human bladder of humans of course), all for the sake of reducing the over all weight of the on-flight-baggage,saving fuel and reducing greenhouse gas emissions!!!..how much of it actually worked is undisclosed (for obvious reasons one would infer) but the effort did make it to my list of "are you for REAL people????"...thanks to J.P. for this insightful info on the creative execution of common sense (or rather, the lack of it) :P
My (two) personal favorites from there included Goldman Sachs CEO Lloyd Blankfein going over the board confessing to 'a Times of London reporter that he was just a banker "doing God's work.".... For $43 million a year'....:D thanks to David Ellis for delivering this good news to us all..
Next on the list would be the desperate effort by All Nippon Airways to unburden the Boeing 777 of certain unwanted load (in this case,stuff in the human bladder of humans of course), all for the sake of reducing the over all weight of the on-flight-baggage,saving fuel and reducing greenhouse gas emissions!!!..how much of it actually worked is undisclosed (for obvious reasons one would infer) but the effort did make it to my list of "are you for REAL people????"...thanks to J.P. for this insightful info on the creative execution of common sense (or rather, the lack of it) :P
Friday, January 1, 2010
To Blog or Not To Blog..
The dilemma of whether to write or just waste away the ever impregnating thoughts in my mind finally reached a consensus of letting themselves out (no matter how vague they might seem or appear), after the silent New Years' Eve that I spent in quiet and peace doing what I know I am not too good at-contemplating the year gone by. Well the entirety of credit can't be bestowed fully upon the populating ideas in my head but rather and more honestly to my fruitless effort at being unable to conjure up pictures of moments witnessed, thoughts provoked and feelings evoked, at the call of my will.
So I decided to share what my mind perceives, of things that I do and those that I wish I could do (like not knowing how to swim while in New Zealand, or never getting my backhand in tennis right, or even better, never being able to get up in the morning until its 10:00am and not being able to sleep until its way past 3:00am...and its endless) but the good news though is that I started working on them this New Years :) I just started with my blog..duh..
But besides, played tennis for 2hours and must say, the backhand looks promising...dined with David Smith savoring "FREE LUNCH" ...took pictures wherever and whenever I felt the beauty of New Zealand was too precious to be missed and yes, called up loved ones to wish them the pleasantness of this year which I so wish for myself.
Not a bad start huh for a self proclaimed procrastinator :D
So I decided to share what my mind perceives, of things that I do and those that I wish I could do (like not knowing how to swim while in New Zealand, or never getting my backhand in tennis right, or even better, never being able to get up in the morning until its 10:00am and not being able to sleep until its way past 3:00am...and its endless) but the good news though is that I started working on them this New Years :) I just started with my blog..duh..
But besides, played tennis for 2hours and must say, the backhand looks promising...dined with David Smith savoring "FREE LUNCH" ...took pictures wherever and whenever I felt the beauty of New Zealand was too precious to be missed and yes, called up loved ones to wish them the pleasantness of this year which I so wish for myself.
Not a bad start huh for a self proclaimed procrastinator :D
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