Last month – August 30 – brought us National Slinky Day. We did not know the classic toy had its own day, nor were we aware that it was another one of those happy accidents often at the heart of entrepreneurial origin stories.
In 1943, mechanical engineer Richard James was designing a device that the Navy could use to secure equipment and shipments on ships while they rocked at sea. As the story goes, he dropped the coiled wires he was tinkering with on the ground and watched them tumble end-over-end across the floor.
After dropping the coil, he could have gotten up, frustrated, and chased after it without a second thought. But he—as inventors often do—had a second thought: perhaps this would make a good toy. A lot of inventors talk about keeping an open mind and maintaining playful habits, explains Monica Smith, the head of exhibitions at Smithsonian’s Lemelson Center for the Study of Invention and Innovation.
“The Slinky was something that he saw happen and he thought it was cool. It wasn’t an obvious idea for a toy,” she says. “It wasn’t something he was setting out for—it’s more serendipitous than that. He kept an open mind and found a different use for it.”
Corporate managers believe that to the extent they can predict the future, they can control it. Entrepreneurs believe that to the extent they can control the future, they don’t need to predict it. Entrepreneurs thrive on contingency. The best ones improvise their way to an outcome that in retrospect feels ordained…
Thriving on contingency, outcomes that feel ordained… some could argue this conflates luck and skill. Napoleon famously (and apocryphally) was said to prefer lucky generals over clever ones. (He was reliably quoted on the subject thusly: “A bold general may be lucky but no general can be lucky unless he is bold.”)
Recent research, this time from Harvard Business School, emphasizes the importance of serendipity as opposed to simple luck. In Make Serendipity Work For You authors Mark de Rond, Adrian Moorhouse, and Matt Rogan recount an old tale about three princes from Serendip and their skills of observation and problem-solving:
The princes did far more than make chance observations. The tale is instructive because the princes relied on their ability to recombine a series of casual observations into something meaningful. And it is just this combinatorial skill — the ability to combine events or observations in meaningful ways — that differentiates serendipity from luck. Serendipity is to see meaningful combinations where others do not.
Richard James saw that “something meaningful” and used his engineering expertise to work out the ideal dimensions for the spring – 80 feet of wire into a two-inch spiral. (The exact mathematical equation for the slinky can be found in his patent materials.)
He [Richard] left his family in 1960 to join a religious cult in Bolivia and died there in 1974. He left behind six children between the ages of 2 and 18 and a business in shambles… Using a mortgage taken out on her house, James “gambled everything she had” and went to a New York toy show in 1963.
That was the same year the classic toy’s catchy jingle aired on television for the first time.
“The reason everyone knows the jingle,” her son told the Philadelphia Inquirer, “is that we were too broke to buy a new one. We burned it into the mentality of the country.”
During the Vietnam War, soldiers would sometimes use a Slinky as a portable, extendable antenna for their radios, fastening one end to themselves and tossing the other end over a tree branch to get a clear signal.
Symphonic Distribution Founder Jorge Brea. Photo courtesy of Symphonic Distribution
The music industry changes fast. In less than two decades, listeners went from buying CDs to buying downloads to paying monthly subscriptions for streaming services—all while vinyl sales surged. For independent musicians, it can be hard to keep up with the fluctuations in the industry. Symphonic Distribution wants to help.
Founded in 2006 by Jorge Brea, Symphonic is a digital music distribution and marketing company that helps indie artists reach new audiences. Headquartered in Tampa, the company’s 48 employees are also based out of offices in Brooklyn, Nashville, Denver and Bogota, Colombia. Symphonic has worked with artists as diverse as reggaeton artist Daddy Yankee, EDM producer Marshmello and country singer Scotty McCreery. Last year, the company made $14 million in revenue.
Back in the day, the only way to get your music heard by a broad audience was to go through major record labels. But times have changed.
“The music industry has become so democratized that you don’t have to go down that route of being signed to a major [record label],” said Brea, who was recognized by Billboard magazine as an Indie Power Player in 2018 and 2019. “You can work with a company like ours, and we’ll help get your music out there.”
Major record labels have seemingly inexhaustible resources to spend on promotion, but working with an independent distributor like Symphonic means artists typically still control their rights and earn a higher percentage of their royalties.
Symphonic offers clients a “360 experience,” according to Brea, which includes services such as music video distribution, post-production work and marketing to help elevate their products. It helps place music on platforms such as Apple Music, Spotify, Pandora and YouTube, charging a standard rate of 15%, meaning artists keep 85% of their royalties. Each deal can be customized depending on the artist’s situation.
Brea first launched Symphonic to distribute his own songs. As a local electronic DJ and producer, he couldn’t afford to cut vinyl and CDs, so instead he turned to digital distribution, found some success and started offering the service to other artists.
In recent years, major record labels have caught on to the value of independent, boutique-style distribution. As such, companies like Sony, Warner Music and Universal have purchased indie distribution companies like The Orchard, Ingrooves and Alternative Distribution Alliance, each of which compete with Symphonic.
However, Brea thinks that remaining truly independent gives Symphonic added value for clients, enabling the company to provide exceptional customer service and adjust to changing trends in the industry.
One way Symphonic stays ahead of the curve is by working in markets before they gain mainstream popularity on the global stage. Brea said the company’s current focus is on expanding its presence in Latin America, but he is eyeing artists and opportunities in China, Russia and African countries as well.
Despite the international reach, Brea remains committed to promoting musicians in the Tampa Bay Area. In August, Symphonic hosted the fifth annual Vibes of the Bay event, an event designed to highlight local artists.
“Tampa is a great business, finance and health care market, but there isn’t a big music industry here,” he said. “We want to make sure that we can help artists from the Tampa Bay Area be heard.”
One of our most-read posts here at NVSE is The Fate of Control (December 2009). In it we cite a phrase coined by Fred Wilson’s at AVC – “shtick tolerance” – as a key to any successful long term relationship. As we blogged in that decade-ago December:
You don’t have to accept everything about your partner – outside of integrity/honesty – but you must be able to more or less tune some things out over the long haul. You’re patient with their shtick because they’re patient with yours. It’s hard work.
Fred is back with another outstanding post, once again on the subject of long term relationships. Here’s an excerpt from The Long Engagement:
What I would prefer to see, and do see in many cases, is a founder who takes the time while they are not raising money to build a number of relationships with potential investors and then engages those investors in a process when it is time to raise capital. I like to call this process the “long engagement”.
It might sound like a lot more work than the fast and furious fundraising process that many founders are running these days.
But I don’t think it is a lot more work. Building relationships over a six to twelve month period can take the form of an occasional face to face meeting, emails back and forth, and even a few visits to the office by the investor. And none of that has to have the pressure of a pitch, an ask, and a price.
We think Fred is spot on. In most cases our relationship with an entrepreneur starts early – months or even years in advance of an investment. Ideally everyone involved has sufficient time and opportunity to explore the fit and potential of the chemistry that will prove crucial to success. Here’s how we put it in a March 2013 post, Due diligence: mine, yours, and ours:
Entrepreneurs who are raising growth capital (i.e. bringing on a long term partner) as opposed to selling their businesses (i.e. get the best valuation) should invest a lot of time conducting due diligence on their prospective financial partner. A credible partner will let you (indeed, encourage you) to talk to as many of their previous entrepreneur partners as you want to get a feel for what they are like to work with.
Entrepreneurs should ask for references from successful investments, unsuccessful investments and current investments. Ask for the venture firm’s entire list of previous and current investments and randomly call a number of them. Find some independent sources on your own who weren’t provided as references but know the venture firm…
Establish a solid foundation for the relationship early: Will you share the same vision? Agree on ground rules?
Once the honeymoon is over, will you collectively put forth the constant effort required to sustain the relationship? How will you resolve conflict? Are communications open and largely free of clashing egos? Does the quality of the arguments make the outcomes better?
The women and men in leadership at PowerChord have different, and complementary, thought processes, said Lanny Tucker, a tech industry veteran who was named CEO at PowerChord in 2016.
“Sometimes us men, we want to jump up and pull the trigger and a lot of action. The women in the team add a different perspective and a very valuable perspective that benefits our customer, our recruitment of personnel and our stature in the community,” Tucker said.
PowerChord develops software-as-a-service that provides brand specific marketing for its clients, companies with hundreds or thousands of dealer distributors or franchisees.
Ballast Point, a Tampa growth capital and venture equity firm, invested $10 million in PowerChord in 2016, a few months after Lanny Tucker joined as CEO.
Since then, PowerChord has grown from 35 employees to almost 80, and as the company grows, it’s important that female leadership grow as well, Tucker said.
“There’s been study after study done. Companies that have a good gender mix have more innovation, more profitability … and they’re more admired,” Tucker said, citing Fortunemagazine’s annual list of the world’s most admired companies.“Companies that are ranked the highest in that group have almost twice as many females in senior leadership positions than the less admired companies.”
PowerChord announced the latest promotions last week. Michelle Tipton was named vice president of finance, and Stephanie Shreve was named vice president of customer success. Both are seven-year veterans of the company. Their promotions came two months after PowerChord named its first female vice president, Nikki Vegenski, who is vice president for marketing and strategy and also a long-time PowerChord employee.
The company named two directors as well : Nicole Clemens as director of people and culture, and Kate Dalley as director of product management.
“These are our leaders of the future. They are going to be people both with PowerChord or other companies that will take on C-level capabilities and functions in the future and we’re really proud of what they do and what they stand for,” Tucker said.
Meet the new members of the PowerChord leadership team
Michelle Tipton served as financial controller as well as accountant and HR specialist with PowerChord for seven years, before she was promoted to vice president of finance.
Traditionally, finance departments focus on historical performance, Tucker said. One of Tipton’s goals in her new role is to use data that reflects PowerChord’s past to help the company move forward.
“The past is all relevant data and it’s really important to have those analytical skills and toolsets, but also how can we expand the current programs and platforms that we’re using to become more of a data-driven team, to support the organization’s strategies moving forward,” Tipton said.
Tipton’s job is taking the next big step, as artificial intelligence and data analytics are transforming the finance function, Tucker said.
“That’s the predictive part, being able to look into the future with the data that we have in the past and be proactive in our decision making, as opposed to just reactive,” he said.
Stephanie Shreve served as PowerChord’s director of partner engagement for seven years before she was named vice president of customer success.
“My focus will be on fostering an environment of customer experience,” Shreve said. “From the moment we start talking to a potential client all the way through to bringing them on board, we want to make that a smooth seamless experience, so they can then offer exceptional customer experience to their customers.”
Prospective clients face a tough decision when considering taking on new business partners, Tucker said.
“That fear, doubt and uncertainty is won over by both metrics and data, it’s won over by past performance and recommendations of current customers. And quite frankly, a large part is personality and trust. Trust is the most important word, and that’s the hallmark that Stephanie is trying to build,” Tucker said.
Nicole Clemens, the new director of people and culture, will drive key functions of human resources and business strategy with a modern perspective built upon creating a collaborative culture and ensuring equality for all employees. Since joining PowerChord in 2015, Clemens has spearheaded instituting paid paternity leave, implemented a company-wide key performance indicators and bonus program, and has coordinated culture events to engage employees.
Kate Dalley, director of product management, is dedicated to providing scalable and efficient solutions to PowerChord’s local and global markets. She is also responsible for assessing ongoing industry needs to ensure the company is providing innovative and transformational SaaS services, while also continuing to define the ongoing evolution of the PowerChord platform.
Affordability, tech talent pools and access to capital top the list.
It costs $2000 to rent a U-Haul in San Francisco. Rent one anywhere else and it’s roughly $100. This year the Bay Area will lose more people than any other region in the country. The reason is a variety of factors; affordability, access to opportunity and technology making it increasingly easier to work from anywhere.
When you’re considering where to relocate, which I’m in the process of doing myself, access (both to capital and talent) is key. What I look for in a destination city are strong existing companies, a large talent pool and capital that exists but may not be investing in tech yet.
Think Outside of Conventional Tech Hubs
I toured Orlando in January. In the last six years the city has grown 16.31 percent. And at first blush you may think theme parks, retirees and tourism. But they have the largest university in the country, based on enrollment, in UCF. Downtown is young. And there’s a pipeline of talent both from universities and strong existing companies like Disney, Lockheed Martin and EA Sports.
Orlando has already seen the Silicon Valley exodus pay dividends, with fast-growing Fattmerchant. The young payment processing company is growing rapidly. Founder Suneera Madhani and her brother Sal Rehmetullah, who worked in Silicon Valley, intentionally chose to plant their flag in Orlando.
“Fattmerchant is where we are today because of the support of the Orlando community,” said Suneera Madhani, CEO, Fattmerchant?. “We are proud to be Orlando born and bred and find that as we expand Orlando continues to have the infrastructure we need to not only achieve our growth but to continue to surpass our goals.”
Enter on the Upswing
“We’ve stayed ahead of the curve by testing and implementing bleeding-edge cleantech solutions, such as floating solar power, electric buses for public transit, and even positioning ourselves as a national research hub for autonomous and connected vehicles,” said Chris Castro, who leads sustainability and smart cities initiatives for the City of Orlando.
If Orlando wants to attract those leaving Silicon Valley it starts with the same things most cities pitched to Amazon for HQ2. Castro anticipated this years ago and has Orlando already prepared.
Donna L. Mackenzie, Executive Director, Canvs, Starter Studio, FireSpring Fund has worked to deliver a similar infrastructure to Silicon Valley in Orlando. Her space offers a variety of education programs that are open to the public, accelerator programs that take founders from idea to a scalable venture, collaborative work spaces, seed funding, and access to angel and venture capital.
Make Sure a City Invests in Education
Otronicon, Orlando’s annual tech conference, is different than anything I’ve ever attended. It’s for kids, rather than adults. It’s interactive, educational and full of plenty of Esports tournaments.
“It’s a great venue that introduces students to the high-tech world and gives them the opportunity for high-tech careers right here in our community,” said Adam Breed, Engineering Project Manager, Lockheed Martin?. “A software development panel at Otronicon featured a lead Lockheed Martin engineer and opened the eyes of a recent college graduate. He was quickly interviewed and brought into Lockheed Martin within weeks to help develop some of our most advanced simulators.”
Assess the Network
Full Sail University, which prepares people for work in entertainment, has also been paramount in this youth movement. Last year 66 Full Sail graduates worked on 10 Oscar winning films.
Chance Glasco, the co-Founder of Call of Duty is an alum. His latest venture Doghead Simulations is creating VR meeting space and is partnering with Full Sail University with its HQ on site. Having access to state-of-the-art and graduating talent was key in Glasco’s decision to stay local.
This rise of highly-trained entertainment talent has also translated in to a growing film industry. “Last year, the Orlando region saw a 78 percent increase in commercial productions when compared to the previous year. While Florida currently lacks an Entertainment Industry Financial Incentive Program,” said Sheena Fowler, Orlando Film Commissioner, and also a Full Sail alum.
What to Consider Most
Orlando’s challenge will be migrating real estate investors to startups and high tech. The success of Fattmerchant and the work Donna Mackenzie and others are doing in the incubator space will help.
If I’m a young company that wants to create a longer runway–keep costs low to buy time before success–I would chose Orlando. The young talent is there. There’s an Orlando tech ecosystem already in place that wants you to succeed.
There’s no state income tax, no inflated wages or housing and there’s a growing, young, downtown community.
Orlando is a lot like Bitcoin was five years ago, you should get in while it’s still cheap.
With a new CEO and additional equity financing to optimize wellness program delivery for small and midsize employers, MeYou Health is ready to become the first provider of a wellness software-as-a-service (SaaS) solution in the SMB market.
MeYou Health (MYH) today announced that Trapper Markelz, current President and Chief Operations Officer, has been named Chief Executive Officer of the Company. MYH has also secured additional equity financing from Ballast Point Ventures and other current investors to accelerate the Company’s efforts to optimize wellness program delivery for small and midsize employers. Both announcements are part of a major initiative by MYH to take its highly automated white-label platform for health plans and layer on a fully self-service customer interface to enable the Company to become the first provider of a wellness software-as-a-service (SaaS) solution in the SMB market.
Mr. Markelz, 40, began his career at MYH in 2009 as Head of Product, and in 2015 assumed the role of General Manager. He was named President and Chief Operating Officer in 2016 after MeYou Health was spun out from its former parent company, and he has been instrumental in building and scaling sales operations, account management, implementation, B2B marketing, and automated digital enrollment marketing.
Matt Rice, a partner with Ballast Point Ventures and Chairman of the MYH Board of Directors, says, “Trapper is the ideal person to lead the talented team at MeYou Health, as his vision, judgment, and leadership have been crucial to the Company’s success over the years. MYH’s move into the HR SaaS market has momentum, and we are excited to fund additional growth.”
“I’m very excited by this opportunity and see it as a great honor to lead this Company,” says Mr. Markelz. “Over the last eight years, our team has learned enormously from our work with hundreds of employers, both large and small. MeYou Health has always been a software company, and now we can use that software expertise to deliver a market-leading, fully automated solution.”
MeYou Health provides a full-feature, turn-key wellness suite optimized for small and midsize businesses. Designed for digital delivery, MeYou Health’s platform was built from the ground up to give employers a social, engaging, and effective alternative to traditional wellness programming. With industry-leading engagement and multiple clinical trials demonstrating impact, MeYou Health’s programs deliver measurable results to even the smallest organization. Founded in 2009 and based in Boston, MA, MeYou Health is made up of talented people from healthcare, engineering, design, and research backgrounds, all dedicated to helping employers improve their employees’ health and well-being.
Arnott brings experience in a wide range of global healthcare MIAMI – August 3, 2017 – TissueTech Inc. announced today that it has named John Arnott to its Board of Directors. Mr. Arnott was most recently Operating Partner and Executive Chairman of multiple portfolio companies for The Riverside Company, one of largest and oldest global private equity firms.
Mr. Arnott’s career in healthcare dates back four decades and he has an extensive background in corporate, private equity, international, regional and country operating environments, including senior positions with Idex Corporation, Alpine Biomed, Sierra Scientific, Hospira and Abbott Laboratories.
“Given John’s long and accomplished career, we feel he will be a strong addition to our board as we maintain our status as the leading experts in the scientific understanding and innovative clinical application of umbilical cord and amniotic tissue in regenerative medicine,” said Amy Tseng, Chief Executive Officer of TissueTech. “Just recently, TissueTech surpassed 300,000 human implants performed by clinicians. That milestone demonstrates that we’ve been increasingly successful in finding new and important arenas where regenerative therapy offers the potential to address underserved and unmet clinical needs and improve patients’ lives. The addition of John further strengthens our board due to his experience across a number of healthcare sectors with large global organizations.”
Mr. Arnott’s career launched in 1977 when he began work for the National Health Service in the United Kingdom, ultimately serving as Chief Medical Laboratory Scientific Officer for the Welsh National Blood Transfusion Service. From 1990 to 2003, he held several executive positions at Abbott Laboratories, including Vice President and Regional Director of European Operations and corporate Vice President of the Hospital Products Division. Before joining Riverside, he served as Chief Executive Officer & Chairman of Alpine Biomed, Executive Chairman of Sierra Scientific and President of Idex Health & Science LLC.
“TissueTech continues to pioneer the clinical application of the regenerative properties of human umbilical cord and amniotic membrane,” Arnott said. “Throughout my career, I’ve had the opportunity to participate in the development and commercialization of some of the world’s most innovative medical products. I look forward to bringing that experience to an organization that is committed to advancing the practice of medicine with continued innovation in regenerative medicine.”
About TissueTech, Inc.
TissueTech, Inc., the parent company of Amniox Medical, Inc. and Bio-Tissue, Inc., pioneered the development and clinical application of regenerative, amniotic tissue-based products. Amniox Medical markets products for use in the musculoskeletal and wound care markets; Bio-Tissue markets products for the ophthalmology and optometry markets. The National Institutes of Health (NIH) has supported TissueTech’s research with more than 30 continuous years of research grants. Since the company’s inception, clinicians have performed more than 300,000 human implants of the company’s products and published more than 300 peer-reviewed studies supporting its technology platform. The company’s first product, AmnioGraft®, is the only tissue graft designated by the FDA as homologous for promoting ophthalmic wound healing while suppressing scarring and inflammation.
The study listed tax breaks, government policies and cost of living as reasons tech companies are moving to Florida cities.
Huntsville, Ala., was first on the list.
“The tech industry is no longer bound to the coast,” said ZipRecruiter’s Chief Economic Adviser, Cathy Barrera. “As a result, we’re seeing the tech industry expand out of the major metropolis areas, and into smaller regional cities that have since flown largely under the radar.”
In The Spirit of the Laws Montesquieu posited that the invention of The Letter of Exchange was politically transforming because capital could now travel. In his view it has always been true that:
Commerce is sometimes destroyed by conquerors, sometimes cramped by monarchs; it traverses the earth, flies from the places where it is oppressed, and stays where it has liberty to breathe.
This is a collection of books that we routinely recommend to friends, colleagues, and the executives of our portfolio companies.
Everything is Obvious: *Once You Know the Answer – Duncan Watts
Drawing on the latest scientific research, along with a wealth of historical and contemporary examples, Watts shows how common sense reasoning and history conspire to mislead us into believing that we understand more about the world of human behavior than we do; and in turn, why attempts to predict, manage, or manipulate social and economic systems so often go awry.
Into Thin Air– John Krakauer The personal account of a deadly disaster at Mt. Everest in which experts who knew better still made tragically wrong decisions. There are some valuable lessons to be learned here about the perils of making decisions under pressure without adequate reflection on the possible outcomes.
The Goal – Eliyahu Goldratt
This gripping novel – featuring a harried plant manager working ever more desperately to save his plant and his marriage – is more than compulsive reading. It contains a serious message for all managers in industry and explains the ideas which underline the Theory of Constraints (TOC) developed by Eli Goldratt. This book is a staple of many MBA programs and is as relevant today as ever. It is also a great primer on the basics of manufacturing.
The Tipping Point – Malcolm Gladwell
Little changes can have big effects. When small numbers of people start behaving differently, that behavior can ripple outward until a critical mass is reached. Ideas, products, messages and behaviors “spread just like viruses do.” Great entrepreneurial companies experience one or more tipping points in their life cycles and think often about creative ways to bring them on.
Blink – Malcolm Gladwell
We can make better instant judgments by training our mind and senses to focus on the most relevant facts—and that less input (as long as it’s the right input) is better than more. This book relates directly to successful investing, since after all the hard analysis and due diligence is completed, the real decision comes down to a judgment “in the gut” that calls forth all the lessons learned over many years of investing.
Against the Gods – The Remarkable Story of Risk – Peter Bernstein
A comprehensive history of man’s efforts to understand risk and probability, beginning with early gamblers in ancient Greece, continuing through the 17th-century French mathematicians Pascal and Fermat and up to modern chaos theory. Along the way he demonstrates that understanding risk underlies everything from game theory to bridge-building to winemaking. A great read for entrepreneurs who have to think constantly about managing risk in their own businesses.
The Black Swan – Nassim Taleb
Examines the influence of highly improbable and unpredictable events that have massive impact. The problem is that we place too much weight on the odds that past events will repeat when most of the really big events are rare and unpredictable. Trying to extract general truths to explain them may be emotionally satisfying, but it’s practically useless. This book will make you think about risk differently, and it impacted BPV’s view of success and failure and the elements of chance that lead to both. In the end, it argues for humility when enjoying success and perspective when dealing with failure.
Talent is Overrated – Geoff Colvin
Greatness doesn’t come from DNA but from practice and perseverance honed over decades. The key is how you practice, how you analyze the results of your progress and learn from your mistakes, that enables you to achieve greatness. This book helps explain why, as investors, we have such a bias towards entrepreneurs who have both substantial domain expertise and years of experience building companies in their industry.
LEADERSHIP & MANAGEMENT
Why Great Leaders Don’t Take Yes for and Answer – Michael Roberto
The key to making successful strategic business decisions lies in how you design the decision-making process itself. Entrepreneurs will benefit from Professor Roberto’s analysis regarding how leaders can best understand both the data and biases that underlie key decisions.
Know What You Don’t Know – Michael Roberto
Go beyond mere “problem solving” to uncover and address emerging problems while they’re still manageable–before they mushroom into disaster. Many of the surprises that distract and sometimes derail entrepreneurs can be avoided or dealt with early if they know how to look for them ahead of time.
Walk the Walk – Alan Deutschman
What happens in those unusual cases of true leaders – in business, education, the military, and nonprofits – who always “walked the walk”, especially when times got tough. We have seen time and again the value of entrepreneurs who roll up their sleeves and execute alongside their employees. The best companies have employees who will give their all to make the company successful, and the key to that kind of devotion is a leader who walks the walk.
Built to Last – Jim Collins
A central myth, according to the authors, is that visionary companies start with a great product and are pushed into the future by charismatic leaders. Much more important, is flexibility and an atmosphere in which bright people were not afraid to “try a lot of stuff and keep what works.” We like this book even more than “Good to Great”.
The Loyalty Effect – Fred Reicheld
Major companies replace half their customers in five years, half their employees in four and a half and their investors in less than one – but traditional accounting measures fail to capture the impact. Fascinating research and real world examples of the economic impact of holding on to your customers for the long run.
Execution – Larry Bossidy & Ram Charan
Disciplines like strategy, leadership development, and innovation are the sexier aspects of being at the helm of a successful business, but the ultimate difference between a company and its competitors is the ability to execute. The right strategy, the best product, creating “economic moats” – all of those matter. But the truth is most entrepreneurs succeed relative to their competition due to superior execution. This book is also a favorite of Tom James, the CEO of Raymond James and member of the BPV Advisory Board.
Who: The A Method for Hiring – Geoff Smart & Randy Street
Smart and Street, who have helped some of the top players in the private equity world recruit senior managers for their portfolio companies, have broadened the how-to-hire process from interviews to a 360-degree perspective on recruiting A players. The authors boil down their recommendations into a 4-step process, from scorecard and source to select and sell. Every entrepreneur would benefit from reading this book and understanding how to make superior hiring decisions, as the true cost of bad hiring decisions is even greater than you think.
Power Score: Your Formula for Leadership Success – Geoff Smart, Randy Street & Alan Foster
Data from 15,000 management interviews over twenty years indicate that successful leaders get three things right, which can when combined into a “Power Score” and compared with the best proven leaders in the authors’ ghSMART database. The formula is simple, but very few leaders operate at consistently high levels in all three area. This book describes how to continuously improve in each area and offers several helpful real world examples of how great leaders do it. Backed up by a lot of great data and research, the process can’t help but enhance leadership success if executed faithfully.
Reckless Endangerment – Gretchen Morgenson & Joshua Rosner
Morgenson and Rosner draw back the curtain on Fannie Mae, the mortgage-finance giant that grew, with the support of the Clinton administration, through the 1990s, becoming a major opponent of government oversight even as it was benefiting from public subsidies. They expose the role played not only by Fannie Mae executives but also by enablers at Countrywide Financial, Goldman Sachs, the Federal Reserve, HUD, Congress, the FDIC, and the biggest players on Wall Street, to show how greed, aggression, and fear led countless officials to ignore warning signs of an imminent disaster.
The Forgotten Man: A New History of the Great Depression – A. Shlaes
This breezy narrative comes from the pen of a veteran journalist and economics reporter. “A fresh appraisal of what the New Deal did and did not accomplish,” and “a thoughtful, even-tempered corrective to too often unbalanced celebrations of FDR and his administration’s path-breaking policies.” Shlaes brings to the tale an emphasis on economic realities and consequences, especially when seen from the perspective of monetarist theory, and a focus on particular individuals and events, both celebrated and forgotten (at least relatively so). Thus the spotlight plays not only on Andrew Mellon, Wendell Wilkie and Rexford Tugwell but also on Father Divine and the Schechter brothers—kosher butcher wholesalers prosecuted by the federal National Recovery Administration for selling “sick chickens.”
Startup – Jerry Kaplan
A real David and Goliath tale and the story of why things go right or wrong, how competition can kill you, and how financing really works within a small startup. One of the few classics on venture investing written from an entrepreneur’s point of view. It has a West Coast flavor to it but still very relevant.
Barbarians at the Gate – Bryan Burroughs & John Helyar
Two versions of the fierce competition for the largest buyout ever consummated, a landmark in business history and a story of avarice on an epic scale. This is a story from the big buyout world, a distant cousin of venture investing, but nonetheless one of the most entertaining books ever written on the private equity world.
The House of Morgan – Ron Chernow
Portrays the influence that the Morgan banks have had on the history of the Western economy since the late 18th century. The epic story of the development of the American industrial experience is inextricably related to the history of the Morgan banks.
Titan – Ron Chernow
Captures a pivotal moment in American history – the dramatic post-Civil War shift from small business to the rise of giant corporations that irrevocably transformed the nation. A finely nuanced portrait of a fascinating, complex man, synthesizing his public and private lives and disclosing numerous family scandals, tragedies, and misfortunes that have never before come to light.
Devil Take the Hindmost – Edward Chancellor
An entertaining albeit sobering look at the history of speculative manias and the mass delusion that surrounds them. As an investor, it easy to get caught up in bubbles and manias, even when you are looking out for them. Are things really different this time?
The Money Machine: How KKR Manufactured Power&Profits – Sarah Bartlett
Chronicles the rise and tactics of KKR (Kohlberg Kravis Roberts & Company), which came close to making “leveraged buyout” a household term. A fascinating read on financial history and the misuse of power. There aren’t many good books out there on how the private equity world really works, but this is one of them.
The Extra 2% – Jonah Keri
What happens when three financial industry whiz kids and certified baseball nuts take over an ailing major league franchise and implement the same strategies that fueled their success on Wall Street? In the case of the 2008 Tampa Bay Rays, an American League championship happens—the culmination of one of the greatest turnarounds in baseball history.
Competitive Advantage – Michael Porter
By many accounts, the most influential management book of the past quarter century. Porter offers a veritable goldmine of analytical concepts and tools to help companies get a much clearer grasp of how they can create and sustain competitive advantage. Every entrepreneur and investor should analyze their business using the Porter framework and better understand where both their opportunities and vulnerabilities lie.
Good to Great – Jim Collins
Making the transition from good to great doesn’t require a high-profile CEO, the latest technology, innovative change management, or even a fine-tuned business strategy. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner. Yet another testament to the power of great managers and superior execution.
Margin of Safety – Seth Klarman
One of the most difficult-to-track-down finance books ever written, since it is no longer in print. Aside from a clear explanation of value investing, Klarman provides practical advice from how to evaluate businesses to where to find excellent investment opportunities for value investors. Klarman’s discussion of how to think about value and trying to invest where there is a “margin of safety” is in our view as applicable to growth equity investors in private companies as it is to public company investing.
Outliers – Malcolm Gladwell
A convincing case for how successful people rise on a tide of advantages, “some deserved, some not, some earned, some just plain lucky.” Like “The Black Swan”, this book puts success in perspective and explains how macro-factors are often even more important than the quality of the people involved. We seek to invest in great people, but we also understand that the best combination for an investor is great people taking advantage of great opportunity, whether or not they are responsible for it.
Pioneering Portfolio Management – David Swensen
The results of David Swensen’s investment strategy for the Yale University endowment have remained as impressive as ever. Swensen was one of the earliest advocates for endowments making substantial commitments to alternative assets, including private equity and venture capital. This is a great overview of how he thinks about both the opportunities and the risks inherent in alternative investments.
The Entrepreneur’s Guide to Business Law– C. Bagley & C. Dauchy
This standard-setting book is an essential resource for anyone looking to understand the legal challenges faced by entrepreneurs. The information you need to avoid potentially costly missteps, from leaving your current job to taking your company public.
A Land Remembered– Patrick Ramsey
Winner of the Florida Historical Society Tebeau Prize as the Most Outstanding Florida Historical Novel, this is the story of three generations of the MacIveys, a Florida family who battle the hardships of the frontier to rise from a dirt-poor Cracker life to the wealth and standing of real estate tycoons. The sweeping story that emerges is a rich, rugged Florida history featuring a memorable cast of crusty, indomitable Crackers battling wild animals, rustlers, Confederate deserters, mosquitoes, starvation, hurricanes, and freezes to carve a kingdom out of a swamp.
The Founder’s Dilemmas– Noam Wasserman
Often downplayed in the excitement of starting up a new business venture is one of the most important decisions entrepreneurs will face: should they go it alone, or bring in cofounders, hires, and investors to help build the business? More than just financial rewards are at stake. Friendships and relationships can suffer. Bad decisions at the inception of a promising venture lay the foundations for its eventual ruin. Drawing on a decade of research, Wasserman highlights the need at each step to strike a careful balance between controlling the startup and attracting the best resources to grow it, and demonstrates why the easy short-term choice is often the most perilous in the long term.
Three Simple Steps– Trevor Blake
Founder of BPV portfolio company QOL Medical, Trevor Blake studied the lives of successful men and women who preceded him, and developed three simple rules that helped him first to escape poverty, then to achieve a life of adventures, and then to achieve financial independence. Written in a straightforward and no-nonsense style, Three Simple Steps shows you how to take back control of your destiny and reshape your mind for increased creativity, serenity and achievement. A a practical guide to real-life achievement by a pragmatic businessman who attributes his incredible successes to these very simple ideas.
How Money Walks – Travis H. Brown
Between 1995 and 2010, millions of Americans moved between the states, taking with them over $2 trillion in adjusted gross incomes – equivalent to the GDP of California, the ninth largest in the world. Why? Which states benefited and which states suffered? And why does it matter? Using official statistics from the IRS, How Money Walks explores the hows, whys, and impact of this massive movement of American working wealth. Why does this matter? Because the robust presence of working wealth is the leading indicator of economic health.