My fears - 4 months later

Four months ago, I posted my fears for all to see in the hopes of shrinking them down to size. Another benefit to posting them out there was it gave me something tangible to go off and work on. I'm happy to say 4 months later, although I haven't eliminated all of those fears, I've gotten a handle on them and feel really empowered to go after what I want. Here's an update to each:

Former Fear #1: My dad will be pissed/scared/hurt

One of the recent "thought experiments" I've done is to imagine I'm 90 years old and telling stories to people. When I say "60 years ago, when I was in my 30's, I..."  there were two ways to complete that sentence. 1. I quit my job and went and got my MBA in real life. I (totally succeeded/totally bombed) and learned a lot and had a lot of fun. Or 2. I stayed in a well paying job where they didn't really use my skills and hung out for 30 years because I was afraid my dad (your great great grandpa) would be pissed/scared/hurt. Suddenly, it was clear what life was all about. My dad would get over it.

It was also very helpful that my younger sister and I are our biggest supporters. My sister, who lives near my parents, told me recently that she started working on my dad for me. She told me the whole line of questioning she used, starting with something like "Don't you want him to be happy? He's not happy where he is... he'll be fine, he's smart and resourceful." She's paying me back for our entire childhood where I paved the way for her (including the time she asked a girl to the Homecoming Dance for me, so when she got to high school our parents would let her go). She basically is saying "do what you need, I'll take care of dad."

Former Fear #2: I'll fail miserably and hafta take a job that's much worse than the job I left

In a corporation, they grade on a curve, so to speak. 6% of the organization has to be rated "below expectations." I joined this 6% club, mainly because my organization doesn't value entreprenurial type people. One of the reasons was I didn't use our standard tools for my non-standard projects. Doesn't that actually sound like a reason to promote someone? So I ask myself this question: Why do I need to take this?

I also put together another thought. If I quit and go get a "real life MBA" so to speak, doesn't that make me more attractive to the type of company I'd like to work at, should I decide to go back to a company? I also went out and talked to all my friends who own businesses to see if there were things I could offer them. One particular friend was very interested. So I'm covered, I won't crash and burn right away at least.

Former Fear #3: I just don't have the drive to do what it takes.

This trait of mine still rears its ugly head. I've done a lot of work trying to figure out why I'm like this and what would get me out of it. I recently read The Birth Order Book: Why You Are the Way You Are, and it talks about first borns (which I am) and how they're perfectionists. I'm far from a perfectionist, but I read on anyway. Then it got to a part where it talked about another type of perfectionist: a frustrated perfectionist. This person is a perfectionist at heart, but is so afraid of criticism he gives up and doesn't finish things. This point hit home so much. I'm still working through this, and even looking to see if I can get some coaching.

I tried to work through this issue over the last 2-3 months by doing the 5 hours a week = iPhone 4 method. I tracked my work and booked hours, and I was able to do 5 hours a week for 2 months. After that, I upped it to 6 hours a week for a couple more weeks. This way I didn't have time to think about making something perfect, just book the hours. However, the last 3 weeks I haven't done any work on my projects. Blogging tonight is an attempt to get back on track. I think the issue is my project was to the point where I was close to involving other people; and that's when the fear of imperfection and criticism kicks in.

Former Fear #4: I'll never find a mate.

One thing I've started doing was to work on meeting people outside of work. Interestingly, Adam McFarland just put up a great post entitled Maintaining a social life after leaving the corporate world. I'm not necessarily doing it to find a mate, but more to prove to myself that a social life exists outside of the company. I've joined a minority young professional group (while I can still call myself a "young" professional) and met some great people there. And yes, I've also met a couple of people that interested me that didn't work for my company.

So things have gotten pretty clear to me. I'm taking the holidays to reflect on my next step, but my biggest fears have been brought under control.

My fears - 4 months later

Fantasy Stats Blog

I have started a new online experiment with Fantasy Stats Blog.
For a few years now, I have been doing my own statistical rankings for Fantasy Baseball and Basketball leagues. Without going into all the bland details, I find that rankings tend to overvalue Points in basketball and HRs and RBIs in baseball. I also use it to balance my teams across each of the 8 normal categories used in Fantasy.

So I created this page to sell my rankings and team optimizer. For the few weeks before the NBA season started, I was using Google Adwords to try and sell my program for $9. Various football programs and subscriptions go for up to $25.

I sold a few but it did not cover the costs of Adwords. On Dale's advice, I have lowered the price for the rest of the post draft season to $1 to try and build a database of people who are willing to try it. Hopefully if they see the value in it for $1 they will be more likely to pay $9 next year to be able to draft with it.

Let me know any of your thoughts or comments. I think right now I have a defined product but need to work on the business model and marketing.

Fantasy Stats Blog

A money experiment - CP style!

I've been taking some cues from Neville's Financial Blog lately, including setting up goals and giving yourself a punishment (like donating money to the Chicago Bears charity) for not hitting it and getting a reward (like an iPhone 4) when hitting it. Read about it here.  I'm taking another cue from Nev today, and that's his Money Experiments, where the idea is you can make money with very little money. Nev's tried a few things, the most famous being enlisting a homeless guy to sell bottled water on the street.

My idea came on a recent trip to New Orleans. Walking down Decatur Street, where there are a ton of street artists, one particular piece of art caught my eye. It was a fabulous, slightly abstract painting of a jazz musician silhouetted against a lampost with "Bourbon Street" painted on it. It was painted on a wooden plank and looked like it would go great on my wall. And that's saying a ton, because I really don't care about decorating my house at all (the only decorations I had before cleaning it up to sell the house was a display of Univ of Wisconsin football ticket stubs from 1996-2000, a Yao Ming jersey, and a stadium chair from the old County Stadium in Milwaukee). The art was fabulous, so I immediately bought one for myself. I asked they artist if he had a website or if he sold his art on Ebay. He said no, it cost too much to ship, and something or other about someone else having a better website. I told him it was great and he should think about doing that.

A few days later we went back (the food is too good on Decatur Street) and I figured I'd buy one for my sister and one for my parents. Since he had a deal where if you buy 2 you can get the 3rd for half price, I thought I'd go ahead and buy a 3rd one and see if I could sell it on Ebay and make a profit. Hence, the beginning of my money experiment. I completed the experiment today, and I'm looking forward to showing you my results in the coming blog entries!

A money experiment - CP style!

Restarting the 5 hour weekly commitment

Well, it looks like @Timothy didn't quite make his 5 hours a week goal. To his credit, he fulfilled his promise and bought some pink Chicago Bears shirts from their charity. Read about it here. I'm curious to see where he goes next!

With that, I'm re-starting my 5 hour a week commitment after taking a week off on vacation. I'm still trying to brainstorm what my reward and punishment would be. I think I'll keep the $100 donation to Bears Care as the punishment. I've kicked around a few ideas about the reward. One was to buy one of my friends lunch. That way, they'd be encouraging me to make it work. Another idea was to offer up a $10 gift card to Amazon to a random commenter if I completed the goal. That way the whole community would be encouraging me! Thoughts?

Restarting the 5 hour weekly commitment

Renewing the Corporatepreneur

As a 10 year corporatepreneur and an original contributor to this blog, I have been quiet this past year or so. The recession hurt my business like most, especially considering it was dependent on online ad rates. Having a corporate job did take some of the stress of the recession off, but I am now ready to renew my efforts as a corporatepreneur. My old business is still running at significantly lower income, but I have decided to take what I have learned to look for other new opportunities.
It is exciting to start with a blank slate after focusing on the same business metrics for so long. But at the same time it is daunting to think about all of the time, effort and work it took the first time. That is why I have gathered some statistics to support the theory we have all held here about the need for corporatepreneurs.

1. Retirement will be the new field of the Haves vs the Have Nots.
2. Any job, even a good one may not be enough to fund a modern retirement.

When I started in the corporate world, I saw a lot of people retiring at the normal 50-55 years of age. However, what I did not know was that so many of them did not really fund a lot of their retirement. They were the last generation to have pensions and benefitted from a great run through the 90s of the stock market.
In 1985 91% of employers offered a pension.
In 2005 61% of employers offered a pension.
In 2009 only 37% offer a traditional pension.
I am actually surprised how relatively high the last 2 numbers seem vs how it feels. However, the message is the same, traditional pensions are dead and everyone is on their own for retirement. And many companies have stopped any 401k matching programs.

The primary retirement question used to be WHEN you could retire. With people hoping to comfortably stop working at 55 or even 50. After reading Rich Dad Poor Dad, I thought the question for our generation would be not when but IF one could retire. I thought this shift was 20 years away, however with the recession and a massive debt crushing our economy, we may have already hit the time when a significant portion of the population could not retire at all. In a recent CNNMoney poll, 34% said they may never be able to retire. Even scarier, you can go to INGcompareMe.com to see how your retirement planning stacks up against 100,000 people who have entered their data. The average amount saved at every age group and income seemed shockingly low to me. I consider myself a dedicated saver for retirement and I still worry that I am not doing enough to prepare for retirement.
I read a recent article talking about moving the retirement age from 62 to 67 or even 70. They justified it saying it is necessary because of large debt and feasible because people are living longer and our service economy is not as hard as farming or labor allowing people to stay in the work force longer. All fair points, except for the fact that companies would need to want to keep people around until the age of 70. And looking around the office, I do not see too many people beyond 55. That means you may expect to have a 10 year gap between retiring from the corporate world and social security and Medicare benefits. Are any of us planning ahead for this second career? I have heard of people retiring to go into teaching or other types of work. I am certainly not against working in retirement because there are many health and social benefits, I would just like for it to be a choice and not a way to try and make ends meet.

The ultimate goal of a corporatepreneur is to have a business take off so that you can be your own boss. Even if that never happens it would be great to have a business fund a proper or early retirement. Or If none of those dreams come true, it would be great to have a business established and running that could ease the tradition into retirement.

I have to think in the next decade, we will move from anonymous blogs to whole communities helping each other achieve our goals.

Renewing the Corporatepreneur

Comment of the year

@Timothy said, regarding my reward and punishment for my 5 hours a week goal:

Very nice! I was thinking of picking up a Galaxy from ATT. Toys are a perfect motivator. If the toy doesn't work, Bears Cares ought to do the trick, especially since the Bears just handed the Pack a loss.

Comment of the year

This is it!

In about 45 minutes, I will have fulfilled my 5 hours a week of work for 5 straight weeks. The closest I've come to not getting the 5 hours in was the last two weeks. Last week, I was taking a trip out to SF and had no hours booked up to the day I traveled. Thank goodness for Delta's wifi on the plane! I knocked out 2 hours on the 4.5 hour flight out there. I couldn't do more because 1. The battery on my Mac drained, and 2. There was about 30 min of turbulence that was bad enough that I couldn't type straight. Then on Friday, while everyone else was sleeping and I was still on Eastern time, I knocked out the remaining 3 hours, giving myself the 5 hours for the week. Not bad considering I didn't do any work on the weekend. This week the same thing happened. I had no hours booked through the week... just constantly had stuff going on and the messed up sleep schedule caused me to be really tired at night. Well I knocked out 2.5 hours on Saturday and I'm wrapping up the last 2.5 hours for tonight.

I've been tracking the work I've been doing and the time I've spent doing it. A majority of the time I've used to learn Wordpress for a new website I'm trying to start. It's fun going through the logs. On Sept 5, I spent 30 min at Starbucks downloading Wordpress. Then later, I spent an hour on my couch troubleshooting the wordpress installation (it's NEVER the 5 min installation they say!). But then as I went along, I started picking up what Wordpress was all about... picked a theme, figured out how to change widths of stuff, figured out what "the loop" was, and eventually getting to a point where I could do some stuff on the code level. It's awesome to see the progression!

I definitely want to keep this level of discipline in my work. I would like to get to a glidepath to get to 10 hours a week. I've been pretty good about the work being real execution work, with minimal brainstorming and theorizing work (I tend to gravitate towards that kind of work anyway, so it won't be an issue to try to limit it). It's still hard to get started, all the self doubt and wondering if what I'm doing is really worth it or not kicks in. But it's a great feeling when you're done with the hour and you figured out that Wordpress issue!

As for the iPhone 4... I cheated a little bit and bought it last week in SF because I wanted the better camera and video recording capability. But I was still going to make that donation if I didn't get the hours in, and I was more determined than ever to get the hours in so I wouldn't hafta face you guys!

This is it!

Disappointing results for Fall textbook season

The fall textbook season at Xavier University is just about done. This year's numbers were 25% of last year's fall semester (that's a 25 index for those corporate types that talk like that). Of course my reaction to that was to say "time to move on to another idea, this one is dead." But that's not very entrepreneurial. Plus after reading about all this stuff about failure and how one should learn from it, I really should try to learn from this!

So I started coming up with hypotheses as to why this was happening:

Competition. First, it seems like textbooks are a hot topic nowadays. Tons of sites out there are trying to get student's attention. The latest one is Chegg, which is a textbook rental site. As an aside, back in '07 when I was conceiving NOTtheBookstore.com, I also had the idea of a textbook rental business. I chose this model because it required a lot less capital to work with. So maybe there was a lot of competition, and people weren't using my site to buy from Amazon or Half anymore.

New textbook info requirements. The government passed a law requiring a school to post required textbooks and prices at the time of registration.  Maybe this meant my site wasn't providing enough value for people to click through to, since one of the discerning features was it showed you what books you need. Now they already tell you!

Students now know to buy online. This was another value I thought the site brought, that is to tell people to buy online. When I started the site, I had no idea I could buy the same book for much cheaper online!

Finally, and I think this is probably the 80 for the 20 reason...

I didn't have any on-campus marketing presence, other than Facebook and newspaper ads. The Marketing Club and I took a break, and initially revenue was doing fine. So I concluded that it was self-sufficient. I'm thinking that conclusion has been disproven.

Some other supporting data... The drop in revenue corresponded to a drop in traffic. I haven't run the numbers yet, but by eyeballing it, it seems like the revenue per visit numbers are the same. So it's not that students came to the site and was disappointed in it. People who showed up bought something at the same rate. People also saved on average 50% off the bookstore price, which hasn't changed (in fact, I use that number in my ads). So it's not that book prices online have gone up either.

Conlcusions:

On campus marketing through the Marketing Club was essential. It's one thing to see something advertised on Facebook or in the school paper. It's another to have fellow students telling each other about it.

One opportunity for me is to put in a new "killer feature." Educating students on getting books online and having my site be their site isn't what it used to be. People already know about it. I need something to add value for the students to give them an incentive to use my site. I have some ideas, but not sure any of them are "killer." One is to provide a place for students to post tips for other students on whether the books are really needed, or cheapest places to buy the book.

Next action:

This is a no brainer. Get back in touch with the Marketing Club. I'd like to run a focus group and test some of these conclusions with them to see if I'm right.

Any thoughts? Suggestions?

Disappointing results for Fall textbook season

5 hours a week = iPhone 4

I've been captivated recently on Neville's blog on his project to blog every day for a month. He gave himself a punishment if he didn't do it... he would make a $300 donation to a local homeless shelter that he hated. If he did it, he'd spend it on what he called a "money experiment."

That got me thinking... what a cool concept! What can I do? His goal was to write more consistently. One thing I'd like to do better is to be more consistent in working on stuff outside of work. I recently canceled my cable, so I've got time. One goal I've been trying to hit is 5 hours a week of good solid work on my entrepreneurial exploits. It's not asking for much... I'm thinking 2 hours on Saturday, 2 hours on Sunday, and 1 hour spread out through the weekday.

So there's the goal... 5 hours a week of good solid work. What should the reward/punishment be? I just found out that I'm eligible for the iPhone 4. So the reward will be, if I can get 5 hours a week for 5 straight weeks, I will buy myself the iPhone 4. For the punishment... I'm thinking a $100 donation to the charity of one of my hated team rivals... Either the Yankees, the Bears, or the Minnesota Vikings (I'm a Brewers/Green Bay Packer fan). Well I checked out the Chicago Bears site, and they have a charity called "Bears Care." The Minnesota Vikings site talks about some outreach stuff, but doesn't exactly make it easy for you to donate money. (I see all kinds of headlines about rumors of Favre being on a plane to Minnesota... GOSH I HATE THE VIKINGS. I wish Favre would just retire!). Well, "Bears Care" wins out because I can't find any info on donating money on the Vikings site.

I will start this next Monday, 8/23. 5 hours of solid work a week. If I can do 5 weeks straight, I buy myself an iPhone4. If I can't, I make a $100 donation to the Bears Care foundation. (I don't know what's worse, giving up the money or being on their mailing list so I hafta get Bears stuff all the time. Makes me really motivated).

5 hours a week = iPhone 4

My fears

A few weeks ago, an email came out at work that announced that voluntary packages were being offered to employees with certain criteria. Basically, the package is a way for a company to get rid of employees in a nice way... they basically pay you a good chunk of change to leave. I fit the general criteria, which got me to thinking if that would be something I'd want to take advantage of. A combined feeling of excitement and utter fear came over me. I'm at a point where I've saved up enough money, plus with the benefits that were being offered, I could survive for over a year at my current lifestyle assuming no income. Not a bad buffer to have as I try to figure out how to make an income outside of a corporation.

I was in this excited but utter fear state for a few days until they had the meeting to explain the program. I couldn't help but tell my dad, which if you remember from the sabbatical experience, probably wasn't the best person to tell first. That same look of "why are you doing this to me" came over him.

It turns out I wasn't eligible for the program, because in my department my position wasn't included in the offer. But it got me thinking, why was I so scared? I know I have skills that aren't being utilized. If I were picture myself on my deathbed looking back to where I am now, I would absolutely be disappointed at myself for continuing with the status quo when I have nothing to lose. I decided to read
 Making the Courage Connection by Doug Hall for the second time, which helped a lot.

In the book, it talks about bringing your fear out and looking it right in the eye. In one of Martha Becks books (either Steering by Starlight or Finding your North Star, I forget which) she talks about the "Fear Dragon." So today, I'm going blog what my biggest fears are... I'm going to put those dragons out in the blogosphere and exaggerate the crap out of them, so hopefully you all can help me shrink it down to size.

Fear #1: My dad will be pissed/scared/hurt

I've blogged about my dad before. He loves me. I love him. But he just doesn't understand why I would even think about giving up all the security of a great paying job. He's going to be so worried about me all the time that he'll have health problems. He'll call me all the time in that worried, "why do you do this to me" tone.

Fear #2: I'll fail miserably and hafta take a job that's much worse than the job I left

My current Fortune 50 company pays very well and takes great care of their employees. If I leave, and then it turns out things are worse, I'll need to take a job at a worse corporation that doesn't treat their people as well. Plus I'll probably need to move cities and start completely over socially. I'm someone who likes a core group of friends and doesn't really like to mingle for the sake of mingling. This fear has really been accentuated by the last time I did something that went against my parent's advice and was risky: I got a puppy. I was scared to do it. My parents weren't real keen on the idea of me getting a dog, but I felt like I had done my homework and was ready. I was an emotional wreck with the puppy, feeling like I was neglecting it and all stressed out because of all the time it required. I was bailed out when my best friends were looking for a dog and took him, but that experience weighs on me whenever I have a risky commitment to make.

Fear #3: I just don't have the drive to do what it takes.

I have an issue with getting things done. I have a hard time starting things or getting this done because I'm so afraid that it'll just be a waste of time. I'm also afraid that I'll need to stick my neck out there and risk looking stupid. And finally I'm afraid I'll hafta ask people for help. I don't really like asking people for help, I just like to take care of it myself.

Fear #4: I'll never find a mate.

Most of my friends I've met through the company I work at (we are a major company in the city). I have no idea how I'd meet people to date if I'm working on a project at home without the company providing me a social circle. I'm not a bar guy. Plus if I did meet someone, instead of being able to say "I work for (Fortune 50 company)" I'd hafta say something like "I'm trying to figure out this entrepreneur stuff but still working on it" in which she would think "unemployed loser." It also doesn't help that I just ended a year long relationship recently.

So there they are, out in the open. Be happy to hear if others of you have had similar fears and what you did to overcome them.

My fears

Prepare to be disrupted

Recently I cancelled my cable... That's right, no more Time Warner Cable. It all started when I was watching CSI one day. I used to be a big CSI fan, but I realized that I didn't really care about it and I was really just watching it for the sake of it being on. So I took the step to delete the subscription from my DVR. Then I realized, I really didn't watch that much TV. And even if I did, I could get CSI from other sources like Netflix or even over the air. The only thing I needed cable for was ESPN, and that was mainly for Monday Night Football.

I would save $67 a month by not having cable. I'd be happy to pay $5 a month for ESPN during football season. But there's no way to do that is there? On the contrary... when I go on Time Warner Cable's website, they keep shoving "bundles" in my face, saying how much you save by bundling their internet, cable, and phone services. Save money by spending more? That's a bunch of bull. There's no reason for Time Warner to offer a la carte services. What's the marginal cost for beaming me just ESPN vs. 250,000 channels? Nothing. The cables are already there.

This is a classic case of a company overshooting their customer. Clayton Christensen talks about it in his book Innovator's Solution. When that happens, they are ripe to be disrupted. Other companies who can offer a "good enough" product to get the job done, and structure themselves accordingly, can disrupt larger companies. Time Warner isn't competing with Dish Network or DirecTV. They're competing with my over the air HD antenna, my mlb.tv subscription, and my local sports bar. But they don't realize that... they're still running ads for bundling and showing me how much they're cheaper vs. Dish or DirecTV.

Or, their cost structure doesn't allow it...  Or their accountants don't allow it. They probably have a king's ransom tied up in infrastructure costs. And on their books, they need to pay off the depreciation even though depreciation isn't a real cost. So they need to make a profit big enough to pay off depreciation. Little do they know they may be heading towards bankruptcy.

I love disruptive companies that take down big companies (that's maybe why I'm a Milwaukee Brewers fan and I hate the Yankees). My favorite company is Netflix, who took down Blockbuster with their new model. They had their cost structure set up to distribute movies by mail. Blockbuster had a million little retail stores. No way could they keep up with Netflix with their Total Access program. And guess what? Netflix may be in position to disrupt another big dinosaur: Time Warner Cable.

I posted a while back about how small companies can take down bigger companies. Go out and be disruptive!

Prepare to be disrupted

Math is not linear

Great presentation... echoing my thoughts about math, and education in general.

Math is not linear on Prezi

Math is not linear

Rent vs. Buy: One person's actual data

Recently, after doing my taxes and figuring out how much of a tax benefit I get for my mortgage, I thought to myself, "I wonder if owning a house really does pay out the way everyone says?" So I proceeded to tally up every expense and benefit owning a house had compared to if were to have rented a place at the same monthly payment. I've lived in my place for over 8 years. I figured it would be a great real life, raw hard core data example to share with people.

In a nutshell, after brainstorming everything I could possibly think of, it came out remarkably even. In other words, if I had rented a place for the same monthly payment I was making, I would have come up no worse for wear. In fact, I didn't even include any time costs, like mowing the lawn, weeding the yard, etc. Here's a breakdown of the costs I came up with:



The equity and appreciation that we hear so much about is offset by realtor and repair costs. What's this I keep hearing about "throwing your money away" when you're renting because you're not building equity? Well, too bad when you sell it you need a realtor. And when the roof needs fixing or the runoff water needs to be re-routed to the front because it's flooding the back, that comes out of your pocket too. Not that I have any personal experience of that.

Here are the assumptions I used to come up with the costs:

Years in house	8
Purchase Price	170000
Down payment investment	2.00%	Assumed rate of return if you had invested the down payment
Sold Price	184086	My own guess based off comps
Appreciation %	1.00%	Based off the sold price
Down payment	30000	20% of purchase price

Here's a breakdown of all the costs that went into the graph, and some more detail:

HOA fee	-150	per year	I live in a house, so this fee isn't too bad
Closing costs	-3000	one time
Insurance	-400	per year
Maintenance/Utilties	-38	per month	Garbage, water, and sewer
Down payment opportunity cost	-600	one time	Earnings if I had invested the down payment
Tax benefit	1050	per year	After the standard deduction, and 25% tax braket
Repairs	-9400	one time	See chart below
Realtor costs	-11045	one time	6% of sold cost
Appreciation	14085	one time	Based off my own estimate of comps
Equity built up	150	per month	Average over the 8 years

And here are all my repair costs, in gory detail:

Siding and wall damage from storm (deductible only, insurance covered all)	$1,000
New roof (plus deductible minus insurance)	$3,000
Roof boots (3X)	$300
Reroute runoff and drainage	$1,100
Landscaping	$1,200
New carpeting	$2,000
New drywall from fixed leaks	$800
Total Repairs	$9,400

These repair costs are even before anything a home inspector might come up with when I sell the house. Plus I need to re-seed my yard, it's looking a little sickly. And the back fence needs painting. Again, I didn't count the money I paid my neighbor kid to mow my lawn, or the hundreds of dollars of mulch, or fertilizer, or the tree I had to cut down that died... I better stop and continue this analysis before I lose everyone.

So what happened to all the great benefits that my parents and everyone else told me owning a house had? I tried to figure out what went wrong. The answer, as you might expect, is the housing market. I had a 1% appreciation per year over 8 years. I did a little sensitivity analysis... if I had gotten a 3% appreciation per year, I would've been $30,000 ahead! Whoa. OK, so let's say it was -1% (where it was in a lot of markets I bet). And the answer is... -$25,000. I think that's what everyone calls "underwater."

So this whole idea of owning a house as an asset boils down to how well the housing market does. And it's a huge swing. This is what economists call leverage... you borrow money to invest in something. So owning a house is an investment. It's owning a very risky investment. Would you put down $30,000 and buy shares of any stock? How about borrowing $170,000 on that $30,000 and buying up that stock? So why would you do the same on a house?

Here's raw data. Buying a house is a very risky investment. All the equity built up and the tax benefits gets sucked up in realtor fees and repairs.

Yes, it's the American dream. I plan on selling this house, but I will probably buy another one in the future. It's great to own your home so you aren't at the mercy of a landlord or a lease. But go into it knowing it's very risky, and be able to mitigate that risk by having a LOT of money in reserve. Buy a house because you want to live in a house, not because it's an investment. And make sure you can truly afford everything that comes along with it (see above).

Rent vs. Buy: One person's actual data

An update

Thought I’d give an update since my last posting. In a nutshell, I’ve been focused on NOTtheBookStore.com and less on the violins e-commerce site. Last quarter I tried expanding to the University of Cincinnati, with a little help from their marketing club student organization. UC’s quarter ended this week, which meant a whirlwind turnaround for textbooks. And the marketing club has gathered steam and started doing their promotional fliers and other activities.

This semester will be very interesting. UC is four times bigger than Xavier, where I had previously been targeting and have been breaking even (most of the costs are for marketing). UC is a pivotal test to see if the idea scales to bigger schools. So far it’s been slow, but with Xavier it took about a year before things took off to the point of breaking even. If UC takes off, it would give me enough confidence to hire someone to revamp the site and improve the design and flow.

The violins site has taken a back seat for the last month or so. My contact with the Chinese supplier has been quiet. She’s a family friend, so I’m confident that if I took the time to contact her again she’d help me out. I did some initial work with a Shopify site, but I wish it were more of a drag and drop. Most sites I’ve worked with, the drag and drop part of it is too simple, but programming with CSS has been too difficult. Google’s Blogger so far has the easiest to work with from a layouts standpoint. There’s still a skill gap there. Another gap has been the use of Photoshop or Illustrator to design graphics. I could really use that skill so I can update the graphics on the site easier.

I’ve started reading the book “The Other 8 Hours” based off of Adam’s recommendation. It’s inspired me to continue to do a little every day, even if it’s as small as 10-15 minutes. Hopefully the time will add up and eventually I’ll get something successful! I’ve deleted all my back episodes of CSI and took it off my DVR. Hopefully this will buy me the time I need every day!

An update

Go away grammar police

I received a comment from my “The bigger they are the harder they fall” entry recently. It was from “Anonymous” and he/she said:

“I’d prefer it if you said ‘have to’ instead of ‘hafta’. It’s just childish and hurts credibility.”

I remember grammar and its role in blogs being a topic of debate from other blogs. Here are my thoughts.

First of all, I’m very happy that someone reads this blog and is inspired enough to post a comment on it. I hope this person is a regular reader and gets something out of this blog. But I kinda – sorry kind of – doubt it. This person chooses to pick on grammar instead of commenting on content. This person would have much more credibility in my mind if he/she said “Interesting insights on how small companies can compete with big ones. Oh by the way, I’d prefer it if you said…” The other thing that tells me this person isn’t a real reader is he (I’ll use “he” from now on) almost takes personal offense to it. He uses “I’d prefer it” instead of “The right way to use it is…” And calling it childish is another clue (yes, I know starting a sentence with “and” isn’t grammatically correct either).

I know my grammar. I probably know it better than 90% of the people in the US. I did well in English class. I know my subjects and predicates, pronouns and antecedents, and parallel structure. But there’s another part of English class that people forget: the “arts” side of English, like poems, prose, and different styles that don’t follow grammar rules. Remember Catcher in the Rye? Have at it grammar geeks. My blog, and I bet most blogs out there, don’t aspire to be New York Times articles. There’s more Catcher in the Rye type poetic license. So what do you hafta say about that? 

Go away grammar police

The foray: Step 1

Thanks to the people in the blogosphere (does anyone use that word anymore?) for the help. I had some pretty interesting tidbits, from some offerings of wisdom to some recommendations.

@kvr said: "Besides if you don't see a way to earn back $25 a month then maybe your in the wrong business." That woke me up. 

An anonymous commenter suggested a site to check out, which I did. It talked about general things to look for in an e-commerce site host.

@Adam McFarland said: "It sounds like you have a good 'in' to get these violins at a good price from a company that not everyone has access to. That's a huge competitive advantage to start with." I hadn't thought of the connection with China as a competitive advantage. I still revert to thinking only about the product and not the business holistically. 

@nethy on Adam's blog suggested Weebly. I checked it out, it actually was pretty neat... drag and drop web designing. For a product with a high price point like violins, may not be the best. But I definitely see a use for it for future endeavors. 

What put me over the top was a post on Neville's Financial blog about how interest rates in a savings account were laughably low. I'm losing money by it sitting in a savings account that pays interest rates below inflation. So now's a good time to invest it! Neville responded to my comment and offered up a post he did about starting his e-commerce site. I actually had read it a long time ago, but I plan to do it again now that I've got $25 sunk into it. :)

So... I just signed up for Shopify. And for good measure I entered their e-commerce contest where the top selling site got $100,000. Just for fun. Thanks all for the encouragement. The first baby step is done. The next one will be to figure out how to make the site look professional. 

The foray: Step 1

A foray into e-commerce

My dad, who works a lot with China, one day asked me if I had any interests in selling violins. He had a contact who manufactured violins, and since I'm a violin player myself he figured he'd ask. I was intrigued, since I had just bought a new violin (the first since high school), and someone told me it was actually made in China. Turns out Chinese-made violins have gotten pretty good.

I got a catalog from the manufacturer, and the prices seemed low enough to get a good margin. My parents, who happened to be heading to China for a visit, bought two sample violins and lugged them on the plane back. Over the holidays, I played it and had a violin teacher friend of mine play it too. He confirmed the market price would be something where I could make a nice margin.

But how do I go about selling violins? I had no interest in setting up a retail store. So I figured starting by selling on-line was the way to go. There are lots of questions. Are people willing to buy a violin on-line? Who do I market this to? How do I set up an e-commerce site? I had an idea... why not sell Chinese made violins to Chinese people? Not to propagate stereotypes, but that's quite a large market (I myself belong to the Chinese violin playing demographic). It would be pretty easy to target advertising, and you'd think the trust factor would be there.

I was pretty pumped up about this over the holidays. I even got a fortune that said "An interesting musical opportunity is in your future." (Apparently taking pictures of fortunes with the iPhone doesn't work that well.) Recently, I figured I should take the next step... which I believe is to set up an e-commerce site. I'd ideally love to set up a cheap, if not free, site where people could click on a "buy" button. Then I could at least test the idea to see if any traffic was generated.

But this proved to be a little dauting. I asked Adam McFarland on his blog, and he suggested Shopify. I checked it out, but it was $25 a month. So I did some Google-ing, and found a tutorial on how to set up an ecommerce website with Wordpress in 5 minutes. Then I discovered the difference between Wordpress.org and Wordpress.com. I needed to host my own site in order to set up the e-commerce plug in. After way too many hours of researching hosting sites, I paid $80 or so to set up a bluehost.com site for a year.

It took me about 2-3 hours to set up the Wordpress e-commerce site (had to do a little debugging). I then had trouble customizing the site to look decent. So it was back to the drawing board.

I checked back on Adam's site and @nethy suggested I try Weebly, which allowed you to drag and drop your way to an e-commerce site for free. I tried that out, but I wasn't happy with shopping cart because it dumped me off on Paypal. I figured if someone was going to pay that kind of money for a violin, it'd hafta at least look like the cart was on my site. So back to the drawing board again.

I looked at Godaddy's e-commerce solution... $9 a month. It got bad reviews. 1and1's web hosting was $9.99 setup fee, and required a year subscription. Its reviews said it was hard to use for newbies (that's me!). Yahoo was like $30+ with a percentage of revenue too. I think my next step is going to be Shopify, Adam's original suggestion.

I keep wondering if I'm overcomplicating this process. I'm already out $80 for hosting. I'm to the point where I think I need to just suck it up and try one of these sites, thinking I'll never learn if I don't try. And now I'm wondering if this is even a good idea. Any advice from the experienced crowd out there?

A foray into e-commerce

Richard Branson: Life at 30,000 feet

Richard Branson is the definition of the serial entrepreneur - but what I love is that while he keeps launching businesses he doesn't just sell them off and move on - he continues to build his portfolio of companies. I also love that he is a dreamed - as evidenced by Virgin Galactic - one of the 1st space tourism companies! Richard Branson's companies employ 55,000 people with revenues of $25 Billion. He has obviously become quite rich but has also given back by providing so many employment opportunities to others (see list below). Enjoy this interview with "Sir Richard."

Richard Branson talks to TED's Chris Anderson about the ups and the downs of his career, from his multibillionaire success to his multiple near-death experiences -- and reveals some of his (very surprising) motivations.



Virgin brands (under various ownership)
(source: wikipedia http://en.wikipedia.org/wiki/Virgin_Group)
AirAsia X — long-haul budget airline operating from Malaysia (20% owned by Virgin Group)
Oüı FM — rock radio station in France and Asia
V Festival — two-day music festival held in two separate locations in the United Kingdom
V Festival (Australia) — an Australian version of the V Festival
Virgin Festival — a North American version of the V Festival
Virgin Active — a health club chain in South Africa, Spain, Portugal, Italy and the UK
Virgin America — a United States budget airline based at San Francisco International Airport
Virgin Atlantic Airways — an international carrier based at Heathrow Airport, London
Virgin Balloon Flights — a hot air balloon operator
Virgin Blue — an Australian-based airline operating in the South Pacific
Blue Holidays — The holiday program of Virgin Blue, now a joint venture between Virgin Blue and Zuji
Pacific Blue — a Virgin Blue subsidiary based in New Zealand
Polynesian Blue — a Virgin Blue subsidiary based in Samoa
V Australia — a planned Virgin Blue international subsidiary set to offer flights between Australia and the USA
Virgin Books — publisher, retailer and distributor of books
Virgin Brides — bridal wear shop in Manchester, UK
Virgin Charter — a private jet online marketplace
Virgin Comics — comic book producer
Virgin Drinks — drink manufacturer
Virgin Cola — carbonated cola soft drink
Virgin Vodka — alcoholic beverage
Virgin Experience Days — corporate and consumer experience events
Virgin Flowers — Internet florist
Virgin Galactic — a venture to market and operate commercial space flights, using spacecraft designed by Scaled Composites
Virgin Games — online games and gambling
Virgin Green Fund (originally known as Virgin Fuels) — venture capital firm for investing in petroleum alternatives
Virgin Health Bank[2] — a business enabling parents—to—be to store their baby's stem cells
Virgin HealthMiles
Virgin Holidays — UK travel agency and tour operator for worldwide destinations served by Virgin Atlantic and its partner companies
Virgin Holidays Cruises — UK cruise holiday agent
Virgin Limited Edition — exclusive hotel operator
Kasbah Tamadot — exclusive Moroccan holiday destination
Lady B — luxurious Catamaran available for Caribbean charters
The Lodge — ski lodge
Natirar — private spa located in Somerset County, New Jersey
Necker Island — exclusive island in British Virgin Islands for private hire
The Roof Gardens and Babylon — 1.5 acres (6,100 m2) open air gardens, venue, nightclub and restaurant in Kensington, London
Ulusaba — exclusive game reserve in South Africa
Virgin Limobike — passenger bike service in London
Virgin Limousines — chauffeured limousine service in San Francisco and Northern California
Virgin Media — provider or home telephone, cable television, broadband and mobile services to the United Kingdom
Virgin Media Television — a British television network, made up of Virgin 1, Trouble, Bravo, Living TV & 50% stake in UKTV
Virgin 1 — a general entertainment channel on Freeview, Virgin Media and Sky Digital
Virgin Mobile — brand used by several companies providing mobile phone service around the world
Virgin Mobile UK — provides mobile phone service in the United Kingdom, now part of Virgin Media
Virgin Mobile Australia — provider of mobile phone service in Australia
Virgin Mobile Canada — provider of mobile phone service in Canada
Virgin Mobile South Africa — provider of mobile phone service in South Africa
Virgin Mobile USA — provider of mobile phone service in the United States
Virgin Mobile France — provider of mobile phone service in France
Virgin Mobile India — provider of mobile phone service in India
Virgin Money — providers of financial services
Virgin Credit Card
Virgin Nigeria — international, regional and domestic Nigerian airline
Virgin Play — a Spanish publisher of video games, once part of the now defunct Virgin Interactive.
Virgin Radio — Virgin branded radio stations around the world.
Virgin Radio Asia — collection of station operating in India and Thailand including Virgin Soft, Hitz, Easy FM and Oui
Virgin 99.9FM - a Canadian radio station, broadcasting a hot adult contemporary format at 99.9 on the FM dial in Toronto, Ontario. The station is owned by Astral Media. Formerly branded as 99.9 Mix FM, it adopted its current brand on 2008-08-25, pursuant to a licence from the Virgin Group.
Virgin Radio (France) — -(Lagardère Active) a rebranding of the "Europe 2" radio station
Virgin Radio Groove — (TIML Golden Square Limited) soul, motown and disco music station broadcast on DAB, internet and Satellite TV
Virgin Radio Italia — (Finelco) An Italian radio station
Virgin Records — record label now owned by EMI
Virgin Spa — shop chain retailing Virgin Cosmetics product
Virgin Trains — a railway operator in the United Kingdom
Virgin Unite — charitable foundation
Virgin Vacations — U.S. travel agency
Virgin Vie At Home — retailer of body care, cosmetics, homeware and jewellery products through the Internet, direct selling and Virgin Vie stores
Virgin Vines — A Californian—based company, created in 2005 and producer of Red and White wines
Virgin Voucher — gift voucher scheme, also functions as a staff reward scheme
Virgin Ware — clothes brand and retailer

Richard Branson: Life at 30,000 feet