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BAM business failures - part 1

Monday, May 25, 2015

I recently returned from a conference where I was speaking on themes related to BAM (Business as Mission).  I shared some factual data, some principles and best practices and, of course, some successful case studies.  I always welcome audience participation and one well-informed and experienced business man raised his hand and asked, “What about the failures?  Is everything a success?”  I assured him that there were plenty of failures, at which time he suggested I develop a seminar on Kingdom business failures.

I think that is a good idea; so I am starting with a simple list of failures in an effort to get us thinking about the subject.  It is important to remember, however, that sometimes a business that seems a failure really has been a success and it is not readily apparent.  Also when there are multiple bottom lines; there may be success in one area, but failure in another.  Other factors also mitigate coming to an adequate list of BAM business failures and the cause of them.  

While it may be ambitious to try a “first attempt” at understanding the failures I have noted over the years, remember that since we do not have all the information, the data is limited.  For now, let’s define a failure as a business which shut down after earlier anticipation of success.  Consider these items to be anecdotal but nevertheless - food for thought. I will use pseudonyms here for people, countries and business names, to protect well-intentioned people.

In this Blog #1, I will use the Person, Place, Product, Plan outline; a later Blog #2 on this subject will take a look at other issues.

Is it the right person for the job?   
Some people are simply not wired for entrepreneurship and business start ups, or they may have some capacity, but underestimate the immense time involvement. Such was the case of a solar lighting and heating company we coached in the rural mountains of Nepal.  There was a need for the product and the timing seemed right, but after several thousand dollars of investment in a national owner, it became evident that he saw this as a part-time endeavor and he was more naturally gifted and interested in pastoral ministries and NGO activities.  It failed.

An English school in central Asia lost a partner who brought a lot to the table in terms of the product, but he hated living in the country and wanted to only give a few hours to the business.  This left the other partner handicapped and so he closed down the business.  A business start up needs a person’s full time involvement.

Is the business in the right place?  
Location of a company may be a key factor in its survival.  An adventure company in Africa discovered that their product would better serve the market if it was elsewhere in the country.  Transportation time and costs in bringing the clients to the mountain adventure was prohibitive and rather than move, they decided that they would sell the company.  This failure was only partially due to location, but it does highlight the importance of comprehensive research.

Is it the right product?  
One only has a viable business if there is a paying customer.  The product must suit the market.  A company wanted to help citizens of a large Asian country to emigrate to North America by providing services which would help them to study abroad.  The services included English preparation, visa applications, housing etc.  As visa requirements and the political climate began to change, what could have been a viable product, turned out to be difficult to market because of a changing international climate.  Also, the owner did not find appropriate advocates in the local culture to insure the product would be welcomed.  Could this have been avoided?  Maybe, but it does highlight the importance of robust research.

Is it the right plan?  
There a many startups which do not heed warnings of others, or they do not subscribe to consulting help or coaching expertise.  Even with help from those who have succeeded before them, it is difficult to succeed in foreign markets.  An agricultural business in a former Soviet Republic failed for lack of planning; the markets were too far away, they experienced a blight on the plants, and contracts were broken.  All of that was predictable, but the plan was not adaptable to the changing conditions, and adequate risk analysis and mitigation was not in place in the plan.

But wait a minute!  These were business failures but in all cases but one, these business entrepreneurs are still in the field, learning from the first “failure” and re-building another endeavor.  Perhaps success is just around the corner. Being a Kentucky Fried Chicken lover, think about this:

Harland David Sanders: Perhaps better known as Colonel Sanders of Kentucky Fried Chicken fame, Sanders had a hard time selling his chicken at first. In fact, his famous secret chicken recipe was rejected 1,009 times before a restaurant accepted it.

And since I am typing this on Microsoft software, how about this?

Bill Gates: Gates didn't seem like a shoo-in for success after dropping out of Harvard and starting a failed first business with Microsoft co-founder Paul Allen called Traf-O-Data.  While this early idea didn't work, Gates' later work did, creating the global empire that is Microsoft.

I share all of this in hopes that aspiring BAM business builders can learn from others’ successes…and failures…and will keep moving in the direction of success!

Larry W. Sharp, Director of Training, IBEC Ventures

Mr. Hockey – what did he say about business?

Monday, May 18, 2015

I just returned from a week in Alberta, Canada where ice hockey excitement ran high with Calgary winning the first round of the National Hockey League playoffs.  It reminded me of my hockey days, playing minor hockey in Alberta, even playing in the Calgary Saddledome where the Calgary Flames play their home games.  I even dreamed of making it to the big time some day.

Wayne Gretzky did make it to the big time and beyond.  I don’t think there is anyone who would not agree that Gretzky is the greatest player to ever play the game.  He was an all-star every year he played; won multiple Hart, Art Ross, Lady Byng and Conn Smyth trophies.  He was inducted into the Hall of Fame immediately upon his retirement.  His record for the most points scored may indeed last forever.

Gretzky is also known for his “wise sayings” and indeed I mention some of them here because many of them apply to small business owners, entrepreneurs and can be motivators as we seek to start up Kingdom businesses around the world.  Think of them in the context of your life today, whether an owner, a manager, a coach or a consultant.

The highest compliment that you can pay me is to say that I work hard every day, that I never dog it.

I couldn't beat people with my strength; I don’t have a hard shot; I’m not the quickest skater in the league.  My eyes and my mind have to do most of the work.

When I was 5 and playing against 11-year-olds who were bigger, stronger, faster, I just had to figure out a way to play with them.

I’m not a big risk-taker.  I don’t know anything about the stock market…I stay away from things I don’t know anything about.

You miss 100% of the shots you don’t take.

Hockey is a unique sport in the sense that you need each and every guy helping each other and pulling in the same direction to be successful.

Procrastination is one of the most common and deadliest of diseases and its toll on success and happiness is heavy.

A good hockey player plays where the puck is.  A great hockey player plays where the puck is going to be.

Ninety percent of hockey is mental and the other half is physical.

I wasn't naturally gifted in terms of size and speed; everything I did in hockey I worked for.

Your responsibility to your team is to play the best that you can play as an individual…and yet, not take anything away from being part of a team.

Growing up I was always the small guy.

I love the game and I loved every minute of being a player.

It sounds like in Wayne Gretzky’s hockey experience, as for all of us in life, success depends a lot on things which we have control of – hard work, strategy, team work, dedication, timeliness, analysis, love of the game – a wonderful challenge for us today!

Larry W. Sharp, Director of Training, IBEC Ventures

An Alaskan mother; an Alaskan entrepreneur

Monday, May 11, 2015

Yesterday was Mother’s Day.  I always think about my mom who passed away 15 years ago; and I often remember my mother-in-law, who also is long gone from this life. I learned many things from my mother-in-law business owner.

Doris was the founding owner of a seafood company in Kenai, Alaska.  I worked for her for several summers processing fish from the cold pristine waters of Cook Inlet, Alaska.  It was my first real management job.  Things were not always rosy in the land of the midnight sun, but I learned a lot.

Doris was an entrepreneur.  She could see around corners and was in the forefront of innovation in the Alaskan fish industry in the 1960s and 70s.  She thought differently from everyone else.  She thought the freezing of fish was a superior method of preserving the quality of salmon at a time when canning was the normal means of processing. And so she became a pioneer in the frozen fish industry of the state – something which is totally the practice today.  

She also was a pioneer for the flying of fresh fish from one part of Alaska to another in an effort to balance the work of the processing plants.  For example when Bristol Bay had lots of freshly caught fish and the plants could not handle them all, she would hire former Vietnam pilots to fly old DC-3s, 4s, and 6s from the Arizona desert to Alaska. She then designed a system to fly the fresh fish to places like Cook Inlet where there was no glut of fish.  A few weeks later, the process might be reversed.  It was a winner of an idea and is still done today.

What did I learn from her?
  • She had a strong work ethic, working hard for the success of the business; if it needed to be done and no one else was available, she rolled up her sleeves, came down from the office and dug right in to the task no matter if it was on the slime line, in the massive freezers, offloading fish, or driving a truck to town.
  • She was creative. As plant manager I oftentimes was stymied for a solution to a problem but she seemed to always have an answer.  We once filled a massive truck with frozen king salmon and drove through the night to get them to a market before the price dropped.
  • She had passion for what she did and enjoyed life to the fullest –whether in the business, church work, raising nine kids, or helping a neighbor.  She did everything with her whole heart.
  • She had a generous heart and would always go the extra mile for our customers.  I remember hopping a helicopter in the middle of the Alaska summer night to deliver a generator to a stranded boat adrift in the inlet.  Service was #1 for Doris.
  • She was a persistent risk taker.  Her innovative ideas were not always popular but she took the risk anyway.  One day she decided to fly quality control fish roe experts over from Japan while we in management tried to figure out how to speak to them and feed them what they needed.
  • She was a networker.  She seemed to know everyone and everyone knew her. One time I wondered where she was going and discovered she was on a plane heading for the capital, to speak to the governor about some fish related legislation.
  • She brought good people into the leadership team – who would work tirelessly for her.  She knew how to evaluate talent and rewarded them accordingly.
  • She treated her employees fairly, providing cabin, trailer and tent residences for short-term summer workers; she paid above market wages for both regular and overtime hours.  People loved working for Doris.
  • She was always accessible – she had an open door policy.  It was partly her personality to do so, but she always wanted to know what people thought, listened to their ideas and made them feel a part of the business.
  • She was open-minded and was always working toward a new idea.  She once hired a new tender to work the waters of Kachemak Bay thinking that new markets were to be had.  I knew because I worked that tender as a buyer, working 24/7 to be successful.
  • She was comfortable with chaos.  Because she was always thinking outside the box of tradition, life would be chaotic many times. Fishermen can be a strange lot, fish biologists unpredictable, and markets fluctuate wildly.  Raising children added to the mix.  She seemed comfortable with it all.
My mother-in-law was not perfect by any means; in fact I learned some things from her failures in life and business.  But for this day of celebrating Mother’s Day, I celebrate my mother-in-law and what I learned about business from her.

Larry W. Sharp, Director of Training, IBEC Ventures

Crisis in Nepal: What would Jesus do? What should we do?

Monday, May 04, 2015

I am writing this on an airplane while on my way to Phoenix to speak at a conference about Business as Mission.  Also tonight my youngest daughter is flying to Nepal as part of a First Response Team for World Vision.  Certainly the results of the earthquake there have produced a humanitarian crisis of gigantic proportions.

Thousands have died and it may take months to find all who perished in this poverty stricken country, with its mountainous terrain, weak infrastructure and inadequate preparation.  Certainly it is a time to grieve the immense suffering taking place there. In times like this we must ask ourselves what our response might be – western governments, private enterprise or individuals? 

For decades we have known Nepal to be one of the world’s poorest countries and the recipient of much foreign aid. But IBEC has realized from its beginning that what Nepal needs is enterprise, foreign investment, business development and jobs.  Job creation in the name of Jesus is the only solution to poverty.  That is why we have been active with business startups there since 2006.

One of our lead consultants (and former CEO of IBEC), Ken Leahy, has mentored multiple business in Kathmandu, the capital.  Currently IBEC is involved with two other businesses (one is a coffee business and the other is in the IT sector) in an effort to create profitable, sustainable, job creating Kingdom businesses. The photo above is from Nepal Coffee; you can see more photos in the write up about this business on the Case Studies page or our website

We believe that is what Jesus would do – and it is what we should do.  Don’t get me wrong – immediate aid is important in a disaster like we see in Nepal right now. It is right for people like Trudy to be there – serving long hours in an effort to save lives and bring some relief.  She is one of my heroes. The world needs the likes of World Vision, World Relief, Samaritan’s Purse and others like them.  

But charity should not go on for years and when it does, it becomes toxic (see notes below).  Why?  Every human in crisis needs relief from the stress and hopelessness of the crisis, but then they need empowerment, dignity and resources to grow and develop.  Job creation does just that.  We think that in today’s world Jesus would bring both immediate help (like how he healed the blind man) and long term focus on life and faith.  The Good Samaritan of Luke 10 provided immediate aid, but he thought of the long term future.  Jesus said “go and do the same.”

We in IBEC ask ourselves – what is most needed to complement the relief services pouring into Nepal today?  If we take the long view from now until eternity, we should focus on job creation to alleviate poverty, social injustice and sickness.  In so doing we will certainly help people to know the “Jesus Way” and thus provide for them in this life and the next.

Moyo, Dambisa. Dead Aid – why aid is not working and there is a better way for Africa, 2009
Luptpon, Robert D.  Toxic Charity – how churches and charities hurt those they help, 2011

Larry W. Sharp, Director of Training, IBEC Ventures

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IBEC Ventures -- Consultants for BAM/Business as Mission