Everyone Can Create

Kevin Ashton - How to Fly a Horse

The encouraging part is that everyone can create, and we can show that fairly conclusively. The challenging part is that there is no magic moment of creation. Creators spend almost all their time creating, persevering despite doubt, failure, ridicule, and rejection until they succeed in making something new and useful. There are no tricks, shortcuts, or get-creative-quick schemes. The process is ordinary, even if the outcome is not.
Creating is not magic but work….
The best artists, scientists, engineers, inventors, entrepreneurs, and other creators are the ones who keep taking steps by finding new problems, new solutions, and then new problems again. The root is innovation is exactly the same as it was when our species was born: looking at something and thinking, “I can make this better….”
The creativity myth confuses having ideas with the actual work of creating….
The best way to create is to work alone and evaluate solutions as they occur. The worst way to create is to work in large groups and defer criticism. Steve Wozniak, Steve Jobs’s cofounder at Apple and the inventor of its first computer, offers the same advice: “Work alone. You’re going to be best able to design revolutionary products and features if you’re working on your own. Not on a committee. Not on a team….
The vast majority—98 percent—of teachers say creating is so important that it should be taught daily, but when tested, they nearly always favor less creative children over more creative children.
[This] effect is not restricted to schools, and it persists into adulthood. Decision makers and authority figures in business, science, and government all say they value creation, but when tested, they do not value creators.
Why? Because people who are more creative also tend to be more playful, unconventional, and unpredictable, and all of this makes them harder to control. No matter how much we say we value creation, deep down, most of us value control more. And so we fear and favor familiarity. Rejecting is a reflex.
How a Fly a Horse
By Kevin Ashton

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“Black Lives Matter” is Sad

Obviously Black lives matter, isn’t that sad. I think that it should depress people that we have to remind them that Black lives matter.
~ Soledad O’Brien

While Soledad’s O’Brien’s point is very valid, if explored deeper then you come to see that “Black Lives Matter” represents adopting a corporatist mindset. As Douglas Rushkoff writes in Life Inc, it represents succumbing:

to an ideology that has the same intellectual underpinnings and assumptions about human nature as—dare we say it—mid-twentieth-century fascism…. a culture, economy, and belief system that places market priorities above life itself.

Douglas Rushkoff

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Millionaire Healthy Living BDC

Millionaire Healthy Living Business Development Company

According to Local Dollars, Local Sense by Michael Shuman:

If you don’t want poverty in your community, your businesses must pay living wages with decent benefits. And if you don’t want polluted air, water, and land, your businesses must behave in environmentally sustainable ways.

For this reason, we are developing the Millionaire Healthy Living Business Development Company (BDC) that will prioritize spreading and replicating local business models with outstanding labor and environmental practices in the Metro New York area. As explained in Investing Answers:

BDCs are similar to venture capital (VC) or private equity (PE) funds since they provide investors with a way to invest in small companies and participate in the sale of those investments. However, VC and PE funds are often closed to all but wealthy investors. BDCs, on the other hand, allow anyone who purchases a share to participate in this market.

WinCo Foods

One business model that we are looking at closely is a privately held, majority employee-owned American supermarket chain based in Boise,Idaho called WinCo Foods. At one store in Corvallis, Oregon, the combined retirement savings of 130 employees roughly comes to an astounding $100 million. And according to a Forbes article:

And that figure is growing rapidly, such that in a few years the average wealth of these employees could easily exceed $1 million. Quite a few individual workers already have account balances above that level….

WinCo has more than 400 front line employees with more than $1 million in their ESOP accounts and hundreds of retirees similarly well set. Each year, it sets aside an amount equal to about 20% of each employee’s pay, in the form of stock, and the value of the underlying shares has risen rapidly, too.

Millionaire WinCo employee Cathy Burch

Most Americans in WinCo employee Cathy Burch, 42, situation have either no savings at all or an account such as a 401k containing less than $50,000, but Cathy owns almost a $1 million in stock. Cathy is seen here with her husband Kevin.

We will be discussing the Millionaire Healthy Living BDC at the Women’s Government Contracting Forum.

Business Development Companies

Business Development Companies (BDCs) have been thoroughly exploited by Wall Street professionals but largely overlooked by local business developers. According to Investing Answers:

BDCs are similar to venture capital (VC) or private equity (PE) funds since they provide investors with a way to invest in small companies and participate in the sale of those investments. However, VC and PE funds are often closed to all but wealthy investors. BDCs, on the other hand, allow anyone who purchases a share to participate in this market.

Ares-Capital-Corporation

As of September 30, 2014, Ares Capital Corporation is one of the largest business development companies (“BDCs”) by both market capitalization and total assets, with approximately $9.2 billion of total assets (NASDAQ: ARCC).

And according to Local Dollars, Local Sense by Michael Shuman:

Congress understood that private pools of money can contribute to economic development, especially if the public purpose of assisting small business is front and center. A [BDC] is essentially a venture fund for small businesses. The [BDC] must provide beneficiaries not only capital but also managerial and technical assistance. And while unaccredited investors cannot invest in any [BDC], if a [BDC] goes public through an intrastate offering like any other company, they then can participate. One could imagine, for example, No Small Potatoes [an investment club] organizing a [BDC] involving perhaps twenty-five local food businesses in Maine, taking the [BDC] public, and then inviting residents throughout the state to support the diversified pool.

In the year ending May 2014, Americans made 61 billion visits to restaurants. That’s down from 62.7 billion in 2008 and flat compared to the last several year. Of the over 1 billion visits lost each year, the vast majority have been to independent establishments.

This lost of visitors was compounded by daily deal providers sucking value away from local merchants. In 2011, revenue for daily deal providers like Groupon grew 138% but visits to independent restaurants were down 4%. According to Bill Bice of Coverboom this works out to $280M lost by independent restaurant owners.

Groupon grew out of a social activist website called “The Point” to became the fastest growing company ever with an apparently great idea that seemed to serve the needs of small business owners. “The Point” got its name from The Tipping Point: How Little Things Can Make a Big Difference, a book by Malcom Gladwell: “The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.”

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$15 Trillion to Main Street

Wall Street to Main Street
We have about $30 trillion in Americans’ long-term savings in stocks, bonds, mutual funds, pension funds, and life insurance funds. Yet less than 1 percent of these savings touch local small businesses—even though roughly half the jobs and the output in the private economy come from local businesses.
From a Forbes article by Steve Denning we learn that a magisterial study by Deloitte’s Center for the Edge shows the rates of return on assets and on invested capital for 20,000 US firms from 1965 to 2011. It shows that “managerialism” has been steadily failing for the last half century.

Economy-wide Return on Invested Capital

The graphic shows that something has gone so terribly wrong with the type of businesses supported by Wall Street—the supposed engine of economic growth and the supposed creators of jobs. When these firms have rates of return on assets or on invested capital of, on average, just over one percent, we have a catastrophe on our hands. An ROA of just over one percent means that firms are dying faster and faster: the life expectancy of firms in the Fortune 500 is now less than fifteen years and declining rapidly.

If our capital markets were functioning efficiently, roughly half of our $30 trillion savings or about $15 trillion would be going into the half of the economy that is local small business.

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