09/14/19

CEO Shoptalk — Fragility

In the early days of a startup, when you are running on pure adrenalin, co-founders are in constant contact. Every new development is shared completely, you are likely to be in close physical proximity, and the novelty of it all creates a glue that binds the co-founders together thereby provoking a level of communication that ensures the founding team is fully informed.

At the beginning you are giddy with communication.

This chaotic time builds trust and generates confidence. It is a heady and energetic time. It is the camaraderie that soldiers create on the battlefield. Co-founders are at war against the market, so that comparison is not a great leap.

But, then the company raises money or gets traction or screams, “We have product-market fit, y’all!” and the closeness that was there at the crib side of the new baby begins to change.

Roles are more distinct, there are spheres of responsibility, employees are hired, parts of jobs are delegated, board members begin to deploy their wisdom, and the pace begins to quicken.

The ability for the co-founders to attain full communication and full knowledge of what is going on is tested by the actual progress.

It is at this junction in time — almost verifiable by a watch — that the strength of a co-founding team is tested.

And, the test is this — Is the organization robust (as it relates to co-founder communication) or is it fragile?

The answer, dear reader, 104% of the time is that the relationship is hopelessly fragile. It is the normal state of affairs because it requires specific work, organization, and that most precious of all commodities in the universe — time, to beat the fragility out of your fledgling company.

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09/13/19

Reading History With A Critical Eye

I believe that the United States of America has produced two superlative leaders in its entire history: George Washington and George C Marshall.

I have been a student of history (said the guy with degrees in civil engineering, economics, math [the economics and math degrees come from the electives I took for civil engineering wherein I had 28 more credit hours than I needed to graduate], and finance, but no history) for as long as I have known how to read.

In the last 40 years, I have been enthralled about learning about leadership by reading history — primarily biographies about Presidents and military leaders — to see what lessons I can glean from them that are applicable to my own little sphere of influence as a CEO and a CEO coach. I was a CEO for 33 years, an Army officer for 5 before that, and a CEO advisor/coach for 7 years.

The case for Washington’s greatness as commander-in-chief of the Continental Army, the first President of the United States, and an entrepreneur is easy to find. He is sufficiently removed in time that his life is well documented by progressively better and better research and books about his life and the lives of those around him.

My favorite “starter kit” on Washington is Ron Chernow’s biography, Washington, A Life. [Chernow’s books on Hamilton and Grant are also excellent.]

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09/13/19

We IPO — An Obscenity Or Just Offensive?

If you have been off the ‘net, you may not have heard, but We (We Work) is trying to float a public issuance of its stock. Your Big Red Car wrote about it here.

We IPO — You Work, I Work, WeWork

Back in the middle of August when that was written, several pithy criticisms of the deal were made. Since then, We (We Work) has gotten some sense beaten into its dopey head and backtracked on the most egregious offenses against common sense and humanity.

Is it enough? is it enough? Is it enough? No. No, a thousand times NO!

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09/12/19

Uber v the Gig Economy Independent Contractors

There was big news out of California this week that will impact the business model of Uber and Lyft, ride sharing companies who employ their drivers and their vehicles as “independent contractors.”

This employer — employee independent contractor relationship is critical to the business model of both Uber and Lyft.

The issue of whether an employee is a direct employee or an independent contractor has been around for a long time. Long enough that something called the “ABC Test” has been formulated as a way to resolve the nature of the employee relationship.

The ABC Test goes like this:

 1. Is the worker free from the control and direction of the employer (called the “hiring entity” amongst the legal literati)?

 2. Does the worker  perform work for other hiring entities outside the scope of this particular hiring entity’s business?

 3. Is the worker regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed for the particular hiring entity?”

Uber believes their drivers are independent contractors. If you imagine that a driver works for both Uber and Lyft, the idea that they are an independent contractor is not all that far fetched. But, read on, dear reader. Nothing is ever that simple.

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09/11/19

America Under Attack — 11 September 2001

NEVER FORGET

On September 11, 2001 the War on Terror became real for America when we were attacked by nineteen terrorists who killed more than 3,000 innocent victims at the World Trade Towers, the Pentagon, and in a field in Pennsylvania.

The tide of patriotism that rose in its wake was sufficient to quench the fires of terror and launch an effort that resulted in taking the fight to the enemy in the Middle East. There has not been a terror attack on American soil of such magnitude since 9-11.

This did not happen by accident.

In the original attack and in the subsequent wars, places like the Virginia Military Institute sent its graduates to fight. VMI lost fifteen men who made the ultimate sacrifice in the War on Terror. They were mothers’ and fathers’ sons, brothers, husbands, friends, and Brother Rats. They were and are VMI men.

VMI exists to produce such men and women, citizen-soldiers willing to go in harm’s way when our Nation calls.

This is what the price tag for freedom looks like when you go to a school like VMI, from whence the leaders come to fight America’s wars.

Today, I honor every person who has been impacted by this unprovoked, cowardly act. I honor these VMI men, our best. Look into their eyes and recognize the sacrifice they made for us, me, you.

Rest in peace, good and faithful warriors, VMI graduates. You answered America’s call; you did your duty; you defended freedom; you delivered on the sacred promise that is VMI.

A grateful Nation mourns your loss and honors your sacrifice. RVM

NEVER FORGET

 

09/8/19

Transformational Storytelling

As a CEO of a startup or a company that has escaped from the cradle into “small company-dom” you are in a constant state of storytelling, storytelling that dictates the transformation of you as the CEO and your company.

As a writer of stories, you are told to “write what you know” while your Big Red Car believes the correct bit of inspiration is: “Write what you imagine based on what you know.”

They key thing here is that you are not writing a history, but a story of what the future will be because you are charged with creating that future.

 

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09/7/19

Afghanistan — No Peace, No Honor

The Trump admin is about to cut and run from Afghanistan. Worse, it is the right move. We are tired of Afghanistan, and it is not (never was) a strategic threat to the United States.

Stop right there — is that the right policy for the United States?

There are some who say it is given the current world situation and the lack of an American strategic interest in Afghanistan. Your Big Red Car agrees.

Some background as to how we were seduced into America’s longest war in its history.

 1. President Bush accused Osama bin Laden of masterminding the 9-11 attack (11 September 2001) on the World Trade Center twin towers.

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09/6/19

Apple Bonds — Making Applesauce

Beautiful day in the lovely city of Atlanta enroute back to Savannah from whence I fled Dorian the Hurricane Monster. It was a pleasant diversion with one of the highlights being the Georgia Aquarium, a recommendation from a pal/reader. Great recommendation.

So, Apple has just sold some corporate bonds. Corporate bond yields are trending down with the general flight from equities into bonds. But, Apple doesn’t pay general corporate bond yield prices — about 6% for others.

No, sir.

Apple placed $7B of 3 to 30 year maturities at very tight spreads above Treasuries. They had intended to place $3-4B, but the book grew so quickly (more than $25B in offers to buy Apple bonds), they went with the bigger number.

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