Interring ‘08 and piping ‘09 aboard

A happy Hogmanay and New Year’s Eve, folks. I don’t know about you, but I think I’m going to spend the dregs of this annus horribilis (thank you, QE2) counting the hours until the presidential inauguration and hoping for a 2009 that will somehow rescue us from disaster.

Dire as our situation seems, I have to say that I believe this new president has what it takes to make a good difference to our country. But we’re going to have to help him by being willing to live and work more intelligently and less self-indulgently.

It’s truly going to take creative nerve. So I also hope a lot more people discover that they have some. 

That means we can enjoy the celebration tonight, but let’s be darned careful to stay alive and not damage too many brain cells. We’re going to need every last one of them in the next 12 months.  

Best wishes and a guid auld lange syne from me and from Geniocity.com. See you Monday.

Improving the survival rate for small businesses

I was talking with a group of small-business people yesterday. A couple of them happened to mention that the great majority of small businesses fail. And that there are a great many reasons why they fail, from insufficient capital to poor planning and bad management.

This got me thinking: There may be nothing anyone can do to prevent a disorganized or dimwitted entrepreneur from destroying his start-up. But why should we all assume that this huge rate of infant-business mortality is inevitable and immutable? 

Why couldn’t the teaching of certain practices and the establishment of helpful programs increase the number of young businesses that survive and thrive the same way that proper nutrition, regular obstetrical check-ups and well-baby examinations help more mothers and infants stay alive?

And why don’t more of our communities see the survival of small businesses as a priority?

I think the answer to all three is: There’s no good reason why small business remains so unsupported. And I think communities everywhere owe it to themselves to get busy and create development programs that will allow more entrepreneurs to succeed.

The arts sector has been leading the way for several years now. Many cities, universities, arts councils and development agencies have recognized that artist-entrepreneurs have enormous potential as creative economic drivers, but need guidance in best business practices and access to resources in order to make their enterprises viable.

Cleveland is one of the nation’s leaders in this, with its unique Artist as an Entrepreneur Institute co-founded and run by the Council of Smaller Enterprises (COSE) and the Community Partnership for Arts and Culture and also the COSE Arts Network, which provides information, educational opportunities and resources to member artist-entrepreneurs. 

Because of such imaginative efforts, encouragement of arts-based businesses has become a national trend.  

But it shouldn’t be limited to the arts. After all, nearly every business starts small, even those that eventually become giant conglomerates. (Coca-Cola? One pharmacist with a recipe. GE? One tinkerer who invented a lightbulb. Google? Two guys with a computer). The one or two people who start a small business often have a great idea, vision and drive, but relatively little experience with management – and even less money. 

They need guidance, mentoring, moral support, access to investors and bridge loans or grants to help them take that all-important step from struggling to self-sustaining. Perhaps what we need to set up for them – as we do for those needing health care – is community clinics: resource centers where any small-business entrepreneur can go to find all those things and learn to make effective use of them.

Can we let any expectant mother go untutored and uncared-for? Can we justify letting any child be born unhealthy and live unattended? 

Can we afford to let any good idea die? 

No. So let’s get going.      

Where’s the help for small businesses?

Well, I took a few days off, but the country’s economic implosion didn’t. In my post-holiday look at the news, I’ve found that some other people are upset about the same thing that’s been infuriating me: Though the U.S. depends heavily on the jobs and commerce generated by small businesses, small-business entrepreneurs and owners get next-to-no help from anyone with money – not governments, not venture capitalists, not business-development organizations – not even in this age of bailouts. 

As Simona Covel of the Wall Street Journal wrote Friday:

 ”For many small businesses across the country, these are scary times. The dramatic pullback in consumer spending is only the latest blow threatening to push some strapped small businesses out of existence. Customers are paying their bills late, cutting off cash flow, the lifeblood of a small business. Even healthy companies are being choked by the lack of credit lines and bank loans. Others are still reeling from several years of high raw-materials prices.

“In a recent survey from the National Federation of Independent Business, more than a quarter of small business owners said the current economic downturn is threatening their ability to survive. Nearly half of respondents said slow or lost sales are their most immediate problem.

“In the months ahead, ‘we are going to see small businesses that were marginal go out of business,’ says William Dunkelberg, NFIB’s chief economist. ‘We’ve never seen sales trends as weak.’

“Small businesses are a driver of the U.S. economy. In the past decade, small businesses — those with fewer than 500 employees — have created 60% to 80% of the nation’s net new jobs each year, according to the Small Business Administration. More than half of Americans are employed by a small business, and these companies are responsible for more than half of the nation’s nonfarm private gross domestic product.”

I have to ask: Does it make sense to anybody that even in better economic times, community and state business resources go almost exclusively to luring and nurturing big technology ventures? And that since times have gotten really bad, all the help is going to the giant corporations that messed things up in the first pace?  

Where are the investments in the diversified array of smaller companies that every economy needs? Haven’t we learned anything from all the factory towns that have collapsed because the one big employer pulled out or went bankrupt? Why are our government development efforts and venture foundations and angel investors putting all their eggs in the tech-manufacturing basket? Even the greenest portfolio manager would recognize that as a dumb move.

Maybe it’s time we small-business owners demanded smarter and fairer investment strategies from our cities, states and nation.

As Covel’s story notes, ”Many are frustrated that Washington is bailing out some of the largest companies and banks. ‘Our members are angry that the federal government is giving taxpayer money to big companies that have been horribly irresponsible while small businesses are not getting the money they need to keep their doors open,’ Margot Dorfman, chief executive of the U.S. Women’s Chamber of Commerce, told the House Small Business Committee earlier this year. The government should set aside money specifically to assist small businesses, she said.”

The small-business community needs to speak up now – and not just owners, but anyone who works for or buys from a small business. We all need to remind our mayors and council members and state representatives and governors as well as our national leaders that small businesses are a big part of our nation’s economic survival and future.

Imagine how many small businesses and jobs that $150 billion AIG bailout would have supported. Now pick up the phone and call your elected leaders.

That’s the spirit

This season is supposed to be about something more meaningful than money-grubbing. 

But if idle hands are the devil’s workshop, then busy hands must be Santa’s Workshop, because there’s almost nothing good or important I can think of about the holidays that isn’t essentially entrepreneurial in spirit.

Being motivated by love. Fulfilling the needs of others. Determinedly following a star. Having faith and hope despite the odds. Lighting a candle in the darkness.  Resolving to improve ourselves and the world. 

Lofty stuff, that. And yet we all carry out such concepts in practical and homely ways, as entrepreneurs do, making good products (gifts, cookies, a cheerfully decorated room) that people desire (because of the caring they represent and the enjoyment they bring) and for which we’re paid (in smiles and friendship).

It’s our holiday business and it requires imagination, planning, clear goals and hard work. Family and friends are the company, literally and figuratively, and teamwork is required for good results. There are even labor issues – have you tried getting your kids to help? - and, of course, costs, both material and psychological. 

But failure can’t be an option. So on this day before the day before Christmas, at the intersection of three holidays about the things we hope for and celebrate in ourselves and in our future, I wish all of you love, health, peace, joy and the kind of success that will make, not just your own, but all lives richer in the best of ways.

Forget the economikah, have a happy Hannukah

And so winds down the worst holiday retail season in decades.

Or so I’m told. I don’t have much with which to compare it, as I got into the retail business only six months ago and most of that time was characterized by national economic disasters. In my experience as a store operator, business has always been bad.

But even though The Geniocity Shop didn’t have the level of sales I had hoped it would this fall, it’s still here. And like the rest of my business, it will live to try again in the new year as I continue to build inventory and editorial content slowly, and learn what works and what doesn’t. 

I can’t pretend I’m not a bit battered by how difficult the process of getting started has been, but I also feel lucky and grateful that the store keeps attracting new artists and that overall site traffic is steadily increasing, thanks to Geniocity’s terrific bloggers, Will Limkemann, Peter Friedman and Matt Charboneau.

Better times are coming – they just have to be. Soon, we’ll have a new president and a new administration whose preparedness is already being proved every day. Their fresh ideas and approaches are bound to reassure all of us that – at last and at least – the government is trying to do something effective and right. Even a small boost in public confidence may make a tremendous difference.

So whether your holiday has already begun or comes later in the week, I wish you a happy and hopeful one, with lots of light, warmth and humor. Here’s some now ….

No good entrepreneurs in Cleveland

I got angry yesterday morning.

It’s not an emotion I like to experience before breakfast, but a Plain Dealer story I read left me little choice. It reported that movers and shakers in Cleveland’s business-development community believe our region lacks seasoned entrepreneurs and that the best strategy our leading development fund could adopt would be to import talent from Boston, Silicon Valley and select places overseas.

Excuse me? A shortage of talent and experience?

This is the bitterest joke that Cleveland endlessly plays on itself – claiming that people here aren’t good enough to invest in when the real problem is that the talented, enterprising ones are routinely ignored by the very leaders and groups that could help them and the local economy the most.

“Believe in Cleveland”? Great promotional slogan for a city whose ”developers” don’t do anything of the sort. What they do is look around with their noses in the air, see nothing that’s happening on the ground and conclude that we need to uproot the brilliant thinkers and doers from some other city and embed them in our half-empty office towers and decaying factories. 

There are imaginative and capable people all over this corner of Ohio who are starting from scratch with great ideas that could become important sources of jobs, money, community pride and, someday, global influence – but because they don’t fall into the one narrow category of worthy enterprises (IT innovations or biotech that will produce $1 billion in revenue in five years) local major funders will consider, they are denied the money they need to succeed. 

Compare this reality to what’s happened in Ireland, a long-impoverished nation that has undergone an absolute economic revolution in the last few years. What did the Irish do right?

 As the New York Times reported nearly a year ago:

“The change began when Ireland entered the European Union in 1973. In subsequent years, the government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.

‘The change came in the 1990s,’ said James Murphy, founder and managing director of Lifes2Good, a marketer of drugstore products for muscle aches, hair loss and other maladies. ‘Taxes and interest rates came down, and all of a sudden we believed in ourselves.’ ”

Think of that. Ireland encouraged its own people – not people from someplace else - to set up their own businesses. National leaders trusted that Ireland actually had talented entrepreneurs just waiting to be given a chance and encouraged them with material help. They believed in themselves. And – what do you know! – a lot of entrepreneurs emerged and are succeeding fantastically, building their ideas and small companies into international corporations that are bringing gobs of money, excitement, pride and an improving standard of living to a land once synonymous with hopeless destitution. 

Now, get this: Right underneath the story I read about Cleveland business development was another one noting that the Ohio state government had approved grants to three business projects expected to bring jobs to Cuyahoga and Summit counties, the home bases of Cleveland and Akron, respectively.

What is one of the three? A $78,000 grant to buy equipment for Proxy Biomedical Limited, an Irish company specializing in bio-materials, as part of a $2 million project expected to create 26 jobs.

So Ireland believes in the Irish and so does Ohio. But no one in charge believes in entrepreneurial Clevelanders. 

No wonder our most gifted citizens so often decide, after years of fruitless efforts, to “be leavin’ Cleveland.”

Ripples from Rosenberg’s rebuttal

Robert Finn, who preceded Donald Rosenberg as classical-music critic of The Plain Dealer, had this to say in an e-mail to an acquaintance (published here with Finn’s permission) about Rosenberg’s demotion and his subsequent suit against the newspaper and the Cleveland Orchestra’s parent organization, the Musical Arts Association:

       ” … I think there is a much wider and more important side to this whole affair, one that [g]oes far beyond contractual clauses and legal niceties. 
       It is almost a moral issue. Both the PD and the Cleveland Orchestra have disgraced themselves in this matter — the PD for living up to its longstanding reputation for caving in to outside pressures and the orchestra for exerting that pressure in the most heavy-handed Bush/Nixon style against someone whose opinions displeased it. 
      Don Rosenberg was simply doing his job. Whether you or I agree with him is quite beside the point. The main issue is that he was demoted for doing what he was hired to do. The PD cannot claim that he is incompetent — after all, they are allowing him to review all sorts of other musical events. The only issue is that the orchestra management wanted him silenced and they got their wish. I know Don well enough to say that he was simply stating his own opinion based on what he heard. There is no hidden agenda or axe-grinding going on here. The statement that he ‘attacked the orchestra’ is utterly false.
    What self-respecting critic (of music or anything else in the arts) will ever want to work for the PD after this incident, knowing that the paper does not want honest expression of opinion that might displease someone? … Arts criticism is of course a highly subjective thing. Two trained musicians can sit next to each other at the same concert and come up with sharply opposed opinions about it. Yet it is a valuable thing and should be practiced vigorously. It is not the same thing as determining who is on the take at city hall or who should play second base for the Indians. It takes specialized knowledge to write, and is always open to disagreement, provided that those who disagree can back up their arguments from their own knowledge. If it is censored by nonmusicians, it becomes worthless.
     Maybe there should be a clause in the [Newspaper] Guild [union] contract guaranteeing that management will in no way interfere with the free expression of opinion by arts critics.”

                                                                                                                         – Robt Finn

Creative lending … for creative business?

The Federal Reserve seems to be getting inventive in its efforts to save the economy. Dropping interest rates essentially to zero, churning out money - if these tactics have the desired effect on lending and spending, a lot of companies will be able to get loans to pay for crucial equipment, supplies, hires and the other necessities of staying solvent and competitive.  

But I hope lenders will support something besides huge, established corporations and technology start-ups with billion-dollar potentials.  I hope they’ll invest in tiny creative start-ups that will improve individual lives, neighborhoods and communities by building a diverse, grassroots economy.

I hope this not just because the era of heartless, own-everything megaconglomerates needs to be over, taking its totalitarian economy of unchecked executive greed, crushed competition, boring homogeneity and feudal resource and power systems with it. I hope this because the reimagined world we need, with new solutions to our entrenched problems and fresh ideas and creative marvels to inspire us all, will come from individual visionaries who begin changing the world from their garages and spare rooms with nothing but their own brains and hands.

They’ll have little collateral to offer. Their creations could turn out to be the next microchip, “Harry Potter” series, miracle drug or global snack craze – or remain just an enjoyed and enriching part of local life. Either way, they’ll be worth the investment.  

As the United Negro College Fund points out, a mind is a terrible thing to waste. Or, as Dan Quayle had it, what a waste it is to lose one’s mind.

I suspect one thing leads to the other.

That’s why I hope the Fed’s efforts save our nation and our sanity by putting new money where America’s potential really lies – in its people of imagination, talent and determination. They’ll pay us all back.

A prayer in time of recession

My geographic region has lost about 7,000 jobs since January. The nation has lost more than 600,000 manufacturing jobs alone in the same period. 

On behalf of those who are out of work or closing their businesses, I offer these few words:

 Done in, I throw me down to weep

My income’s small, my debt is deep

If from a ledge you find me pushed

You’ll know I fell ’cause I was Bushed

When doing what’s right seems bad for business

Business has had a dark side ever since the earliest hominid tried to trade a banana he secretly knew to be rotten for his neighbor’s useful sharp stick. Mr. Hominid probably needed that stick a minute later to fend off the fangs of his cheated and furious customer. 

People have been deliberately selling the public shoddy or dangerous goods and useless or harmful services ever since. Patent medicines made mostly of alcohol, toys full of lead, cigarettes, cars that explode in flames when fender-bent from the rear, no-money-down mortgages, oil-well investments, melamine-laced infant formula - the list is enormous, outrageous and ongoing.

It’s hard to imagine the people who thought up and sold these things as anything but criminals or worms or both. It shocks us that they could do what they did, all the more because – as in Arthur Miller’s “All My Sons” - they are so often people like us, with families they want to protect. 

In fact, the difference between them and many other run-of-the-mill business people may be only a difference of degree. We first-time entrepreneurs – baby business leaders that we are – need to watch carefully how the big boys and girls act and then watch ourselves even more closely.

What will we do if a politically connected acquaintance or a big customer asks us, in essence, to take a dive for money – to pad the figures, buy inferior supplies from her nephew, to remain silent about the pollution in the housing development’s soil in exchange for a share of the construction work? What if using the cheaper, more brittle plastic means we’ll turn a profit on each teething ring instead of just breaking even – though there’s a slight chance the ring can shatter into shards in the baby’s mouth? 

Even trickier: What if our friends or families pressure us to be loyal instead of honest? What’s more important? Protecting their reputations or the public’s trust in our companies?

It’s probably easy for all of us to think we’d have the moral strength to resist temptation, bullying or sentiment and champion the good. But an awful lot of people end up dealing with their dilemmas by saying and doing nothing. Why? Well, most of us have seen what happens to resisters and whistleblowers.

I’m looking at this issue and at myself because I work in an industry founded on, and sustained by, its courage to speak the truth. The media tend to be scorned and railed against by the public – not just because we have some incompetent and unprincipled members, like every other business, but because, in speaking truths as accurately as we can, we upset people of all kinds who disagree or just don’t want to hear.

That is a virtue. The press doesn’t exist to reinforce prejudices, fawn on authority, suppress facts and puff those who pay. Organizations that do those things are not gathering and sharing news: They’re practicing public relations at best and propaganda at worst. And yet, journalists feel it when people don’t like us or what we do. We’re human – we’d prefer to be admired, rather than the opposite. We’d prefer people to buy our news and pay to advertise in our publications.

But not if they expect us to take that dive in exchange. So we have to have thick skins and strong spines to keep on working when leaders and readers and advertisers harangue us and try to get us to change our standards. It takes guts to conduct our business the way it must be conducted. And I think I can speak for the majority of journalists when I say it’s easier to stand up for the truth when you remember that you’re serving a public that must have accurate information if its members are to help one another, govern themselves and stay free. 

That’s why so many of us – and so many others who understand the value of an independent press - have been shocked at Donald Rosenberg’s demotion from his position as the longtime classical-music critic of The Plain Dealer. Whether the newspaper was legally at fault in demoting him is not mine to say, but I believe there can be few in our industry who don’t think this action was a flagrant violation of every fundamental journalistic tenet and ethical standard.

The newspaper’s editors evidently thought Rosenberg’s reviews were hurting their relationship with the renowned and civicly influential Cleveland Orchestra and its supporters. They must have decided that letting him do his job properly and state his informed views honestly was bad for The Plain Dealer’s bottom line. They actually got it backwards – and in taking the dive, have damaged their company’s credibility.      

Those of us in the business who speak out about such violations protest not to tear this or any other media company down, but to save it. It’s typical for companies, like nations, to equate patriotism with cheerleading or acquiescence when true patriotism actually lies in refusing to let the thing you love be less than its best. Ethical journalists are thus true patriots, including patriots of their own industry: whistleblowers by definition and vigilant members of the whole village it takes to raise our profession and our community to greatness.

Our business is having trouble enough adapting to the digital revolution – it won’t survive at all if it compromises quality. We might as well sell the public rotten bananas.