Entrepreneurs Can Lead Us Out of the Crisis

Dr. Iain Clelland at Radford University shared this story from the Wall Street Journal with me.

I can’t add anything (at least for the moment), because I think the message is both true and clear.

To wit:

Entrepreneurs Can Lead Us Out of the Crisis By TOM HAYES and MICHAEL S. MALONE

“It’s time for the Obama administration to provide incentives for the creation of real jobs. Mr. Hayes, a long-time Silicon Valley executive, is the author of “Jump Point: How Network Culture is Revolutionizing Business” (McGraw-Hill, 2008). Mr. Malone, a columnist for ABCNews.com, is the author of “The Future Arrived Yesterday,” forthcoming from Crown Business.

The passage of the $787 billion stimulus bill has so far failed to stimulate anything but greater market pessimism. This suggests to us that the strategy behind the American Reinvestment and Recovery Act is wrong — and worse, that the weapons it is using to fight the recession are obsolete.

Just as generals are notorious for fighting the last war, Congress and the White House seem intent on fixing an economy of hidebound and obsolete companies and industries, while ignoring the innovative ones rising before us and those waiting to be born.

Missing from this legislation is anything more than token support for the long-proven source of most new jobs and new growth in America: entrepreneurs. These are the people who gave us everything — from Wal-Mart to iPhones, from microprocessors to Twitter — that is still strong in our economy. Without entrepreneurs, we will never get out of our current predicament.

This recession is more than a business-as-usual downturn caused by bad lending practices, government incompetence and Wall Street avarice. A greater, underlying dynamic is at work, a fundamental change taking place in the global marketplace. The U.S. economy isn’t built for this new world (indeed, neither is any other nation) which is why our problems are racing out of control, while our solutions are proving both slow and inadequate. The danger now is that by merely fixing the old economy we will leave ourselves even more unprepared for the new one.

Only entrepreneurs have the flexibility, the freedom and the risk-everything ambition to find the path back to prosperity in a rapidly changing, technology-driven global economy. Here’s how to help them:

- The biggest problem for new start-ups is the lack of capital. Here in Silicon Valley, investors are paralyzed by a lack of faith in the future. Solutions? First, kill Sarbanes-Oxley or make it voluntary. Right now.

When brilliant young companies can once again go public without the prospect of being stuck with a massive, expensive reporting infrastructure, they will do so — creating new wealth, important new corporations, and reigniting venture capital investment.

- Nontraditional means of capital formation need support to let the brave risk takers of today build the future. So allow entrepreneurs to more easily tap tax-free retirement accounts — or better yet, let them create tax-free accounts specifically to fund themselves.

- Eliminate payroll taxes, which unnecessarily burden young companies. Many small companies don’t hire full-time employees because of the payroll tax burden, and this inhibits the creation of new jobs.

- The marquee venture capitalists have little time nor inclination anymore to invest seed capital in early stage companies. The real heroes these days are the nonprofessional investors — the “Angels.” These folks aren’t always the high net worth people we imagine, and often they aren’t as sophisticated as we think. So make the tax system more forgiving for them — or allow the creation of tax-free investment vehicles similar to what we now see with nonprofit foundations or 529 college savings funds.

- Business blogger Sramana Mitra has suggested a novel “tiered” tax structure to promote a return to risk-taking. VCs would pay lower capital gains taxes on investments in early stage companies and higher taxes on later stage deals. This would be the venture-capitalist equivalent of long-term versus short-term capital gains rates, supporting both strategies, but giving a bigger break for the greater risk.

- Help big business think small. The stimulus legislation is packed with incentives for large companies, but not one incentive is designed to encourage companies to create new jobs rather than merely preserving the ones they already have. To restore lost jobs, big business is going to have to take risks again — and that means investing in both internal, “intrapreneurial” ventures, and, in a venture mode, also investing in external new start-ups.

- Convene a presidential summit on entrepreneurship and small business. The last president to do so was Ronald Reagan in 1982, and the chief topic was the impact of the fax machine. We are long overdue. There is no better time for President Obama to listen to the folks who hold the fate of this economy in their hands.

At its best, the stimulus legislation is an immensely expensive attempt to restore what the U.S. economy has lost in the last few months. But the world is already moving on. The only way the American economy is going to regain its lost health and vitality is to lead the world into the future. Entrepreneurs are the only people who can get us there.”

Let’s be part of the Solution – and, not the Problem.

Brian Patrick Cork

Filed under: Business, Entrepreneurs, Radford University , Entrepreneurs, Radford University, Wall Street Journal

generational networking

I am coaching Boyd – an emerging thirty-something star at Coca-Cola.

To set the stage, allow me to remind you that this is the first time (era?) that four separate generations are working side-by-side (“new millenials” to baby boomers).

As I set up connections for Boyd within our business community, I want him (and others I coach) to always have key questions for the leaders I send him to.

In this case, I introduced him to Jim Bratton, a local entrepreneurial enabler in-and-around the Venture Capital community.

He has come up with a very good list of cross-generational questions:

1)  Tell me about the “Triple Bottom Line” and your new firm.
2)  Where do you see “green” business headed and how will the stimulus package impact it?
3)  Based on your experience, what’s the best way to get mentored on the job in the entreprenuerial world?
4)  Based on my background and skills, where do you think I should focus my efforts in building new skills and experience?
5)  Who else should I be talk to?

More later.

Brian Patrick Cork

Filed under: Articles By Brian Cork, Business, Career Path, Coaching, Entrepreneurs , Atlanta, baby boomers, Brian Cork, Business, Coca-Cola, Green, Networking, new millenials

brian’s BEANS

We will be announcing the formation of brian’s Beans in the next few weeks.  Look for the nomination forms!

This is all about mentoring the next generation into being part of the solution – and, not the problem.

This is where Business meets Thomas Jefferson, Best Business Practices, Mentoring and, the Laws of Natural Selection!

More later.

brian patrick cork

Filed under: Business, Coaching, Success , best business practices, Brian Cork, Business, mentoring, Success

the REAL stimulus package

So…

My current theory is that McKinsey has posited a report stipulating a formula whereby public companies of a certain size reduce their work forces by a certain percentage. We are seeing this (i.e. employee reductions of approximately 6000 per company) happen almost daily.

What will most certainly follow is stock analysts rewarding these companies (and themselves) with opportunistic positive forecasting. Those companies that cooperate participate in the stimulus campaign will, in turn, be rewarded with higher stock valuations and share prices – which is good for shareholders (this is particularly great for executives), and our economy (generally speaking).

The bottom line: The American people can’t/ won’t tolerate a devolving stock market much longer. So, it will “go up” (as the Barrista as Starbucks said yesterday [to be clear, she said the "go up" part - none of the other bits and pieces]).

Seriously.

As large companies sacrifice shed lower-level employees (and dead-weight) mid-level management, the stock market will react and trend upwards (despite 33 year old ADD-addled day traders). NOTE: a Client of mine that is the CEO of one of these aforementioned billion dollar companies recently mused that part of this thinking includes “squeezing” the remaining employees so productivity (also) goes up even as the cost is reduced.

As the stock market begins to go move up, and stock analysts “cooperate”, investor, and American confidence in general, will mount; the DOW will point North (go up); and, the economy will follow.

Then companies will begin hiring again.

And, GM will start selling SUV’s to people that live in Alpharetta again. NOTE:  One (amongst many) reasons I purchased a Ford F-150) was due to their bold stand in refusing to take money from the government relative to the “other” stimulus package that will take a decade to waste everyone’s time and become not much more than wikipedia-fodder.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

Filed under: Business, Economy , Economy, Ford F-150, McKinsey Report, Starbucks, Stock Market