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13211

    To be uncertain is to be uncomfortable, but to be certain

    is to be ridiculous.

    --Chinese Proverb

                                  

My modus operandi after graduating college was to eliminate uncertainty in my life as much as possible. The alternative for me at the time was to feel like the feather in the wind which would one day be artfully shot in the opening of the film, Forest Gump.

After becoming the CEO of a direct marketing company, the magic word for me was “visibility”. I wanted predictable results…predictable processes…and craved the comfort of certainty. When uncertainty reared its head, I felt all that was needed was more information. Just be a little smarter.

I hungered and thirsted for information but was starved of real knowledge.

     “…rare events cannot be estimated from empirical observation

         since they are rare.”

         --Nicholas Taleb, Author of The Black Swan

Our most profitable catalog was a military video catalog featuring over 1500 videos on military subjects. It took four months to get a catalog from product selection to somebody’s mailbox.

Then one day after sending out a few million catalogs, President George Bush (41 that is) launched a massive military operation called Desert Storm. Our response rates fell 80% and nearly bankrupted us. Nobody wanted to watch videos of past wars while there was a new one brought to living rooms via CNN.

Yet Albert Einstein’s famous saying, “God does not play dice with the Universe” was terra firma for me. Randomness and uncertainty could be tamed by working harder than everybody else. In those years, I often left home before my kids awoke and got home long after they went to sleep. Hey, eliminating uncertainty is hard work. When uncertainty reared its head, the remedy again was to be a little smarter. Develop better predictive models.

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Tagged in: Entrepreneurship
20845

On Saturday June 22nd, 2013 I had a vision.

 

My last vision was April 9th, 2008: the vision came to me between 72nd street and 59th street on the West Side Highway in New York City. I remember I was thinking about the fact that the first thing I read every morning is the New York Times Obituary section: I’m fascinated with how people have led their lives.

 

And suddenly, on that short section of highway in Manhattan, I had the vision: a Facebook-like place where families could archive and share memorabilia and remembrances of loved ones gone. No advertising, the site would maintain itself with tie-ins with pharmaceutical companies and florists. Your uncle died at 63 from cancer? What is the age range of people who died from cancer? How can you prevent it happening to you? The site would also have triggers that would let you know when someone with your last named died, or someone from your high school died, or from your home town. I saw descendants, a century from now, reading well wishes and remembrances by friends of the their great great grandparents. I came up with a domain name. 

 

By the time I passed 59th street, I couldn’t wait to get to work to see if the domain name that sprung from my head was available. It wasn’t, but of course….after the vision, the work starts. 

 

That night I was driving into my driveway on my way home from work when I got a call on my cell. A woman I’d never met was calling to tell me that my oldest friend, my roommate in college, had died of a heart attack the night before. Strangely, he had composed a list of people to contact in case of his death and I was number one or two on that list. The problem with Visions: they place themselves at the center of your world view and if the Vision is strong enough, your world begins to morph itself to accommodate it. More on this below.

 

Visions like this, if you are lucky enough to have them, are rare things. I spent the first half of my life pursuing the life of an artist - musician, painter, writer - so I had some experience with altered states from staring down a canvas and had a great deal of respect for all right brained activity. What separates entrepreneurs (and artists) from the other, sane section of the work a day world, that when we are afflicted with these visions, there is a deep burning desire to see them REALIZED! 

 

To illustrate: my first real vision happened in my later 30’s at a time when CD-Rom games like 7th Guest and Myst were popular. At the time I was a lowly salesman selling 3D Animation workstations to special effects houses. My job put me in the path of most of the computer games trade shows, so I would bump up against some of the major players in the industry all the time. Then I had a vision: Dreamland! A puzzle based video game based on Dante’s Inferno. 

 

The power of visions is that, unlike ideas, they come fully formed - of one piece - and that means they are much more powerful than a typical daydreaming session. My vision of Dreamland was such a powerful idea in my mind that people I talked to were just drawn to the idea. I ran into Matt Costello, the writer for 7th Guest and based on my enthusiasm agreed to help me, eventually introducing me to his agent and being on my board of advisors. Another person who lived in my apartment at the time was a scenic designer for the movies and he introduced me to Krisi Zea, an award winning production designer. I showed her a 5 second clip of some moody 3D trees on a barren landscape that I had talked the artists at the software company to make for me, and both she and our mutual friend were in. 

 

Weeks after the vision, I had quit my job, I had an agent, a team, my first company (Quartet), an office I rented above a real estate office, verbal interest from Microsoft to distribute this game that didn’t exist yet except in my head, and effects house Digital Domain all set to do the production.

 

Eventually it failed but not because of the vision: somebody had a bigger vision. Dreamworks had just formed. Our final meeting with Microsoft was set to take place in Redmond where we were expecting to get initial funding. Our meeting was postponed because Spielberg, Geffen, and Katzenberg took our slot! At the end of their meeting, Microsoft had agreed to shut down their gaming division in exchange for being the sole distributor of Dreamworks Games: games, like mine, that didn’t exist yet. 

 

Yet the power of Vision didn’t go away: it morphed. The fact that I was approaching 40 with 2 small children, a wife, and a house mortgage didn’t affect my decision to keep going. The end of DreamLand and Quartet drove me to get the Vision REALIZED some other way. 3D on the Web in the form of an open source technology called Virtual Reality Modeling Language (VRML). I started writing about VRML and creating games on the Web instead of on a CD. Eventually I was one of the leading tech writers on VRML which prompted SGI, who at the time was heavily invested in VRML, to hire me as their VRML evangelist. 

 

My first order of business: I developed small 12k VRML Web banner ads. And with a group of similar minded technology companies from Macromedia, Intel, and Unicast, we introduced the world to Rich Media Advertising. The Vision was not the same Vision I had when I was dreaming of creating the next Myst, but it was the power of that initial inspiration that changed my life forever.

 

In retrospect I feel the development of Rich Media in Web advertising was the realization of that Vision I had a few years before. The vision morphed from a CD-Rom game project that would have probably died on the vine (the computer game industry imploded that year and took years to recover) but instead I was part of the ground floor of a brand new industry: The Web and Rich Media Advertising.

 

Stay tuned for Part Two of Visions.

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20308

hud-smalt-whskThis weekend I took a ride up to Gardiner, NY to visit the Tuthilltown (pronounced Tuttle Town) Spirits Distillery. I was expecting a quick 5 minute tour of facilities followed by a tasting of their Hudson Whiskey. What I got was instead was one of the most interesting stories in entrepreneurship I've ever heard about.

Started 7 years ago, Tuthilltown Distillery became the very first Distillery to open in New York State since prohibition. Seven years later, Hudson Whiskey is available around the world (20 cases where headed to Lebanon while I was there) in their distinctive Pharmacy bottles and employees about 27 people, growing to 40 according to their growth plans. The success of Tuthilltown is a story that touches on every exciting aspect and stage of entrepreneurship, and the reason I love entrepreneurship so much.

Rule One: Adapt Or Die.

Ralph Erenzo, a professional rock climber and founder of ExtraVertical Climbing Center in Manhattan, had a dream of creating a Climbers ranch near The Gunks, a popular spot for climbers near Gardiner, NY. After purchasing the land, neighborhood opposition prevented Ralph from creating his dream. Now what?

Rule Two: Take advantage of a Change in Circumstances

Opportunities come at times of change. Ralph looked out on the farm he now owned and thought: what else can I do with a farm. How about distill whiskey from grains the farm produced? Only problems were that Ralph had no idea how to distill whiskey and the state licensing fees where $60,000 a year. This was the main reason no distillery had opened since prohibition: it was too costly due to government licensing fees and taxes. But that year, the state of New York change the laws and reduced the cost to around a $1,000 for two years. That was the opportunity that Ralph needed.

Rule Three: On the Job Training

Ralph's partners decided to take a tour of the southern distilleries to see what they could learn and what they learned was....no one was going to give them any information about how to make whiskey! So they had to figure it out themselves. First up: they spent months trying to figure out why their yeast was not creating alcohol. For months, they spilled out vat after vat of mistakes. Then workers at a local Hasidic bakery told them: you don't know much about yeast: they needed to wait another 24 hours for the yeast to do its job and start generating alcohol.

tuhtilltown

Rule Four: innovation.

They got better. At first they produced Vodka because in order for Whiskey to be called Whiskey on the label it had to be put into white oak casks and the casks could only be used once. Casks were expensive and since they couldn't reuse them, they had an expense cask that couldn't be reused and raised their overhead. They also had the problem of time: They didn't have the resources to sit around for 4 or 5 years waiting for the whiskey to age and create its distinctive color, which comes from sitting in the barrels.

But after reading the laws carefully they realized one thing: while the law states the whiskey must be put in white oak barrels, it doesn't say for how long. By putting the whiskey into smaller barrels, they increased the surface area to liquid ratio and thus the whiskey aging process for shortened. They also found out that distilleries in Scotland do reuse barrels and where happy to purchase all the used barrels they wanted to sell.

In addition they found that pouring a Manhattan Cocktail Mix (Rye, vermouth and bitters) into a 5 gallon first use whiskey barrel and letting it sit for 90 days would create one of the most incredible Manhattans you've ever had: soon every bar in Manhattan was looking for their used 5 Gallon whiskey casks.

But the aging process still took to long: They thought about putting stave's from the barrel in the whiskey in order to create more surface area but the laws specifically state that you cannot add anything to the whisky cask. BUT it didn't say you couldn't REMOVE something. So their idea was to drill wholes in the stave's and on the inside of the barrel, thus increasing the surface area (an idea they immediately patented) and were able to reduce the aging process to 20 days per gallon of whiskey.

Their distinctive bottles, that look like they came out of a pharmaceutical shop, are exactly that: a relative had 1,000 bottles sitting in the basement of former pharmacy, and the rest is history. Each bottle is hand numbered with the year, the batch, and the bottle number. Each batch tastes different because of the home made nature of the the way their distillery works.

I don't want to give away all the secrets: but if you go ask about their unique method for stiring the barrels. If you find yourself in the Catskill region of New York, do yourself a favor and stop in for the tour. And pick up a bottle of their Hudson Single Malt Whiskey.  You'll love it.

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Tagged in: Entrepreneurship
25172

Everytime I hear about a friend or business colleaque tell me they are going out on their own, I raise a toast. There is nothing better than being your own boss, setting your own hours, and living (or dying) based on your abilities and wits. 

One of the biggest mistakes I've seen people make is this notion that you need to immediately go out and raise money in order to launch a business. Once you take money, you are right back where you started: working for someone else. 

Of the 5 companies I've started, all of them were started on no money and for only one (eDataSource.com) did I make the decision to raise capital in order to grow. So, how do you start a business with no money? 

Here is how: 

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