Very Short Interview, Part 2

My first interview with Dr. John Meena was interesting and enlightening, but honestly I was following directions in order to meet the requirements of the assignment with regards to the questions I asked. I did formulate some questions of my own, but overall, it was directed to get the answers to the questions Dr. Pryor put forth. I was intrigued of his perspective of what I should gain from an entrepreneurship class and did wonder what I would actually get.

This is my second interview with Dr. John Meena, an UF Alumnus and President and CEO of Spring Valley Produce, Inc located in California.

Me:
I am assuming you faced some failures in the process of growing your venture. What was the most prominent failure that you eventually overcame? Also, what did it teach you?

Dr. Meena:
Easily my toughest was a financial loss experience. It felt more than a failure because it was our products division faced a three  prong loss at once and it was financially rough.

All in the same season, we had about 1 million trays of strawberries to sell in a 8-9 week window. We had a heavy investment in this crop because our sales intention for this product was to recoup that investment as well as our commissions. Unfortunately, a collision of extensive rains (no harvest and additional spraying costs for mildew), a variety of produce that was not producing a great product, and then an ecoli food scare that was covered daily on CNN and attributed  (incorrectly but months later) to strawberries during our peak. The result was a significant loss experienced in that division.

The learning curve was that diversification saved us as our brokerage division had its best year ever and offset that loss. It reinforced that lesson which always diversify your revenues with customer and supply base, products, and to the manageability you have. Meaning, don't take on more than you can successfully manage.

Also, and saying this is not always deliverable, but invest only what you are able to lose and survive. As in our case, be prepared to divest of a bad venture which we did last year. In order to stay in it properly with industry changes, we would had to vertically integrate substantially and that was not the right call. Therefore, we exited and focused on our brokerage/distribution stream and expanded under that umbrella.

Me:
What have you found to be a key ingredient in businesses gaining interest from investors? Meaning, no matter what the industry, how can one best attract investors? When you choose to invest in business, what would you look for in that business?

Dr. Meena:
Since I am wholly owned, I'm not the best to ask. However, as we invested our success has been on the personal and out view of them most of all. Second, the business model itself and if the track record which we always insist there has to be for us to look at, is reviewed  both from what success and failures are visible and returns and losses on both. Also, do I control the only receivables and payables (which is a must)? Lastly, where are opportunities for "side deals" as you have to go in with open eyes that someone might try to create revenues off of you that do not include you.

Me:
Last question. Have you thought about an exit strategy? We discussed in our class if we want our children to participate, sell the business, or do we see it coming to an end, or it may not end. I was wondering what your perspective is regarding and "exit strategy"?

Dr. Meena:
Yes and often. My business is so tied up in me that a sale is pretty touch in that, "would customers support a new buyer?". I think to a point but a diluted point. We have one large division that is very salable but probably seven years away. At that point it would require a hiring of a company to seek buyers. As for family, I have one son, but I don't think he is interested and another reason I would wait. Also note, with the industry changes, I am uncertain it would be his best avenue- time will tell.

Me:
Thank you again Dr. Meena for taking the time. It has been an honor to have you share your perspective and experiences to further my education. It has definitely ignited interest to possibly pursue my own venture concept.

Dr. Meena:
I hope this helps and best on continued success.

This second interview, I clearly was more comfortable with the subject and more at ease with asking about areas that I found of interest to me. I believe Dr. Meena was more willing to divulge information because I asked pointed questions with some "meat" behind them.

Overall, my comfort level was much higher this time around.  I could ask questions that allowed me to gauge his responses to my own thoughts and perceptions with what I have learned in the class and that I very much appreciated.

Week 13 Reading Reflection

Most of this week's reading in Valuation of Entrepreneurial Ventures was new to me with regards to the actual checklists for valuation, due diligence, and analyzing a business. What I found most surprising was the in practice reading of the "Rollup Frenzy". It was interesting that ventures go on a buying spree of profitable businesses, but don't have a plan as to how to incorporate that entity into their business plan and thus it leads to failed business through bankruptcy.

There was not anything I could really point out as confusing. This chapter was fairly easy to read and understand.

I would like to know, if companies are going through bankruptcy, what are resources to utilize to find these failed businesses and how can they be acquired? I read how some of the businesses previously sold, fell back into the lap of the previous founders at fraction of what they sold it.

In evaluating a business for valuation, is there an agreement that the company books are open and assessed by the buyer's team or is based on documentation provided by seller?

There was nothing in this week's reading that I necessarily disagreed

Celebrating Failure

I am more experienced therefore, I have had many failures and learned many lessons from each. I would have to say, that I choose not to dwell or really consider these failures, but I learned a long time ago these are just "learning opportunities".

My most recent opportunity for learning was an employee who was having difficulty focusing on their work due to disruptive employees. They were at the point of wanting to go to our human resource because of the issues they consistently encountered.

The employee came to me with this opportunity and I listened and engaged with the employee. I felt I understood the concern and we could resolve the problem moving forward. The next day I met with the disruptive employee to explain the concern that was brought to my attention. I heard that side of the story and felt there must have been some legitimacy in their position and their actions were not in fact related to the employee that initially came to me with their concern. I prefer to bring parties together to resolve matters and have an open discussion with myself as the mediator. It has always worked for me in the past and was confident after hearing both sides, it would work again.

Still Smile in Face of Failure (High Five Anyone?, Anyone?)

Could I have been more wrong? Ummm, most definitely. I lost control of the meeting. Tempers flared and I knew immediately, this was heading downhill. I separated the two and retained the employee that came initially to me with their concern. This employee was quite disappointed in me by placing them in that environment and now was considering leaving the organization. I was able to briefly apologize for her feeling I put her in a disruptive situation and asked her to please not look at the company in a negative way based on how I handled this matter. She was sure how she felt, accepted my apology and then left my office.

This troubled me because, I clearly missed something in the employees concerns. I was way over confident in my abilities based on past experiences. I assumed this was a quick fix, but in all actuality, this was not.

I found ways to slowly earn the employees trust by making an effort to change their environment and make strategic changes as far as seating (I suggested them and gave the employee an opportunity to consider and accept the change). This employee is thriving immensely in the company. I saw a lot of potential with this employee for the organization overall, not just in my department. In my opinion, it makes good business sense to keep valued employees and ensure they have opportunities for growth in and out of my department.

I was reminded never to get comfortable with my past successes and assume past strategies will work today. I value the lessons I learn from these opportunities because it helps me to continue to grow as a manager. The perspective I gained from this class regarding failure with regards to risks, is that risks are part of life and you cannot avoid them. The real question and test is what do you do when faced with the failure of that risk?

This class has changed my thinking about the only limitations to my becoming an entrepreneur is my thinking age matters. It is all about the concept for a "real" need.

My Exit Strategy

This is a business that I hope moves well into the future, even if I must step down because I no longer can contribute to the positive growth of the firm.

I would like it to be a business my children would like to also participate or their future children. I would think they would also understand the need that we are attempting to meet and that is of those who struggle to find affordable housing.



 By the time I retire, I would intend the growth of the company had extended past just service offerings, but managing properties of the potential homeowner, that is subsidized, but limited to the community of future homeowners learning via "real life" the cost of home ownership prior to handing the keys over. This will take time to first grow the service side of this business to gain interest of investors that will enjoy a sizable return on their investments and see the potential in building an apartment community for these future homeowners. Stability in work and consistency in cost-saving measures are the key things that lenders would like to see, along with good to excellent credit rating. We need to be able to show our clients can afford to pay their mortgage timely and still live comfortably.

So my vast ideas for expansion beyond services, will take time, patience, and a lot of capital in order to really obtain this dream. This is the main reason I know I will have to surround myself with the right individuals that not only want to help the organization grow to its full potential, but also care about the individuals we are attempting to help meet their need.


 I don't see me just handing the keys over in five to ten years, I see this as an organization that will start in one city and then hopefully expand to other cities in order to successfully meet a need nationwide. This is a vision that cannot just be sold off, it has to carefully be nurtured to its maturity. I will strive to be the Warren Buffett for my cause, and heck he is 85 today and still making his mark.
 

Week 12 Reading Reflection

Can you really be both?

I think the biggest surprise to read was that highly creative entrepreneurs have a difficult time meeting administrative requirements in the "growth" stage of the business. To read that the entrepreneur has a difficult time adapting to the difference in mindset is very surprising, even though it would seem logical you hire a team of people to take on those strategic roles in which you know you are not the strongest.

I definitely understand and agree that a venture must remember the entrepreneurial thinking is what is has made the business successful thus far and you must continue to drive that thinking to stay innovative and in the forefront for multitude of reasons. I was confused as to why institutionalizing change as the venture's goal was important. How can we meet the "vision" of the company and have "change" as goal? Probably reading too much into it, but I think this would be cause of confusion and yes we want innovative thinking, but it has to be with a purpose aligned with the organization for the most part, right?

What exactly is it that entrepreneurs perceive as a high cost to planning? I ask, because it would seem in my opinion that it is common sense versus the avoidance of such that could cost you the venture.

In regards to entrepreneurial point of view and administrative point of view, what is it the author found that tends to scare those highly creative entrepreneurs from transitioning to a different skill set in thought? Are these the serial entrepreneurs that create and then sell ventures because they do not want to really see a venture through its life cycle?

There really was not anything in this week's reading that I disagreed with the author, although I did find it quite interesting some of issues presented as obstacles that venture's face during the growth stage, I would think should be common sense.

Week 11 Reading Reflection

This week's reading is about innovation strategy and why it is necessary it aligns with a business strategy that the firm has communicated.

I would have to say it would seem common sense that your innovation strategy match up to the firm's business strategy, so when I read the author's research reflected the opposite, that was surprising. It clearly can be detrimental to a firm, so not sure I grasp the concept of why it is not unilaterally enforced in the organization.

The reading was easy to understand with the exception of I don't have a clear understanding of exactly what are "phase-gate" models. I understood the positions of the proponents and opponents, but I did not understand what exactly it entailed.

Two questions that arise from the reading for me are:
Am I to understand that most reasons why business and innovative strategies do not align is because the senior leadership is not involved in asking questions directly of the progress of each division regarding what is the progress in innovation alignment with the business?

So it is recommended that there be at least a disruptive innovation in order to stay competitive. I wonder if there should always be R&D to look for those disruptive innovations while maintaining routine innovation?

There was not anything in this week's reading that I disagreed with the author and/or thought he was wrong.

Venture Concept No. 1

My concept includes the unmet housing need for the lower income and middle income working family. The ideal customer is that customer who does not see owning a home as a reality and struggles to find a home that fits their family within their budgeted needs. These families barely make it from paycheck to paycheck, but continuously work because they were brought up to believe that their hard work will eventually pay off.

Ever since the Great Recession, families were qualified for homes they could not afford. In fact, housing prices were well above what they actually should have reflected. The bubble burst and either one or more working individuals within the household experienced job loss due to the trickle effect of the housing market blowing up.

According to the Pew Research Center and their analysis of government data available in order to be considered middle income class in the state of Florida, your median income needs to be at least $46,036 and lower income is from $30,691 to $92,072. The unfortunate result of this research is that it does not take into account the living expenses needed to, well, live. There is the cost of utility, food, clothing, and taxes to name a few.

These working families are living with families, finding homes further from their jobs because they cannot afford the housing in the county in which they work. Some get subsidized housing assistance and believe this is their only option. As news articles report, many of these subsidized housing options are below standards for anyone’s life.

As long as there are income disparities, there will be an opportunity for this business to be successful. These working families raise their children to do better than their parents are doing. These families struggle in the hopes their children will not. This business concept will actually reward these hard working families with a home and A.P.R they can afford for a real home.

The innovative thinking behind this concept is that my business will be service offering that has required courses in the home buying opportunity. Our classes will be offered at differing times to fit the lifestyle of the working family. There must be full participation of the family so there is a clear understanding of what is required of each member of the household to ensure successful long term ownership.

We will have individuals in the organization familiar with credit reporting and the steps needed to correct or remove negative reporting. We will walk the family through this tedious process and ensure they are not just left with a “to do” list, but the assistance in writing necessary statements or making necessary payments to improve their overall credit score. We will work with other programs such as Head Start to Home Ownership that offer financial assistance as well as Federal Housing Administration that will guarantee a portion of the home loan. This is a lot of work and time that goes into completing forms and requirements. A lot of time a two income family (or one income) does not have. We will be that helping hand. We will require the participation as far as the classes offered, but as far as the forms needing to be completed, we will assist in completing the forms and ensuring the checklist of items that we are very much familiar with required for our customer base to meet and qualify are met in its entirety. Time is money and in most businesses, they would not want to spend much time. In my business Trans-It-Home, time is how we ensure we make money. We give the time for each of our clients and get them to understand yes it is time consuming, but the cost of owning a home should be known in advance of making such a purchase, so time is needed to gain a complete understanding of this undertaking.

Structure of the business will have to include individuals with customer service experience as well as a financial background of some sort. Not necessarily a degree, but experience in the banking industry, or mortgage industry will be preferred. Individuals well versed and articulate in verbal and writing communication. The staff has to be patient and celebrates the successes of each of their working families when the key is handed over for their home.

The one element that will be my venture’s “unfair advantage” will be my ability to always look outside the box, step back and look for opportunity to overcome and obstacle. I have the mindset that everyone has value and this mindset will part of our company mission statement. There is no judging of any individual families that walk through our doors. If they can show they have a working history and steady income from those singular or multiple jobs, then we can assist those families in qualifying and getting a home. Our business model will be “Trans-It-Home is working for those working for their families well-being”. There are a lot of steps involved in owning a home and this business will already know those steps and I will have a creative staff that will find ways in effectively completing these steps in the most cost-effective manner.

The next venture will be actually having an apartment complex that accepts housing subsidies and the families renting these apartments will have had to go through our program and are still uneasy and want the option to really test their knowledge in “real” life scenarios. This is a community of like-minded individuals lifting each other up and sharing their best practices with each other. Every success is celebrated, but the terms of the lease will not exceed two years. If our family is qualified and buys a home, there is no penalty for getting out of the lease early. We just want to ensure they are ready for the next step. It will be an opportunity for our families to save money for Energy Star appliances and other items necessary to keep their home in order such as a lawn mower if applicable. We will assist them in getting the best deals for the top of the line appliances they desire.

It would be my hope this business will grow from state to state. I have not decided the best offering of expanding this offering, but I believe it can be a service that would be easily attainable. I would like to think this venture will help us get families off the street and into a home they cherish and are proud to call their own. The lower and middle income families work hard and find it hard to see any option to invest. I believe owning a home will open their eyes to the possibility investing in their own and their family’s future.