Return On Investment

An enterprise starts with the hope of a return on its investment. For a start-up, this is often envisioned on a spreadsheet, with the initial revenues being smaller than the initial expenses creating losses; however, the revenues increasing by some percentage and over time they outpace expenses to generate an attractive return on investment (ROI). While that is the typical story on paper; it's not reflected in the reality around us.

The World Population graph seems to show a linear growth like the one described in the above plan with some event happening in the late 1800's to suddenly make it change. Any idea what that historic event might have been?

If you haven't read the paper folding post, this may make a more sense if you do that. The graph shows natural, exponential growth. If we would change the time scale to end a century earlier, the curve would look the same, only the historic event would now appear to be in the late 1700's.  End another century earlier, and the momentous event still moves back with the new scaling.

There was no event that changed the World population growth rate. Population growth is an example of growth from feedback and this graph is what that curve will always looks like. Small victories in the beginning, remaining small for far longer than our linear minds can imagine, then accumulating faster than linear thinking can grasp.

The two mistakes we can make are to believe the smaller growth rate is failure or to not accept the higher growth rate as success and invest in necessary infrastructure to keep the feedback going. It takes a faith that the returns will really happen to avoid either downfall. Of course this growth doesn't go on forever. There are always limits to growth; however, some are just in our linear minds.

During the Beatles's era, Maharishi Mahesh Yogi, who may have been the subject of their song Fool on the Hill, challenged his followers with the claim that if the square root of 1% of a population practices Transcendental Meditation (TM), crime in the area would decrease. In 1993, TM followers came to Washington DC during a record heat wave (which correlates to increased crime) to create such a critical number. Crime decreased for the period of the experiment. After its conclusion, it increased again.

This is not unique to TM. The story has been repeated in countless endeavors where fools have believed in continuing to repeat something powerful and gentle until the feedback effects can finally be observed; or until their return on investment is finally realized. We live in a faithful (systematic) universe; just not a linear one.

Image credit: mattlemmon

The Tao of Active Investing

The principles of building lasting value are timeless and universal. Chwan Tzu, an ancient Chinese philosopher, wrote the following centuries ago. It illustrates the impact of a repetitive, powerful, and gentle lifestyle as described in the Tao, the Chinese book about understanding and joining with natural forces. The story starts when Prince Hui complements his cook on his skills with a cleaver.

"Well done!" cried the Prince; "yours is skill indeed."
"Sire," replied the cook, "I have always devoted myself to Tao. It is better than skill. When I first began to cut up bullocks, I saw before me simply whole bullocks. After three years' practice I saw no more whole animals. And now I work with my mind and not with my eye. When my senses bid me stop, but my mind urges me on, I fall back upon eternal principles. I follow such openings or cavities as there may be, according to the natural constitution of the animal. I do not attempt to cut through joints: still less through large bones.
"A good cook changes his chopper once a year -- because he cuts. An ordinary cook, once a month -- because he hacks. But I have had this chopper nineteen years, and although I have cut up many thousand bullocks, its edge is as if fresh from the whetstone. For at the joints there are always interstices, and the edge of a chopper being without thickness, it remains only to insert that which is without thickness into such an interstice. By these means the interstice will be enlarged, and the blade will find plenty of room. It is thus that I have kept my chopper for nineteen years as though fresh from the whetstone.
"Nevertheless, when I come upon a hard part where the blade meets with a difficulty, I am all caution. I fix my eye on it. I stay my hand, and gently apply my blade, until with a whach the part yields like earth crumbling to the ground. Then I take out my chopper, and stand up, and look around, and pause, until with an air of triumph I wipe my chopper and put it carefully away."
"Bravo!" cried the Prince. "From the words of this cook I have learned about the way of life."

A new active investing venture will always go through these 3 stages:
1) Seeing the whole and being confused by all its parts (Learning)
2) Understand the details and complexities (Managing)
3) Knowing exactly what to do from experience (Mastery)

Its comforting to know where we are at any given time and to be prepared to be happy there until we grow into the next stage.

Image credit: silentius

Crystallization - Beauty Built On Imperfection

Things are never right. That's what ultimately creates order and beauty with a system. The story of crystallization is a remarkably accurate metaphor for how that happens in a natural system that an Active Investor can readily apply to understanding social systems such as their business.

The orderliness of a crystal begins with the random movements found in liquids. Crystals are created when molecules of a substance, normally solid at room temperature, are dissolved in a solution. These molecules will sometimes be attracted to each other for short periods, only to become attracted away by other molecules over time. Everything remains chaotic and fluid until a "seed", a point of imperfection, is introduced into the solution. The seed has a slightly higher attraction to nearby molecules, so they are drawn to it. If this initial attraction is strong enough, the group grows until its size is such that the group becomes consistently more attractive to other molecules than the surrounding solution. This is the "critical size" and when reached the protocrystal is now "in business" and continues to grow.

All of this is similar to a business during its start-up phase. For a business, the solution is not a liquid, it's the answer to a market need. A good business solution can be replicated and the company providing it begins to experience some repetition of sales. Orders will be slow and random at first; but they will grow with greater consistency over time.

This is not the end of the story. There is another step in the crystallization process. The protocrystal continues to grow ; but eventually it gets to a point it can no longer remain "dissolved" and it falls out of solution. Now the original imperfection appears to have been transformed into the beauty, order, and attractiveness of a visible crystal. The visible crystal continues to grow, gaining more molecules from the solution, until it reaches an equilibrium with its environment.

A growing business will face a second step as well. Meeting more market needs will begin to overwhelm the founding staff and another decision, as difficult as the one to initially start, has to be made. An investment must be made in building internal systems and structures if continued growth is to be nurtured. This is hard for the financially struggling team who have sacrificed for the sake of building their solutions; but out of the internal systems and structures come the power to sustain long term growth.

It's now a different business, one that is building lasting values.  Those values will allow it to reach far beyond its initial products and services that brought it to life. A visible legacy drops out of solution.

Image credit: wlodi

An Item of Interest

Networking is popular these days because it's inexpensive and meaningful. Email, the killer app that propelled global acceptance of the internet, was the same way. Today email filtering companies report that over 90% of all email on the internet at any given time is spam. Can networking be headed in the same direction?

Networking advisers universally maintain that the group meetings are just the tip of the networking iceberg. The real work is accomplished at subsequent one-on-one meetings where individuals meet to discuss if the person they are meeting is someone they can refer to others.

We all want to be trusted advisers and the only way to get there is to have a history of delivering results. Even if you do not personally deliver the final solution, if you have started the solution with an on-target referral, you build trust. This means even if your practice cannot solve every problem you encounter in the market, if you can refer to others who do solve them, you build trusted adviser credentials.

As Active Investors meet one-on-one, they seek a knowledge of reliable solutions to problems their business cannot deliver. The size of their referral network will determine how frequently they can help others generate results, and thereby earn trust.

Relationship marketing has also been popularized as a way to build trust. People prefer to to business with those they know. What confuses many in networking is that this is true but incomplete. People prefer to do business with those they know and trust. The objective of the Active Investor's networking activities is not relationship building. It's the sharing of problem solving capabilities.

Salesmen look for items of interest to bring to meetings. These items give the encounter meaning and dramatically increase the chances of a sale. The item of greatest interest that an Active Investor can bring to a networking one-on-one meeting is a credible solution to a problem our networking partner might encounter. Our personal history, scope of practice, family, hobbies, etc. are nice to discuss but they're of little benefit to our partner's ability to build trust.

Preparing for any business meeting, networking or otherwise, could include a simple exercise. Look at both palms and ask yourself a question, "Am I bringing an item of interest, or am I bringing spam?"



(The blog photo was chosen because in a one-on-one meeting with the Texas networking mentor Jeff Weaver I was insisting that items of interest had to be specific to each individual. Jeff told me about successfully using a history of Valentine's Day as an item of interest on a general basis. The picture comments on Flickr also support how interesting many others have found this related image to be. It looks as if love just might be a universal item of interest. John 13:34,25)

Image credit: naama

Related articles by Zemanta

• 4 Arrested in Massive E-Mail Spam Sting (usnews.com)

Intention and the Cooperative Universe

A new discipline has emerged this century, the study of Intention. It's often discussed as the Attraction Principle which asserts we attract into our lives those things we dwell on. Examples include if our thoughts are about physical ailments, or poor finances, or an unsatisfactory performance, we will attract poor health, lack of funds, and below standard performances. Alternatively if we genuinely intend good health, abundant finances, and superior performance, these will be what is attracted to us. By itself, the Attraction Principle might be just a sophisticated form of self-delusion; however, in literature such as The Field by Lynne McTaggart evidence is being assembled from advances in quantum physics that provide a scientific basis for its validity.

There is a strange outcome to the Heisenberg Uncertainty measurement problem that results in energy remaining after temperatures reach absolute zero. I was taught absolute zero meant no atomic motion and therefore no energy and scientists of the last century "normalized" their calculations by simply subtracting this away as "background noise". This may have been an over-simplification. When some physicists keep this energy, now called the Zero Point Field (ZPF), in their equations, it appears the discrepancies between classic and quantum physics are resolved. After further study, it appears the ZPF may be a source of abundant, ever-present energy our advancing civilization will surely require. One estimate is that the ZPF energy in one cubic meter of "empty" space would be sufficient to boil all the oceans on our planet. For Stargate Atlantis fans, this is the energy source behind their Zero Point Modules (ZPMs).

This ever-present field appears to be influenced by everything within it and in turns is an influence on everything in the universe. Scientists are now trying to study how one or more individual's Intentions can be "transmitted" through the ZPF. In many of these studies, the universe responds to the changes in the ZPF and appears to cooperate with the Intention.

The science of Intention does not fit well with mainstream paradigms and is currently relegated to the fringes of the scientific community. Yet the research continues and evidence that the universe cooperates with deeply held Intentions continues to accumulate. The research itself has been attractive to physicists, theologians, philosophers, healers, the military, and many others. It ought to be of interest to the Active Investor as well.

The forces around us shape our destinies, yet from this research we learn that we also shape those very forces. Since we see Intention also has all the characteristics of a force to build lasting value, it's repetitive, powerful, and gentle. The Active Investor should be a student in learning to harnessing its potential.

Photo Credit: EraPhernalia Vintage

Related articles by Zemanta

• Is Quantum Mechanics Controlling Your Thoughts? (discovermagazine.com)
• Uniting light and matter (shankee.com)

Critical Point Analysis

Clockworks have long been metaphors for systems in general. They illustrate energy transformation, cyclical behaviors, information encoding, and much more. One aspect of systems they clearly illustrate is the existence of a critical point.

Imagine the power involved in controlling the heavy hands of a large tower clock. The drive gears must exert crushing force to keep the hands at exactly the correct position. A critical point analysis of the clockworks would be an effort to find a point in the system where the movement of those hands could be stopped with only the pressure from a single finger. In this example, it's the flywheel. Stop the flywheel and everything else halts. That's a critical point and it's the spot of greatest advantage to any planned system intervention.

Business is an incredibly complex system with hundreds of gears (relationships) that mesh together to make it work. The idea that a critical point may exist in a business is difficult to prove; but since the clockwork metaphor seems to be working, it's worth exploring. If there was a critical point in a business, how could we identify it? What would it look like?

Within the clockworks the parts with the greatest mass and largest energy requirements, the hands, are also also the slowest moving. Our critical point, the flywheel, has little mass but is in continual motion. The critical points exhibit speed and repetition but not a lot of substance.

These characteristics are what make ideas critical points. Once an idea starts to spread, the heavy hands of execution begin to move. Internet and advertising consultants tell us extended repetition of a message (the idea) is far more powerful than a single large presentation. A business works because the people involved believe in it.

Critical points have the same characteristics we've already found in the powerful creative forces of nature. They are Gentle, Powerful, and Repetitive. When we find a critical point and dedicate ourselves to it, like an Archimedes who has finally found his place to stand, we can move our world.

Image Credit: poltag

Related articles by Zemanta

• What to Do With Negative Energy People (usnews.com)

Our Invitations

Invitations take many forms, from the formal printed style seen here to the subtle courting signals every society develops. They are powerful tools that open the doors of significant relationships and because of that we handle them with great respect.

Every piece of marketing material should be considered an invitation. We invite the market to experience our product or service; however it's often done in a strange manner. We use a cost benefit analysis approach. There is no doubt that before an invitation to do business is accepted, a prospect will consider costs and benefits; but to base the invitation on this design dehumanizes the prospect and commoditizes the business.

Imagine being an Event Planner rather than an Active Investor developing a marketing strategy. Successful events always have a feeling that is forever kept in the attendees memories. We often forget the details about exactly what happened at an event; but we will continue to remember how it made us feel. Business transactions are similar social events, especially those of an introductory nature. As we are invited to potential business opportunities feelings are remembered as much as any transactional benefits.

Since advertising and networking have become facts of life in American business, we're all continually exposed to them. They are forms of invitations. What will be remembered is how they make us feel. No matter how timely or creative it might be, unsolicited email feels like spam - disrespect and nothing else. On the other hand, even the coldest of calls that includes a sincere request for advise feels like appreciation. Invitations invoke our feelings.

In response to our rhetorical question, "Do you need a written invitation?" the answer is generally "It certainly wouldn't hurt."

Image Credit: Matt Biddulph

Our Highest Calling

Image by Getty Images via Daylife

Business is tough these days and the temptation is to become all things to all buyers so that you might sell something to some. That's another self-defeating behavior arranged by an Ego whose focus is on its own well being. We simply can't be successful at the business of everything. Our market message becomes confused and we're now known for nothing. Would you remember "Widgets, Gadgets, and More Stuff" or would you more inclined to remember and try "Widgets Are Us" the next time you need to satisfy a widget craving? While we can't be everything, we can be something. The question is "what?"

People associate known good or bad qualities in one area to other areas. They think that because someone is attractive they are also resourceful and honest. They will be suspicious of another if they simply know nothing other than they are poor. This is the halo effect. If you have a positive image in one area, a halo will create a positive image elsewhere.

Being exceptional in one area calls for a focus on it. The fear is that a narrow focus will limit business and cripple profitability. Not always. People's tendency to associate can continue to work to the Active Investor's advantage. If a business demonstrates competence in a complex or unusual area, customers will assume their competence in simpler and more common aspects of the business. The art of profitable focus (halo building) is to choose to build your reputation of excellence in the most complex or unusual area where you can still prove your excellence. Without your drawing attention to any other aspects of the business, prospects will simply assume they have been handled with the same degree of professionalism.

When traveling Interstate 35 through Texas, stop in the town of West. Along the east service road are 3 gas stations, each with a large marque sign competing for your business with major oil company brand recognition and current pricing. At this level they seem similar; however, one of them has so many cars parked there, they have purchased the lot next to them to handle the frequent overflow. This business also sells kolaches. They've created so many delicious varieties the crowds of travelers come without a thought of a major brand or the current pricing. Any travelers new to kolaches see those crowds and assume if they're that popular, these have to be worth buying.

The Cost of Goods Sold for a kolcahe is small change; but what has been achieved by a successful focus on the unusual is worth millions. What should be our focus? What is our highest halo? The answer also is our highest professional calling.

Related articles by Zemanta

• Texas Brand'em - Your Ace In The Hole! (smallbusinessbranding.com)
• Rational group delusions (stumblingandmumbling.typepad.com)
• Impressive halo effect: users prefer search results with the Google logo, even if they're not Google results! (90percentofeverything.com)

Choice of Entity

Image by Raymond Yee via Flickr

Anyone wanting to become an Active Investor, that is invest in their own enterprise, has to choose a legal form for the business. Making the best choice will require discussions with a lawyer on liability issues and a tax professional on tax exposure. In spite of all this advice, the Active Investor needs to make some personal decisions before consulting either.

A lawyer will seek to aggressively protect their client, including recommending a business form that will provide the best shielding for personal assets. While this is prudent, you should never fall into the illusion that a chosen entity type adequately protects you from potential legal actions. Many attorneys have been successful in proving an entity has not been maintained according to state law and this has exposed the owners personal assets to their complaint. Be aware of the liability protection a business entity can provide; but never depend solely on that. There are two things every business should maintain to protect the owner from liability - a passion for excellence (quality) and insurance. If these are not both built into the heart of any business plan, then there is an argument that the best choice of entity is employee.

Before discussing tax ramifications, there is also an issue the potential Active Investor should consider. It's been said 85% of the workforce are employees, 14% are self-employed, and 1% are business owners. Are you changing from employee to being self-employed or to being an owner? If the goal is to build and own an organization, tax considerations are somewhat different from trying to minimize a self-employed professional's tax exposure. Working out of a normal (C) corporation can create double taxation for the self-employed, which is very undesirable. Some type of "flow through" entity is often recommended. However, if the objective is to build an organization, the funds to grow the business need to come from future company profits. The C corporation has a low (15%) tax rate for it's first tier. This allows the small business to retain some earnings at that low tax rate for growth. If the profits would "flow through" to the owner to avoid double taxation, those funds for growth are effectively taxed at the owner's tax rate. Different intentions create very different tax strategies.

There are many more considerations that need to be considered with an attorney and tax professional. Successful business people often attribute much of their success to having a winning team of trusted advisers who have guided them through these and other issues. However, the secret of the adviser's success is having a client who has thought through what they really want and can give those advisers clear directions.

Related articles by Zemanta

• Be Your Own Boss (jobsearchingblog.com)
• Startup: Clock Starts When You Incorporate (startupprofessionals.com)
• Keep Lawsuits Off Your Back (usnews.com)
• You Know You're An Entrepreneur When... (tokitover.com)
• 4 Questions To Ask Before Starting A Business (myventurepad.com)

Market Trust

Image by Lorenia via Flickr

Many believe a marketing program is successful if it raises the public's awareness of your product or service. Coach Roland in a May 31,2009 blog posting points out that we all have become saturated with messages trying to raise our awareness. Awareness alone won't lead to sales. He asserts our messages need to communicate what we intend to do to earn the market's trust. We have to do more to really get their attention.

Mature successful firms get most of their business from repeat customers or referrals from satisfied clients. Trust has been earned in prior dealings. Here the driver of continued success is the customer service staff. They are the guardians of market trust and need to be in close contact with the marketing staff. Social networking is providing marketing with a new generation of tools to measure customer service effectiveness and satisfaction. These departments work together to preserve existing trust.

Newer and smaller firms, more likely to be run by an Active Investor, may not have this kind of staff and or large base of past customers. Trust needs to be developed. How can a business reach out to the market in such a way that both trust and awareness are developed? A system dynamics approach is to look at trust as a resource, that is a stock of something that has a level that can go up and down, and then consider what are the drivers that will increase its level. Some rather universal drivers of trust are:

- Credentials: Are there authoritative "seals of approval" we can display to verify quality or competence?
- Appearance: Is our offering presented in such a way it creates an assumption of worth, or do we look mediocre?
- Recommendations: Do we understand and develop a history with those who may not purchase but still be in a position to recommend us?
- Concern: While Active Investors are typically always concerned for their customers, is this expressed in a way they can appreciate it? Do they feel we have really listened?
- Familiarity: Can we be remembered? Familiarity breeds business.
- Integrity: Is trust built into our business and personal decision making? Nothing develops trust more surely than personally being trustworthy.
- Assurances: Is there historical data or performance guarantees to factually support any measure of trust a prospect is considering granting us?

Each business is unique with its own ways to build trust. They are to be found at decision points where there is an opportunity to do the right thing or to be expedient. When you have first convinced yourself you'll always be doing what's best for your customer, you'll know what to do to further develop market trust.

Related articles by Zemanta

• Customer Service Is the New Marketing (futurelab.net)
• The Trust Audit (thecustomercollective.com)
• Do You Really Need to Be Liked by Your Prospects? (thecustomercollective.com)

Sellers Remorse - The Greatest Exit Ever Told

This diagram summarizes many Exit Planning strategies. We've all experienced the fact that nothing goes on forever. There are limits to growth. This is due to the effect of Balancing loops as explained in System Dynamics. The diagram shows business growth leveling off as some limit to a resource is ultimately reached.

The optimal time for a business owner to move to their next challenge is before that happens. It's the "X" on the chart marked "Time to Exit." From this earlier position a Potential Growth possibility exits. A new ownership will change parameters and frequently delay the Balancing forces that result in the Actual Growth curve. The big issue at this point in time is that it feels like selling now is too soon. This is strange; but that's the wrong feeling you may get at the right time.

We can never know the future and can never know the exact time selling our business will yield the optimal result. What we can know is when it's time to move on to the next thing in our life, in spite of financially-based feelings.

The timing of the Easter story is striking when seen as an Exit. The crucifixion Christians celebrate on Easter is preceded by Palm Sunday. This day celebrates the triumphant entry of Jesus into Jerusalem, by all political and social standards the peak of His ministry to date.

Imagine the feelings that might have been experienced by Jesus and His followers as He Exits at this point. Everything seems to be going so well! Yet His mission is completing and He knows this is the right time. Unlike every other Jewish Prophet or King before Him, death will not limit the growth of His ministry. Defeating death will enable the greatest growth cycle of all history.

In the Garden of Gethsemane it may have felt to everyone like leaving too soon. That's not always a bad thing; it can be what the right timing feels like.

Related articles by Zemanta

• Infinity--they keep making more of it (myventurepad.com)

Forces around us

In a Lewin Force Field Diagram, like this one, an organization is pictured to be at a certain level because that is where the Driving and Restraining forces acting on it come into balance. This diagraming technique helped the US Government during World War II to more effectively mobilize the civilian population in supporting the war effort.

 As an analytical tool it often gives an insight into understanding our current situation. We are often guilty in making the fundamental attribute error where we believe things are a certain way because of the personalities of the people involved. While success in anything requires personal dedication and effort, when that is coupled with positive circumstances, things happen.

American is a land of opportunity for every individual. That makes us quick to make our circumstances about the individuals rather than the forces involved. Look at how we become more obsessed during elections with politicians personal characteristics rather than their understanding of the nation's problems.

Leigh Hilton, a Texas attorney specializing in asset protection, brought this national disposition to light recently when she told me she asked clients to think about what they wanted to happen "if" they should die. They had too much trouble thinking of what to tell her if she asked them to think about "when" they die. Our Egos just have enormous difficulty imagining life not centered on us personally.

An advantage of being in corporate America is that our responsibilities are generally on things we don't personally own. In those circumstances it's much easier to be process oriented and systematic. Our thinking frequently changes when we choose to own our own business. 

More than most, Active Investors need to get over their American Ego dominance. We need to understand and believe in the dynamics of the vast forces around us. Try a Lewin diagram next time you're about to assign blame to yourself (or anyone else) for what is happening. Forces can be family, health, the market, competition, industry, legal, the economy, spiritual or from any number of sources that constantly affect us.  Are there any that are being ignored?

The Acorn and Divine Intention

the oak sleeps in the acorn
Originally uploaded by Norma Desmond

An acorn will always become an oak tree. It will never grow into a tulip, a WhatABurger, or anything else. There is an inescapable destiny evident in nature, which we'll label Divine Intention.

An unavoidable aspect of Divine Intention is that it cannot be completely known in advance. Look at any number of acorns. You'll never find a tiny oak tree inside. The oak tree "emerges" out of the acorn and a fertile environment.

With or without a religious background, this sense of Divine Intention can be felt. How do we learn to co-operate with it? To carry the metaphor further, our efforts cannot be focused on planning to be a tree. At any point in time we're an acorn without a clear picture of what an oak might be. Our focus has to be on finding the fertile environment where we can grow into our Divine Intention.

The conventional word for environment in business is "market." Active Investors are obsessed with their markets. They are concerned more about them than anything else. Free time isn't spent on process improvement, that's allocated time. It's spent imagining how roots can grow deeper into the environment. There is a simple trust that our "oak" will happen if we can just develop the roots.

This is the primary drive of the successful business owner or professional. There's nothing wrong with a primary passion for your craft instead; however, that's an employee, not an Active Investor.

Folding a piece of paper

Paper Folded Eight Times
Originally uploaded by Curis

Imagine having an infinitely flexible piece of paper. Now fold it in half. It's twice as thick. Folding that in half doubles the thickness again. If this was done forty more times, how high would the paper become? Think of your answer before reading any more. This is a favorite introductory exercise to the explanation of growth in System Dynamics that was a subject of The Active Investor's  first posting.

When I started, I was wondering how long it would take before a brand new blog (and blog author) would start to get feedback. Last week I was speaking with a leading DFW area commercial risk specialist, Javier Hernandez, and as we parted he mentioned enjoying his reading of The Active Investor. Feedback was first felt in week 9.

Why is this small comment such a big deal? Let's get back to paper folding to imagine the power of feedback cycles. How thick did you estimate the folded paper would become? If we assume the typical thickness of paper to be about 0.1mm, then after 42 folds the paper would be 440,ooo kilometers high. This would be higher than from here to the moon.

Of course, we just can't image that. Creating anything with feedback opens a door to incredible growth potential. While feedback is easily apparent with internet activities, it's the engine of all "word of mouth" marketing Active Investors seek. Our business plans and actions are best judged in the light of their potential feedback (there is both good and bad). Then as we begin to sense positive feedback, we can take heart that we're on the right track - possibly from here to the moon.

Spring

February is the beginning of Spring here in North Texas. My grandfather would have been plowing fields in Chilton to plant winter wheat. I'm over at Foreman's Hardware getting ready for another growing season and I feel like Tim, the Tool-man, Taylor, enjoying that unique feeling of being a traditional hard goods store. It's great to be here in the Spring!

We can't see the growth that's happening beneath our feet; but we can believe in it. In nature, we've seen it happen every year, so that's the basis of our faith in the coming growing season. 

Not everyone is a Spring person. Spring people love the feeling of possibility. They can work in their yard, or work on their business, without having to see instant results. Their immediate payoff is in their imagination. They can see how good the yard is going to look or how successful the business initiative will become. When you talk to them, they can't resist telling you how great it all will become. It's a happy conversation as you get carried by their enthusiasm.

In business, Spring exists all year long. Dr. Jeffery Lant popularized the "Rule of Seven" which tells us the first six contacts with a prospect are for awareness. Only after 7 or more do we see results. The email autoresponder industry suggests the following:

2% of sales are made on the 1st contact,

3% of sales are made on the 2nd contact,

5% of sales are made on the 3rd contact,

10% of sales are made on the 4th contact,

80% of sales are made on the 5th - 12th contact.

Both views are about a growing-only season we're going to experience.

To really enjoy a business, we first learn to see and enjoy the possibilities during it's Spring.