Archive for June, 2009

The Iowa Floods, One Year Later

Tuesday, June 30th, 2009
Not Yet Back to Normal

Not Yet Back to Normal

The Associated Press reports that “one year after Iowa floods, many still wait for help”. By my calculations, they have another five years to go and the help will be far less than they had anticipated. The AP reports of the inadequacies of FEMA (Federal Emergency Management Agency) programs and that long-term assistance has been slow to materialize. HUD (Housing and Urban Development) Secretary Shaun Donovan, visited Cedar Rapids, Iowa to announce new disaster relief grants at which time he acknowledged that there is a problem with the long gap between immediate relief and long-term rebuilding assistance. He attributed this, in part, to the fact that for every single disaster Congress has created a new law and a new allocation system that delays agency response. I am impressed by his candor. Secretary Donovan’s remarks provide insight as to why you cannot rely on government assistance if you want to keep your small business running.

One of the most heartbreaking, but not surprising, cases cited in the AP report was that of a family that is paying its mortgage on a home too damaged to inhabit while paying rent for their immediate living needs. As bad as that is, if you own a small business, you get the double-payment twice, for your home and your office. Homeowner’s and tenant’s insurance should cover the cost of your housing when a disaster displaces you. In my case, when I was evacuated from my home after 9-11, my homeowner’s insurance was responsible for the costs incurred should I have chosen to stay in a hotel. It sounds like this family did not have adequate insurance. At a time when financial regulatory reform is focused on consumer protection, we should place equal emphasis, if not more, on financial literacy. And we should give generously to private disaster relief charities, whose reserves have been exhausted in the recession. I was very happy to see American Airlines call attention to this need in the current edition of its inflight magazine.

It’s Raining Losses

Monday, June 29th, 2009
Rainbow Over Geneva, Not New York

Rainbow Over Geneva, Not New York

Everyday disasters are taking their toll on small businesses in New York City where 21 of the 26 days of the month to date have been rainy and unseasonably cold. Businesses that cater to outdoor pursuits, such as street vendors, outdoor cafés, sports entertainers, beach vendors, Central Park carriage rides, amusement parks and others have seen dramatic declines in seasonally-adjusted revenues for the month of June.
Cumulative rainfall in New York City for the month of June is close to nine inches. I suppose the bright side is that umbrella vendors may be faring well this month. The economic impact of the rainfall is unlikely to make the news; news media prefer more dramatic, and less frequent disasters, such as major hurricanes. But this certainly illustrates how the everyday disasters are often ruinous to small businesses. I photographed this rainbow appearing over Lake Geneva when I lived in Switzerland. Unfortunately, for New York City small business owners, the rainbow has not yet appeared.

Doing Well By Doing Good, Part 8 of an Occasional Series

Sunday, June 28th, 2009
Looking for Direction?

Looking for Direction?

For those thinking of making a change towards more meaningful work in the time of economic stress, perhaps my experience may be helpful. The essence of entrepreneurship is bootstrapping. I described in an earlier posting how I leveraged the only resource I had, my time and enthusiasm, to build websites for my business. I did the same to obtain technology resources. My first small business, Childs Capital LLC, was selected as the grand-prize winner in the sales and marketing category of the 2006 Cisco Growing With Technology Awards. This prize included $25,000 worth of Cisco equipment of our choice and we opted for a complete Voice Over Internet Telephony system.  We were the grand-prize winner of the Visa Business Breakthrough for Small Businesses, which provided a $10,000 grant for small business services. We won second prize in the Microsoft Technology makeover award, which offered a $25,000 package through CompUSA and a $25,000 package through Microsoft. We won the Web-preneur award from IBM and American Express, the SAP Small Business of the Year Award and the technology grant of the Amber Foundation.  Winning the Professional Development Grant of the Web Foundation allowed me to take a fully paid course on DVD authoring at the Sony Training Institute in San Jose.  Taking the time to write the essays in support of the applications provided the small business with much needed resources. Incidentally, the photograph here appears on our Intranet as a navigation aid. After putting all of this technology in place, I put it to use and developed a style guide for our Internet and Intranet. I took this photograph of the country manager for Land O’Lakes in Guinea as we pulled our jeep over en route to Labé from Conakry. Reading the sign was difficult; heavy rains caused the metal sign to rust. Why would you have metal signs in a rainy climate? Good question. The signpost was twisted 90 degrees at the bottom, so it would hard to tell the original directional intent. This photo was completely unposed and illustrates the challenges of working in that part of the world. And a great image to capture the meaning of looking for directions or navigational aids. That is what I love about bootstrapping – it really opens your creativity!

Doing Well By Doing Good, Part 7 of an Occasional Series

Saturday, June 27th, 2009
A Better Future

A Better Future

One of the most memorable projects of my first business was working in Guinea for Land O’Lakes. You likely recognize that company as a brand of butter, cream and other dairy products. What is less well known is that Land O’Lakes consists of more than 1,000 member-cooperatives serving more than 300,000 agricultural producers. Land O’Lakes members assist international development by sharing their expertise in farm-to-market agribusinesses. The farmer-to-farmer model is critical to providing technical assistance to small-scale farmers in developing countries, including Guinea, a French-speaking country in sub-Saharan Africa. Its fertile soil and sunny climate notwithstanding, the country imports about 80% of its food. Improving the productivity of the agricultural sector, which consists almost entirely of small family farms, is critical to the country’s efforts to lift itself out of poverty. I worked on a project with Land O’Lakes in Guinea to assist in technical training and human resource development. Although Guinea is one of the most desperately poor places on earth, the experience was very uplifting. This is one of my favorite images; a photograph I took in Conakry, the country’s capital. The juxtaposition of the dirt road and poor sanitation with a glamorous marble mosque that would look at home in Beverly Hills captures the country’s dilemma. This little girl is smiling because she is on her way to school, a rare treat for girls in her part of the world, where illiteracy rates are about 80%. The smiling optimism of the child captures the look of a better future, which is why this is one of my favorite photographs.

Doing Well By Doing Good, Part 6 of An Occasional Series

Thursday, June 25th, 2009
Women At Their Best

Women At Their Best

Warrilow & Co., a consultancy that advises corporations in marketing to small businesses, recently reported that 29% of small business owners are more tenured than people realize.  Roughly one-third of small business owners reported that their businesses grew out of “ramp-up, not start-up”. They maintained their traditional employment while incubating a small business on the side as a secondary source of income. Only when that business could sustain the proprietor as a primary income source did he or she formally incorporate the business at which point it was officially recognized in the small business statistics.  So many small businesses are more mature than they appear and often grew out of the owner’s personal passion or hobby.  That was certainly my experience and frankly I think it is a less risky approach than trying to jump into the entrepreneurial waters after losing traditional corporate employment. This is particularly true in a market as choppy as this one.  I would advise would-be entrepreneurs to think about securing an income stream while putting their small business plans in place over the longer haul.  That is what I did as I explored my passions by doing volunteer work for charitable projects while being employed elsewhere full-time. Then when I was ready to start my own business, I had a clearer sense of direction. This photograph, by the way, was a gift to me and to the other women recognized by Glamour magazine as “Women At Their Best” for the charity work we had done for our respective causes.

Doing Well By Doing Good, Part 5 of an Occasional Series

Wednesday, June 24th, 2009
Lion of Lucerne

Lion of Lucerne

I took this photograph when I lived in Switzerland and worked for Swiss Re. It is the Lion of Lucerne, commemorating the valor of the Swiss in battle. Mark Twain described it as the “most moving piece of rock in the world”. I took the photograph to show the small pond in front of it, to convey the serenity of the space. The two German women tourists facing the rock give a sense of scale. I learned a great deal about life and health insurance, property-casualty insurance and reinsurance from my experience at Swiss Re and Swiss Re, my former employer, became a client of my small business. Poor people in the developing world usually lack access to basic financial services, such as insurance to protect against contingencies. A drought affecting the small family farm, or a flood, can be catastrophic, as can illness or unemployment. The poor typically don’t have insurance for life, health, property or unemployment to provide coverage. One of the areas in which my business worked was to try to develop such solutions that would be cost-effective on a micro-scale for many small policyholders.

Doing Well By Doing Good, Part 4 of An Occasional Series

Tuesday, June 23rd, 2009
My First Website!

My First Website!

As many Americans are re-evaluating their career decisions at this difficult time and contemplating entrepreneurship as a solution, I thought it might be helpful to share my own experience. After a more traditional corporate career, working for the Swiss Reinsurance Company in Zurich, Switzerland, I returned to the U.S. for family reasons. My mother had suffered a cerebral hemorrhage as a consequence of a ruptured aneurysm and I took some time off to care for her and for my father as well. I was starting my own small business to marry my experience in insurance and finance with the needs for social insurance and access to finance for the poor. And so I founded Childs Capital LLC. Actually, the original name of the business was Chrysalis Capital LLC, but another Chrysalis had filed to trademark that name just a few days before I did. Because of the long backlog in entering applications at the Patent and Trademark Office, the existing Chrysalis did not come up when searched. No matter. I kept the logo we had designed and went with Childs Capital instead since no one could protest the use of my own name. The image shown here is the prototype for the homepage of the website I designed and built for the business.

Being an entrepreneur and a small business owner is really all about bootstrapping and skill-building. As a corporate employee, you specialize in a particular role. As an entrepreneur, you have to be a Jill-of-all-Trades. For me, this involved, among other things, learning how to design and build a website. The September 11th Fund provided training grants for owners of small businesses in the immediate impact zone of the World Trade Center on 9-11 (sadly, we qualified) to take certain professional training programs. I enrolled in the Desktop Publishing and Website Design Certificate Program at the Continuing and Professional Studies Division of Baruch College within the City University of New York. The September 11th Fund provided the tuition waiver. For eighteen months, while running my business, I spent nearly every Saturday from 9:00 a.m. – 4:00 p.m. in  classroom learning website design. Classes met from 9:00 to noon, with a one-hour lunch break and then an afternoon class would follow from 1:00 – 4:00 p.m. Completion of the certificate required that I take classes in Adobe Photoshop, Quark XPress, Typography and Fonts, HTML coding, Dreamweaver, Adobe Illustrator, Javascript – 12 classses in all. A grant from the Sumasil Foundation paid for the software I purchased. And that is how I learned to design and build a website. I did all of the illustration, photography, design and coding myself. I find one of the most enjoyable aspects of running a business to be broadening my skills sets, as everything I do in support of the business is a labor of love. And now I have mastered WordPress for this blog!

Doing Well by Doing Good, Part 3 of an Occasional Series

Monday, June 22nd, 2009
Swiss Puppets in Heimatwerk

Swiss Puppets in Heimatwerk

Research shows that longevity is positively correlated with having a purpose in life. For many people, the current recession is a challenge to re-examine the purpose and meaning of work. After reading an article in the Wall Street Journal about professionals performing volunteer work to transition into new careers, I thought I would share my own experience of merging my interests in the non-profit sector with my corporate career to start my own business. As an investment banker working with insurance industry clients, I was given the opportunity to join one of them. I relocated to Zurich, Switzerland to become a senior executive of the Swiss Reinsurance Company. This photograph, by the way, is one I took of a shop window in Zurich. It is Heimatwerk, a shop of hand-crafted Swiss goods. While working at Swiss Re, I continued to volunteer my time and business experience for charitable projects, including working with Opportunity International. I served on its Board of Governors, helping with fundraising and other needs. Opportunity International is a non-profit organization sponsoring microfinance operations in 25 developing countries. Microfinance is the provision of small-scale loans to poor people to allow them to start their own businesses and work their way out of poverty. Opportunity International was my introduction to microfinance. I could see the connection between the work I was doing for Swiss Re and the need for broader social insurance protection for the poor who are employed in the informal sector.

Doing Well by Doing Good, Part 2 of an Occasional Series

Saturday, June 20th, 2009
Not My Heroes

Not My Heroes

After reading an article in the Wall Street Journal about professionals undertaking nonprofit work to make career changes, either voluntarily or involuntarily in this economy, I thought it might be helpful to share my own story. My business represents the marriage of my corporate career with my parallel work in the nonprofit sector. As I described in an earlier blog entry, I began my career as a research associate at the Harvard Business School, during which time I developed a business plan to provide homecare services for frail senior citizens. I moved to New York and was soon working as an investment banker in the financial institutions group of Goldman Sachs. My clients were insurance companies, which helped build expertise that would prove critical when I would start my own business.  While at Goldman, I volunteered my annual vacation allowances, four weeks at a time, to charitable projects. In one year, I traveled to Stavropol, Russia to work on a project sponsored by the U.S. Agency for International Development. Stavropol is located about 600 miles east of Moscow and is the location of Avtovaz, the manufacturer of the famous Russian car, the Lada.

When the Soviet Union collapsed, Avtovaz lost its principal export market as Eastern European countries began to deal with some of the environmental issues that were the legacy of communist rule. At the same time, they lost their domestic market to more fuel-efficient Volkswagens. Unemployment in the region soared to 40%. Avtovaz Bank, the financing arm of the car manufacturer, sought to convert the company’s financials into U.S GAAP to make them comprehensible to foreign investors. At that time, Avtovaz was in discussions with both Fiat and General Motors. (This was more than one decade ago.) My responsibility was to teach classes on bank accounting and risk management for 40 hours a week for several weeks to an association of Russian bankers. It was one of the most rewarding experiences of my career. This photograph, by the way, was taken in Stalin’s bunker. It had been sealed since World War II and had only recently been accidentally discovered by school children playing. In the photograph I am flanked by the Mayor and by one of my escorts. The photographs of the “three heroes” (Lenin, Marx and Engels) were placed on the wall to inspire Stalin.

Doing Well By Doing Good, Part 1 of an Occasional Series

Friday, June 19th, 2009
Governor Weld, Rep. Bradford and Yours Truly

Governor Weld, Rep. Bradford and Yours Truly

The Wall Street Journal recently published a piece “Jobless Professionals Yearn to Do Good: Nonprofits See a Flood of Applications With Business and Legal Know-How” showcasing the stories of professionals contributing their time and expertise to non-profit organizations. Some of them lost their jobs through layoffs, while others are attempting mid-career changes. In my case, the genesis of my first business was the marriage of my traditional corporate career with my parallel track of service in the non-profit sector. This story was told in a chapter of More Than 85 Broads: Women Making Career Choices, Taking Risks and Defining Success – On Their Own Terms. (85 Broads is a network association of investment banking alumnae of Goldman Sachs. Goldman’s headquarters are at 85 Broad Street.) Because of its relevance to the decisions many people are making right now, I’d like to summarize it for you.  I am pleased with my choices and as I read the WSJ article, I am glad for having made them. It is much, much easier to build a new business or make a career change proactively when the market is strong than to have to react to circumstances beyond your control.

I began my career as a research associate at the Harvard Business School where I was responsible for writing the case studies used to teach the financial institutions course for MBA students. It was an impressive opportunity to learn about the insurance and banking industries. At the same time, I began what would be a life-long pattern of volunteering my free time to contribute my business skills to important social projects. While working full-time at HBS, I was selected as one of fifteen winners of the Better Government Competition of the Pioneer Institute for Public Policy. At that time, Massachusetts was in a fiscal crisis with a substantial budget deficit and the penultimate of state bond ratings, a situation that is depressingly familiar to California residents today. Pioneer sought “armchair governors” who could develop ideas to deliver higher-quality government services at lower costs. Fifteen finalists were selected on the basis of their ideas and invited to develop complete business plans for implementation with access to government officials for research support. Governor William Weld promised to review each one to implement the plan wherever feasible. Together with Representative William Bradford, the ranking minority member of the State Legislature, I developed a business plan to provide homecare services to the elderly at no incremental cost to the taxpayer.

This was a significant contribution because as homecare services are discretionary, they were cut in the early stages of the Massachusetts budget crisis. This gave the frail elderly who needed these services to live independently the incentive to spend down to a level of impoverishment to qualify for Medicaid, an entitlement program. Medicaid would pay nursing home care for indigent seniors at much higher cost to the taxpayer and much lower quality of life for the seniors, who would presumably prefer not to be institutionalized. Imagine the opportunities that exist now for creative solutions to state government problems!