Fat Tax = Entrepreneurial Opportunity?

For geeks reading this blog, it is being composed on a triple-boot Toshiba P35 17″ notebook running Windows XP Home, Windows 7 beta, and Ubuntu 9.04 Jaunty Jackalope. We’re running in Ubuntu using Scribefire 3.3, a full-featured blog editor that is integrated with FF [3.0.9] as an extension to compose and post this blog. Why? Because I can and Ubuntu runs circles around Windoz any day and twice on Sunday.

I have mentioned in passing in my ENTR200 classes @ Purdue University that the “hand is writing on the wall” for obese people to be targeted for higher health costs, which could be viewed as a Fat Tax. The purpose of this blog is to further develop this hypothesis. Wiki suggests “excessive body weight is associated with various diseases, particularly cardiovascular diseases, diabetes mellitus type 2, obstructive sleep apnea, certain types of cancer, and osteoarthritis.^[2] As a result, obesity has been found to reduce life expectancy”

It is also one of the leading preventable causes of death worldwide causing an excess of 111,909 to 365,000 deaths per year in the United States and responsible for dying years earlier, as much as 20 years early, for men. Given the serious nature of obesity, it makes perfect sense that the President’s Health Care Initative should include both incentives for reducing obesity in the US and disincentives for those who don’t/won’t/can’t comply, in effect, a Fat Tax. We are moving quickly toward a society where your body will no longer be your own, but shaped by the very society that supports it. How far away is mandatory dna testing? A society where the Salin Palins of the world are booed fined for giving birth to other than normal children, and in fact, like China, birthing becomes a privelage, not a working of Mother Nature is not that far out.

Last night I had dinner with a friend who is an administrator @ Home Hospital in Lafayette. She related that Home Hospital employees have an annual wellness exam, and assuming their “vitals” are within prescribed parameters, they receive $40/month payment for being healthy. This is in essence the reverse of what I suggested above – companies paying their employees to be healthy, a reverse tax so to speak. Could the US government do the same? Pay people to change dangerous habits such as smoking, drinking to excess, or being obese? Would this be more effective? The carrot instead of the stick….Is this a ploy readers of this blog should consider for their startups?

Not all that far out now is it. Turmoil is the grease that lubricates entrepreneurial opportunity and most certainly “change”  associated with turmoil as things get sorted out in the health area should equate to enormous opportunity. Take your pick, opportunity will be even more present in the future.

To all my current ENTR200 students, I thank you for the classroom interface and the juice you bring to the table. It’s up to you what you do with opportunity when it faces you in the future. It won’t be “exactly” from a textbook or “exactly” as stated in a syllabus. The even numbered answers aren’t in a book’s index. You will have to sort it out. Go foward and sort. Are you going to be a person who watches what’s happening, wonders what’s happened, or makes things happen. Exactly. Hank

Skullcandy: S’up Dude?

A student in my 9am ENTR200 class at Purdue University, Susheel Motwani, suggested Skullcandy would be an interesting blog topic. I agree; it is a very interesting startup targeting the Action/Extreme Sports crowd with mainly  audio products with a “grab you” bent. By the criteria used by most readers of this blog, the founder, Rick Alden (b. July 4, 1964) is an “old” dude with a wife Holly and four children (Preston, Brooklyn, Autumn, and Tyler). He ought to be doing just about anything EXCEPT what he is doing, and doing so very well. Seems Skullcandy is #31 on the 2008 Inc 500 list of fastest growning US private firms. And guess what? He is doing his own thing targeting a youth-centric group that he buds with as an avid snowboarder himself. Wiki has the following background on Rick:

While working for his Bachelor of Arts in political science from the University of Colorado at Boulder, Alden co-founded his first company with Jim Gardner in 1986– National Snowboard Inc (NSI). An events and marketing company producing consumer, amateur, and pro-snowboarding events nationwide. As quoted by Rocky Mountain Newsreporter, David Lewis, on February 5, 1992,”Gardner and Alden did notinvent snowboarding, but they distilled it, translated it, and marketedit. They were instrumental in making snowboarding an industry and not just another youth-culture fad.” Alden later sold NSI to the American Ski Association in 1991. After years of snowboarding, Alden launched his second venture in 1995, designing and patenting the first ever step-in snowboard boot andbinding system. This venture was co-founded with snowboard industry veteran Brett Conrad, and launched under the brand name, Device Manufacturing. Four years later, Alden sold Device Manufacturing to
Atomic Ski Company[1]

In 2003, Alden formed Skullcandy designing products that offered the consumer audio solutions and that also fit into his active[2]. The first Skullcandy product – the Skullcandy™ Portable LINK – was introduced at the 2003 Consumer Electronic Show (CES) in Las Vegas, where it won its first Design and Innovation Award. A few weeks later, the brand was launched to the action sports industry at the Snow Industries America (SIA) show. Alden’s Park City, business hit $35.7 million in sales last year (2007), according to Inc. (magazine). CNN Money [3] reports 2008 sales as “…approaching $100 million dollars.”

Pretty simple stuff in reality. NOT rocket science. Nice multimillion dollar company. Laughing all the way to the bank, and having fun in so doing. Nice life. Susheel also provided a video link here: My thank Susheel! Hank

AllMyFaves

Tim DeLong, a student in my 0900 ENTR200 section at Purdue University, passed on this link from his father: http://www.allmyfaves.com/ It does a decent job of putting most of the links in icon format on one page for your speedy browsing. See screen capture below. The site’s tabs are more specific. Thanks Tim [and your father also!] Hank

YAPS: “Yet Another Purdue Startup”

Digital Literacy Contest [DLC]is a online contest wherein participants have 30 minutes to answer 30 questions using the internet. One of my former ENTR200 students Amit Pahwa is part of the core team of four currently running the company, while a full-time student @ Purdue. I recently asked Amit for information about how being involved with DLC is going. His response is below. It can be done, and a few are doing it. Why not you? Hats off to Amit and his team! Hank

Hi Hank!…

We applied for the MacArthur grant last semester and won, the awardstook place in Chicago last Thursday and Friday. That opportunity allowed us to network with dozens of other entrepreneurs in the education sector and also swap ideas and inspiration.

There are four people on the team and we have all been working together since last winter. George and John are our programmers and developers, Dan handles sales, and I handle the operations.

Since there are only 4 of us, the separation of our tasks is very loose and we frequently find ourselves taking over parts of each others tasks when one of us is too busy. George, John, and I are also full time students so we work whenever we aren’t in classes which means short and busy weekends. We all enjoy the majority of the tasks that we do and try to make each task new by making sure that once we have completed a task that is from then on either automated or easily accomplished. Though we are all busy we make it a point to have bi-monthly meetings in person because it keeps the comradery high.

Though it is cliche, communication is essential, we fall apart as a team and a company whenever we aren’t consistently talking and sharing our thoughts. In a startup with such few people it is important to say everything and make sure everyone gets their say so that there isn’t any bad blood. We have also found that documentation really helps. Though you may think you are busy, or maybe the opposite, keeping a general list of tasks that you did that day will give you a lot of insight in how long something takes and where you may be able to increase efficiency. It is also important to make use of other free online tools like googledocs and dropbox – we can share documents and folders with each other easily which helps to keep things organized and with all of the “to-do list” websites it is very easy to keep track of what thingsstill need to be done and who needs to do them.

Since we formed as a team last winter we have received 2nd place in the BDM Business Plan Competition, 2nd place in the I2P competition, been used as a case-study at Brown University which allowed us to do a joint-poster session with them at ACRL (a large library conference in Seattle) and received a MacArthur grant. We have been offered funding – though have politely turned it down so far. We have also gone from being a Purdue only competition to having competitions across the country at 9 different universities (all listed on the website). We have even started to branch out to public libraries and will soon be expanding to high schools. We have also apparently found an audience internationally
thanks to the internet and have received requests from a number of international universities and colleges.

Some links:

The MacArthur grant we won:

http://www.dmlcompetition.net/winnerDetail.php?x=ddc
The Digital Democracy Contest:

http://www.digitaldemocracycontest.org/
Our logo:

http://www.dmlcompetition.net/images/winners/ddc.jpg

We are also highlighted on the Purdue Computer Science homepage at the
moment: http://www.cs.purdue.edu/

I hope that wasn’t too much. Please let me know if you need anything else.

Thank you for this opportunity,

Amit

Grade Yourself

For the twenty or so students in my ENTR200 classes who have been commenting herein on a regular bases, here’s the chance I mentioned in class last Thursday to give your self a grade: 0 to 50 points extra credit. Just leave a comment with the blog name you have been using, and I’ll take your input into consideration in the assignment of credit. Open until class start next Thursday, last day of class. Hank [Pic from Techcrunch of Dustin Diaz who just left Google for Twitter]

Purdue’s Compliment Guys @ Indiana Statehouse – More Viral Marketing

We have our own Have A Happy Friday [idea adapted/stolen from a Ball State dude]while Purdue has its own Compliment Guys. Here’s a clip of Brett Westcott and Cameron Brown engaged in viral marketing for their product, compliments. Hank

Have A Happy Friday: Expect the Unexpected!

I Want to Live in a World Where…..

Flip video is running a contest that has the potential to generate a huge amount of viral marketing for them.  Basically, they have given out 50 camcorders, one in every state based on a 500 word max entry. The winning entries were chosen based on Flip’s impression of the most compelling and/or creative. CBS got into the mix tying the Flip contest to Obama’s first 100 days. A Lafayette, Indiana man Eric Hicks is Indiana’s representative and a local guy, winning with an essay on what the President’s top priorities should be. He captured snippets for a couple of months, and edited them into the video below. The local Journal & Courier ran a sidebar article on Eric yesterday.

As of when this blog was written (Noon 4/22/09) the video hasn’t hit YouTube, but I surmise it will and will go ballistic. This is a great example of a firm, Flip, spending a relatively small amount – the Flip camera retains for less than $150 [Amazon link] for potentially hugh returns. There’s a lesson here for entrepreneurs. Eric’s entire song is embedded below the video in a player widget. Hank

GirlyWhirls

No, this isn’t about Schwarzenegger’s girly boys; it’s about a young lady from Austin, TX named Marlo Adelle Greta who runs GirlyWhirls.com, a barette-making buiness from home. Her web site states:

“Marlo started making hair accessories to go with her outfits at age 14. When friends requested personalized hair clips, Marlo enlisted her mother to help with sewing them and eventually introduced GirlyWhirls to local businesses in downtown Austin. As demand increased, Marlo turned to Craig’s List for employees. The employees were trained at the family home provided with patterns to trace. By the third year, Marlo was selling in 12 boutiques in Austin and in California, as well as online. In 2008 Whole Foods Market ordered her new line of romanticized feather hairclips with a vintage flare.

As Marlo continued to grow her business, she was involved in giving back to her community through volunteer efforts in PALS and teaching art at Laguna Gloria Art School. She traveled to the Dominican Republic to teach art to impoverished children. With three employees, Marlo plans to continue her business while in college and to expand the online business.” She is quoted in the link below as stating: starting a business is “a lot easier than having to go find a job. I make my own decisions, and the harder I work, the more money I can make. That’s a cool thought – it’s all up to me.”

I was lead to this young entrepreneur by a recent article in the WSJ “Cupcakes and Cattle Greeding: Teens Turn to Summer Start-Ups.” Seems that high school student summer employment is forecast to be at an all time low. Will it be any better for college students? I think not. Perhaps it’s time for readers of this blog “to do something.” Hank

In support of EPA’s CO2 regulation

Last Friday, the Environmental Protection Agency “declared” that carbon dioxide and other greenhouse gases posed a danger to public health setting the stage for increased regulation of their emission. In general, the response to such an approach has been Chicken Little revisited, ie, the sky is falling, or about to. In comments to a NYTimes blog article, the real information which occurs often as not, is in the comments.

A commenter “wdef” had this to say:”And let me give you some examples of the benefits of emisions regulations …. After environmental rules were passed that severely limited dumping chemicals into the ground and water, it became expensive to dump byproducts legally. Companies were forced to find ways to recycle byproducts, and guess what they found? By being able to reuse the byproducts back into inputs to their process, they ended up saving a ton of money, in fact it would have been cost effective even before the regs went into place. 

An even better example? Automobile emissions. Cars in the early 1970’s put out about a thousand times more pollution then they do today, and they were making maybe 6 or 7 mpg. The average car engine back then was lucky to last 50,000 miles, and it was routine for mechanics to have to pull the heads on cars to ‘decarbonize’ them, and rings and valves would get beat up by the crap formed after combustion. Today, besides the incredible lower emissions, you have car engines that will last 250,000 miles without a rebuild and you have something like a 500 horse Corvette that can do 25 mpg on the highway, and that technology was the direct result of emissions regulations that the industry cried about. Yes, it added to the price of the car, but it also created a car you don’t have to replace every 2 years, either.

An even older example of what regulations spur: In the 19th century, two major safety innovations were created, the Westinghouse air brake and the Janney knuckle coupler. The heads of the railroads cried it would be too expensive to put these on their trains, that it would bankrupt them, etc. In 1890 the Congress mandated these on all trains; and guess what? The heads of the railroads found out with these improvements, they ended up making a lot more money, because they could run longer trains at faster speeds and not have to pay out on wrecks.”

What’s the lesson? As I attempted to communicate in my ENTR200 classes, pending change such as alluded to above is fertile ground for entrepreneurs. Go forward and do something. Hank