Friday, December 26, 2008

Only three months until EntConnect 2009

Time is certainly passing quickly. It is only three months until the next annual Entrepreneurial Connections (EntConnect) conference, from Thursday, March 26, 2009 through Sunday, March 29, 2009. Traditionally the conference consists primarily of a reunion of former readers of Midnight Engineering magazine and a few newbies who have gotten suckered into trying it out, but each year we try to figure out new ways to attract fresh blood. This usually brings the discussion back to the question of what people feel they get out of the conference and how to increase its value to current attendees as well as potential attendees.

Check out the conference Web page for an idea of what the conference was like earlier this year.

The conference planners are always looking for new ideas, for example:

  • What fun activities to plan for Friday before the conference begins.
  • Where to hold our traditional Friday kickoff dinner. Unfortunately, Valente's Italian restaurant has closed.
  • Suggestions for keynote speakers.
  • Volunteers for Saturday and Sunday session speakers.
  • How to promote the conference better.
  • Any other suggestions for improving the conference.

I am sure that the effects of the current economic "difficulties" will be fodder for a lot of discussion.

Oh, and please feel free to join the Midnight Engineers Yahoo discussion forum.

-- Jack Krupansky

Thursday, December 25, 2008

Initial Kiva loans

I forgot to mention that my primary criteria for my initial Kiva loans was to make the final contribution of $25 or $50 so that the full amount of each micro-loan would be funded so that I would be sure that the loan would proceed immediately. In reality, that is not usually necessary since many of the micro-loans have already been disbursed by the time they are posted on the Web site. Still, it is nice to see the process completed promptly and the loan cleared through the system. I did not want my money to be sitting around idle.

Once I start getting repayments, I will no longer use this as my top requirement. Hopefully I can get to the stage where every month I get enough repayments to contribute to a new micro-loan regardless of how much of the loan has been funded.

Funding micro-loans in Kiva is a great response to all of the global anger about all of these big banks that require all of these bailouts and are not lending to people who can really use the money anyway. If you want a new world order that is not controlled by big banks, Kiva is a great way to go. It is an alternative to begging or forcing big banks to give "handouts" to "poor people."

-- Jack Krupansky

Trying out for micro-lending around the world

I still have not decided what to do with my extra $20, but I did decide to go ahead and try out which lets you participate in micro-lending around the world. I actually funded my Kiva account with enough money to fund a dozen micro-loans in the $25 to $100 range. The actual micro-loans are in the $225 to $2,500 range with a number of lenders such as myself kicking in $25 or more for each loan. I figured that since there was a chance that a single loan might fail, a dozen loans would have a better chance of giving me reasonable success and personally give me a broader perspective on the failure rate as well as exposure to different parts of the world and different types of micro-entrepreneurs. Note that Kiva micro-loans do not pay us "lenders" any interest, but they do pay us back our principle, unless they fail.

I believe that the micro-entrepreneurs (borrowers) are in fact paying interest, but that the local micro-lenders keep most or all of that interest to fund their operations and expand their capital for additional loans. I do not know whether Kiva gets any of that interest. I just know that Kiva does not pay any interest to us lenders. In addition, Kiva "suggests" that you make a 10% contribution to Kiva. I decided not to make any donations at this time. I will see how things work out as the loans become due and then decide whether to make a donation.

You fund your Kiva account via PayPal and then make loans from your Kiva account. When loans get repaid you can then choose whether to use the proceeds to fund additional loans or to take your money out.

It will be interesting to see how the current economic recession impacts these micro-entrepreneurs around the world.

Note that the borrowers are very small businesses, typically individuals. The loans are to support their businesses. These are not consumer loans.

Also note that Kiva does not loan directly to the borrower. There are a number of micro-lending "banks" (Kiva calls them Field Partners) in areas around the world. Lenders like me are providing the capital (through Kiva) that these micro-lenders are then disbursing to the micro-entrepreneurs.

The micro-lenders also provide support and advice to the micro-entrepreneurs. Some also require borrowers to collaborate in groups to support each other. The goal here is to increase the likelihood that the micro-loans really will improve the business of the micro-entrepreneurs so that they do earn enough to repay the loans.

The term of a micro-loan may only be five to eight months, but sometimes a year or maybe even eighteen months. The idea is that the loan should have an immediate impact on business. The first payment may not be due for three months or so. For my initial loans a bunch have an initial payment in February or March. One does not have an initial payment until June.

I am not particularly thrilled that I earn no interest, but it is nice to be able to see the face, name, and details for each micro-loan. The theory is that this money is really making a difference in the lives of real people around the world.

It is also nice to know that these micro-loans are actually helping "the working poor" to maintain and even enhance their income, rather than simply offering them a "handout."

It turns out that many of these micro-loans have already been made by the micro-lender by the time we see them on the Kiva web site, usually within the past few weeks. The micro-lender has decided that they have enough funds on hand to go ahead with the loan and is essentially selling the loan to us micro-lenders through Kiva and then the proceeds of that sale is capital for making other loans.

Now, I still need to figure out what to do with my extra $20. It is not even enough to make the minimum Kiva loan of $25.

-- Jack Krupansky

What to do with an extra $20

I have an extra $20 bill right now. What can I do with it? That is, what can I do with it which would make a noticeable difference in my life or anybody else's life? Sure, I could simply put it in my wallet and spend it eventually on something or put it in one of my savings accounts, but it really would make a negligible difference. Even if I donated it to some allegedly "worthy" cause, would it really make any noticeable difference six months or a year from now? Sure, maybe $20 would buy a fair amount of food for some starving people somewhere in the world, but once again, what difference would that make a year from now?

Actually, I did just remember that there is something called which lets you participate in micro-lending around the world. I keep meaning to check into it. That may be my answer. It is a way to "make a difference" that that is not necessarily just a one-time thing or recurring cost.

-- Jack Krupansky

Monday, December 22, 2008

Questions to ask for your great new business idea

So, you have a great new idea for a product or service or business. Now, you need to ask the following questions which were developed by former DARPA Director George H. Heilmeier:

  1. What are you trying to do?
  2. How is it done today?
  3. What is new in your approach?
  4. If you are successful, what difference will it make?
  5. What are the risks and payoffs?
  6. How much will it cost? How long will it take?
  7. What are the midterm and final "exams" to check for success?

I especially like the part about asking "what difference will it make?" So often, we have new and great and exciting ideas, but will they really make that big a difference?

-- Jack Krupansky