Entrepreneurs – Page 6

May 26, 2010

Diseconomies of Scale

We know about economies of scale from Adam Smith and the famous pin factory. As you make more of something the per unit cost goes down.

But when an organization get past the optimum size dis-economies of scale start to set in. Airlines are an obvious example. American, Delta and United are more expensive and give worse service than Southwest. Here is a link to an article about Dis-economies of Scale. In case you want to see if I’m making this up.

Government is another area were we might be seeing dis-economies of scale. I was reminded of this when I wrote a recent piece about Costa Rican Entrepreneurs.

The US used to be subdivided into 50 states that had a lot of autonomy. Now more and more of what goes on is dictated by Washington. It is big and cumbersome. And even if it has the best of intentions it is too large to be nimble. Countries like Costa Rica and Singapore are smaller and faster with less bureaucracy. They may have a competitive advantage in the world for the next few generations.

May 4, 2010May 4, 2010

Tina Thomsen

A few years ago my friend from a long time ago Tina T. moved with her husband Alan G. to Spain. They bought a house near Granada and are now renting rooms and a small apartment to travelers. You can rent a piece of their beautiful house for not a lot of money.

This idea of retiring and then renting part of a beautiful house as a supplementary source of income is an excellent one. It keeps your hand in without a rigorous schedule and keeps some more options open. The ability to find rentals on the internet has leveled the playing field for individuals. It used to be that it required several levels of distribution to find renters now organizations like VRBO and Owners Direct give an individual vacation home owner broad visibility at low cost. Change is…

May 1, 2010

Costa Rican Entrepreneurs

In the 1990’s I heard an economist say that “in the future countries will compete based on how well they treat people, ideas and capital.” He made the point that the USA was one of the worlds leaders in all three areas but that we had to be careful that we didn’t get complacent. During our trip to Costa Rica in January Nurit and I saw three examples of entrepreneurial activity that should make thinking Americans concerned.

Lands in Love is a new eco-tourism lodge started by some immigrants from Israel. I told their story back in January. They chose Costa Rica because it had easier immigration laws than the USA and was the easiest place that they found in the world to start a resort.

I Love Sushi was founded by Marc Hauser, an American, who emigrated to Costa Rica 15 years ago because it fit his life style. He was able to become a serial entrepreneur in Jaco Beach, Costa Rica. It could have been Hermosa Beach, CA.

Brian May is a young Mechanical Engineer married to a friend of ours, Tracey. He and Tracey ended up in Costa Rica after doing a stint as Christian Missionaries in Nicaragua. He reps machine tools for one company and does some programing for another company and there is no doubt that they will own a business some day.

In all three cases businesses are getting started in Costa Rica that could have been started in the US. These three entrepreneurs chose Costa Rica because it is more conducive to small start-ups. This should be of concern to the people who make the rules in the USA.

April 30, 2010

Bong Bar

This November California is going to vote on legalizing marijuana. If it passes there will be a gold rush. A Maui Gold Rush. My idea is to act on the assumption that the proposition will pass. Buy or lease a small beer bar in a place like Monrovia and change the name to the Bong Bar. Keep selling beer but talk about pot a lot and get some publicity out of it.

When legalization happens start selling pot right away, in a judicious, discrete and tasteful way. Have high prices and send a lot of the money to politicians, lawyers and government. By showing how it can be done you may be able to influence the rules about how legalization happens. In the meantime you can have a lot of fun. Make some money and build a reputation as a creative person in the food and beverage business.

The downside is you have to run a beer bar in Monrovia for a few years.

March 5, 2010

A Distribution Opportunity

In Boulder Colorado last summer we ate at a very good restaurant on a night that they had a price fixe menu with wine pairings. The wine was being poured by a young man who was a very specialized wine distributor. He bought wine from small vineyards in the Piedmont area of Italy and sold it to fancy restaurants in Colorado and he was making a living at it.

I used to think that because of the internet, distribution was not a growth industry anymore. And certainly when the producers or the consumers are huge they don’t need the services of a middleman so big distributors are dying. Proctor and Gamble don’t need distributors. And neither does Walmart. But a small restaurant in Boulder Colorado that wants a unique wine list does. And so does a small wine producer in the Piedmont.

Not just wine. What about cheese from New Hampshire, specialty eggs from Georgia, bananas from Costa Rica. In India they grow more than 30 types of rice. As far as I know only one of them, Basmati, is distributed and promoted in the US. If I was young and looking for a business to be in I’d seriously look at specialty distribution. It has a low barrier to entry and very high potential rewards.