Dan’s Chocolate Adventure

In the interest of environmental preservation, in other words leaving at least one tree in North America that Michael Dell doesn’t cut down to ship me 9 catalogs a week, I’ve been trying to find out how to actually remove myself from the Dell mailing lists. This is the official policy of Dell. I kid you not,

Top poker en ligne en ligne - la Roulette

Les variantes, les plus populaire de ce jeu passionnant, ce sont la Roulette Française et la Roulette Américaine. this is on their web site:

» Add or Remove Your Name and Address From the Dell Catalog Mailing List
To add, remove or update your mailing address from the catalog mailing list, you need to be registered on our e-mail subscription list.

Great, so to get off their catalog list, I need to join their email list (yet again).

The Christmas chocolate season is in full swing. Most people seem to think Valentine’s Day is the largest chocolate of the year, but it is actually Christmas, by a long shot. The Christmas season goes on for about 5 weeks, while Valentine’s Day is only a few days. So while the days are more intense around Valentine’s, the season is actually quite a bit bigger at Christmas.

I was talking to my sister last night, and she made a very interesting point. She said “If people were better educated in the humanities, and had a framework for understanding other cultures and people, we wouldn’t need so many scientists and mathematicians designing weapons systems to try to protect us.”

A few weeks ago Business week had a cover story on the future of work, featuring a sexy story about managers IM’ing on five continents, using four different technologies simultaneously, from the parking lot 7-11’s, etc, and closing a huge deal in real time in Taiwan. I’m sure that was great fun for the writer to swim in this imaginary dreamworld of productivity. The reality, however, is that most people would be far more productive if they would do three things:

• Write items down on a notepad that they need to do, and diligently follow up before they go to bed.
• Read instructions carefully, and learn to read without having to be told things.
• Get rid of all of the fancy technological solutions that have high fixed costs, don’t connect to others, and have a net negative productivity return. Ie, stay with web based email, the phone, and simple IM.

I was reading a document written by John Bogle, the founder of Vanguard, last night. The return on capital for all U.S. businesses from 1900 - 2005 was 9.5%, and the stock market return of the S&P500 over the same period was 9.6%. The extra .1% being investors willing to take slightly more risk in P/E ratios. So no matter what stocks do in the short term, they resort back to a perfect reflection of business peformance in the long term. This backs up Benjamin Graham’s quote that “In the short term, the stock market is a voting machine, but in the long term, it is a weighing machine.”

I’m thinking about getting a Nikkor macro (Nikon calls them micro) lens for the biz. Will help with photos on this blog as well. Currently I’m thinking about the 60mm Nikkor Micro, as this seems to get good views from photographers. Bought used, it’s not too pricey.

Wal-Mart raises all kinds of emtions among people, which I don’t care to comment on here. It’s interesting to really ask yourself what Wal-Mart is, and why 100,000,000 people a week shop there. It is essentially a no-cost negotiating agent that delivers on its contracts immediately, and has no minimums. That is, as an individual, you “ask” Wal-Mart to negotiate for you against big supplier corporations, and if they are successful, they deliver the goods to you as the customer immediately. If they are not, you do not pay anything. Hence there is no risk.

You could easily go out and hire someone to do this for you, but you’d have to pay them up front, and they could not aggregate demand to the supplier, so they’d never be able to drive prices as low.

I’m working from the home office today as our driveway is being widened and I’m trying to keep an eye on it.

Note, for example, how the cement mixer here is about to drench our bush in concrete. This is why it pays to be around.

Note to self: a “near miss” with wet concrete is not recommended.

There are plenty of well-known benefits to the Internet, blogging, and the frictionless, democratic exchange of issues. One of the disadvantages is that, as the cost of publishing approaches zero, the supply goes essentially to infinity. With no costs attached to publishing, the incentive to produce well-researched, good content drops, as you can always just publish again tomorrow, and there is no penalty to a bad piece, except some loss of reputation.

When Gutenberg first invented the press, it was very difficult indeed to get press time when there were only two in all of Europe. Prior to that you had to find a monk to transcribe something for you, an even more difficult process.

This is one of the reasons I think the traditional publishing industries will survive for a long time. They may decline, but I expect it to be a slow decline if it happens.

Allowing employees to work from home accomplishes four things simultaneously:

• Family Friendly. In a large city, employees can transfer roughly 300 hours, or 7.5 weeks of work, from the highway to their families each.
• Good Business. If employees do not transfer all 300 hours to their families, they can transfer more of that to productive work.
• Environmental. It reduces variable energy consumption (fuel), and base commodities consumption (raw materials to build roads and vehicles).
• Patriotic. It reduces demand for foreign energy, a big cause of our gaping trade deficit and other worldwide commitments.

Matt Simmons, who has been an oil investment banker for about 40 years, discusses oil and commuting in this video. He points out that “transportation is 70% of the oil barrel.”

No, this isn’t a post about a restaurant. It’s a post to let you know that if you have pneumonia, as I did about 6 weeks ago, you may still be coughing 6 weeks later. The amazing thing is how long it is taking the muscles around my rib cage to heal. I’m not sure if this is a normal byproduct of pneumonia or a symptom of my severe upper-body lethargy.

A friend of mine was thinking about leaving finance and entering the venture capital world. I was telling him that I though venture capital was difficult because it was more about media than money.

When you look at the returns in VC, if they don’t have the big 1 or 2 hits in a portfolio, the return collapses. Entrepreneurs who own a “big hit” company know what they are sitting on, and seek out the best known firms. Hence, as a small or startup VC, you have to get very lucky to get a big hit. The small firms often get the scraps.

Why do the entrepreneurs seek out the well known firms? It’s not about money - there is a lot of that floating around for good, growing businesses. It’s to secure the media buzz and the press exposure that prominent VC firms increasingly bring. That is worth much more than the money, and the established firms know how to work those channels.

This is something I just learned today: the FDA (Food and Drug Administration) requires chocolate to have 10% cacao to be labeled milk chocolate. That’s pretty low.

From the NY Times:

Some major media groups, who produce much of YouTube’s most popular content, remain skeptical. At the same investor conference where Mr. Schmidt had spoken, Philippe Dauman, the president and chief operating officer of Viacom, had this to say:

“People aren’t going to spend money for user-generated content like a cat going to the bathroom. We want to provide advertisers a quality environment that they would pay more for.”

Enough said.

Early this morning I parsed throught my Outlook contacts, removing about 500 of the 600 in a specific folder that was showing its age. Many of these people had been running startups that failed or shut down for some reason. In fact, about 9 of 10 startups had failed, and in the remaining 1 of 10, in only about 50% of cases was the original founder still around.

I started thinking about patterns as to why this might be the case. My data sample certainly matched what you hear in the classical business press about startup sucess rates. One of the things I noticed is that, for many of these companies, they simply had transactional costs that were too high for what they were garnering in gross profit per sale. That is, they had to do too much work for what they were being paid each time they processed a sale, and they eventually collapsed. Even on a small scale, their model wasn’t profitable.

Alan Greenspan used to talk often about how transactional productivity gains was one of the great driver of economic gain in the U.S. in the past twenty years. Indeed, in a recent example of success, Google, you can see how low their per-transaction expense is. A computer server handles the query, and handles the advertising matching, and handles the billing. Their per-transaction costs are probably in the millionths or billionths of a penny.

We have two primary lines of business at Dan’s Chocolates. The is a factory direct to consumer boxed chocolates business. This biz, which you can see at www.dans.com, is fairly seasonal. We tend to offer the best chocolate shipping prices on the Internet.

In our other business, we sell chocolate bars via retailers. We have eight flavors, which you can see here.

From this humble beginning, I hope to bring you along for the ride of building a new American chocolate company. We’ll talk and show chocolate, but also other things of importance in building a company, like finance, daily operations, etc. There will be no PR spin, as I am the founder and this is not written by marketers. And unlike many blog-chronicled startups, we’re doing this the way 99.99% of entrepreneurs do - with no venture money or outside investors. So while I intend to provide some interesting gastronomic insight, I’d also like to discuss issues that help you in your work and life.

Thanks for taking a look. I’ll try to post at least a few times per week. Glad to have you along!

Dan