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Archive for February, 2009

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Risk and reward are typically tied together.

The standard formula; more risk = more reward. The clear problem with this equation is that there is a specific point where risk outweighs reward, and the chance of achieving a profitable outcome becomes statistically impossible.

This decision point is hard to see, feel, and measure….But we have to try if we want to be more effective at managing risk.

Sometimes we need to test these boundaries in order to know where they are… Fully aware that we might fail, in fact unless we do fail we will never know where that point of decision really is.  Now, I’m not a big fan of failure, but if you don’t push yourself or your business to a point where failure is a clear option, you may never reach your (or your businesses) full potential.

Today I was snowboarding off the back side of Snowmass in Colorado and I saw a sign that reminded me of this point in a clear and direct way.

Rarely in business do you get the benefit of a bright red sign that lets you know you are at a major decision point… certainly not with the skull and crossbones for added emphasis.

(BTW, the snow out of the standard ski area was amazing, well worth the risk to lay down some fresh tracks in the waist deep fluffy stuff.)

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It’s already late Friday. And many of you are feeling woefully unprepared. Why? You’re going to have to fill out a ballot for an Oscar pool in less than 48 hours and you haven’t seen 75% of the nominated films.

Have no fear, North is here. While we excel in providing early stage venture analysis, occasionally we enjoy conducting due diligence on other innovative & ambitious undertakings.

In case you’re wondering, I HAVE seen all but two of the nominated films from the major categories (a perk of having friends and family in the “the biz.”). I’m also co-defending champion of a very prestigious Oscar Party Pool in Echo Park. Okay, now I’m just setting myself up for a bashing on Monday.

So without further ado, here are my picks for the 81st Academy Awards.

Disclaimer: Film enthusiasts should always conduct their own research and due diligence and obtain professional advice prior to making any Oscar ballot decisions. North and its management or associates will not be liable for any loss or damages caused by a reader’s reliance on information obtained in this blog posting…

Best picture: Slumdog Millionaire – seems to have all the momentum right now

Best director: Danny Boyle – Slumdog Millionaire – deserving

Best actor: Mickey Rourke – The Wrestler – he was damn good (Penn a close second)

Best actress: Anne Hathaway – Rachel Getting Married – upset special over Winslet

Best supporting actress: Penelope Cruz – Vicky Cristina Barcelona – upset special over Taraji Henson

Best supporting actor – Heath Ledger – The Dark Knight – sentimental pick, but he was good

Best foreign language film – Waltz With Bashir * – Israel – going to see tonight

Best animated feature film – Wall-E

Best adapted screenplay – Slumdog Millionaire

Best original screenplay – Milk

Best original score – Slumdog Millionaire

Best original song – Down To Earth – Wall-E

Art direction – The Curious Case of Benjamin Button – i fell asleep in this too…boring

Cinematography – Slumdog Millionaire

Costume design – The Duchess

Best documentary feature – Man on Wire – my best film of the year

Film editing – The Dark Knight

Make-up – The Curious Case of Benjamin Button

Sound editing – Iron Man

Sound mixing – The Dark Knight

Visual effects – The Dark Knight

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This rainy morning I was invited by Clean Tech Los Angeles to attend a pretty cool announcement at City Hall. Mayor Villaraigosa and former President Clinton announced a five-year project to make the city’s street lights more energy efficient. Anytime you can hear a former president speak in person on President’s Day, you gotta go for it. And he didn’t disappoint, providing compelling insight on the new stimulus package and the global economic crisis.
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Spearheaded by the Clinton Climate Initiative, the plan calls for swapping out 140,000 of LA’s residential street lights with more energy efficient LED lights and would be the largest program of its kind undertaken by a city. A little perspective – normal street lamps last four to six years, while LED lights last up to 10 years. The Mayor says it’ll save Los Angeles $48 million over the next seven years, and is expected to reduce carbon dioxide emissions by 40,500 tons each year (the equivalent of taking 6,700 cars off the street).

LA is on an ambitious mission to become the model “green city” and this is just one of the trendsetting (hopefully) initiatives they have in motion. The city is backing up their talk too, with billions of dollars of investment and attractive incentives to make Los Angeles the premier destination for innovative cleantech ventures and entrepreneurs.  I’m currently part of the Clean Tech Kitchen Cabinet, which is a group of talented entrepreneurs, evangelists, investors, creatives, and media professionals in the socially-constructive space that get together once a month to discuss and share their ideas for a better & greener LA.

Even Tamara Henry , Ms. Arkansas 1997 showed up with her vintage sash.  A tad bizarre. Not sure if she got her hard-hitting interview with Bubba or not, but she definitely attempted to badge her eco cred with her choice in wardrobe color.

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In all seriousness, let’s hope the street light conversion initiative will further establish LA as credible leader in the Clean Tech movement. It’s definitely another encouraging step. The city is proving more and more than it wants to be known for impactful results other than just box office receipts and cosmetic surgeries.

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From time to time my fiancee (that sounds weird…let’s go with girlfriend) signs us up to attend lectures at the LA Public Library. Some are hits, some are misses. The last lecture we attended was about the LA Taco Truck scene. Right in my wheelhouse. Unfortunately, the speakers put me in a bad food coma (minus the free tacos).

Last night however, she redeemed herself. The speaker was author Jonah Lehrer, who just penned the book How We Decide. While there are some parallels to Malcolm Gladwell’s Blink, Lehrer goes a little deeper into the science (neuroscience to be exact) behind decision making. He talked about the occasions when the rational part of the brain is best in decision making; and then discussed examples of when we should leave reasoning behind and just let our intuition (emotions) guide our behavior. Can’t wait to dig into the book. It’s sure to contain many insightful nuggets for entrepreneurs and investors alike.

BTW – I thought about the most recent time where I decided to leave behind my “rational” thoughts in making a decision. Well, clearly it was when I decided to post this shitty, low-quality, ridiculously blurry camera phone photo onto the blog. My apologies Jonah (on the right)…

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Okay, taking a break from ROTFLMAO about the $1M Pepsi logo, I wanted to put something out there that has been bugging me lately. Today’s business climate has degenerated into a world of scam paranoia. At some point the greater consumer psyche (if there is such a thing) has become super saturated with over the top marketing claims, million dollar sweepstakes, and insane hucksters selling outrageous impossible stuff.

I can’t blame people for feeling like the world is one giant rip off. From the minute I wake up ($3.65 cup of coffee), gas up the tank (doing my part to help Chevron set a profit record with their “new” $3.00 gas), to parking the car ($0.75 each 20 minutes; $36 per day max), riding up the elevator (commercials on the little screen make not talking to co-workers a little more comfortable). Once I hit my desk there are no fewer than 50 email messages to sift through… selling all sorts of (ehem) enhancement medications, time shares, debt consolidation services, and online graduate degrees. The news isn’t much help. Corporate fraud is rampant, giant multi-million dollar bonus packages cashed in only a few hours before the company cashes a giant government bail out check, and then there is a string of cabinet level resignations related to tax evasion, avoidance, or just plain ignorance. Arggh!

I can see how easy it is to start to wonder if there is anyone left in business that actually offers a product for a fair price, treats their workers with respect, and makes an “honest” living? Clearly, I’m off on a rant. I realize that there are tons of legitimate businesses out there, I’m just tired of feeling like I have to start to wear a wallet chain to actually protect my wallet. (instead of trying to look like Chris Angel)

We (North) work in a business that is considered full of legendary scam artists who prey upon the hopes and dreams of the unsophisticated entrepreneurs. Or so we are led to believe… I have to wonder are all these people truly “scam artists” or are they perhaps working in a field where risk is high and the chances of success are low? Is every person who tries to raise capital and fails to do so a “scam”, or might they be great at what they do, put in tremendous amount of work and just not hit a homerun every time the walk up to the plate.

Will someone get a million dollars if they invest $19.99 per month in a website where they can post their business plan? Maybe. People in America become millionaires every single day by investing only a single dollar. It’s called the lotto and it’s not a scam, or is it? People get some value from the fantasy of winning a fortune. Are the business plan posting sites about as much fun as a fistful of lotto tickets?

Maybe what really matters is how open the process is, and how clearly the odds of success are stated to the person playing the game. I can’t imagine that many people feel that their lotto ticket was a scam when they find out that they didn’t win. Should they?

I think the hard part is trying to tell what the intentions of the business or person are when they operate in an industry that has very a low success rate. Why in this particular industry are professionals with good intentions so quickly painted with the “S” word. Raising capital is a very hard process and the competition is intense. Think about it, you are trying to convince total strangers to hand you millions of dollars. The rate of success for even the best entrepreneurs and investment bankers is extremely low. So in an industry where even the most talented can strike out, how can you know which players to put into the lineup?

Smart entrepreneurs need to look long and hard at the value that they get in return from any tool, technique, partnership, or consultant they hire to make themselves a better entrepreneur. Wise up, think clearly, and look for partners that are going to work hard with you, for you, and on your side. There are great players in this game, the trick is picking them out of the crowd.

Would you buy a watch from this guy?

Would you buy a watch from this guy?

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Pepsi, you just got Punk’d. Arnell Group, you just took the fizz out of branding.

Please excuse me while I go off on a rant. Last year, Pepsi hired Peter Arnell and his disciples to handle the redesign of their iconic red, white, and blue logo. The rumor is that Pepsi spent over $1 million on this assignment.

Umm, let’s just be happy that WE didn’t pay for it (fortunately for us, our government didn’t have to bail out the recession proof soft drink makers). Just think, they could have run a worldwide contest with every design school out there and gotten huge positive PR out of it. But instead, they turned to Arnell and his stable of “brand psychics.”

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Turns out a freelancer posted the actual logo presentation deck on the Internet for us all to witness. The deck spins that the revamped logo draws on thousands of years of design principles, the Earth’s gravitational pull and the greatest works of art to persuade people to buy the sugary drink. The document called “Breathtaking Design Strategy” is littered with historical, philosophical, scientific, and mathematical ideas dating back to 3000 B.C.

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At one point, the presentation compares “Planet Pepsi” to the Earth’s magnetic pull, with diagrams showing Pepsi as the gravitational force between the end of the aisle and the checkout stand. I kid you not. Check out some of these visuals. Straight up W.T.F.!?!?!

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It’s unfortunate, as consumers already have an elevated “bullshit radar” for brand marketing. Companies that still believe that they are in charge are dead wrong. The consumer runs the show. Respect their intelligence. Involve them. Be authentic with your words “internally” and “externally”. Arnell must have had the the Pepsi marketing brass under some sort of spell (or waterboarded them with a truck full of 2 liter bottles of Pepsi One).

It’s important to remember that brand marketing done right can be extremely valuable for any new or established venture. Smart branding can make the difference between attracting outside investment and not. It can make cash registers ring or flat out turn consumers off. It can make your brand a champ with the people or a chump in the press. Brand innovation can generate strong brand awareness, inspire action, and result in a loyal following.

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Just look at how beverage start up Jones Soda broke through using user-generated content on their labels. Pepsi shelling out $1M+ for a logo is not innovative, it represents old school Madison Avenue principles that have very little relevance today. Want value back? Then don’t hire a giant agency that has a ton of overhead, giant salaries, and talent that is past their prime & out of touch. In this economy, you need to collaborate with big thinkers than know how to do more with less.

EXTRA TIP: Before pulling the trigger on an outside vendor, make sure you thoroughly vet them beforehand (or at least google them with the word scam after their name. Psst…this isn’t Arnell’s first violation.

This is the second time Pepsi’s logo has drawn some unfavorable press. When it debuted just before the inauguration, consumers thought it looked eerily similar to President Barack Obama’s “O” campaign logo.*

pespsiobama

*Sidenote: there’s a great blog called SemiObama which looks closely at the visual representations of Obama and unpacks the various cultural, religious, national, and political icons and symbols surrounding him that are used to evoke meaning and emotional reaction.

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In tribute to the upcoming SXSW music festival (March 18-22) in Austin, TX, we thought we’d share a video from last year’s Sansa Playground event. The North team was down in Austin on behalf of SanDisk to introduce, excite, and educate music industry insiders on the new Sansa brand and their slot-enabled line of MP3 players. Kudos to Spencer from NonStop Riot for cutting together this MSTRKRFT video and spreading the love. Good times.

Psst…if you look closely at 2:15 into the video, you can actually spot Alex and Brody showcasing their moves. Hilarious.

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