Class Information Class #2 – September 29 Business 095 – 4 credits Tuesdays - 5pm-8:40pm KCI building, Room 4006 Ben Dubin ben@dubin.com Mobile number: 408-621-0170 – Text me or call me. Leave a message I don’t answer and I will get back to you. Don’t forget to tell me who you are in your text) 1 Important Dates & Deadlines Late registration accepted with instructor's add code/signature. Sept 21 – Oct 2 Deadline varies for each course. Generally, the deadline is Friday of the second week for 12-week classes (October 11). Each class may be different. To verify the exact date for your classes, access your MyPortal.fhda.edu account. Oct 16 Deadline to file a pass/no pass option. You can complete the pass/no pass option online before the term begins. Once the term has started, you must submit your completed Pass/No Pass Form to the Admissions & Records Office. To download the Pass/No Pass Form, log into your MyPortal.fhda.edu account. Nov 9 Veterans day observed Nov 26-29 Thanksgiving! Dec 8-11 Finals week June 22-26 Final Exam week 2 © 2009 - Ben Dubin -, Inc. All rights reserved. Schedule Sept 29 (Today!) Slides presented on the How to Market Goods and Services for your business Sample Business article analysis Mystery Entrepreneur Check blog for additional readings & assignments Oct 6 Slides presented on the Forms of Businesses as well as Planning and Organizing your Business Business Article Analysis #1 due – Topic: Small Business. Need to turn it in and in class review Start to think of preliminary idea for your business presentation Mystery Entrepreneur Check blog for assignments - http://bus95.blogspot.com 3 © 2009 - Ben Dubin -, Inc. All rights reserved. Class Blog http://bus95.blogspot.com All files from class will be there along with some interesting required readings 4 © 2009 - Ben Dubin -, Inc. All rights reserved. Textbook 5 Textbook Reid Hoffman 6 Class #2 Agenda Market Capitalization The Art of Positioning Marketing! Mystery Founder 7 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? How do we determine the total value of a company? Market Capitalization = total number of shares X share price We also just call it Market Cap It really how much the company is worth and what someone would have to pay to buy them 8 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? Last year, the most valuable company in the US is was…. Exxon Mobile (XOM) 4.19B shares X $72.96 = $306B 9 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? But today the old leader is back on top again Apple (AAPL) $109.06/share They have just 5.82 billion shares So their market capitalization is $634 billion 10 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11 What is the most valuable company in the US? Last March (2015) Apple (AAPL) $126.30/share They have just 5.82 billion shares So their market capitalization WAS $739.02 billion $105B LOST!!! 12 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? Apple is the most valuable company in the US today And it they are worth $105 Billion LESS today just a ½ year ago! 13 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? By the way… Exxon has dropped to #3 Google is #2 with a market cap is: $429B #3 – Exxon is $359B #4 – Microsoft is $352B #5 - Berkshire Hathaway is $320B 14 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is the most valuable company in the US? The other top ten companies are: Johnson & Johnson = $256B General Electric = $254B Wells Fargo = $266B Wal-mart = $204B 15 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Where it all begins…. In talking with people that are thinking about starting a company, business, etc. they all face one big initial hurdle…. Starting! 16 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Guy Kawasaki Guy Kawasaki (born August 30, 1954) is a Silicon Valley marketing executive. He was one of the Apple employees originally responsible for marketing the Macintosh in 1984. He popularized the term "evangelist" in marketing the Macintosh, and the concepts of evangelism marketing and technology evangelism. 17 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. The Art of Starting 1.Make Meaning 2.Make Mantra 3.Get Going 4.Define your Business model 5.Weave a mat 18 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Make Meaning Why are you starting your business? If your organization never existed, the world would be worse because ___________________ 19 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Make Mantra Like a mission statement… …but shorter, cooler, more meaningful, etc. 20 Make Mantra Authentic athletic performance Fun family entertainment Rewarding everyday moments Think Winning is everything 21 Make Mantra Coca-Cola Mission statement: The CocaCola company exists to benefit and refresh everyone it touches Manta could be: Refresh the World 22 © 2006The McGraw-Hill Companies, Inc. All rights reserved. Get Going Thing Big Find a few soul mates Polarize people Design different Use prototypes 23 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Define your business model Be specific More everything Keep it simple 10 words or less Elevator pitch Copy someone 24 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Weave a MAT Milestones Assumptions Tasks 25 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Quote “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Sam Walton 26 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What and Why Big Rule Target Market Stages of Market © 2009 Ben Dubin - All rights reserved. What is Marketing? Marketing is your strategy for allocating resources (time and money) in order to achieve your objectives (a fair profit for supplying a good product or service). McGraw-Hill/Irwin 28 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is Marketing? (cont) Marketing is essentially about marshalling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends. Marketing is the process whereby society, to supply its consumption needs, evolves distributive systems composed of participants, who, interacting under constraints - technical (economic) and ethical (social) - create the transactions or flows which resolve market separations and result in exchange and consumption. McGraw-Hill/Irwin 29 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. What is Marketing? (cont) Marketing is the social process by which individual and groups obtain what they need and want through creating and exchanging products and value with others Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably Marketing looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention). The right product, in the right place, at the right time, at the right price. McGraw-Hill/Irwin 30 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Big Rule Know your customer! McGraw-Hill/Irwin 31 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Customers McGraw-Hill/Irwin 32 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Breaking it down Markets may be very big – we need to be able to make them more manageable. How? McGraw-Hill/Irwin 33 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Term – Market Segment A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. McGraw-Hill/Irwin 34 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Market Segment A true market segment meets all of the following criteria: • it is distinct from other segments (different segments have different needs), • it is homogeneous within the segment (exhibits common needs); • it responds similarly to a market stimulus, and it can be reached by a market intervention. McGraw-Hill/Irwin 35 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Term – Target Market Target Market = the group of potential customers selected for marketing i.e. you “target” to aim for McGraw-Hill/Irwin 36 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Stages of Market McGraw-Hill/Irwin 37 Stages of Market Crossing the Chasm, Moore McGraw-Hill/Irwin 38 Stages of Market Crossing the Chasm, Moore McGraw-Hill/Irwin 39 Stages of Market Innovators – the first 5%-10% that adopt the product Early Adopters – The next 10%15% Early Majority – Next 30% Late Majority – Next 30% Laggards – Remaining 20% McGraw-Hill/Irwin 40 Why Market? To get your customer’s attention To educate them Motivate them to buy Get them to actually buy Get them to buy again McGraw-Hill/Irwin 41 Why Market? McGraw-Hill/Irwin 42 Innovators and Early Adopters Characteristics Venturesomeness: the willingness and desire to be daring in trying something new and different Social integration: frequent and extensive contact with others in one’s area Cosmopolitan: point of view extending beyond the immediate neighborhood or community Social mobility: upward movement on the social scale Privilegedness: attitude and possession of money (less risky to try something new) McGraw-Hill/Irwin 43 Target Market Influencers In addition to targeting innovators and early adopters, finding the innovators and early adopters among the influencers of your market is important for a marketing plan with a limited budget Groups of influencers – athletes, actors, wealthy people, grade school kids, college students, seniors,………….. McGraw-Hill/Irwin 44 Mystery Founder ? © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder This person started out as an early entrepreneur. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder grew up in a Catholic working class family. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder was the youngest of five kids. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder’s other four siblings were all girls. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder was a local person. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder grew up in Oaktown. Yes, Oakland, California. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder’s father was a welder. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder wasn’t great in school. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder was a just a mediocre student. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder “learned to work hard and sought a way to fulfill (his/her) dreams” (this is an actual quote from our founder). © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder When our founder was just 13 years old our founder got his/her first job paying only $5 per week. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder No, it wasn’t you normal kind of “kid” job. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder would sit in foul territory near the baselines to retrieve baseballs grounded foul by batters for the Oakland A’s. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Not that kind of Bat Boy!!! © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder graduated from high school. Yeah!!!!! © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder did not graduated from college. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder No, our founder wasn’t a winner at all. Our founder never even went to college. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Being a Mystery Founder, our founder started a company (as founders tend to do). © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Oh, some more personal information out our founder. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder married at the age of 19. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder opened his/her business at the age of 20. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Opps!!!! I am sorry. I was wrong about our founder not going to college. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Well….. …..what I mean is the he/she didn’t go to a 4 year college © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Our founder went to a….. ….Community College! © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Not just any Community College….. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder ….but a decent one… © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder ….actually …..a good one © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder ….ok….. ….a really good one…. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder ….a really really really good one…. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder By the way, our founder’s business was just 7.8 miles from this very classroom. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder ? © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder 83 Mystery Founder 84 Mystery Founder 85 Mystery Founder Daily newspaper, The Memphis Commercial Appeal, stated that she would be the perfect model for an entrepreneurial Barbie doll. 86 Mystery Founder Debbie Fields Mystery Founder Debbie Fields Mystery Founder Not the See’s Candy lady Mystery Founder Not the Betty Crocker lady either Mystery Founder Not Aunt Jemima either Mystery Founder Not Uncle Ben’s either Mystery Founder Debbie Field’s Mystery Founder 94 Mystery Founder Mystery Founder On August 16, 1977, Mrs. Fields Chocolate Chippery first opened its doors in Palo Alto, California. Halfway through her first day she had not made a single sale, so she went outside and started handing out her cookies for free. Soon people were streaming in to the shop to buy more of her cookies. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Her company motto "Good enough never is", says all about her business philosophy. She worked hard and her customer satisfaction was a priority. That, and the great cookies she baked. She later changed the company name to Mrs. Fields Cookies to allow for other type of cookies than just chocolate chip. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder In 1987 Mrs. Fields' Cookies did well financially. It earned a profit of 18.5 percent on sales of $87 million, up from $72.6 million in 1986. The company in 1987 purchased La Petite Boulangerie, a chain of 119 French bakery/sandwich stores, from PepsiCo for $15 million. In just four weeks Randy Fields used specially developed software to help him and his wife reduce La Petite Boulangerie's administrative staff from 53 to just three individuals. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder One of the business innovations she saw to was the introduction of state-of-the-art computer systems in 1989 for streamlining her company operations. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder The firm equipped each of its stores with inexpensive IBM-compatible computers that were linked by modems to the company's larger system in Park City. Computerization allowed the firm's retail stores to plan daily production schedules, monitor stocks and order materials automatically, communicate with headquarters using electronic mail, improve employee training, and handle payroll and other accounting tasks. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Soon after that, in 1990, she started franchising the business concept. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Mr. Fields, aka Randy Fields, was a Stanford Universitytrained economist. They got married in 1976. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Mr. Fields was a Stanford graduate and had many parties at their house. Debbie was a great cook and she cooked for many dinner parties. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder •For about a year as a new wife, Mrs. Fields tried to fit into her Randy’s world as a dutiful spouse by hosting visitors and making polite conversation. •However, a painful incident in which she tried to pretend she was a sophisticated person made her decide to do something else with her life. •She said, "at last I understood that I had to do something that was mine.... I gave up, in that moment, the desire to succeed in other people's eyes and realized that first I had to succeed for myself." •She elaborated, "I couldn't be Randy's shadow any more, his tagalong.... Somehow I would have to change, to become an independent, self-respecting individual able to stand on my two feet." © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder •An early crisis illustrated how the young company operated. Mrs. Fields refused to replace higher cost raisins with less costly but also less tasty dates. •Debbi Fields explained that, "The point wasn't to make money, the point was to bake great cookies, and we sacrificed for that principle. •From the very first, I set up a policy that we still follow today. Our cookies had to be warm and fresh and when they were two hours out of the oven, what hadn't been sold was donated to the Red Cross to be given to blood donors, or to other deserving charities, and we baked a new batch. We guaranteed everything we sold." © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Her husband's business acquaintances loved her cookies, so she asked them what they thought about starting a cookie business. "Bad idea," they said with their mouths stuffed full of cookies. "Never work," they said, "Forget it." Debbi's mother, her in-laws, and her friends and fellow students at Foothill College also said she would fail. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder Just like her parents in Oakland, she had five daughters: Jessica, Jenessa, Jennifer, Ashley and McKenzie. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder In 1993 she eventually sold out to private investors and turned her attention to motherhood. © 2009 - Ben Dubin -, Inc. All rights reserved. Mystery Founder In 1997 she divorced long time husband and remarried in 1998 to Michael Rose and moved to Memphis, Tennessee. © 2009 - Ben Dubin -, Inc. All rights reserved. Mrs. Fields Today The company has grown into over 650 retail bakeries in the United States There are bakeries 80 in 11 different countries Like Ray Kroc, Mrs. Fields began franchising in 1990 110 Mrs. Fields Today She currently lives in Memphis, Tennessee with her second husband, former Holiday Inn and Harrah's CEO, Michael Rose. She and her husband are very involved in philanthropic work throughout the area. 111 Mrs. Fields Today The company is officially now called: Mrs. Fields Famous Brands, LLC 112 Mrs. Fields Today TCBY is also owned by the LLC, as is PretzelTime, Great American Cookies and Pretzelmaker 113 Mrs. Fields Today The LLC describes itself as: • a retailer of freshly baked, on- premises specialty cookies and brownies in the United States and a retailer of soft-serve frozen yogurt with live active cultures. 114 Mrs. Fields Today As of December 29, 2007, the Company's franchise systems operated through a network of 1,608 retail concept locations throughout the United States and in 22 foreign countries. 115 Mrs. Fields Today Franchising – Start-up Cost: $100,000 to $200,000 Total Investment: $179,100 to $251,100 All prospects must be 18 years of age and up. Net Worth requirement is $150K and liquid capital is $75K. 116 Mrs. Field's Today Market cap = $? billion Revenue = $? billion Profit = $? Billion I don’t have these numbers, Mrs. Fields Famous Brands, LLC is a private company and they do not publish their numbers. 117 Mrs. Field's Today http://www.youtube.com/watch?v=qLZnQ 8ptOCY 118 Mrs. Field's Today June 5, 2008 - Mrs. Fields announced plans to begin efforts to restructure their debt by offering a deal to current bondholders. The plan also included the option of filing a prepackaged bankruptcy in the event enough noteholders didn't agree to the offer. July 10, 2008 - Stephen Russo resigns as CEO. On July 15, 2008, the Board of Managers of the Company appointed Michael R. Ward and John Lauck as Interim Co-Chief Executive Officers to fill the role vacated by Stephen Russo. August 15, 2008 - Mrs. Fields Famous Brands announced plans to implement a prepackaged Plan of Reorganization and file for Chapter 11 bankruptcy. August 24, 2008 - Mrs. Fields Famous Brands officially files for Chapter 11 protection. 119 Mrs. Field's Today LESSON #1 - MAKE YOUR CRITICS EAT THEIR WORDS. "The greatest failure is not to try," says Fields. "Had I listened to all the people during the course of my life who said, "You can't. You'll fail. It won't work. You don't have it," I wouldn't be here today." 120 Mrs. Field's Today LESSON #2 - PASSION IS THE KEY IN A SUCCESSFUL BUSINESS RECIPE. "You have to have passion when you're finding a recipe for a career," says Fields. "If you love what you are doing, you'll never work a day in your life." 121 Mrs. Field's Today LESSON #3 - LET YOUR CUSTOMERS TRY AND BUY YOUR PRODUCT. "I learned how important what I call 'try and buy' was," says Fields. "I didn't want to advertise and say my cookies are the world's best. It would be presumptuous of me to say that. Instead I wanted people to actually experience the product, try the product, and if they thought it was worthy, if they liked it, then they could buy it." 122 Mrs. Field's Today LESSON #4 - GOOD ENOUGH NEVER IS. "Good enough never is," says Fields. "Set your standards so high that even the flaws are considered excellent." 123 Mrs. Field's Today LESSON #5 - STOP DOING WHAT IS NOT WORKING When Fields opened up her very first store, she was excited. She had finally created a solid business plan and found a banker that believed in her. On the store's first day of business, Fields' husband questioned her about her long-term financial objectives, but Fields was so excited to finally be in business, she dismissed him. "Oh my gosh, Randy," she told him. "You know, I've got an annual goal. I've got monthly plans. But today I just want to get started. I just want to open up the store." 124 Mrs. Fields’ Mission Statement "To Share the Fun of Cookies” 125 Next Week! Business Article Analysis #1 due – Topic: Small Business • Find an article – anywhere – that is about a small business. Then I want you to just write a paragraph about the company why you think the company is interesting or not, and why. • Need to turn it in and in class review of some of them Start to think of preliminary idea for your business © 2009 - Ben Dubin -, Inc. All rights reserved.