Sunday, August 30, 2009

The Printed Blog

Link of the day - I will pay you $25, if you come up with a cool domain name for me.

http://www.theprintedblog.com/

By now, we all know that the Internet is tomorrow and the printed media are yesterday. So when, to borrow from Lost, is Joshua Karp? The 36-year-old former consultant from Chicago is publisher of the Printed Blog. The content buzzes like the World Wide Web: Every bit comes from the blogosphere or photos snagged from Flickr (with creators' permission).

But the format is undeniably 20th century: ink on paper, or to be more specific, four-color ink on eight sheets of 11 by 17 glossy stock bound by staples. The free weekly debuted in late January in Chicago and San Francisco, where volunteers and some of Karp's 14-person staff handed out 3,000 copies to commuters at train stations. It expanded to New York and Los Angeles in February and Karp hopes to add Washington in March. The paper is a huge money drain.

Karp says he's bringing in $500 to $600 a week from advertising. But it's cost him more than $15,000 to print the first three editions. Add in payroll and office rent and the $30,000 that Karp says he's pulled out of savings to start his venture will be spent before the publication can roll into D.C. No worries, says Karp. He says he's negotiating loans for as much as $50,000. Besides, his credit cards aren't maxed out yet.

Entrepreneur's Notebook: Practical Advice for Starting a New Business Venture

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything

The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants

Small Business Cash Flow: Strategies for Making Your Business a Financial Success

Streetwise Small Business Book Of Lists: Hundreds of Lists to Help You Reduce Costs, Increase Revenues, and Boost Your Profits

Thursday, August 27, 2009

The Manhole Cover Picker-Upper

Link of the day - I will pay you $25, if you come up with a cool domain name for me.


http://www.rockmillsent.com/

Opening manhole covers, which weigh up to 400 lbs., is difficult at best and dangerous at worst. Dave Roberts, 51, who spent 25 years lifting them while working for waste-water authorities in Minnesota's Twin Cities, decided to find a better way.

A perpetual tinkerer, Roberts designed a machine to remove the heavy cast-iron lids using a powerful magnet and a hydraulic hoist that attaches to a back of a vehicle.

He assembled the first device in his garage five years ago and sold seven of them to his employer. Roberts quit his job in 2005 and financed the business with more than $100,000 borrowed against his house and from credit cards. Last October, he and business partner Rick Carlson, 53, relocated to Rock Valley, Iowa, after economic developers there connected them with a group of 12 local investors who invested an undisclosed amount in the company, which they renamed Rock Mills Enterprises. The patented device, called the Lifter, sells for $3,595, and they have shipped about 90 so far, with $63,500 in revenue in 2008.

Roberts and Carlson pitch their tool as a way to save time and reduce the risk of injury to workers, and they see a vast market for the product in municipalities, utility companies, and institutions like military bases and universities.

Entrepreneur's Notebook: Practical Advice for Starting a New Business Venture

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything

The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants

Small Business Cash Flow: Strategies for Making Your Business a Financial Success

Streetwise Small Business Book Of Lists: Hundreds of Lists to Help You Reduce Costs, Increase Revenues, and Boost Your Profits

Wednesday, August 26, 2009

Owen Claw Inventor

Link of the day - I will pay you $25, if you come up with a cool domain name for me.


http://ovenclaw.com/

On a visit to Portland, Ore., about three years ago, Bill Leikam watched curiously as his brother used an odd piece of plywood to pull a hot rack from of the oven. "I said: 'What was that?'" recalls Leikam. It was the family's "oven buddy" he was told.

Like every inventor, Leikam believed that he could design a much better version. For about six months, the retired chief of a Silicon Valley high-tech firm ruminated on the idea and then headed to a local lumberyard to try his hand as a toolmaker. After devising five different iterations and plowing $12,000 of his own savings into the new venture, Leikam launched the Oven Claw in Palo Alto, Calif. Last Christmas he began selling the hardwood utensil online and at seven specialty stores.

Although there are other similar devices on the market, Leikam, 68, says the Oven Claw is sturdier and better designed. The 18-in.-long grabber can easily extract a cooked turkey from the oven without making a cook reach her arm inside. Eventually, he hopes his "high-end" Oven Claw will be sold in stores like Crate & Barrel privcapId= and Williams-Sonoma. By May, Leikam expects to be profitable and says the company will pull in $50,000 in sales this year.

"People tell me that I should come up with other utensils," says Leikam, whose cooking interests tend toward casseroles and Italian foods. "But for the moment I am focusing all of my energy and money on this one before I branch out."

Entrepreneur's Notebook: Practical Advice for Starting a New Business Venture

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything

The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants

Small Business Cash Flow: Strategies for Making Your Business a Financial Success

Streetwise Small Business Book Of Lists: Hundreds of Lists to Help You Reduce Costs, Increase Revenues, and Boost Your Profits

Tuesday, August 25, 2009

Better Clothes for Babies

Link of the day - I will pay you $25, if you come up with a cool domain name for me.


http://www.newforbaby.com/

In 2005, when Leigh Rubio, a Portland (Ore.) stay-at-home mother of two, saw her infant daughter accidentally scratching her face, she wished for a simple solution that she couldn’t find: baby shirts with fold-over sleeves. That only added to what she disliked about the little kid clothes on the market. Baby pants were too high so their waistbands pressed into tender, healing belly buttons. Some shirts lacked neckline snaps and were painful to stretch over soft heads. And cloying pastels and duck patterns were everywhere. So Rubio, now 34, and women’s apparel designer Lyn Huffman, 32, teamed up to design a fitted and stylish layette. Targeting newborns also helped them carve out a niche in the crowded children’s apparel market. They scraped together $75,000 in savings, a $50,000 bank loan, and, says Rubio, “supportive husbands who never second-guessed us” to create their first line. Since August, they've expanded to offer clothing made in the U.S. for toddlers up to 24 months old. Within a year they turned a profit and now bring in $5,000 to $10,000 monthly through their online store, newforbaby.com.

The Million-Dollar Idea in Everyone: Easy New Ways to Make Money from Your Interests, Insights, and Inventions

IdeaSpotting: How to Find Your Next Great Idea

How to Make Millions with Your Ideas: An Entrepreneur's Guide by Dan S. Kennedy

101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms & Dads

Make Your Ideas Mean Business

Friday, August 21, 2009

10 Books That Take An Alternative View Of The Economy And How It Functions.

1. The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers

This tart takedown of fashionable management theories is a refreshing antidote to the glut of simplistic books about achieving high performance. Rosenzweig, a veteran business manager turned professor, argues that most popular business ideas are no more than soothing platitudes that promise easy success to harried managers. Consultants, journalists and other pundits tap scientifically suspect methods to produce what he calls "business delusions": deeply flawed and widely held assumptions tainted by the "halo effect," or the need to attribute sweeping positive qualities to any company that has achieved success. Following these delusions might provide managers with a comforting story that helps them frame their actions, but it also leads them to gross simplification and to ignore the constant demands of changing technologies, markets, customers and situations. Mega-selling books like Good to Great, Rosenzweig argues, are nothing more than comforting, highbrow business fables. Unfortunately, Rosenzweig hedges his own principles for success so much that managers will find little practical use for them. His argument about the complexity of sustained achievement, and his observation that success comes down to "shrewd strategy, superb execution and good luck," may end up limiting the market for this smart and spicy critique.

2. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

If the prescriptions for getting rich that are outlined in books such as The Millionaire Next Door and Rich Dad Poor Dad are successful enough to make the books bestsellers, then one must ask, Why aren't there more millionaires? In Fooled by Randomness, Nassim Nicholas Taleb, a professional trader and mathematics professor, examines what randomness means in business and in life and why human beings are so prone to mistake dumb luck for consummate skill. This eccentric and highly personal exploration of the nature of randomness meanders from the court of Croesus and trading rooms in New York and London to Russian roulette, Monte Carlo engines, and the philosophy of Karl Popper. Part of what makes this book so good is Taleb's ability to make seemingly arcane mathematical concepts (at least to this reviewer) entirely relevant in evaluating and understanding everything from the stock market to the success of those millionaires cited in the aforementioned bestsellers.

3. Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development

"Conventional MBA programs train the wrong people in the wrong ways with the wrong consequences," states this academic and author, who here examines and proposes drastic change in our traditional form of management education. He believes MBA programs are schools of business that pretend to develop managers, and he addresses such issues as what can be done to develop managers in a serious educational process, offering a critique of MBA programs and an analysis of the practice of management itself. Mintzberg's recommendations include program changes, as well as his observations on faculty tenure, prima donnas, and entrenched thinking. He believes MBA programs have failed to develop better managers who should be improving their organizations and thereby creating a better society. This book offers an important perspective for the global MBA community, which serves its students, business, and society in general.

4. The Misbehavior of Markets: A Fractal View of Financial Turbulence

"...forty years after I started battle on the subject, most economists now acknowledge that prices do not follow the bell curve, and do not move independently. But for many, after acknowledging those points, their next comment is: So what? Independence and normality are, they argue, just assumptions that help simplify the math of modern financial theory. What matters are the results. Do the standard models correctly predict how the market behaves over all? Can an investor use Modern Portfolio Theory to build a safe, profitable investment strategy? Will the Capital Asset Pricing Model help a financial analyst, or a corporate financial officer, make the right decision? If so, then stop arguing about it. This is the so called positivist argument, first advanced by University of Chicago economist Milton Friedman."

5. The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

Justin Fox has a great blog and writes for Time magazine, having previously written for Fortune magazine. So it was not a surprise that his book is well written and fast paced. Better yet, he has chosen to cover the most critical topic in all of finance: does the market correctly price stocks, bonds and real estates? In delivering a masterpiece he has either killed himself in thoroughly researching the subject or someone talented has directed him to all the right issues. He correctly dates the emergence of the efficient markets theory to the early twentieth century, then covers the contribution of Paul Samuelson, who is oddly enough always forgotten in any coverage about the efficient markets doctrine. He then goes through the sequence of Markowitz, Miller, Modigliani, Fama and Michael Jensen (an odd insertion indeed, since Jensen sweared by efficient markets theories but made his name emphasizing firm level inefficiencies, ones profitably eliminated by buyout funds, but whose profits would not be so impressive if the market could correctly price their coming contribution). He then introduces Richard Thaler and Robert Shiller, and thus downplays Amos Twersky and Daniel Kahneman, which is a failing of the book.

6. The Black Swan: The Impact of the Highly Improbable

If, as Socrates would have it, the only true knowledge is knowledge of one's own ignorance, then Nassim Nicholas Taleb is the world's greatest living teacher. In The Black Swan, Taleb's second book for laypeople, he gives a full treatment to concepts briefly explored in his first book "Fooled by Randomness." The Black Swan is basically a sequel to that book, but much more focused, detailed and scholarly. This is a book of serious philosophy that reads like a stand-up comedy routine. (Think Larry David...)

7. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

Economists, in pursuit of mathematical precision, seem to have forgotten that not everything can be easily counted. Traditional economic theory centers on the premise that people make perfectly rational decisions. People, however, are not so rational. Despite many attempts, not every variable that goes into our decision-making process can be easily quantified, weighted, and stuffed into a formula. As any non-economist knows psychology -- and its hard to measure variables -- plays a large role in how people make decisions.

George Akerlof and Robert Shiller's book, Animal Spirits, offers an accessible look at how traditional economics can be expanded by incorporating some basic concepts from psychology. The term "animal spirits," originally coined John Maynard Keynes in the 1930's, describes how impulses and emotions naturally lead to economic boom and bust cycles. Traditional economists seem to have ignored even the most primitive of these spirits.

8. Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

Fortune's Formula is a fascinating study of the connections between such seemingly unrelated topics as gambling, information theory, stock investing, and applied mathematics. The story involves the stunning brainpower of men such as MIT professor Claude Shannon, who single-handedly invented information theory, the science behind the Internet and all digital media; Ed Thorpe; and John Kelly of Bell Laboratories, who developed the "Kelly criterion," a now-legendary investment strategy for maximizing growth while controlling risk. Initially, Shannon and Thorpe took Kelly's theory to Las Vegas and applied it to roulette and blackjack. Later, they took it to Wall Street and cleaned up--Shannon made a personal fortune while Thorpe created the highly successful hedge firm Princeton-Newport Partners. They both discovered that Kelly's system was particularly effective when applied to arbitrage (minute price differences that result from market inefficiencies). As Poundstone ably demonstrates, the merits of Kelly's criterion are still hotly debated today.

9. A Failure of Capitalism: The Crisis of '08 and the Descent into Depression

Posner (How Judges Think) is uncharacteristically dry in this dense book that states flatly that we are in a recession only because we are too frightened to call it a depression. He makes a near-heroic attempt to delve into the roots of the current crisis, citing some of the harder questions: how did it happen? why was it not anticipated? how is the government responding? A great deal of ground is covered, and the book takes the form of a high-altitude survey, assessing all the major points without getting bogged down in detail. Quickie explanations of subprime mortgages and the credit crunch orient the reader, and Posner addresses the takeaway lessons about capitalism and government, the puzzling lack of foresight from the economist community, the apportioning of blame and the resulting future of conservatism. All good topics, thoroughly and thoughtfully presented, but much of Posner's material is already woefully out of date. This book will make a serviceable study of the current crisis, but it does not serve its intended audience well in the meantime.

10. Outliers: The Story of Success

The main tenet of Outliers is that there is a logic behind why some people become successful, and it has more to do with legacy and opportunity than high IQ. In his latest book, New Yorker contributor Gladwell casts his inquisitive eye on those who have risen meteorically to the top of their fields, analyzing developmental patterns and searching for a common thread. The author asserts that there is no such thing as a self-made man, that "the true origins of high achievement" lie instead in the circumstances and influences of one's upbringing, combined with excellent timing. The Beatles had Hamburg in 1960-62; Bill Gates had access to an ASR-33 Teletype in 1968. Both put in thousands of hours-Gladwell posits that 10,000 is the magic number-on their craft at a young age, resulting in an above-average head start.

Wednesday, August 19, 2009

So, you want to open your own bakery?

Link of the day - I will pay you $25, if you come up with a cool domain name for me.



Tells the story of Adrienne Braxtons struggle to turn her Brooklyn bakery business from a weekend sidewalk stand to a real storefront. The film follows Adrienne as she chases the American dream of owning her own business while facing the demands of providing for her grandson and the difficulties of navigating New Yorks complex social service system.

The Million-Dollar Idea in Everyone: Easy New Ways to Make Money from Your Interests, Insights, and Inventions

IdeaSpotting: How to Find Your Next Great Idea

How to Make Millions with Your Ideas: An Entrepreneur's Guide by Dan S. Kennedy

101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms & Dads

Make Your Ideas Mean Business

Eat Stop Eat: The Only One Realistic Way to Start Eating Less and Finally Lose Weight

Sunday, August 16, 2009

Lefty's San Francisco profits by selling to an overlooked market niche.

Link of the day - I will pay you $25, if you come up with a cool domain name for me.

http://www.leftyslefthanded.com/

President Obama and his fellow southpaws have cause for celebration this week: Thursday marks the 18th annual International Left-Handers Day. But for entrepreneur Margaret Majua, founder of Lefty's San Francisco, every day is an occasion to give thanks for lefties.

Majua spotted an ad two years ago for a strange-looking writing instrument called the Yoropen. Shaped like a grasshopper, the pen was touted as a writing boon for left-handed people because its design allowed lefties to see what they'd just written without smearing it.

"At first I thought it was pretty creepy-looking," she says. "Then I thought it might just be weird enough to sell."

Her instinct paid off. The Yoropen is now one of the bestselling items at Lefty's San Francisco: The Left Hand Store, which Majua opened in March 2008 on San Francisco's iconic Pier 39, adjacent to Fisherman's Wharf.

Lefty's is one of the world's only brick-and-mortar stores catering to the left-handed. It continues a San Francisco tradition: Thirty-one years ago, Left Hand World pioneered the market, opening on Pier 39 in a tiny 350-square-foot space. The store closed a decade later, but it spawned a solid fan base. The landlord searched for a tenant to continue the store's theme in the original location, but found no takers -- including Majura, a serial retailer who opened her first Pier 39 enterprise, a refrigerator-magnet store, in 1986. Since then, she's created more than 20 themed specialty stores in tourist destinations such as Las Vegas, Hawaii and Disney World.

Armed with that experience, Majua decided it was time to take the left-handed leap. Fueling her commitment was the discovery that the very few retailers selling left-handed products stocked only items that were already commercially available.

"No one had developed a product line," she says, adding that she wasn't impressed with what was already on the market. "I knew I had to fill the store, but I also wanted the stuff to look good together. I'm fascinated by merchandising."

As part of her reinvention plan, Majua -- who is right-handed -- invested about $100,000 to develop a Lefty's product line of 20 stationery items, such as spiral notebooks, sketchbooks and memo pads, all with the spirals on the right side. She is also developing a dozen kitchen tools, including vegetable peelers, pancake turners, and measuring cups, which are scheduled to be available as gift sets at the end of the year.

"Smaller companies don't have the financial resources to develop products for left-handers, and larger companies don't see this as a big enough market," Majua says. "I saw it as niche I could fill."
Left-handed icons

It's a niche with a star-studded history. Only an estimated 10% to 15% of the population is left-handed, but the roster includes such luminaries as Leonardo da Vinci, Bill Gates, and five of the last seven U.S. presidents. Lining Lefty's walls are framed pictures of left-handed celebrities such as Beethoven, Mozart, Judy Garland and Alexander the Great.

Even pop culture is represented. Sandwiched between Queen Victoria and Mark Twain is Ned Flanders, the left-handed character on The Simpsons who runs his own retail store, The Leftorium. In Lefty's, Flanders has his own 14-inch plush doll, as well as a $5 refrigerator magnet -- and he's been outselling President Obama, who's represented on a t-shirt with the tag line "Obama is a leftie."

"Customers who don't know President Obama is left-handed ask us if the tag line refers to his politics," says Kelly Kempczenski, Lefty's manager. Like Obama, the store's sales staff are all left-handed, and love demonstrating Lefty's products for the curious or the desperate.

"Many left-handers have already adapted to regular products, but half of the people who try one of our left-handed products buy it," says Kempczenski, recalling how her elementary school teacher tried to make her use her right hand. "I use left-handed pens and scissors myself, and they're really useful."

They also sell well. Pens and pencils for lefties account for 25% of Lefty's sales, with that strange-looking Yoropen -- available in four styles in the $6 to $60 price range -- responsible for half of Lefty's pen sales. Notebooks are also popular, especially during back-to-school season. About 20% of Lefty's revenues come from online purchases, where the average order totals $60.

Majua projects that Lefty's 2009 revenues will reach the high six-figures. Early next year, she's planning to move the store to a new location 100 feet away with nearly triple the space. She'll need it to stock an expanded range of left-handed kids' products, including guitars, baseball mitts and golf clubs.

She's also considering selling her custom products to other left-handed retailers. "My ego doesn't want to, but business reality will probably dictate I will," she says.

There's another motivation at work as well, she concedes: "My staff has made me really aware of how customers really appreciate the products, which has inspired me to design and stock more of them."


The Million-Dollar Idea in Everyone: Easy New Ways to Make Money from Your Interests, Insights, and Inventions

IdeaSpotting: How to Find Your Next Great Idea

How to Make Millions with Your Ideas: An Entrepreneur's Guide by Dan S. Kennedy

101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms & Dads

Make Your Ideas Mean Business

Thursday, August 13, 2009

Chris Anderson - Free

Link of the day - I will pay you $25, if you come up with a cool domain name for me.



Chris Anderson visits Google to present his book "Free" This event took place on July 9, 2009, as part of the Authors@Google series.

Chris Anderson is the author of the international bestseller The Long Tail. He is the editor in chief of Wired magazine and was a U.S. business editor at The Economist. He began his career at the two premier science journals Science and Nature. He holds a Bachelor of Science degree in Physics from George Washington University and studied Quantum Mechanics and Science Journalism at the University of California.

In his revolutionary bestseller, The Long Tail, Chris Anderson demonstrated how the online marketplace creates niche markets, allowing products and consumers to connect in a way that has never been possible before. Now, in Free, he makes the compelling case that in many instances businesses can profit more from giving things away than they can by charging for them. Far more than a promotional gimmick, Free is a business strategy that may well be essential to a company's survival.

The costs associated with the growing online economy are trending toward zero at an incredible rate. Never in the course of human history have the primary inputs to an industrial economy fallen in price so fast and for so long. Just think that in 1961, a single transistor cost $10; now Intel's latest chip has two billion transistors and sells for $300 (or 0.000015 cents per transistor--effectively too cheap to price). The traditional economics of scarcity just don't apply to bandwidth, processing power, and hard-drive storage.

Yet this is just one engine behind the new Free, a reality that goes beyond a marketing gimmick or a cross-subsidy. Anderson also points to the growth of the reputation economy; explains different models for unleashing the power of Free; and shows how to compete when your competitors are giving away what you're trying to sell.

In Free, Chris Anderson explores this radical idea for the new global economy and demonstrates how this revolutionary price can be harnessed for the benefit of consumers and businesses alike.

101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms & Dads

Weekend Entrepreneur: 101 Great Ways to Earn Extra Cash

The Perfect Business

eBay 101: Selling on eBay For Part-time or Full-time Income, Beginner to PowerSeller in 90 Days

Wednesday, August 12, 2009

A Missouri entrepreneur boils the lab business down to a science.

Link of the day - I will pay you $25, if you come up with a cool domain name for me.

http://www.chemir.com/

Shri Thanedar's job is to help companies beat the competition. His secret? Chemistry.

Take Devro, a Columbia, S.C.-based sausage-casing manufacturer that was losing business to a rival with a shinier product. Devro called on Thanedar, whose firm, Chemir, does chemical analysis and manufacturing.

After paying Chemir $7,000 to reverse-engineer the competitor's product, Devro developed a comparably shiny casing with a longer shelf life. "We couldn't do that ourselves," says Devro engineer Marco Hobi. "Chemir has all the state-of-the-art tools."

It wasn't always that way. Thanedar, 54, who emigrated from India in 1979 to get a Ph.D. in polymer chemistry, bought the company in 1991 for $75,000. Back then the three-person outfit solved manufacturers' problems, figuring out why blue pills were getting yellow spots or why contact lens solution caused eye irritation.

In 2003 Thanedar began shifting his services to meet a growing demand: helping analyze and develop new drugs. His strategy included the acquisition of seven companies, which boosted Chemir's annual revenues from $6.3 million to $60 million.

Last year, with the recession looming, Chemir started pulling away from small biotech firms, which were short on credit, and wooing large pharmaceutical and chemical companies, which had fewer outsourcing needs but more cash. Today 60% of its business comes from conglomerates such as Merck, Monsanto and Pfizer. Thanedar expects his revenue to hold steady in this down year.

"We saw what could be done, and we took steps," he explains. "We didn't just wait for the market and the economy to turn around."

101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms & Dads

Weekend Entrepreneur: 101 Great Ways to Earn Extra Cash

The Perfect Business

eBay 101: Selling on eBay For Part-time or Full-time Income, Beginner to PowerSeller in 90 Days

Monday, August 10, 2009

Books We Read

Here are last ten books I read this summer. What about you, what books have you read and liked?

1. Sex, Drugs, Einstein & Elves: Sushi, Psychedelics, Parallel Universes and the Quest for Transcendence (reading right now, quite cool at times)

2. The Age of the Unthinkable: Why the New World Disorder Constantly Surprises Us And What We Can Do About It

3. Off the Books: The Underground Economy of the Urban Poor (Gang Leader For A Day is better)

4. Our Culture, What's Left of It: The Mandarins and the Masses (the cover is cool, too)

5. Deviant Desires: Incredibly Strange Sex (not quite what I expected, but still curious)

6. When Technology Fails (Revised & Expanded): A Manual for Self-Reliance, Sustainability, and Surviving the Long Emergency

7. Flim-Flam! Psychics, ESP, Unicorns, and Other Delusions

8. Fool's Paradise: The Unreal World of Pop Psychology

9. Sleeping With Extra-Terrestrials: The Rise of Irrationalism and Perils of Piety

10. I Am a Strange Loop

Saturday, August 01, 2009

Making Money With Treasure Hunting

Link of the day - I will pay you $25, if you come up with a cool domain name for me.

http://www.melfisher.com/

KEY WEST (Fortune Small Business) -- The air tastes warm and salty, and the midmorning sun glints off the turquoise waves that sway the Dare.

Thirty feet below the deck of this 83-foot salvage ship, a half-dozen scuba divers are scouring the remains of a 400-year-old Spanish galleon, which is laden with emeralds, pearls, silver and gold. I lean over the side and watch a diver emerge from the depths, his arm held high. He clutches what looks like a spiky black rock. He spits out his regulator and shouts, "Yeah!" The divers on the boat break into cheers. They instantly recognize the object he's holding as a mass of oxidized silver coins -- perhaps 50 all together -- that could be worth as much as $500,000.

Aboard the Dare, divers pass around the rock. One of them lifts the black mound to his nose and sniffs deeply. "Smell it," he tells me. "It smells like silver." The scent takes me back to my grandmother's kitchen and the aroma of her polished flatware.

These divers have been on this ship for more than a week, making four or five daily searches on an expedition that, until today, has been largely a bust. "This makes our whole trip worthwhile," says Josh Fisher-Abt, a 28-year-old diver whose grandfather created Mel Fisher's Treasures, the small outfit that organized this trip.

The family-owned business runs treasure exploration and recovery operations year-round in the warm tropical waters surrounding Key West. Over the past two decades, Mel Fisher's Treasures has grossed as much as $14 million in one year from the booty it has found. Seven of the past 10 years have not been profitable, however, so to ensure cash flow the firm raises $2.8 million a year from individual investors, who currently number about 200. Buying shares worth $10,000 to $80,000, the investors -- divers, small business owners, history buffs -- become part owners of Fisher's treasure-hunting operation and get paid in silver coins, gold chains, pearls and other spoils.

"This is about history," says Dave Pfent, 42, a lean, tan dentist who runs his own practice in Fort Myers, Fla. Pfent has been an investor in the company for two years at the $10,000 level and has made a dozen dives to various shipwreck sites that the company is excavating. But Pfent admits to other incentives too: He and his wife, Elizabeth, also a dentist, once had the thrill of finding emeralds (although they weren't worth much).

"Right now, I think it's better to invest in something you can hold, not something on paper," he says.

Mel Fisher, who died in 1998, was an early scuba aficionado and dive instructor. In 1953 he opened the first dive shop in the United States, in Redondo Beach, Calif. Fisher spent 16 years hunting for the Nuestra Seсora de Atocha, a Spanish galleon that disappeared in 1622 en route from Cuba to Spain. He moved to Key West to coordinate the search and hired researchers to comb through marine archives in Seville.

Although Fisher found the first artifact from the ship in 1971, it wasn't until July 20, 1985, that his divers finally found the main wreck 35 miles offshore, along with its sister ship, the Santa Margarita. Both vessels were loaded with treasure, about half of which the Fishers have since recovered.

"He went bankrupt five times before he hit it," says Sean Fisher, 31, another of Mel's grandsons, who is currently taking over business operations from his dad, Kim, 53.

After the initial find, the Fishers spent years mired in a legal battle with the state of Florida, which also laid claim to the wreck. The case went all the way to the U.S. Supreme Court, where the Fishers won a 5-to-2 decision in 1982. On the day of the high court's ruling, a state inspector was on the family's salvage ship, to keep track of any treasure in case Florida won. The Fishers were all too happy to see the inspector go.

"They radioed the news that a boat was coming to pick him up," says Kim, who, like most of the company's employees, wears a casual short-sleeve shirt, shorts, flip-flops and a weighty silver Spanish coin around his neck. "We waited until we could see the boat on the horizon, and then we tossed him overboard."

The next day we embark in a small speedboat for an hour-long ride on gently rolling seas. On arrival at the Dare, the crew transfers our bulky dive bags to the larger boat. The ship's underwater fans have just finished clearing some of the sand that covers the coral bedrock below, creating a hole about 25 feet wide and 20 feet deep. That's where we're headed.

The noon sun shines bright and hard overhead, as six investors and I stand on the rocking deck, pulling on our lightweight wet suits. We hook up our tanks, check the air gauges and secure our masks and fins. Standing on the edge of the deck, I put my hand up to hold my mask and regulator and step overboard. I fall 10 feet and splash into the foot-high waves.

At first the water is silty. We have only a few feet of visibility as we float 30 feet down to the ghostly white bedrock. The visibility quickly clears to about 20 feet, and I can see my fellow divers crawling around on the ocean floor.

We peer into holes and overturn large coral rocks to check underneath. Pfent is digging away in the sand with a large clamshell. Two company divers scan the coral and sandbanks around the hole with metal detectors. I feel a tug on my fin and turn around; Fisher-Abt is motioning for me to follow him. He points to a small rock a few feet away. I pick it up and stifle the urge to squeal; underneath is a pottery shard from the Atocha.

Divers frequently find these remnants of olive jars, which were used to store oil and food in the ship's galley. My little brown triangle is about three inches across and speckled with a few white barnacles -- my first find. I unzip the neck of my wet suit and tuck the artifact inside for safekeeping.

After 20 minutes the divemaster sounds an electronic signal, and we all ascend to the aluminum ladder on the side of the Dare. On deck I hand over my pottery shard to be catalogued in the treasure log, as does Pfent. As an investor, he can request the shard he found as part of his next dividend. "I'll display it," he says with a grin, "and have a great story to tell."
Booty time

That afternoon, back on dry land, investors are waiting to receive their annual dividends at Fisher headquarters. Expectations are running high as Sylvia Van Dyke and Margaret Freeburg, who split a $10,000 share, enter the office of Shawn Cowles, the company's investment-relations manager. They sit at a large desk as the energetic Cowles swivels his computer monitor around so they can see the screen and launches into an explanation of the year's salvage efforts.

"The news isn't good," he says.

In 2008 divers found only $980,000 worth of treasure. Fortunately for Van Dyke and Freeburg, Cowles explains, the Fishers guarantee their investment plus a 10% return; the two women will receive about $11,000 worth of treasure directly from the company vault. Their payment comes in the form of two coins. The first is a worn silver piece worth approximately $600. But Van Dyke and Freeburg perk up as Cowles pulls out the second coin: a rare silver Star of Lima worth $9,500. He explains that these coins were minted in Peru on Christmas Day 1588, and are famed for their beauty and fine detail. The women lean in, spellbound.

"I just don't know how we're going to cut this coin in half," jokes Van Dyke, 56, who works in the U.S. Patent and Trademark Office in Washington, D.C. She tells me later that they plan to set the coin on a necklace and then probably take turns wearing it. They'll also reinvest in the coming year, as do 70% of the company's backers.

After a week of diving and distributing loot, the Fishers and their crew gear up for their annual beachside costume party. This year's theme is pearls. The festivities start at 6:30 p.m. at Casa Marina, a posh Mediterranean-style resort. As the sun sets over the glassy ocean, partygoers dive into cocktails and sway to Jimmy Buffett covers played by a local band.

About two-thirds of the 440 revelers use the pearl motif as an excuse to dress in white and flash major bling. The more creative guests model elaborate costumes of their own design. One couple dress up as a pair of pearl rings; others come as jellyfish, oysters and Neptunes. Dave and Elizabeth Pfent make a dapper pair of pirates. Van Dyke's green toenails match her fitted mermaid costume. Sean Fisher and the rest of his family schmooze and pose for photos with investors.

"Yeah, running a company is stressful," Sean says. Then he stops and smiles as he looks out at the ocean. "But I could be in Indiana selling insurance," he adds. "Instead I'm in Key West selling treasure."


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