Posts Tagged ‘business idea’

Billion Dollar Business Idea

Thursday, May 28th, 2015

Dear Friends,

It seems to me, a smart business idea that could net someone millions, and perhaps billions, is a website that reads and posts a simple to read synopsis of every shareholder’s report, briefly describing any changes the board wants to make, the likely consequences to the company and profits short and long term of those changes, an easy to read and understand report on any election to the board of trustees regarding their background, philosophy of corporate governance and work history, those synopsis and reports would be written for every firm with over one hundred million in gross revenue, and for a nominal fee that synopsis could be read by any shareholder of those companies. Companies that are ethical would offer to pay for the service for their shareholders. To get that done, such a company needs to become well known, create simple to read, correct and understandable reports and synopsis, as well as the intellectual capital to make it work. The potential earnings of such a company are staggering.

If there was such a company it could be a paradigm shift in the principle agent relationship. Today the agents have all the power. They send shareholders a several hundred page document that we are supposed to read and understand, that is in arcane language, redundant and actually says nothing of any import pertaining to the question they want us to vote on. That paradigm has created a lop sided power relationship between the principles and agents. That lop sided power in the relationship has allowed many companies to be run against the shareholder’s interests and have enabled senior management to get an out sized portion of the profits. I mean really, what employee is worth tens of millions of dollars, while running a company into the ground?

Empowering the principles to over see the agents can only lead to protecting the principle’s interest and limit the power of the agents to abuse their position. The power differential in the principle agent relationship has been used for over a century to enrich the senior management at cost to the shareholders and customers. Examples abound where shareholder profits and wealth have been undermined by management. One famous case was when J D Rockefeller bought an iron company, converted it into a publicly traded company, sold the shares for double what he paid, and remained as the CEO, reaping even more profit at the expense of the shareholder chumps.

Such a rebalancing of the principle agent relationship would create better run companies that would have a better relationship with their customers. Everyone is self interested, which is to say we all seek to maximize our returns on our investments. Economists call human beings rational maximizers. Clearly, since we are all self interested, if given actionable knowledge, we would seek to increase the longevity of our assets, seek long term profits instead of short term gain, provide excellent quality service and products to our customers while ensuring the company’s business model is consistent with the times. In short, instead of our agents working under pernicious incentives, we could return the entrepreneurial ethos to businesses.

If the principle’s interests are protected and the companies themselves are better run, the macro economy will improve, by potentially starting a new wave of Schumptarian economic expansion. Schumpeter coined the term, “Creative Destruction,” to explain the macro business cycle. In it, he posited… a new idea that improves efficiency in management, production or product, starts the business cycle. In the creative part of the cycle, as the new idea is implemented, the macro economy grows at a rapid pace. Once the idea is mostly implemented and the gains have been mined out, the old firms that have become outdated go belly up, ushering in the destruction portion of the business cycle, (recession). The recession destroys inefficient firms, freeing up capital, space and equipment for the next entrepreneur to begin the cycle again.

When a new firm is started, the more disruption it creates the more profit there is to be had, especially in the financial services sphere, where the sector is awash with other people’s money. As in any innovative idea that is disruptive, starting a business that reads and produces synopsis of every firm’s shareholder reports, board of trustee elections and board of trustee requests, would be a sea change in the way shareholders get information about the firms they own, by leveling the information landscape. In and of itself such a firm would start the creative cycle. Such a firm would need a great deal of startup capital to hire the necessary lawyers, MBAs and knowledge base to make such reports, and do it inside the regulatory framework that has been set up by the agents to protect their interests, or to change the regulatory environment if needed. The initial cost would be high, but the profit over the long term, the benefit to shareholders and the economy at large, would be tremendous.

Sincerely,

John Pepin

Business Ideas

Monday, December 5th, 2011

Dear Friends,

It seems to me that I have several business ideas but I do not have sufficient time and interest to make them work. I am offering them free to anyone who wants to put them into production for his or her own profit. Maybe some are already in the works elsewhere but I offer these two in good faith. In the end, that is all we ever can do, offer in good faith, since no one has perfect knowledge. Someone however, maybe you, may get very rich from reading this blog…

The first is an oil shale extractor. Surface deposits of oil shale and tar sand of varying degrees of productivity exist all over the World. These are, at present, untappable sources of, sometimes high quality, crude oil. They are often remote or in too small in size to make building a giant factory, on site and custom designed, profitable. The initial costs far outweighing the productive potential of the site. However if a small scale design could be commercially produced. One that could be moved to the site cheaply. Similar in size to a modern crushing/ screening operation, (which it would be an add on or adjunct to). Producing a relatively small amount of oil, but at $100.00 a barrel, a production range of 100-1000 barrels a day, would be quite profitable, especially for a small scale operator. The other output, dirt, would be sold as clean fill. This scale operational output could be efficiently trucked by roads or shipped via railroad to a port or small scale refiner.

Ideally, it would use a recovered solvent instead of heated water to extract the oil, in the ground up shale or sand. It would be containerized, so it could be efficiently transported, World wide, directly from the factory. The machine would probably be tracked so it could be moved around the quarrying or mining operation to make it more efficient. (Line it up with crushers, loader areas, oil loading areas etc…) It would be as modular as possible making equipment maintenance as easy as possible. A modular design would make equipment repair much more simple but would also enhance the profitability of each machine that left the factory floor. This would be a relatively simple engineering task for a large, or maybe small but entrepreneurial , producer of crushing equipment.

Distributed crude oil production would drastically reduce the power of the point producers. Oil could be produced locally and refined locally as well. This would necessarily lessen the World’s need to ship oil over long distances thus reducing the likely hood of a large scale disaster. Producing oil in this way would also bring billions of barrels of newly recoverable oil onto the World markets. The lot of Mankind would be greatly improved.

The second is an EMP protective laptop/tablet computer case. The Sun is entering an active solar cycle. It has been overly quiescent for a few years and scientists are expecting it to enter an extremely active cycle. This will result in heavy bombardment of Earth from the Sun in the form of solar flares. They can have powerful effects on electronic equipment. In the case of an unprotected laptop or tablet computer, the expensive machine can be destroyed in such an event, with loss of all the data it contained.

It would be made up of a hard case made of hard nylon reinforced mu-metal, a foam rubber layer with a fine copper screen then a nylon cloth inner sleeve. The copper screen would be a faraday cage and would probably be connected to the mu-metal outer shell with capacitors. The outer shell would be coated with neoprene rubber of various colors. Or perhaps silicon, whichever has the best characteristics for slippage, durability and adhesion to the hard case.

The EMP laptop/tablet case could have an optional solar battery charger and compartment. This would enable the owner to charge a laptop even if the power grid were down for a time. This would allow a person to be productive or if the internet is up they would have access to valuable information. Such a system would only be effective if the laptop or tablet were in it. However, the likely hood of a person’s data surviving such an event, would be exponentially better if he or she had one than if they didn’t. Especially if some public notice were given.

These are a couple of the ideas I thought someone might be able to make some money on. Perhaps you. But, what is important is the point that, what makes a business idea good… is that it will profit your fellow man. If an idea creates new luxury, makes old luxury necessity or in some other way improves the lot of Man, it can be said to be a winner. Mo Ti said that it is in our interest to be of profit to our fellow man.

That is the reason capitalist societies flourish while others flounder.

Sincerely,

John