Ever needed a good discussion of small business valuation after taking a financial statement analysis class? Wilbur Yegge's A Basic Guide for Valuing a Company provides several accepted valuation formulae (Hybrid, Excess Earnings) in addition to his own valuation style.

The primary benefit I derived lay in the application of valuation formulae to 10 different example busineses. My financial statement analysis class provided a base layer of analytical ability, but left me with big questions about applying those analyses to business valuation.

Plus, it'd didn't hurt that Yegge sounds like a 60-year-old guy that I'd get along with. He tosses in his own aphorisms, "People make money intellectually -- and lose it emotionally." (page 255), among others, like William Hazlitt's "The art of life is to know how to enjoy a little and to endure much.".

He also quotes Sun Tzu, "To subdue the enemy without fighting is the acme of skill.", which reminded me of my earlier rant on martial arts which lacked an emphasis on willpower. The question then becomes: are you smart enough to get what you want from life?


SIC codes are Standard Industrial Classification Codes, which are useful in determining who the competition is.


BookTV just replayed the fight between Bill O'Reilly and Al Franken at BookExpo 2003. Franken unfortunately allowed himself to be emotionally hijacked which led to a stalemate; he could've won. O'Reilly had claimed that "Inside Edition" had won two Peabody awards, when in fact it had won two Polk awards. When this was called into question, O'Reilly had the opportunity to retract, but did not. Franken attacked O'Reilly, accusing him of perpetuating a lie. O'Reilly attacked back, calling Franken an "idiot", and accused Franken, "He demonizes people.".

At this crucial point, Franken could've won if he had waited for O'Reilly to finish his attack, and said, "With documented facts, I made a case against you. You could have retracted your statements or defended your journalistic integrity, but instead you chose to go on the attack." Franken has the advantage by attacking first, yet he fails to capitalize on it.

O'Reilly could also have won. His best gambit would have been to let Franken finish, and then recharacterize the circumstances of the events from Franken's depiction of a lie perpetuated into a recounting of an honest mistake (he wasn't running "Inside Edition" when it won the award; after talking to Franken he realized his error, and he now retracts his statements), or restate the facts as he saw them, if Franken is mistaken. End it all humbly, "While this may be a large issue between Mr. Franken and myself, in the grand scheme of things, it's very small. 10 years from now, this little spat will be forgotten, but we will be living with the effects, for better or worse, of our current government's decisions.".

If my professional conduct or personal ethics are ever called into question, I hope I will have the emotional fortitude to remain calm, and the intellectual strength to deliver the coup de grace.


Peter Drucker once noted there were only two growth elements of a firm, sales and R&D. Everything else is there to support (or slow down) those two departments.

The relationship of marketing to a firm's growth gets a workout in Scott Bedbury's book, a new brand world. Bedbury was Starbucks' Senior VP of Marketing from 1995 to 1998 (when it grew from $248M in sales to $1.102B). Prior to Starbucks, Bedbury ran advertising at Nike from 1989 to 1995 (when he launched the 'Just Do It' and 'Bo Knows' campaigns; I have no financial metrics as neither Nike, nor Edgar Online have SEC 10-k filings online for these years, but let's just say Nike grew a lot during that time period).

Bedbury's book flows directly from a new marketing axiom, "A product is no more than an artifact around which customers have experiences." (page 16), laid down by C. K. Prahalad and Venkatram Ramaswamy (no reference in Bedbury's book, and google'ing failed). Where, then, is our product in our customers' lives on Maslow's Hierarchy of Needs? (Pages 93-4). Bedbury contends that if you can't answer this question, your brand is off-target and foundering.

Having determined your product's Maslovian direction, you can work on your communication with the customer. In this, "Everything matters." (page 107); all communication with the outside world should go through the marketing filter. In my company this would require our billing and tech support departments to coordinate with marketing.

Lastly, we need to be able to monitor our product's Maslovian fulfillment. Nike's first "Just Do It" ad featured some sports montage of the triathlete Joanne Ernst. After the montage ends by fading into the Nike logo, Joanne reappears, sitting on a locker bench she says, "And it wouldn't hurt to stop eating like a pig, either.". Nike received a slew of calls complaining about the ad; many were organizations related to eating disorders, but many calls were angry about something else in the ad. Nike created three focus-groups: athletic females; females who exercised once or twice a month; and overweight, inactive females. The group which was most offended by the ad was the middle group, the occasional exercisers. They didn't exercise much because they couldn't, they were juggling motherhood and a job. This ad was hopelessly insensitive to their primary concerns. (Pages 103-4).

I wonder why Nike didn't focus-group the ad before they released it. Or at least release it in one TV market first and see how it played. I find it hard to believe that they ran untested product in front of a very large audience, but that was apparently part of Nike's brand (un)management.

Bedbury's book is completely anecdotal; he talks largely about soul. He apparently thinks that soul and science are mutually exclusive, as only rarely is the science of marketing mentioned. Granted, this most likely makes the book more accessible, but glossing over and re-labelling market research just cheats his audience. Perhaps it's a bit telling that the same marketing team worked for both Nike and Starbucks, namely Bedbury and his market research analyst friend, Jerome Conlon. Because of Conlon, we have metrics like the Nike Brand Strength Monitor, and research forays like the Big Dig at Starbucks (pages 42-9). These stories were unfortunately understated in relation to the rest of the book.