engineering | The Barefoot Spirit

3 Big Throw Downs Challenge Today’s Grads

Michael Houlihan & Bonnie Harvey — Thu, 25 May 2017 17:00:56 +0000

We are excited to go to a friend’s graduation who just completed his Masters in Engineering from Stanford. When we asked him what he was going to do with it, his response came lightning fast, “I’m going to extend the range of electric vehicles another 200 miles!”

Now that’s the kind of goal we wish all the grads had – a goal that positively impacts the quality of life for generations to come. As much as we would like to think people will do the right thing to protect the future of the planet, many people are simply looking for a quick financial gain. Never mind that it’s clearly costlier in the long run to keep burning fossil fuel and poisoning the ocean, people want to see the immediate benefits.

A 400-500 mile range electric vehicle would provide immediate benefits, not because of politics, not because of concern for the environment, but because of market forces. The big challenge for today’s college grads is to discover ways that pay off immediately to compel consumers to make the right choices.

Better Batteries. Today’s younger generations are inheriting a power grid that fosters monopoly and extortive billing practices. For instance, we buy electricity from our local renewable power district to augment what our solar panels produce. But another company that owns the infrastructure charges us exorbitant monthly fees to be connected to their grid. Consequently, our electric bill has tripled!

Several states in the US are so dominated by the power companies that their pricing structures discourage home owners from installing solar collectors. And these are sunbelt states, perfect for generating solar power! So, what’s the challenge here for grads? Create products that store enough power to allow homeowners to cut the cord to the greedy power companies and be independent. Can today’s grads create local, affordable, and sufficient power storage?

Bio-Degradable Packaging. In the classic 1967 movie, The Graduate Mr. McGuire takes Ben, the graduate, (Dustin Hoffman) aside to advise him about his future. He says, “I just want to say one word to you, just one word … Plastics!” In 1967, the plastics industry was heating up and soon seemingly everything was made of plastic. …And it wound up in our oceans, in our fish, and in our bodies.

Maybe now the advice should be “bio-degradable packaging.” With the explosion of individually packaged home-delivered items, we are drowning in foam peanuts, plastic blister packs, and bubble wrap. Can our new grads create a cheaper and healthier alternative?

And what about the oceans? Can the grads develop a profitable way to harvest the plastic that’s floating around and keep it out of our food supply? Can they create a demand for this type of plastic that makes dollars and sense?

Sustainable Food. With 7.5 billion people on the planet, the food business is a good bet. But what kind of food business? We obviously can’t continue to destroy the world’s lungs to feed the world’s belly. The destruction of the oxygen producing rainforests for grazing lands is not sustainable, nor is it ultimately affordable.

We need to develop locally sourced food supplies that are sustainable. They need to compete economically with fossil-fuel-intensive global sourcing. This will mean food production close to, or in the cities, reducing the cost of transportation significantly. Can the grads find ways to make this more affordable? Can they create market forces that favor abundant, healthy, and delicious food locally produced?

Congratulations to all the grads out there. You have a lot of challenges. The whole world is watching to see what solutions you come up with. So get to work!

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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4 Tips to Avoid Drowning in Startup Expenses

Michael Houlihan & Bonnie Harvey — Thu, 19 Nov 2015 18:00:36 +0000

Worcester Polytechnic Institute near Boston may not be a familiar name. However, many major tech and engineering companies regularly recruit WPI grads. They appreciate the well-rounded education of many of their students who also take classes in business, management, and entrepreneurship.

We recently spoke as part of their executive speakers series about the three core competencies of entrepreneurship: Cash Flow Management, Personnel Management and Distribution Management. We shared with the WPI students and faculty lessons we learned from our experience building the Barefoot Wine brand that we believe all businesses must master in order to survive and thrive.

Many wanna-be entrepreneurs fear failure or loss of control of their companies due to lack of funds. They know many startups fail because they have made too many financial commitments before achieving positive cash flow.

Actually, what they really need is sales! Sales earn investments in real estate, equipment, and personnel, and not the other way around.

In our talk about Cash Flow Management, we offered these tips designed to avoid unnecessary expenses and lengthen the runway until sales take off:

Use Your Hidden Assets. Maybe you have a garage or an unused room you can use as an office to get started. We used our laundry room for the first two years. Maybe you have family members who can do some of the work. Bonnie’s mother and nephew came to live and work with us. What can you repurpose for your workspace? We used an old door on two sawhorses for our desk. This allowed us more funds for the surprising cost of sales required to get our business off the ground, as you too will soon discover

Outsource to Local Producers and Service Providers. Right in your own region are companies that can provide you with many of the goods and services you need. You can pay as you use them, eliminating the need to tie up capital in manufacturing, hardware, or office space. In fact, if you write your contracts properly, you don’t have to take delivery of any products not up to you strict quality control guidelines. We succeeded without ever owning an office, a vineyard, or a winery.

Hold Minimum Inventory. Strive for just-in-time production. Although it’s tempting to go for the quantity purchases to reduce your cost per unit, sitting on unsold inventory can be costly and get your business in trouble. Sales volume must justify quantity purchases. Instead, find suppliers who will warehouse goods for you until you need them. And offer buyers quantity discounts for cash to help your cash flow. We found when buyers buy big, they sell big – and reorder quickly!

Extend Your Credit and Terms. Treat your vendors as strategic allies. Grow together, each benefiting from the growth of the other. Gain you supplies trust by monthly or quarterly meetings where you share your goals, opportunities, and challenges. Show them empathy when you can’t pay your bill on time by giving your vendors advance notice and payment plans. Give them a long-term contract so they see your loyalty. Be patient. Your positive performance over time will win you the higher credit limits and terms you need to save your cash flow.

There’s more than one way to achieve a positive cash flow in the early days. These are some that worked very well for us. And, if you are lucky enough to have investors, they will be more comfortable working with you when you demonstrate resourcefulness by reducing your need for cash.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Setting Priorities is Essential to Goal Achievement

Michael Houlihan & Bonnie Harvey — Sat, 27 Sep 2014 18:30:20 +0000

With the advent of computers, we began to see icons for everything. All these cute little logos were the same size. Most were for programs and applications, but one was inevitably for settings. Even though the settings button was much more important than any of the other buttons because it could really cause havoc to your computer, it was the same size as the others.

We started to see functions as icons you could click on that would call up your contacts, your email, or your favorite app; but with a similar click to a certain icon of the same size, you can change the way your whole computer works. An entire generation was born into this desktop mentality that “all-the-boxes-are-the same-size.” Has this influenced us in other areas of critical thinking?

In the past, students in English classes had to “diagram” sentences. This was a graphic mapping process which identified the grammatical parts of the sentence like the subject (the actor), the verb (the action), and the predicate noun (the person, place, or thing acted upon). This exercise forced students to think in a cause-effect manner to construct sentences that would be less likely to be misunderstood. It also taught students that the structure of the sentence was essential to effective communication. The structure could determine, like the settings button on the desktop, how the message would be received.

Today we seem take structure for granted and leave it to the programmers and operating system engineers. It’s all done for us, so why bother? But has the convenience of having all this “thinking” done for us, with all the formats already designed, and all the processes already set up, robbed us of an exercise that we used to rely on just to communicate and solve problems? Maybe we need to take another look at how to set priorities.

So the question is, what is more important than what? And how do you prioritize your goals? Sure, given the very top priority we all face, which is the limited amount of time, we could safely say that all goals are based on the time it takes to achieve them, and start there. The basic necessities of food, clothing, and shelter – and the requirements to achieve them – further add to the consensus. But after that we begin to get more abstract and personalized in our goals and priorities.

In order to set priorities you must know what has to happen first and why. You must also know what the effect will be on the rest of your goals if what must happen first doesn’t happen. We used to make this point by asking the question, “What’s most important: apples and oranges, peaches and cream, or your pants are on fire?” The correct answer, of course, is peaches and cream, because you’ll need the cream to put your pants out!

But seriously, setting any priority requires a set of standards that you value and apply to the situation. Standards can help you rank your priorities and get the right ones to the top of the list. They can keep you from getting pushed off course by less important interruptions and distractions. With a structure built on standards, you can focus and concentrate on what is most important – and achieve it.

The program engineers, who are doing most of your thinking, have standards and priorities. Shouldn’t you? All the boxes are not the same size. The one called “Standards” is the “settings” button for your priorities.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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