Jim Cramer Says Entrepreneurial Dreams Should Go on Hold - Does Jim Cramer KNOW NOTHING!?!
As anyone who reads this blog knows, I’m addicted to CNBC in the morning. It’s an unhealthy habit, but I find the talking heads on CNBC hilarious because of their extreme short-term’ism. If you watched earlier this week, you got to see tons of folks predicting the bottom based on one day’s good performance. Where were all these smart people to tell us about the bloody October we were going to have? Oh wait, these guys are mostly Monday morning quarterbacks. In any case, it’s a channel for those with A.D.D. Insights are infrequent but for me, entertainment value is high esp with folks like Joe Kernan and the morning crew who seem to be in on the joke.
In any case, I was watching Donny Deutsch tonite (The Big Idea is one of the best shows on TV so check it out) and he had Jim Cramer on. Cramer is a massive personality and for me personally, his picks have done well for me. On The Big Idea, he was talking about the economy, the market, etc, and it was pessimism to another level.
Per Cramer, those with entrepreneurial ambitions should put them on hold for the next few years. While a good stock picker, I think this type of generic device is wrong. What I think Cramer should have said is “Those with entrepreneurial ambitions that are half- or partially-baked should put them on hold forever.”
Per my earlier post on the downturn resulting in smarter startups, having a good idea that solves a real problem will always be in demand. And being contrarian, e.g., when there is blood in the water, can be exactly the right time to start a business as talent may be cheaper, there may be cheap office space and computers available and you may be competing against a lot less fluff to get attention from partners, the press, etc.
As Warren Buffet says, “Be fearful when others are greedy and be greedy when others are fearful.”
Tags: big idea, cnbc, donny deutsch, entrepreneur, jim cramer, joe kernen, startup
October 18th, 2008 at 4:00 pm
I saw that program, too. I don’t know what the agenda was for Donny Deutsch to interview Cramer and, in effect, hold a wake for the United States (e.g., the US is no longer a superpower?) and its economy, but it was a public disservice to the extent you point out above. According to Cramer, any entrepreneur that cannot sell his product cheaper than Wal-Mart shouldn’t enter the market—and even if he can initially sell cheaper, Wal-Mart will eventually drive them out of business.
That’s just irresponsible. You are right on—distinguish between the half-baked ideas and the serious business people that will “add value” to the market place.
October 18th, 2008 at 5:04 pm
Marc-
Thanks very much for the comment. I think you used the word that didn’t hit me when I was writing the post which is that Jim Cramer’s comments were “irresponsible”. It’s also interesting to me that it was a herd mentality which has gotten us into much of this mess and that Cramer and unfortunately, Donny Deutsch were also advocating a bit of a herd mentality when it comes to entrepreneurship.
Luckily, however, I think true entrepreneurs are not waiting for the blessing of any person no matter how smart or well-known they may be. I do think their advice has its salient points and that many of the people out there who are just “following their passion” and hoping to turn it into a business should think twice, but the over-generalization of the commentary is what stuck out for me.
I do like your point about Walmart. Per Cramer, it seems that everyone whose not cheaper than Walmart should just fold up. There is always room to attack the big guys in some niche or by distinguishing yourself with exceptional products or service.
Thanks again for the comment, and I look forward to hearing more of your thoughts. Here’s to hoping that folks in the spotlight refrain from being ‘irresponsible’ going forward.
Thanks,
Anand
October 22nd, 2008 at 6:42 am
I was actually a guest on the show and was invited to ask my question to Donny during the show. I was thinking it was going to be like the rest of Donny’s shows. It was hard accept the shift in the show with Jim’s point of view. The show usually motivates entrepreneur in an inspiring way. To my surprise my company was the only one Jim Cramer said keep going with it and pushing to grow it.
But I have to say the show still motivated me and help me to understand the serious of the economy.
Dave
David Aliberti
www.SterlingSportsCars.com
October 26th, 2008 at 6:46 am
Gentlemen, I appreciate your cander on this issue, but I have to agree with Donny and Jim. While I’m not a small business owner, I’ve been amazed at the response this interview has received across the country. Regardless of whether Donny was correct in bringing Mr. Cramer on, the interview did achieve its intended effect: it scared people as to the potential realities of our future economy, and forced us to think outside the box as to how we will survive the next 18 months.
While I would disagree with the notion that we’ll be living in anything less than an economic superpower, I do think the rules have changed. For one, it appears that countries like China, Russia, and India are here to stay. Eventually, they will get back on track and continue the rapid consumption that we witnessed this summer. Our ability to do the same will come only when these credit markets unfreeze, but when that happens, you will see another run on commodities but with the added problem of rapid inflation. Neither one of those sounds appealing, but we’re no longer in a situation where we can sway others to do our will. Those countries are like 12-year-olds who think it’s time to start challenging mom and dad, even though they have no idea that the parents are the smartest people in the room!
I also believe the rules have changed because of our current situation relative to homes and jobs - we have millions of unwanted homes on the market and people who cannot afford to live anywhere because they’re out of work. Add to that a massive bailout of the banks that everyone is treating as part of the problem, disposable income institutions like Mervyns, Linens n Things, and Circuit City leading a broad charge of business failures, and you have a situation that looks desperate with few short-term answers.
Perhaps we won’t see another 1929, but like Cramer said, it’s time to rethink how we consume in this country and get back to financial basics: saving, living below our means, asking oursleves if we need that Starbuck’s or can we live with a used car instead of a new one. I think those were the messages I got out of the interview. To any of you who disagreed with Donny and Jim, I offer this challenge: secure a copy of the interview (as I did), and play it one year from now. I think we’ll see a world very similar to what they predicted, provided that no quick fix arises, which I think we can all agree is about as possible as Paris Hilton becoming a nun.
I appreciate the venue to share my thoughts, and thank you for the time you’ve taken to read them.
October 26th, 2008 at 5:24 pm
Matt,
Thanks for the thoughtful comment. I agree with many of your points in that the world has changed for any variety of reasons and the changes are going to take some time to play out. As things play out, there will be many casualties unfortunately - large corporations, small businesses, employees, etc.
Ultimately, the situation will require that folks become adaptable and a bit thrifty. As a country, the idea that we have to live within our means, e.g., no longer have a negative savings rate, is going to be required. So while I like and appreciate the fact that Donny and Cramer were providing a ‘wake up call’ and I think it’s healthy to do this (vs saying everything is great), I did find the ‘mood’ of the interview similar to that of the funeral. As I’d argued in my initial post, there will always be room for smart business ideas and those folks should not (and probably will not) listen to the likes of Cramer, Donny or anyone. If Donny and Cramer’s words give pause to someone who has a half-baked idea built with little view to financials, risk and reward, then their words are helpful and they’ve done everyone a public service.
Thanks again for the great comment.
Regards,
Anand