Glad to see you back to your blog! I like your perspective. Innovation is too often treated as an ivory tower exercise, separate from the rest of the business. While that may be good for managing innovation, it shouldn’t be an excuse for ignoring it.

Reading your comments, I couldn’t help but think of Clay Christenson’s advice for managing innovation: encourage profits, not revenues. The idea is that managing innovation for profit ensures that the innovation is built within a business model that makes sense.

So is your revenue recommendation the right metric? Is there a better one that gets inside the heads you refer to (that aren’t thinking enough about innovation)? I would love to hear your thoughts.

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

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.

Dave

David Aliberti

www.SterlingSportsCars.com

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

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.