Franchising as a Growth Strategy

Last year Steve Nelson, founder of Unishippers spoke at the Utah Valley Entrepreneurial Forum. Among other excellent comments he indicated that franchisees are far more successful at staying in business than other startups. His statistic was that 94% of franchises are still in business in five years compared to only 15% of other startups.

Steve Nelson did a great job of setting up franchises in every metro area in the U.S. for his company (which aggregates shipments from many smaller businesses in order to qualify for big volume discounts with major shippers and pass those savings on to their customers.)

I doubt I’ll ever own a franchise, since I’m more of an information technology entrepreneur, but I do love Jamba Juice and Great Harvest Bread Company. If I ever do purchase a franchise, I think it would be with a company that makes money and helps people be more healthy at the same time.

There is a history of Great Harvest written by company founder Tom McMakin called Bread and Butter which traces the growth of Great Harvest from one bakery nearly 30 years ago to a $60-million per year company with 140 stores in 35 states (as of 2001).

Some of the fastest growing companies of all time have used the franchise approach to literally spread to the four quarters of the earth. McDonalds obviously comes to mind; so does Blockbuster.

I’d like to compile a list of books that tells the inside story of companies that grew fast through franchising: please comment on this blog if you know of one.

Google Indexes Televison

Visit video.google.com and do a search. Google is now using data streams of closed-captioning to index TV content on certain channels. Eventually they hope to index all television. It’s a great service.

In about 1989 Brandt Redd, genius programmer of Folio Corp. (at the time) figured out how to capture data streams from closed-captions and import them into a full-indexed Folio infobase. He demoed this to our team and we were all blown away.

But Google’s service is free, web-based, and includes image captures from the TV programs themselves.

Another service I’ve liked over the years is TVeyes.com — but I think Google’s service — especially when they tie Google News Alerts into the TV index they are building — will blow TVeyes.com away.

Amazon’s Amazing GPS-encoded Photo Database

Every few months or so an announcement is made that I consider mind-blowing. You just smile and shake your head and think, “how awesome!” Actually, the pace of such announcements seems to be increasing.

Today it was Amazon’s revelation that in order to beef up their A9.com (which has under a million monthly visitors and is ranked #30 in search engine traffic according to ComScore) they have sent trucks around the country, equipped with digital cameras and GPS systems so that they could take more than 20 million pictures, mostly within 10 major cities, of all the popular store-front and business locations.

Now, their local “yellow pages” search engine will show you a picture of the store, restaurant, or business that you are going to be trying to find.

I predict their vision of how this will enrich their search engine and the investment they are making to go beyond 20 million photos will pay off in a big way for them. Watch A9.com’s web site traffic soar in the coming year. I’ll be surprised if they aren’t up to 5-10 million unique monthly visitors by the end of 2005.

After an almost silly start a few months ago, Amazon is now a very serious player in the search business. And I do mean player. They are playing a game kids call “leap frog.” Kudos to Amazon!

Wall Street Journal Online Subscribers

WSJ Online ended 2004 with 712,000 subscribers up only 3.3% from the 689,000 in 2003. (Paidcontent.org) Here is the full press release. I’ve been a subscriber for several years. I think the subscriptions would increase several times faster if they would allow customers to search archives–not just the last 30 days of articles.

They lock up their archive content and charge extra fees for each article. I bet they could get millions of subscribers if they opened up their archives–but then they would be cannabilizing their royalties from the high end data services like LexisNexis…. so they are unlikely to do this.

Finding Good Articles Online

Sometimes searching Google 8 billion page index is a big waste of time.

I know someone who spent nearly a full day searching the internet for something specific in order to write a school paper. When I found out what she was looking for, I suggested using elibrary.com (now highbeam.com) since I was a subscriber and I knew the site was full of high quality articles from hundreds of publications. Within a few minutes we found exactly what she was looking for.

If you can afford to, subscribe to highbeam.com and use it when you need to do serious research and don’t want to waste time. If you are cheap, try findarticles.com, which is a good free service.

For scholarly content, Google is making good progress with Google Scholar which seems to have 300,000,000 pages indexed.

Wisdom of Warren Buffett

A great post on Darren Johnson’s blog–the wisdom of Warren Buffett.

I find it interesting that there are 6.16 million pages in Google that contain “Bill Gates “, the world’s richest man, but only 360,000 that mention “Warren Buffett”, the world’s greatest investor and second richest man.

According to Forbes, Buffett is worth $42.9 billion and Gates is worth $46.6 billion. Buffett could easily pass Gates this year since Microsoft’s stock has been pretty flat for the last few years.

Buffett’s ideas are not studied or written about or imitated nearly as much as they should be.

It hit me a few months back after studying The Warren Buffett Way how foolish I have been for almost 10 years for owning stock in companies without having studied the investment approach of the world’s greatest investor. I learned a great deal from studying this book.

How often do we ignore the example and/or teachings of the best of the best? Whatever our profession is, there are probably biographies or autobiographies or books written by or about the most successful people in our profession–but I don’t think most of us ever think about finding and studying these. I wonder why.

Is it too hard to find role models and examples, or are we too lazy, or do we just never think about it?

Too Busy To Blog

My apologizes for being absent for the last 10 days or so. Blogging is one of my top priorities and yet lately I have been unable to make time for it. There are a few reasons for that.

Firstly, several of our companies have needed more time from me lately.

  • Infobase Media Corp (www.ldsaudio.com and www.ldslibrary.com) is selecting the next vertical market it will pursue. That requires significant research time.
  • Directory.net has changed its company name to WebEvident (new web site coming soon!) and has been doing more design and development work on its Searchability (TM) web service, which is already being marketed through multiple partners.
  • Worldhistory.com has launched a new web site and has engaged 10 students at Utah Valley State College to work on internet marketing and e-commerce this semester.
  • FundingUtah.com is live and planning a version two that will have more features for entrepreneurs and investors.

Secondly, I have continued to have speaking and teaching and writing engagements, such as lectures at BYU and UVSC, writing articles for Connect Magazine, and today, giving a speech at the Provo Rotary Club.

I spoke today about generous and innovative gifts that perpetually bless the world, including:

  • Thomas Bodley’s creation of the Bodleian Library at Oxford
  • James Smithson’s endowment which led to the formation of the Smithsonian Institution
  • Leland and Jane Stanford’s creation of Stanford University in memory of their son
  • The Perpetual Emigrating Fund which helped tens of thousands of “pioneers” emigrate to Utah in the late 1800s by loaning them money which they later repaid. One such emigrant was David Eccles who became Utah’s first multi-millionaire. The Eccles family is one of Utah’s most prominent families. They currently run many philanthropic foundations whose assets exceed $1 billion. The Eccles legacy started with a 70 pound loan from the PEF so the family could emigrate from Scotland.
  • The Perpetual Education Fund announced in 2001 by LDS Church President Gordon B. Hinckley which provides loans to thouands of students around the world who are seeking higher education. When the loans are repaid, the funds are available for more students.

Then I talked about more modern gifts from individuals and corporations which provide value now and could bless the world for centuries to come:

  • MyFamily.com (if only they would once again offer free web sites for any family in the world!)
  • Hotmail and Gmail (free email accounts for everyone)
  • Google Print (free access to the contents of some of the world’s most important libraries)
  • Skype (free long distance to anywhere in the world for more than 50 million people who have downloaded the software)
  • Wikipedia (open content encyclopedia which will dwarf Encyclopedia Britannica in the coming years and become one of the great knowledge resources in the world)
  • LinkedIn.com (a valuable social networking service that helps people stay in contact with people they know and trust–when it has tens or hundreds of millions of users it will become an essential part of our lives)
  • Worldstock (a wonderful service from Overstock.com helping thousands of artisans and craftsmen in more than 30 countries sell their goods on the internet. Worldstock is already the largest single employer in Afghanistan and I think will be one of the keys to economic growth in developing nations.)

I failed to mention a few others blessings to the world that I usually discuss:

  • Open Source software
  • eBay (the company offers a world market for millions of sellers — a great gift by itself — but founder Pierre Omidyar’s commitment to give away 99% of his wealth in the next 20 years is also a great gift.)

Thirdly (back to the reasons why I’ve not blogged lately), I have been asked to serve as a bishop in the LDS Church (the Church of Jesus Christ of Latter-day Saints). This means that I will maintain my current employment but that in addition I will serve as the minister or spiritual leader for about 120 families in our congregation in Provo, Utah. This is an honor and a very humbling responsibility.

I love the Church and the teachings of Jesus Christ. I am thankful for the great personal peace that I find in studying scriptures and in daily prayer. I don’t know how I would live without being firmly grounded in a religious tradition that teaches faith in God, hope in the future, and charity (or love) for all.

I rarely blog about my personal religious views, and I respect everyone else’s (in fact I learn a great deal by studying writings from various religious traditions), but if you are interested at all in learning more about the Church, or what we believe, or what LDS bishops do, please feel free to email me so we can converse.

Acquisition Creates Blogging Powerhouse

Six Apart which produces the Moveable Type publishing system and TypePad blogging service raised $10 million in venture funds in October. Today it announced the purchase of LiveJournal, a blogging service built on open source that claims 2.5 million users. Together they have 6.5 million blogs, according to TechNewsWorld.com. That seems way high, considering that Pew Research says about 8 million U.S. adults have a blog. (The vast majority of them only post once, however.)

Research on Publicly Traded Companies

Before entrepreneurs ask me for advice, I want them to know their company’s SIC code (or NAICS code) and to know who their publicly traded competitors are that they can learn a great deal from by doing research at www.sec.gov.

Today I created a shortcut to the SEC listings of publicly traded companies in the SIC codes that I am particularly interested in. (A few of these SIC codes have no publicly traded companies, and many of the state links bring up no companies as well.)

This may save me a few seconds whenever I want to read some public filings…and remember, time is money!