Growthink Blog

The Lost Generation?

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Unable to build on numerous exhilarating rallies and hyper-sensitive to every geopolitical tremor, the US stock market ended 2011 right where it began it - with the S&P 500 Index at almost exactly (1257) where it started the year.

I guess that given the heart-wrenching volatility that we have all been subject to recently, a flat year should be considered progress.

The longer view, however, is far more disheartening.

When we consider that the S&P closed 1998 – 13 long years ago - at 1229, or within 2.2% of its 2011 close, we have all suffered through nothing less than a lost generation of investment return.

Think about it, a 1998 New Years baby is now a teenager.

The whole lifetime that is her childhood is a memory, yet that same girl's parents that began saving for her college education on that happy day of her birth, have not seen a penny of return on the money that they worked so hard to make and save.

This is discouraging to say the least.

Luckily, the New Year brings with it both the promise of things to come and the opportunity to "reset" old patterns of thoughts and action that no longer serve us.

And is there anything in business right now that more desperately needs a reset than how we think about making money on our money?

Now, for entrepreneurs, adding greatly to the challenge, is that in the natural hustle and bustle of growing a business what is so often overlooked is how a company’s business plan does or does not support the personal financial plans of the individual stakeholders that make up the company.

This is a tragic mistake – where the entrepreneur is so focused on the day-to-day running of the business that they neglect until it is too late how that business is or is not creating assets in exchange for the lifetime of blood, sweat, and tears poured into it.

Given that my company Growthink’s mission is to help entrepreneurs succeed, I consider this challenge so fundamental and the consequences of further failure so dire that in 2012 I am professionally resetting myself to focus on, above all else, benchmarking and sharing best practices in this regard.

Among other work, this will involve building on my now multi-year experience and inquiry into the brave new world of diversified, “Black Swan” based alternative investments.

Pioneered by innovators like Dave Lambert and Kevin Dick at Rightside Capital, this incredibly exciting arena allows entrepreneurs and investors the opportunity to time and cost effectively build risk managed portfolios of positions in early stage technology companies with "Google-esque” and "Facebook-eque" outlier return potential.

It is a strategy that the realities and the probabilities of 21st century business demand, and one that financial innovators are making available for the first time to Main Street investors.

I will also step up my featuring of the entrepreneurs that I have had the great fortune and pleasure to get to know and see succeed here at Growthink.

Men and women like Liam Brown, Rich Corell, Torfinn Johnsen, Vlad Lempert, and Katie Williams.

Because while “on average” these last 13 years might have been flat, during this same time an ultra-select corps of entrepreneurs have built incredibly valuable companies and have inspired us with their determination, their creativity, and their triumphs.

I look forward to sharing the best nuggets of their wisdom, and hope that all of us capture just a little bit of their special something.

2012 awaits - may it be the best year our entrepreneurial and investing lives.

Let’s make it so.


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