(Or, Why I Put My Money In Self-Help Credit Union, Part II)

 1.

When Michelle Holland started her little bus company in 2009, she would rouse her son at four each morning. He was ten and his single mom had no option but to grab his pillow and plop him in a rear seat of her refurbished yellow school bus while running routes through Charlotte’s neighborhoods. He would grab his last winks of sleep while she collected students from their homes for delivery to a local charter school. For the privilege of avoiding the hassles of car pools, the parents would pay Michelle a small fee each month. She would drop them off before extending her trip a few extra miles to get her own son to his school.

Such was start-up life for Michelle and her Eagle Bus Service. It was tough, but it supplemented the income from her bookkeeping practice. And after several years spent juggling the demands of an all-consuming corporate life with the demands of being a young, single mother, it let her be near her son more often.

Now word was spreading to other charter schools that Michelle could solve their transportation woes. The state gave them funding to educate kids in their own unique ways, but it didn’t give access to the county-run fleets of buses. Principals saw what Michelle was doing for her first client, and they wanted her to expand; to help them, too. They were offering guaranteed payments and year-long contracts if only Michelle could scale-up her service. If only she could get more buses and more drivers.

Michelle's Bus Fleet (Credit: Michelle Holland)

Michelle’s Bus Fleet (Credit: Michelle Holland)

This is the story I’m getting first hand from Michelle in a phone conversation one afternoon last fall. We had been trying to connect for weeks, but Michelle isn’t exactly swimming in spare time. Her morning schedule remains largely the same as it was in 2009 – up well before dawn, preparing to get students safely to school – and her days are spent balancing the desk work of Eagle Bus with the needs of her few remaining bookkeeping clients. In the meantime she was searching desperately for another bus to add to her growing fleet. She usually bought them in North Carolina, but someone was grabbing all the state surplus vehicles before she could get to them. Michelle had just driven to rural Virginia to find one that met her standards. We were speaking because I was interested in how she got the money for that purchase. Continue Reading…

Self Help Credit Union

Self-Help Credit Union in Durham
(Credit: Google Maps Street View)

I’m late for my lunch appointment and covering the 20-mile stretch of highway between Raleigh and Durham at a brisk pace. It’s the last day of September. While North Carolina is showing few signs of autumn, some cool air rolled in the night before and pushed the summer humidity out to the coast. With a shining sun, it’s perfect for rolling down the windows and letting the wind swirl around the faded leather interior of my old Toyota.

I’m heading downtown to meet Kristen Cox, an investment associate at Self-Help Credit Union.  I’ve been thinking about the Enough Project for a few weeks now, and I’m about to write my first check.

The idea is to put some chunk of our family money to work supporting conscious capitalist organizations and projects. We’re doing pretty well these days, financially speaking. I’m less and less compelled to make every dollar go into investments that aim for the highest possible returns. If there’s a tradeoff to be made between earning the highest return possible versus one that’s merely reasonable, I’m willing to explore the reasonable option when it means the money supports something constructive, meaningful and that provides some benefit to my community.

This is the gist of the Enough Project: putting a small slice of our money to work in ways that are consistent with the things we value.

Yet I find myself glancing anxiously at the passenger seat of my car. It’s empty save one checkbook wrapped in the same navy blue vinyl cover my bank issued me when I opened the account more years ago than I care to remember. I’m not sure why, but I’m a little nervous about using one of those checks to transfer our six-month emergency fund over to Self-Help. The transaction is riskless. The new account is covered by NCUA insurance, so it has all the protections the FDIC provides at my bank. It will earn the same interest rate it gets in my bank. It’s completely liquid with the money available to pull out anytime I might need it. True, the check is the biggest I’ve ever written, but I’m writing it to myself! Why the fear?

There’s something about this drive, about this check, about this Enough Project that has me thinking hard about my crazy relationship with money these past ten years. It’s creating a serious case of navel-gazing.

Flashback to June 2004. I was down to my last $50. Literally. And I had a wallet full of maxed-out credit cards, a mortgage-sized student loan payment, and a car note to boot.

It had been six months since my last paycheck, and my job options were so dim that I passed my days filling out applications on the Halliburton website. My mind spun vivid daydreams in which I drove 18-wheel supply trucks in caravans criss-crossing the deserts of  Iraq or Afghanistan, pulling a kevlar bucket tight by its chinstrap when the occasional mortar shell came whistling down. Spending the next year or two as a war contractor seemed my best option for income. Perhaps my only option to avoid whatever comes after one runs out of money to pay his creditors.

I remember lying across my bed in the middle of one sweltering Charlotte summer day, my roommate’s dog resting her muzzle on my thigh while my brain dizzied itself spinning through every desperate plan that might keep me afloat just a bit longer.

Suddenly it all stopped. My mind emptied itself, becoming utterly silent. Staring at the ceiling for what must have been five, maybe ten minutes of total quiet, the despair slowly gave way to a simmering anger. I muttered aloud, for no one in particular, “Never again.”

Continue Reading…

My September books brought so many amazing learning experiences, not to mention the discussions they generated with family, friends, colleagues and even one of the authors.

Financing Our Foodshed by Carol Peppe Hewitt

Let’s start with the winner of the prestigious Most Dog-Eared Book of the Month Award. Thank you Carol Peppe Hewitt for writing Financing Our Foodshed: Growing Local Food with Slow Money, a collection of 22 stories on North Carolina food entrepreneurs (farmers, bakers, restaurateurs and the like) to whom Slow Money NC has introduced local financiers eager to fund sustainable local eating ventures.

IMG_20130929_124805Mainstream investing has become overwhelmed by the opportunity cost heuristic, guided by the simplistic question, where can I make the most money as quickly as possible with the least risk? 

This is not entirely bad, and I’m not quick to cast moralistic aspersions on using capitalism in pursuit of profits. There’s a place for that, and there always will be. But it brings to mind the notion of hypertrophy, this glitch in evolution’s system by which nature allows (for example) a male ibix to grow horns so large, its neck cannot support the weight. Yet those large horns have become a proxy for virility, and the females are programmed to mate with him whose horns spread widest. And so this glitch propagates through the generations with the genes of big-horned ibix begetting even bigger-horned ibix until an entire species is handicapped with antlers with all appeal but no function. I can imagine the big cat mountain predator eager for this easy prey. Given enough generations of reproducing those big horns, the hypertrophy glitch will bring doom to that gene pool.

It’s not that big horns are bad, but there is such a thing as too big.

So it is with capitalism and opportunity cost. It’s not that it’s bad, but there can be too much.

In chasing the biggest-dollar, fastest-bang, lowest-risk return, we put all our resources into high-scale enterprise that promises crazy riches while we starve our local entrepreneurs of the capital they need to get off the ground or grow. Herein lies a hypertrophy risk in our investing system. We chase the promise of the next Facebook (that big-horned ibix) while ignoring the small-scale businesses that create happier, healthier, more sustainable local economies.

The weight of that imbalance threatens to topple us. Continue Reading…

Apparently my fascination with all things Zingerman’s knows no bounds as I explore this Enough Project. I’ve trolled a brilliant little video (by Daniel Seguin) featuring Zingerman’s co-founder, Paul Saginaw, that promotes a concept called “Localism.”

“There’s this idea of having enough” Paul narrates over beautiful pictures of the Zingerman’s businesses. “So when you believe that, when you’re not wanting more and more all the time, what’s driving you is wanting to create something of excellence. It’s liberating.

“What is this? Is it capitalism? Is it socialism? What do we have here? I don’t know if it’s capitalism. I know it’s not socialism. I don’t know what it is and it isn’t. But anybody can do it. It’s just a lot of work. But I would say try it. It’s also fun.”

(The video is here.)

(h/t to Ron Maurer for this link via Twitter)

IMG_20130911_091302

My brief trip to Ann Arbor last April introduced me to a real-life application of conscious capitalism. Zingerman’s Community of Businesses is a thriving enterprise that does good business while doing a lot of business good. Rather than extracting all the profits from their companies, the owners put back much more than they take out. It’s a model that deserves some deep contemplation, and it’s the example I turn to as I seek a new investing construct for myself. Allow me to introduce what I’m calling the Enough Project, a gonzo investing and writing experiment to see what kind of impact I can have by investing small amounts in good businesses committed to doing good.   

Eating in Ann Arbor

It’s raining hard this April morning as our rental car speeds west down the short stretch of interstate 94 connecting the Detroit airport to Ann Arbor. The windshield wipers set quick cadence, a rhythmic background for the good-humored argument entangling my two colleagues and me. My boss, Josh, sits in the back scrolling through his iPhone, barking out various Yelp recommendations for good eating options in Ann Arbor. Daniel is in the front seat, and I’m behind the wheel. We’ve already shrugged off Josh’s first suggestion – that we let some group of restaurants called Zingerman’s monopolize all of our meals – and now he’s tossing out alternatives.

Josh is our company’s resident foodie, and so we usually defer to his better judgement when it comes to dining on the road. Plus his wife earned a masters at the University of Michigan, so he can call on first hand experience when it comes to the local restaurant scene.

Yet we challenge his every recommendation – we’re feeling argumentative – and so we’re now resorting to the advice of anonymous Yelpers.

As Josh relays their suggestions, we sense his heart isn’t into any of the substitutes.

Okay, we finally relent. Your original idea sounds fine.

“Great!” Josh responds, his demeanor changing instantly.He dials a number and within seconds we have a dinner reservation that evening for some place called Zingerman’s Roadhouse.

Second Thoughts on Investing

I’ve been mulling over a change to my investment approach for nearly a year now, seeking to reconcile my desire for high returns with a growing sensibility to do something constructive and socially beneficial with my money. Continue Reading…

 

IMG_20130831_101919

With August at a close, here’s a look back at the ideas I permitted a brief interlude with that squishy matter between my ears.

A few years ago I was routinely knocking out ten books a month. And while I was getting good at parroting back the thoughts of so many authors, I wasn’t creating many of my own. So I’ve cut back, raising the bar on what material gets access to this impressionable brain of mine. The quantity has dropped dramatically, but those books that make the cut tend to be there to help me learn something from someone that understands it much better than I. Yeah, it’s kind of an attempt at a learning hack…I stack several books on similar topics over a matter of weeks, then step back and try to digest them.

This month it was:

Start Something That Matters by Blake Mycoskie the founder and CEO of TOMS shoes. These stories are absolute brain candy, and I can’t get enough of them. I love the feel-good narratives of dude getting a brilliant insight, leaning hard into his idea, and sitting on the top of the corporate world as a result. I suspend disbelief about all the hairy details they leave out, happy to get lost in the flow of a well-spun tale! Continue Reading…

My Nagging Pile

My Nagging Pile

We gave up our subscription to the NY Times Sunday paper a couple years ago when our second daughter came around. To be honest, we should have canceled after having our first child. But we clung tight to the nostalgia of lounging decadent in bed deep into the weekend morning, sipping coffee to the crinkly rhythms of bending, folding, and straightening the newsprint. Even with one child our mornings began much earlier and never offered the leisure of settling into idle pleasures.

And so, as we chased little Clara around the house on Sunday mornings, those fat volumes of newspaper accumulated in an unread tower of information gathering dust in the corner of our bedroom. We wanted to read them. We yearned to read them! But the delight of lazy reading was turning into a nagging sense of obligation, seeming ever-taller each time we shuffled across our bedroom carpet. We might pound through a section late at night after putting our daughter to bed, but by then it felt like more of a clean-up chore than an act of relaxation. And the pile inevitably grew faster than we could shrink it.

So we canceled our subscription and tossed out all the back issues.

When my friend Josh offered me a complimentary copy of the NY Times Magazine this week, I shared it with my wife and we both confessed an immediate swell of envy. He has two kids like us, we thought, how does he keep up with the Sunday Times?! The universe seemed unjust. Continue Reading…

Genius Vonnegut Heller

Flickr Photo by midniteboom. Used under creative commons license.

Joe Heller  

True story, Word of Honor:
Joseph Heller, an important and funny writer
now dead,
and I were at a party given by a billionaire
on Shelter Island.

I said, “Joe, how does it make you feel
to know that our host only yesterday
may have made more money
than your novel ‘Catch-22’
has earned in its entire history?”
And Joe said, “I’ve got something he can never have.”
And I said, “What on earth could that be, Joe?”
And Joe said, “The knowledge that I’ve got enough.”
Not bad! Rest in peace!”

–Kurt Vonnegut

The New Yorker, May 16th, 2005 (1)

I heard that poem last week listening to an audio book on my drive home from the Pennsylvania mountains. How liberating, I thought, to have a sense of enough. There is freedom in being content.

The quote knocked on my mind’s door once again this morning. I’ve begun a book by Muhammad Yunnus, the nobel laureate founder of Grameen Bank and self-labeled “banker to the poor.” He describes microcredit – the practice he pioneered, offering collateral-free loans as little as 30 or 40 bucks a piece – as a force for lifting people out of poverty; for giving them the means to sustain themselves with a livelihood. This brief line stuck with me:

“Access to capital, even on a tiny scale, can have transforming effect on human lives.” (2)

Continue Reading…

Business Gone Good

July 10, 2013 — 2 Comments

A musing on my recent mental captivity to conscious capitalism.

The Conscious Capitalism Pebble

Somehow, someway I was introduced to John Mackey’s 2007 manifesto, “Conscious Capitalism: Creating a New Paradigm for Business.” (1) That essay led to a book promoting the the notion that business can be done better and an organization to convene the like-minded around those ideals. (2)

And I can’t get enough of it.

I read Mackey’s essay nearly a year ago. It’s been like a pebble in my shoe since. Its slight, nagging presence won’t let me forget it; won’t let me ignore it. Its themes have dominated my recent essays, hijacked my reading stack, and overwhelmed my thinking.

So, why? Why this fixation on doing business in a better, more conscious way? Continue Reading…

An essay in which I consider Whole Foods CEO John Mackey’s response to my question, “if Conscious Capitalism is such a good thing, why aren’t more companies doing it?”

John Mackey, Whole Foods CEO Photo Source: Joe M500, Flickr (Creative Commons License)

John Mackey, Whole Foods CEO
Photo Source: Joe M500, Flickr (Creative Commons License)

John Mackey Speech in Raleigh // Conscious Capitalism // Asking Why?

John Mackey stares at the running faucets in the men’s room just moments before his talk. He shakes his head incredulously, muttering to no one in particular, “That’s an awful lot of wasted water.”

The co-CEO of Whole Foods is a man of medium height and possesses a slight build. A tight haircut has tamed the unruly locks of curled hair I’ve seen in so many of his media headshots.  He’s in Raleigh this chilly February morning for a breakfast talk sponsored by our chamber of commerce. Mackey is promoting his new book Conscious Capitalism: Liberating the Heroic Spirit of Business.(1)

He looks around for an air dryer for his wet hands and finding none seems to ponder briefly whether to just slide them across his tan slacks. He opts for a single paper towel instead. Those who want to greet him this morning with a handshake will just have to endure his damp fingers.

Moments later Mackey is giving his spiel before an attentive crowd, a set of remarks unburdened by notes, spilling freely from a mind that has spent much time mulling over the subject. Then he opens the floor for questions. I sneak one in just at the end. It went something like this:

If Conscious Capitalism is such a good thing, why aren’t more companies doing it? Continue Reading…

An article in which I explore skill acquisition, the beauty of practicing skills for the sheer appreciation of the craft, and announce that I’ve teamed up with software firm TransLoc…

Magical Thinking & Joshua Foer as Skill Acquisition Gonzo

In 2010 Joshua Foer burst onto the non-fiction literary scene with the book Moonwalking with Einstein (1). It’s a brilliantly conceived piece of gonzo writing in which Foer combs through the academic literature on skill acquisition theories and applies them in his own quest to improve his memory.

Joshua-Foer

Joshua Foer, Memory Champ

Foer is a good writer with a knack for unearthing compelling real-life stories to illustrate his points. In the case of this book, he is the story. The techniques he learned (and practiced religiously) carried him through to become U.S. memory champion – yes, there is such a thing – in about a year’s time.

He went from having an average memory to being a champion by approaching memory as a skill…something that can be developed and improved.

It’s a tremendous feat and an even better book. It should come as no surprise when it landed on many 2010 must-read lists, including that of Bill Gates. This interest in skill acquisition and development is a refreshing trend to watch. It once held a prominent place in our cultural discussions of success. Now we seem to focus more on inborn talent driving outcomes. Or we become sloppier yet, ditching our critical natures altogether when achieving an outcome we want. We neglect our post-mortems; eschewing the autopsy and contenting ourselves with the crudest explanations of why some activity turned out the way it did.

Joshua Foer didn’t become U.S. memory champion because he was endowed with a great memory. Nor was it because he was recipient of a gushing torrent of luck (though luck always plays a role). He achieved the outcome because he considered memory ability holistically, broke it down into a finite set of skills, found techniques for mastering those skills, and then practiced like crazy.

That same methodology can be applied to virtually any set of skills in which anyone wants to get better. It can also be applied to the complex combination of hard and soft skills that compose a craft.

Continue Reading…

Bill SpruillPhoto Credit: Bill Spruill

Bill Spruill
Photo Credit: Bill Spruill

When an investor believes he has an edge, he’s supposed to stay quiet. He’s supposed to focus his energy on exploiting his advantage, not on trying to teach others the methods behind his approach. That’s conventional wisdom anyway.

And yet here I find Bill Spruill, an angel investor who backs software startups (and a stranger to me just a few months ago) explaining his investing strategy in painstaking detail. It’s the day before Thanksgiving, and we’re sipping warm beverages at the Whole Foods café near my home in Raleigh. We’ve rendezvoused at local coffee houses since September, and at each meeting – despite knowing I’m both an investor looking for ideas and a writer likely to tell my readers all that I learn – he reveals a little more about what we’ve come to call the Spruill Theorem for Reasonable Angel Returns.

In a calm and thoughtful manner befitting a college professor, Bill presents case after case for me to consider. This morning he pushes a folded copy of the day’s Wall Street Journal across the table and points to an article about a high-flying social media venture attempting to raise a fresh round of funding. Its prospects are a bit dimmer than the last time it went looking for cash. “What’s going to happen to the early investors,” Bill asks me in his Socratic style of teaching-by-interrogation, “if this effort fails? What’s going to happen to other promising startups looking to get off the launch pad?”

Those two questions signal the reasons Bill wants to tell me and other prospective angel investors about his insights. What we think we know about the risks of these investments may be misguided. And sticking to conventional wisdom carries with it consequences not only for individuals but for the larger dynamic between investors with cash and entrepreneurs with their creative visions.

It’s bigger than Bill’s portfolio.  It’s bigger than any one startup. It’s an ecosystem issue. And Bill believes that debating the ideas of the Spruill Theorem will make for better informed angel investors and ultimately a healthier ecosystem of software startups in our Triangle community.

“Angel investors are heeding the wrong models,” he tells me. “We’re trying to copy the huge successes, thinking we’ll get the same outcomes. But these stories can be dangerous. These models rarely work for angels.”

He pauses for a moment before adding, “We need new models to follow.”

Continue Reading…

Demetri Martin SUCCESSWhat Standup Comedians Understand About Success That You and I Don’t

Demetri Martin, the 39-year old standup comedian and alumnus of The Daily Show, published the sketch above in his book, This Is a Book. It’s been making the meme rounds on Twitter for a few months now, finding a welcoming audience among the business illuminati. They are glad to have a champion who can convey the wisdom (with such brevity and clarity) that the path to success is a tangled and circuitous mess, not the simple story that we so often hear of ascension in a straight line.

With these few scribbles, Martin betrays an insight into the nature of success that seems to be best understood – strangely enough – by standup comedians. As we’ll explore below, they must all hone their craft through constant tinkering in the control setting of comedy clubs. The best of them never quit this testing mindset. They allow themselves plenty of little failures. They don’t wrap themselves in the success label, considering it something to strive for continuously rather than a status to defend.

In other words, they don’t get caught up in “being a success.” We’ll call that the success mindset. They keep experimenting, keep pressing the envelope, and keep finding new ways to make their customers laugh.

There is something here to be learned by entrepreneurs and business leaders.

Continue Reading…

lucyThe Case for Conscious Capitalism

Next week Austin will play host to a group of executives that label themselves “conscious capitalists.” [See consciouscapitalism.org.] John Mackey, founder and CEO of Whole Foods, will provide the keynote address and suitably so. In 2007 he loaned his influential voice to this movement by penning the missive “Conscious Capitalism: Creating a New Paradigm for Business.”

It’s worth the read, and you can download it here. [pdf] The gist is this:

There is a longstanding prejudice that businesses exist for the enrichment of shareholders. While this is technically true, the notion has been interpreted to mean that corporate managers have the fiduciary responsibility to grab profits whenever they are available for the taking, all other constituencies be damned. It is the investor dominated viewpoint, often ignores the other stakeholders in a business, and it can be obscenely myopic. (See my related article, Whom Does Management Serve?)

It also creates, Mackey argues, a zero-sum game that pits investors against managers, employees, customers, vendors and all other stakeholders. By spending more on employee pay and benefits than absolutely necessary, for example, you’re taking earnings off the table that are the rightful property of investors. If employees win, investors lose.

The Conscious Capitalist movement argues for a different framework for understanding the game of business. Rather than a zero-sum dynamic, it suggests viewing it as a system of interconnected parts. By investing more in employee benefits, Mackey says, you get happier employees who better serve the customer…who then buys more products…which leads to higher profits…which can be shared with investors. Treat all stakeholders in a fair manner and the whole system is hoisted ever higher in a virtuous cycle. The sum of the parts, working in unison, become much more valuable than the individual components.

Continue Reading…

Tom Pirelli ESI Baby

I caught Tom Pirelli on his mobile phone one morning last week. He was near his house in Jupiter, Florida preparing his thoughts for an afternoon meeting about his latest venture, (something to do with using therapeutic lasers to manage chronic pain). He immediately strikes me as a man overflowing with energy, though he is not so young anymore.

I learn that he made a noble attempt at a leisurely retirement after selling his software company, Enterprise Systems, 15 years ago. But it would seem retirement did not fit his constitution. He has since started an ambitious foundation to provide better affordable housing options to impoverished communities in Mexico and Haiti. He has worked with USA Rugby, and took great pride in seeing his favorite sport included on the roster for the 2016 Olympics in Rio. And, of course, he has involved himself deeply in this new laser therapy business.

Tom is a success through and through with the sort of bona fides that might just turn a less humble man into a braggart. Yet despite his litany of accomplishments, this is the picture for which Tom is best remembered:

We’ll return to that later…

Continue Reading…