Raven Thomas is pitching her company that makes chocolate-covered pretzels. After Kevin O'Leary remarks that the market is flooded with people already making, or who could enter the market for, chocolate-covered pretzels and what makes her pretzels any different, Lori Greiner asks her point blank, "If you had to say to us right now why we should invest in this, give us your very best. Why should we invest in this?" Raven's original response failed. She immediately went on about her and her sons and how it's important for them to see that if you put your mind to it you can achieve anything. . . and blah, blah, blah.
Rule of thumb: A successful entrepreneur - and you are an entrepreneur any time you're selling yourself, whether it's asking someone out on a date or interviewing for a job or selling a product or selling an idea or every time you are pitching yourself - convinces people of how by entering into a relationship with them they will make the potential partners better off. Convince me of how you are going to create value for me and I'll do business with you. You have to explain better than anyone else with whom I can partner how my relationship with you will make me better off than what anyone else is offering.
On the flip side, it's not a one way street. I, too, must convince you of how I will create value for you by partnering with me.
In any mutually advantageous voluntary relationship, all parties enter into them only if they perceive that by doing so they will be made better off relative to any other option, including not entering into any relationship. Too many people fall into the trap of explaining how entering into a trade or partnership will make themselves better off rather than their partners. We are all self interested, but in a market capitalist system, in order to make me better off, I have to make you better off.
Convince me of how you are going to make me better off and I'm interested in listening. Start telling me how you are made better off by partnering with me and I'm out!
If you get a good jockey you can replace the horse. But if you get a good horse and you don't have a good jockey, it doesn't matter.
If it's a bad idea, giving [someone] the money only just delays the inevitable.
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You know the difference between when we all started our business versus now? We always get to, "How much of your own money did you put in?" "Is it your own money?" "What did you spend it on?" And it's always, lawyers, lawyers, regulation, trademarks, patents, everything but the business itself.
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That's what I want the politicans to see, that the money is going to the things that are counterproductive and that's keeping people from growing businesses and hiring people. Because if you're spending $100 an hour on a lawyer - a trademark lawyer, a patent lawyer - you know, an accountant, a tax advisor to fill out forms for you, that's time (and money) that could otherwise be spent visiting customers, visiting prospects, selling your product.
Something's gone wrong the last three years in America because we vilify business. All of a sudden, people who create the only jobs that matter - the ones in the private sector - are vilified.
They talk about the importance of creating jobs. First, there are an infinite number of jobs. As long as there are infinite wants - and there are - there are infinte ways to employ my labor services to fulfill those wants. The important thing is for me to do those things most valued and let the rest go unfilfilled.
Jobs are a byproduct of creating value and it's important to not put the cart before the horse. If creating jobs is the overriding objective you get a misallocation of resources. It's the primary problem with Keynesian economics. If "creating" jobs is what's important, let's put people to work digging holes and filling them back up. Let's get rid of machinery and force people to dig with spoons and farm with rakes. We end up poorer, not richer.
What these Sharks (and this is such a misnomer) are really implying - and it's what's really important in this discussion - is that entrepreneurs utilize and employ scarce resources to higher valued uses. Entrepreneurs take currently idle or undervalued labor and put it to work creating more value per dollar than how that labor had been employed. This is what politicans miss when they vilify entrepreneurs, especially the most successful of them.
My hats off to these guys and the great show that they put on each week.
UPDATE: The problem with using terms like "creating jobs" as if that's the ultimate objective is that it gives politicians license and political cover to destroy wealth by taxing the most productive and successful, or borrowing recklessly, to build bridges to nowhere under the guise that they are creating jobs and that's what's important.
It really wasn't difficult to see the flawed reasoning exhibited by Hollywood and "Murphy Brown" when it came to single parenthood. Dan Quayle was correct.
Isabel Sawhill from the Brookings Institution notes:
Twenty years later, Quayle’s words seem less controversial than prophetic. The number of single parents in America has increased dramatically: The proportion of children born outside marriage has risen from roughly 30 percent in 1992 to 41 percent in 2009. For women under age 30, more than half of babies are born out of wedlock. A lifestyle once associated with poverty has become mainstream. The only group of parents for whom marriage continues to be the norm is the college-educated.
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In later research, Ron Haskins and I learned that if individuals do just three things — finish high school, work full time and marry before they have children — their chances of being poor drop from 15 percent to 2 percent.
Unfortunately, don't expect Hollywood and those on the left who championed single women having and adopting children to issue a mea culpa and apologies to all the lives, young and older, that have been made worse off.
Check out the ad below, which is to air (supposedly) during the Super Bowl. Isn't this the beauty of capitalism? Complete strangers - the investors, the managers, the contractors, the labor, and more - toil to give me "everything I could possibly want" in a car. I don't even know these people. A tear rolls down my cheek.
There wasn't any doubt that the Super Committee would fail at coming up with a plan to reduce the budget deficit - neither side had an incentive to do so. This is an institutional problem, not a procedural problem. If you collectivize more than 40% of U.S. GDP (federal, state and local governments) put it up for "debate" regarding who gets what, and then push payment of much of this spending onto future generations, don't be surprised when the rent-seeking class shows up to influence the size and distribution of government largesse. If you want to get rid of the ants, stop pouring sugar on the floor.
With that said, although he doesn't quite get exactly to that point, I give Jon Stewart much credit for attempting to hold Nancy Pelosi accountable for the problem we refer to as Washington. She tries her best to pin it all on the Republicans, who do deserve much of the blame for out-of-control spending, but it's not just them. The debt and deficit is not a procedural problem, it is an systemic flaw in the system. The Democrats act the same way and the Libertarians would too should they ever, ever control Congress.
Here are three videos of an interview by Jon Stewart of Nancy Pelosi. She embodies everything that is wrong with our federal government and spending and debt.