Costa Rica, Family, Leadership, Learning a second language, Learning Spanish

What’s the return rate on an “experience?”

September 12, 2013 David McNeill 2 Comments

images copy In a recent national poll with two choices – keep your current debt level or gain 25 pounds and have your debt erased, 72% of Americans said they’d rather keep the debt than put on the pounds. A fascinating statistic considering the average household’s debt is 112% of disposable income. So for most of us, vanity trumps financial peace of mind. What other financial trade-offs might we be willing to make?

Here is one for consideration. What percentage of your current savings would you give up to spend a one-year sabbatical, family experience abroad complete with rich learnings? This question hits close to home for me as we are trying to capture the following things on our experience abroad.

For some context to answer this question here is some food for thought.

A one-year excursion to a foreign country is very expensive. Without real intentionality and financial planning, it will never happen. And all the advanced planning and budgeting still doesn’t ease the pain of seeing investment dollars (and Colones) go through the drain (especially while the faucet is temporarily shut off). There are the cash costs such as school, rent, a car, monthly expenses abroad, monthly expenses back home, etc. Add on top of this new foregone savings (you don’t really give up salary on a sabbatical, only the savings/investment that would have resulted from that salary).

Assessing the value of an abroad “experience” is very difficult. It’s kind of an expense and it’s kind of an investment, but not exactly either. Keep in mind that there will be storms along the way, so your notion of the “experience value” will likely shift throughout the experience and well after. And the value placed on a particular experience will vary by as many people as you ask, so perhaps consider the questions below:

What would be the value to you in reclaiming a year with your oldest kids?
How about the value of your family knowing a second language and culture?
How about the value of personal reflection time vs. a never-ending to-do list?
How about the value of pursuing and mastering a long-desired hobby?
How about completing all of the above things at the same time?
Are you ready to weather the storms that come during the experience?

In our current situation, the immediate costs are much easier to determine than the collective long-term benefits, which makes the process a struggle at times. Regardless, this was our dream and our gut feel is that it will pay off in many multiples over time, and likely even in some unexpected ways.

Entrepreneurship, Leadership, Learning Spanish, Start-up Failures, Start-ups

Start-up failures I’ve witnessed

August 15, 2013 David McNeill 3 Comments

It’s no secret that most start-ups fail and become painful financial lessons. I recently wrote about the themes of my past successful ventures (Got some start-up ideas in mind?). On the opposite side of the equation, I’ve seen some common themes in start-up failures where I’ve had a front row seat as a witness.

Lots of people continue to pursue start-ups. According to CNN Money, 340 of every 100,000 adults launch a business each month, creating 565,000 start-ups monthly. Incidentally, immigrants (particularly Latinos) at 560/100,000 people, are almost twice as likely as Americans born in the US to launch their own business. Learning Spanish is becoming increasingly important (Why we moved to Costa Rica for a year).

While the aggregate statistics are interesting, my perspective below is based on a much smaller world of friends and acquaintances that have started a business. Typically, this involves making the jump from W2-earning corporate life and partnering with one or more people to pursue a start-up. In no particular order, here are the most common drivers of failure I’ve observed:

Legal steps, such as detailed operating agreements are overlooked or delayed. When I hear someone tell me “it’s not a problem, we are good friends and we’ll get all the legal stuff done later on” or something of that nature, it feels like one of the few times in my life when I can really predict the future. Spend the time and the money on professional advice, as it will protect the business and the friendship.

The business is based on a personal passion with no real understanding of the economic engine or the practical implications of running the business. Not to be confused with passion plus capability plus a good business model, which is a great combination.

The focus is on a remote probability business (albeit with a potentially large payoff). When the overwhelming majority of your success is out of your control that is a hard business. When you are trying to create demand vs. fill demand that is a hard business.

The cash flow is not managed or even worse, not really understood. To say “cash is king” is a “master of the obvious” type statement, but it’s amazing how many people get into a business and don’t understand it, or for that matter, the differences between gross and net sales, gross and variable and net margins, etc. If you (or your partners) don’t understand these concepts from some level of experiential knowledge, be careful throwing money into a start-up.

The exit options (I.e., beyond annual salary and/or distributions, how do you monetize this thing at some point via a sale or public offering) are not considered at the outset or actively managed along the lifespan of the business. When you are simply ready for a new challenge, or there is a business downturn or a bump elsewhere in your personal life, if you haven’t already determined how to exit, it won’t happen. As coach John Wooden said, “When opportunity (or presumably tragedy) comes, it’s too late to prepare.”

What are the most common (and possibly avoidable) reasons for start-up failures you’ve observed first-hand or experienced first-hand?

What might be just as sad as a start-up failure is a great start-up idea that simply dies a dream. Most of the conversations I’ve had with friends and acquaintances regarding potential start-ups land in this scenario. More thoughts on the reasons for this in a later entry.

Costa Rica, Family, Fatherhood, Leadership, Learning a second language, Learning Spanish, Parenting

Temporarily Trading Additional Prosperity for Peace (or, why we moved to Costa Rica for a year)

June 21, 2013 David McNeill 20 Comments

Why? When I first told friends we were considering this move, I was asked why. Right up until our departure I was asked why. Now that we are here, I continue to be asked why by “Ticos” (i.e., Costa Ricans).

The answer to – why? – is really a two-part answer. First, why move abroad for a year? Second, of the available options, why Costa Rica? The second question is easier to answer – schools, safety, things to do and visit, natural beauty, etc. The answer to the first question is multi-faceted and has evolved over several years.

1) Gain perspective for our kids (and us). Our home in Costa Rica is very different from our home in GA. E.g., Our entire lot (yard + house) is 50% of the sq. ft. of our GA house by itself; our four girls share a space that is much smaller than any one of their four bedrooms at home, we are within a few miles of severe poverty and drive through it daily. That said, perspective is relative as our home and neighborhood in Costa Rica are both beautiful – to a Tico, we are living large.

Our girls’ school is 80% local Ticos. For the next twelve months, they will be in a very small minority and all of us are made aware daily of our lack of Spanish comprehension and speaking abilities. It’s our sincere hope that these different surroundings coupled with the items listed below lead to long-term changed perspectives.

2) Learn Spanish. A few interesting facts regarding Spanish – (a) The US composes the largest Spanish-speaking community outside of Mexico, (b) Spanish is the primary language spoken at home in the US by almost 37 million people, more than double the number in 1990, and (c) The percent of the US population forecast to be native Spanish speakers by 2020 ranges from 15%-19%, depending upon the source.

Speaking (and reading and writing) Spanish will most certainly impact our family in a positive way over the longer-term. For me, I am hoping there is a whole new section of the business world in which I will ultimately be able to be a participant of consequence.

3) Experience change for growth. Whether it is a new job or assignment or a move to a new city, every time I dig into something new there is creative energy that comes to the surface. We are now meeting new friends, learning to drive around a city with no road signs and immersing ourselves in a new language & culture. I am hopeful these new challenges reveal hidden strengths and capabilities in each of us.

4) Serve others as a family. We did not need to leave Duluth in order to serve others. However, our ability to do so is now greatly simplified as we have freed ourselves from many of the accumulated day-to-day obligations of life for a brief period of time. Our goal is to engage in a way that creates a permanent change in each of our hearts.

5) Implement a bit of whimsy (a la Bob Goff) and reclaim some family time. Bob Goff’s book, “Love Does”, convinced me I needed to break free from some of the rigidity in our lives and embrace some spontaneous and random joy. It’s my hope I can write a future blog about the implementation of many whimsical family experiences. Additionally, our oldest daughter is about to enter 7^th grade where friends seem to be more important than family. Maybe in this new place we can reclaim a bit of time before the inevitable.

6) Actively pursue Halftime. Bob Buford’s book “Halftime” helped put some good definition around many conversations I had with Kelah regarding this trip. I read this book after listening to a John Maxwell podcast on his top 10 all-time books and it didn’t disappoint. In short, the book prescribes a “halftime” to refocus from a first half of life spent pursuing success to a second half to be spent pursuing significance. In short, “what I do about what I believe.” I’ve incorporated this language into my blog tag line (I.e., Intentional Pursuit of Halftime) and I anticipate writing a future blog on this topic.