Celebrating Failure

One time in this semester where I failed was in my mechanical systems class. More specifically, it was our second exam in the course. On our first exam I did very well, scoring a 97. In the time leading up to Exam 2 I thought that it would be no problem to do well on it, so I neglected studying until about 30min before the exam. However, this strategy did not work out well at all, I knew very little when I took the exam and ended up scoring a 52. While I still didn’t get the lowest grade in the class, I obviously was not very happy after receiving this grade. What I learned from this was that studying for the first time immediately before the exam is not a successful strategy and if I want to do better, I would need to start studying a day or two in advance.

I think that failure is very important and it the greatest teacher. While failing is never fun and can be very embarrassing, its an important thing to go through because you can learn so much from it. My friend, Joe, from UNF has a saying that he says quite frequently: “you don’t learn from success, you learn from failing and seeing the wrong way of doing things”. Whenever I fail, I don’t necessarily get discouraged, I usually take time to reflect and see what I did wrong. Depending on the scenario I’ll use this information going forward and give it another try. But I don’t let it get me down, while it can be defeating, if you keep your head up and keep moving forward no failure will be able to defeat you. The most positive thing you can do after failing is to find out where you went wrong or what you did wrong and ensuring you don’t do it again. However, if you fail and don’t change what you’re doing or let it keep you down then you won’t end up learning anything and it will be a waste of a failure. I think this class has definitely changed my perspective on failure. I would definitely be inclined to go out and try new things and take new risks since no matter how it goes, I know I will take something away from it. Additionally, I’ve learned that failure is ingrained into the nature of entrepreneurship and there is nothing you can do to get away from it; you must learn to embrace it and learn from it.

Venture Concept

Opportunity

My opportunity is the large influx of people moving into Florida as well as the general metropolitan and downtown areas of fast-growing Florida areas. The potential customers that I imagine are young families that are looking to relocate to more popular areas of cities where events are going on. However, these typical customers also work in the area as well, allowing them to work and live without having to travel as much to enjoy thing around their residence while also having a short commute to work. The nature of this need is fairly basic. While the basis of my idea is predicated around building and selling a quality residence that supplies the basic need of shelter. The location is also desirable by building in areas that people want to live in. The main driving forces behind the large amount of people coming to Florida is due to climate, beaches and other touristy spots, no state income tax and an abundance of jobs. With these factors not likely to change anytime soon, it ensures that there will likely be a continued growth in the population of Florida with a constant supply of people moving into the state. Based on this, my window of opportunity will stay open for the foreseeable future as long as Florida legislation and tax law doesn’t change. Lastly, this opportunity has a huge potential to make money, which it involves a large upstart and a lot of work it can be turned into a very successful company as well as be able to expand to other real estate markets.

Innovation

The innovation, in part, in what I am bringing into the market would be a company that not only builds real estate, such as apartments and multi-family residential, but also sells them without having to go through another party or company. This will allow us to be able to supply desirable real estate at a lower cost without sacrificing quality. In addition to this, by practicing the most modern and efficient construction practices it will allow us to lower our building costs and allow for more revenue. We can do this by implementing new construction technology and with advances in construction coming out faster than ever before; if we can stay on top of new practices and continually innovating our build process, it will allow us to compete at the highest level. Secondly, our real estate sales would be in direct conjunction with or projects. By also implementing the latest in renderings and modeling, we will be able to pre-sell building while they are under construction. In addition to this by hosting events with brokers and potential customers, this can help word spread fast about new projects. We will make money through sales of apartments within our construction as well as having the option to sell to investors to fund the project and save ourselves capital. As far as how much money specifically, it would vary widely. It could be anywhere from several hundred thousand for a building sellout up to millions of dollars. The amount of money being made is directionally proportional to the type of construction, the location, the quality of the apartments and the overall size of the building.

Venture Concept

My innovation will provide the quickly growing population of Florida with the problem of housing. By providing a superior product for less money to the demographic of people moving into the state it will make for a successful venture as well as one that has a continuous source of new customers. Reason customers would use my company is because we would be on the leading edge of real estate sales while also creating unique, quality housing in desirable locations. Competitors would be other construction companies as well as other real estate firms that focus on selling similar types of properties. Their potential weakness is that they either do one or the other, build or sell. My company would do both. Providing both teams, sales and construction, with knowledge about our products. Price point plays a huge role as we aim to price high quality housing for a lesser price than currently available. The customer experience and business location also play a huge role. The customer experience in building or buying a house can be very stressful so by making this process as easy as possible as well as providing options will help massively with customer relations. Lastly the business location must be ideal since it is hard to build and sell in a location far away from where the company is based.

I think my overall most important resource would be my networks that I already have established in my target area of Florida. This can be extremely helpful in finding subcontractors, information, financing, potential employees and even just general advice.

Second, my next idea for the venture would be to develop entire areas, not just one building at a time. By creating retail and office space in the areas that I am also building apartment building can help me create desirable areas for my company to build in. Instead of having to find areas that are popular, I would be creating the entire popular area itself.

Third, what’s next for me in five years I would like to have at least two building projects under construction as well as one or two already complete and close to sell out. As an entrepreneur I want to take what I’m good at and turn it into an entity that has the ability to successfully redevelop and develop areas of cities that will provide places for people to live work and enjoy.

What's Next

What I think I would consider the next step for my venture would ultimately be expanding my service and products to general commercial development as well as residential in the form of subdivisions. The first person I talked to, the VP of Construction at a residential builder said that they believe that is the next step to take in a venture like what I have envisioned but it is a big leap to take and requires many risks. But in the short term, he advised that it would be smart to make the products and services as customer friendly as possible. Whether it is the usability of a website, an app or simply in-person service; all of these are keys to growing and maintaining a successful business. Next, I talked to a superintendent that works for a commercial GC. What he brought up was specifically pertinent to the construction side of my venture. HE explained how finding the most efficient field teams can save large amounts of money during construction by completing jobs on time and under budget; providing larger revenues for the company. Additionally, he brought up how the owner/investors of the building must be treated equally as a customer. The third interview was with a real estate agent suggesting the idea of advertising and holding touring events for upcoming real estate properties. This can be done by open house events or even through the use of virtual reality for tours of projects that aren’t completed.

After receiving this feedback, I believe that there are 2 main areas where my venture should focus. The first part of it is the marketing and advertising part. By getting the word out about new and upcoming real estate projects there can become excitement created about the project which will encourage more interest in the project.  In addition to this, hosting “open house” events with brokers and customer this can provide sales as well as showing my real estate projects to potential customers.

The second main focus area is the actual construction process itself. By streamlining this process and doing it in the most efficient manner can drastically increase revenues and decrease overhead costs on construction projects.  By completing projects sooner there will be less fixed overhead cost as well typically being accompanied by some form of bonus from the owner since they can start selling real estate sooner. Additionally, projects completed with less money than was budgeted, the money left over typically goes back into the contractor’s pocket.

A completely new market would be to create a venture in track-home building. Track-homes are essentially “cookie-cutter” houses that are in a neighborhood or subdivision is which nearly all houses look the same. These houses are built en masse and are sold very quickly for low prices, anywhere from low 100s to high 300s. I think the best way I would be able to create value would be in the construction process itself.  These houses are typically built very quickly and by implementing more efficient building practices as well as an experienced team, we would be able to be built faster than the average builder with higher quality. After my first interview, a construction manger that builds track-homes, he explained that it would be difficult, but my idea is possible. However, he advised hiring construction mangers with experience specific to the types of houses I would be building. My second interview was with an entrepreneur that invests in real estate. His advice was that there is a lot of money to be made in this venture given how quickly these types of houses are normally sold. Both interviewees said that my product/service mix was appropriate for this type of venture.

I think what surprised me the most was that my current product/service mix was already appropriate for changing to such a distinctly different market. While many of the same tactics would be used in the selling and building process, they would just be targeted to a different demographic. About half of my assumptions were correct. Originally, I think my idea was too long term. However once realizing how many things there are to be improved in the short term, it makes you realize that you can always be improving your idea.

This new market appears to be as attractive as the existing marketing that I’m targeting. It provides a large cash flow, quick construction time as well as very fast-paced business. However, given the nature of building track-homes I would not change my venture in commercial real estate to peruse one in much less valuable real estate/property. I believe that while my original idea may need tweaking and reevaluation, I think that it has a high potential of becoming successful if done correctly and with the right people.

Your Venture’s Unfair Advantage

1)      Access to an MLS system. This is valuable because it provides access to real estate prices. It is rare because not everyone has access to it, and you must pay to use it. It is very hard to copy by others and while there are other ways of getting this information an MLS system is the best way.

2)      Market Experience. This is valuable because it provides the basis for the business and service I am trying to provide. While it is not rare and substitutable, it is still very valuable which outweighs the others.

3)      Real Estate experience. This is valuable because it is required to be successful in the real estate market. While it is not rare and can be copied it is not very substitutable. This value provides an edge and knowledge over those that are uneducated in real estate.

4)      Networks. This is extremely valuable and can be rare. This is hard to copy by others and there are few benefits that can make up for a strong network. This is an extremely valuable resource to have since there are many advantages to having a big social and business network.

5)      Formal Education. This is very valuable because it provides knowledge that can’t be obtained elsewhere. It is also rare, inimitable and non-substitutable.

6)      Real Estate License. This is very valuable because it allows one to buy/sell real estate as an agent and access to a MLS system. It is somewhat rare but not that hard to copy as anyone that is 18 can get one. This is a very non-substitutable resource because there any not many other licenses that allow you to do this.

7)      Building Experience. This is very valuable but not rare or hard to copy. But it is very hard to substitute. This value greatly enhances my ability to be successful in my venture idea since it is predicated around building and selling and a knowledge in building.

8)      Business Experience. This is valuable because it provides knowledge with the business side of my venture. However, it is not hard to copy, rare, but it is hard to substitute for something equally as important.

9)      Business Contacts. This is very valuable because I have owners of companies, I can contact that will provide me information or be able to advise me on work. This is not a necessarily rare or hard to copy resource however there is not good substitute for it.

10)   Perseverance. This is probably one of the most valuable attributes to have in entrepreneurship. This is a trait that other people can have but they don’t necessarily possess ion their own. There are not many other things that substitutes true perseverance.

I believe that my top resource is my network that I have. Between business owners, entrepreneurs, and business professionals I have a full circle of resources that can provide me with information at every stage of my business venture and is the key to being successful.

Reading Reflection

Makers: The New Industrial Revolution, Chris Anderson

The overall theme of this book, without a doubt, is this is what the future has in store. Throughout the book the text is always looking forward and into the future of what manufacturing has coming to it. While this point could be seen as an argument, I believe that he backs up his point and assert it as a fact rather than an argument. I think that this book connected very well with what we are ENT 3003. The author is an entrepreneur himself, as well as having a background in the Economist Magazine, giving him a strong knowlege in the area. This book also details the ways that the author believes the way that the future will look in regard to manufacturing and the way that the nature of production is changing. The exercise I would create for the class is a paper/study based on how manufacturing has changed since the start of industrial revolution as well as a roughly 10-year forecast into the future of what we think manufacturing will look like in the near future. What I took away the most is how through devices like 3D printers the traditional sense of manufacturing can be replaced. While not on a massive scale, but for many products this idea is highly successful and profitable. By reading this book I learned about the changing trends in the production of goods and realize that where there are being produced is changing as well as the costs associated with them.

Growing your social capital

Domain Expert:

Eddie Garton, Vice President of Construction for Arthur Rutenberg Homes. Eddie has extensive experience in residential building construction as well as several years in commercial construction. Additionally, he is familiar with the process, from beginning to end, on building construction including permitting, estimating, budgeting, managing construction as well as interacting with customers. I found this person by working with him for three years. This person provided me with information on how to start the building process as well as requirements I would potentially need to start a company like I have in mind. By including this person in my network, it will provide me a resource for information as well as networking in the area since Eddie works with many subcontractors and owners of construction companies.

Market Expert:

Debbie Shagnea, real estate agent for Watson Realty Corp. Debbie is a very experienced real estate agent and has been practicing for over 20 years. She consistently sells a large volume of real estate annually and has the #1 real estate agent/team in Florida six times in the past 10 years. I found this person from working with her in Jacksonville to sell a couple houses. Debbie was able to provide me insight on how the real estate market work and any required certifications I might need in order to sell real estate after building it. She also gave me advice on selling real estate and how to target a specific audience. This person is a great network because she has a very extensive reach in the real estate market, loads of experience and knows many other realtors in many areas that would provide a very large customer base.

Supplier:

Jason from One Stop Kitchens and Bath. Jason is the head salesman for one stop which supplies cabinetry for new construction as well as remodels. This person fills the spot because he has an insight on the logistics of supplying a complicated item like cabinetry. I found this person by working with him over the past 2 years while I was working in residential construction. What he did for me was provide detail on how the whole process works on his end as a supplier/installer and how they typically do business with building companies as well as requirements for what they need to build they products. By talking to this person, he can help me network to other suppliers that will be able to provide me with additional product I will need that go into my final product.

This experience has showed me that networking opportunities are huge. They are extremely important to growing a business as well as simply finding information that can help determine if an idea I feasible. This interaction did differ from other networking experiences because instead of representing a company I was working for, it was my own idea I was working for so it made me more inclined to talk to people as well as ask more in-depth questions in order to figure out information for my idea.

Idea Napkin #2

I am a senior in the construction management program at UF. I’ve worked in the residential construction field for the past three summers as well as commercial for a year. Through this I have gained extensive knowledge about the homebuilding and real estate process both on the construction side and the financial side. I have experience with estimating, budgeting, and managing subcontractors to get custom residential homes built and planned for construction. In addition to this I have worked in the construction industry for the past five summers, teaching me how to build many things myself. I aspire to one start my own construction company or a development company. I want to start working for a company to learn the ropes and gain knowledge in the industry and then eventually start my own business or enter into business with someone else. I see this business playing a huge role in my life, using it as something to gain capital and assets to turn into future investments.

What I am offering to customer is a product, in the form of physical real estate and places of residence, as well as the service of a real estate company. By building, developing and selling housing/real estate this will provide for the influx of population moving to developing areas or relocating within the state.

My target audience is individuals or young families that are looking to relocate to developing areas in cities. By building apartment and multi-family housing in developing areas this will attract people that are moving into these areas due to the location of this housing. The people that I am targeting will be younger people that still like to out and do things on Fridays and the weekends. Additionally, they will probably be a young family with younger kids. They will most likely be moving within the state, possibly relocating for work or wanting to move to an area where there is a lot to do.

Customers would care because since my company would be acting as the developer, builder and the real estate agency, we would be able to sell at much lower prices than other developments without sacrificing quality or location. By doing so, customers would be provided housing in a desirable location without having to spend additional money to live in such location.

What sets me apart from everyone else is that I have the experience as well as the formal education to make a company like this successful. Given my work experience in the construction industry as well as the real estate market I believe this would provide me with some of the tools that would be required to start up this business. BY operating in a geographically desirable area there would be a large customer base willing to move into the area.

I believe these elements fit well together for my business idea. I think what elements I combine together create a successful business idea and will have the right target audience to make this idea successful. One point that I incorporated into my second napkin idea was that I described my target customer more specifically, as well as I changed what this typical customer looked like. The second thing I incorporated was I made my business idea clearer. From when I started the first napkin idea to now, I have a clearer vision of what I believe my opportunity is.