The Next Great Business Idea

It seems to me that everyone, all over the world, is sitting around trying to think of the Next Great Business Idea. The reason, of course, is that every week we read about another young geek who has made an internet fortune, and frankly, it's getting very annoying.

If you're looking to make billions, then you'd better keep thinking - and think hard, because you have a lot of competition. Apple Inc., for example spent 3.4 billion dollars a year on research and development in 2012 - and it was at the bottom of the list of the major tech companies. Microsoft spent nearly 10 billion. How much are you spending to help you think out of the box - three bucks for a bottle of Heineken? 


There is good news, however, if you only want to make millions instead of billions, or lower your expectations even further  by shooting for a few hundred thousand dollars, instead. The good news is that you don't have to think of the Next Great Business Idea in order to make a small fortune. You can do reasonably well with The Next Good Business Idea. You might even fare best by improving or enhancing an Old Good Business Idea. Or how about simply Borrowing a Good Business Idea from somewhere or someone else?  That may be the surest ticket to success of all.

The Executive Office Center at Fresh Meadows is an example of a Borrowed Good Business Idea.  Some people in Queens think we invented the concept of virtual office services, but, sadly, we did not. In fact, you can find virtual office centers in cities all over the world. There are dozens of such business centers in neighboring Manhattan, and several on Long Island, as well. However, in 2010, when the Executive Office Center opened its doors, there was not one such facility in Queens - a borough of some two and half million people. (As of this writing, I don't see one in the Bronx or in Staten Island, either - so someone really ought to jump in there.)

Mr. Reza Satchu is one of North America's most successful serial entrepreneurs, having founded a string of multi-million dollar companies. As his experience shows, finding  that next big idea is simply about looking at things you experience every day from a customer's perspective, and thinking about how you can improve that experience.

In an interview last year with the Toronto Globe and Mail, he said, "Most people think to be be an entrepreneur, you have to be walking down the street and a bolt of lightning hits you and you get inspired to look at the world differently and come up with this brilliant new idea...I would argue that most great entrepreneurs are simply able to look at everyday things in a slightly different way than others," he said.

"Just walk through life for a day and think about all the things that frustrate you and write them down and what you could do to solve that problem, because, if you have that problem, then lots of other people do, too.  And if you can solve that problem, then you'll create value and build a business."

The search for the Next Great Business Idea by every Tom, Dick and Harry reminds me of great masses who buy lottery tickets every week. There is something in common between their respective quests - utter futility.  That bolt of lightning may strike one or two among the masses, just as one or two among the many millions will strike it rich with a winning ticket. For the myriad multitudes, however, it will be frustration and disappointment.  

There is another segment of the population, the ones who know better than to engage in the search for the Next Great Business Idea, because, as they say, and believe, "everything has been done already." This is nonsense, of course. Looking at the technological progress that has been made in the last century alone, and the increasing pace of technological discovery, one should realize that everything is yet to be done! I would say that this is the saddest group of all, because these are the ones without even the dream.

Predictions for 2013

What lies ahead for the world of business in 2013?  

"I see President Obama's hair getting whiter and whiter in the coming year.  I see Apple Inc. getting into the market for crystal balls that will integrate seamlessly with the internet (uh oh).  I see history books devoting less and less space to the Mayans." 

This year, there are no end of the world predictions to fret about.  The Mayans got it wrong last year, which is too bad for them, because their once formidable reputation as  advanced civilization darlings of the first millenia BCE has been badly tarnished.

Do you hear anybody talking about a double dip recession anymore?  Me neither.   Despite the political dysfunction in Washington, talk about a double dip recession has all but disappeared.

There was great concern in 2012 that the Euro would collapse, and Greece would exit the European Union.  That didn't happen, thanks to the intervention of the ECB and the International Monetary Fund.  In fact, one of the biggest market jumps in 2012 came in the Athens stock exchange, where stocks rose 33 percent!

A slowdown in the Chinese economy had everybody pretty worried for a while in 2012. But China's export growth rebounded surprisingly sharply to a seven month high in December, allaying world wide concerns.

Yet, no one is exactly cheering.  We've gotten past the fiscal cliff, though many feel the deal reached between the Democrats and Republicans was nothing more than a band aid - a necessary, but pathetic compromise - and the country still faces the looming debt ceiling showdown in March.

The global economy is expected to remain sluggish in 2013, with the European Alliance still in recession.  Top Federal Reserve official Charles Evans said recently that the U.S. economy is expected to grow at a rate of 2.5 percent - a far cry from the 4.2 percent growth grate the Obama administration had originally projected.  The unemployment rate remains elevated at 7.8 percent, and employers are showing little inclination to begin hiring again. Nevertheless, a quiet optimism has emerged as the various threats of global economic catastrophe have receded. 

There is a wide consensus that emerging markets will outperform the U.S. stock market in 2013. Adam Shell, writing in USA Today, also sees an improving economy in western Europe, which has been aided by bond buying by the ECB.  The European Central Bank gave the European Union a big boost last year, when it offered to buy unlimited debt of heavily indebted countries such as Spain and Italy. Mr. Shell believes that U.S. stocks will notch an all time high, but that U.S. stocks with foreign exposure will fare better than those that are United States centric. 

Byron Wien, Vice Chairman and a senior adviser at Blackstone predicted last year that the S & P would close over 1400.  The index, in fact, ended the year at 1,426, representing a gain of 13.4 percent for the year.  However, while many others are predicting new highs for the S & P in 2013, Mr. Wien expects the index to test 1,300 again before climbing back to just about where it finished at the end of 2012.  But, like many others, he is optimistic about stock markets in some other countries, especially China and Japan. Mr. Wien predicts a 20 percent gain this year for Chinese shares.

Bill Gross, the highly regarded bond manager of Pimco's giant Total Return Fund, last year predicted a good year for tax free municipal bonds, which he called a "deserted" asset class.  He was right.  The Total Return Fund returned over 10 percent in 2012.  But Mr. Gross is less enthusiastic about the prospect for healthy returns from municipal bonds in 2013.  "I'm afraid there are going to be ashes in our stocking this year," he said.  "The juice has been squeezed out of the orange."

What's in store for the housing market in 2013?  Karl Case, who helped create the widely cited Case-Shiller Index of housing prices feels that there are lot of reasons to be optimistic, going into the new year. According to Mr. Case, 2012 will probably go down as the year that residential real estate prices hit bottom and began to rise again. However, he is careful to point out that the recovery isn't going to knock anybody's socks off.  "We're cheering because we got to 800,000 housing starts. That's still weak. It only looks good because we dug ourselves into such a deep hole." But Mr. Case says this year would be a good time to buy.  "There are a lot of reasons to be optimistic, but cautiously so."

Remember the mad rush to buy gold in the early part of 2012? At the beginning of the year, everyone was betting that the price of gold would break $2,000, including Maria Bartiromo and Jim Cramer. However, in the final quarter of 2012, after everybody finally climbed on the band wagon, gold prices posted their worst quarterly performance in more than four years, falling more than five percent. What's ahead for gold in 2013? With the global economy tipped to recover in 2013, analysts are forecasting the end of the 13 year bull run for the metal. 

The massive surge in gold prices in the early part of 2012 and the sharp decline in the last quarter brings to mind the great Apple bull run of 2012 - which also ended with massive exodus from the stock, driving its share price from a high of $706 to a shaky range just above $500.  Last year, Mashable predicted that "the year of Apple, Inc. is at hand.  Apple will release a triumvirate of products, including a super slim edge-to-edge screen iPad 3, the long awaited iPhone 5 and an Apple TV...which will seamlessly integrate with the internet."  Many analysts predicted that the stock would reach $1,000 per share.

Nevertheless, Mark Rogowsky, writing in Forbes says that 2013 is the year in which Apple bears get skewered.  He says, "look for a cheaper iPhone (around $400 to carriers), faster product refreshes to become the norm (as with the 4th generation i Pad), and a deal with China Mobile later in the year.  CEO Tim Cook makes explicit that the company is unwilling to cede the global market-share to Android and instead will compete as vigorously abroad as it does in the U.S., where iPhone share remains strong.  Apple ends the year at $800. And he adds, "Oh, and it might be the safest stock to own right now."

In the world of entertainment:  According to Forbes, Wall Street predicts that the second installment in the Hunger Games series - Catching Fire - will be the "biggest blockbuster of the year."  I loved the Hunger Games trilogy.  But that's not why I'm rooting for Jennifer Lawrence over Kristen Stewart of the Twilight series.  She seems less likely to cheat on her boyfriend and sleep with her director. 

Finally, Jack Blumner, Executive Director of the Executive Office Center at Fresh Meadows, believes that the virtual office business model will continue to attract small companies in droves. "Increased confidence will bring businesses back into the market for office space, but they will be seeking less risk and greater profitability by avoiding the high costs associated with traditional office space," And, he adds, "the Executive Office Center at Fresh Meadows will continue to provide the most economical rental platform in the the borough of Queens."