Rewire Philosophy

It is the nature of things to gain complexity over time.  As new problems develop, industrious people wire up new solutions.  Wires are connected to other wires and are threaded through the growing structure as new issues are introduced and rapidly solved.  Over time, the added load and sheer amount of new connections creates issues of size and scope and administration.  Now, adjacent industries are created around the core problem just to handle the new complexity.  More work is created, but somehow the work becomes less satisfying as it is pushed further away from the nature of its source.

It’s a bit tired to reference the tax code as an example of complexity that has built over time.   Unfortunately the ineffectiveness and inefficiencies are universally understood which make it a prime example for what goes wrong when you attack one-off problems over time by connecting a new wire.  What originally started in 1913 as 400 pages is now pushing 75,000 (inclusive of all reforms over time – the ghosts of tax codes past).  At least here, the impacts of compounded wiring are so visible that brave pioneers are compelled to take a step back and ask the fundamental question: What’s a fair way to raise revenue for the government and continue to spur economic growth? 

This yields potential solutions like FairTax (not an endorsement) at 133 pages it constitutes a dramatic simplification of our tax environment. 

My interests lie in the heart of creativity and the entrepreneurs that push the rules to the side and ask even more fundamental questions.   One’s that question the purpose of governmental revenue and ask does funding that organization yield the best results in all areas?  At its heart why not ask the more empowering question: How can a society fund common good projects?

This can lead to far more straightforward solutions like crowdsourcing capital for:

Aligning and igniting the passion of individuals to solve problems in straightforward yet creative ways.  That’s what rewiring is about. 

I am searching for the pioneers that are embracing the power of technology, following their passions, and looking at marketplaces completely muddled with legacy wiring, ripping the connections apart and providing simple, straightforward solutions where producers and consumers are efficiently connected.  

Businesses that have accumulated new practices over time that have clouded their fundamental purpose.

People who can’t see the wiring they have created in their minds that has in fact disconnected them from what’s in their heart. 

The rewire philosophy will grow by investing seed capital in startup businesses, mentorship to burgeoning entrepreneurs, and connections to a network of investors and builders that want to deliver simple and elegant technology driven answers to tomorrow's problems.

For those of you that know me from the wealth management space; don’t worry.  I’ll be back.  Believe me, there’s a lot of rewiring work to be done there.  Subscribe here to keep in touch, e-mail me to get involved, and as always let me know if there’s anything I can do to help you.

 

Creating demand before delivering supply

I'm speaking with a few product based companies that are invalidating everything I learned in my college Economic classes.  The model I exercised in school was to manufacture your supply in order to build inventory.  You then market your product to create demand and ultimately sell your product at the market price.  

Today, you can manufacture demand with no greater of an investment than an idea and a video plea recorded on your smartphone.  Setting a target on a crowdfunding site, demand is validated as the product is pre-sold.  Only after the target is successfully hit, do you scramble to supply your goods - typically through a well established manufacturing partner.   If demand (or your marketing talent) isn't large enough to warrant manufacturing than you shut down the product with ZERO carried inventory and almost no cost outlay. 

On Kickstarter alone, in 2013, over 3 million people committed over $480 million dollars in funds with nothing in return but a promise of future delivery.  While many of these projects were creative endeavors; products and even product categories were successfully tested and then delivered upon through this model.

  Oculus Rift on Kickstarter


Oculus Rift on Kickstarter

Take the Oculus Rift as an example.  The concept of virtual reality has been attempted frequently over the last twenty or even forty years by large companies with billion dollar labs.  A garage entrepreneur jams a smartphone into some goggles with crafty code and some new tricks and says he will deliver if he can raise $250,000 in pre-orders.  

The concept was a hit and attracted over 10x that amount in pre-sales as well as video game visionary John Carmack's support.  Ultimately, Mark Zuckerberg bought the company for $2 Billion dollars.  Not a bad return on the initial outlay of some rough prototypes. 

Admiditly, Oculus was a bit further along than some Kickstarter prototypes that are nothing more than a 3-D printed mock-up.  These new companies, however, are using the platform to accelerate through the market validation phase and pre-sale 100% of their supply.  Successful companies can do this again and again with new products, ensuring that each new model is a success. 

The inflection point of the companies I am talking with, is where they are looking to have even broader distribution than the crowd-funding sites and online sales.  The majority of consumer sales is overwhelmingly still in retail.  How do you change the operating paradigm and DNA of your company from a demand driven creation of supply, to a more capital intensive bulk delivery model that increases risk, squeezes profit margins, and increases sales cycles? Better question is, why?  My answer: to maximize the impact that your product can have on the marketplace - and of course, make it up in volume. 

 

 

On my last day - I was you.

How do you send that final e-mail to the people from the company you co-founded that made you grow as you watched them achieve?  Fortigent has and always will be an amazing family. Our industry leading technology impacts tens of thousands of clients along with our objective investment portfolio guidance.  Every year we were challenged and every year we had fun. 

From a single high net worth family to over $80 Billion dollars of assets the name on my business card has changed a few times:

  • CMS Financial Services
  • Flexrep.com
  • Netassets
  • Lydian Wealth Management (Became Convergent Wealth)
  • Fortigent (Acquired by LPL Financial)

While the structures and names may be different, many of the people stayed to fulfill on our purpose of defining wealth management.  I was always pleased when someone left because they had outgrown our skin and found a new and exciting path to pursue.  I was equally impressed with the caliber of new recruits that joined us to further the cause.  It was with that reflection that I wrote my last e-mail, acknowledging what has been accomplished, the untapped potential in the firm, and the new path being forged by each of us:

Hand entering CUSIPs for municipal bonds in a million dollar account - I was you.

Agonizing over a single line of code that ate up the afternoon - I was you.

Taking the heat from a client over a stupid mistake that someone else made - I was you.

Being the person who made that mistake – I was you.

Building out manager pages after the deadline has passed - I was you.

Reconciling 1099's down to the penny - I was you.

Moving a sticky note to the done column - I was you.

Creating mock ups on white boards and in PowerPoint - I was you.

Crunching the numbers over the weekend – I was you.

Listening to a manager explain why they were better than everyone else in their category - I was you.

Watching the wheel slip as the waves battled the stern - I was you.

Joining together, grabbing tighter, and charting a course for smoother seas - I was you.

Pitching the business and watching as the future client unfolds her arms and leans into the words - I was you.

Standing on stage to share and inspire people to act - I was you.

Inventing the future for one of the most impactful professions - I was you.

Banging the gong – I was you.

As change undoubtedly occurs and challenges us to bring our gifts to the world each and every day - I am you.

To never forget the feeling of accomplishment,

the power of a common cause,

the igniting of passion,

and that love can be felt when "going to work"

- I will always be you.

 

 Captain Fortigent

Captain Fortigent