Grad School - Update

I enjoy taking on new challenges. Many times that includes personal development and growth. That can be accomplished in any number of ways. This time I decided that I would continue my education with St. Edward’s University in their Master of Business Administration program. I chose the concentration of Entrepreneurship in hopes that I can continue to increase my level of understanding in small business management and growth.

So far, the program has been rewarding. I am nearing completion of my second semester and the coursework has been very interesting. Perhaps the most challenging class I have taken so far is managerial finance. If I had to summarize the class in a single word I would label it, interesting.

I will let you know how the program develops. I was waived out of the first phase, and am two semesters into the second phase. With four semesters to go in the program, I still have quite a bit of a journey ahead of me.

Grad School

Since the day I received my first car from my parents, I have been either working or competing in sports. I quickly found that if I was in control of my day to day activities at work, I could enjoy myself immensely; sometimes more than playing sports. In fact, I would turn down Football Scholarships to run a small business. Education was important to me, but it would have to take place in the evening, I had a business to run.

Over the next several years, I would hop from one college to the next, taking classes and changing majors with each new experience I had in the “real world”. Eventually I would settle at St. Edward’s University (http://www.stedwards.edu) in Austin, Texas where I would obtain an Undergraduate Degree in Business with a concentration in Entrepreneurship. Fitting.

The degree has come in handy, but in ways that most people would probably not imagine. Networking has been a big key. Due in large part to the size and atmosphere at St. Edward’s, I have been able to make many lasting and influential contacts. The actual education for me was hot and cold usually because I already had direct experience or exposure in the “real world” with the application, theory, or concept we were going over in class.

I have set out and accomplished what many people search for in small business ownership. I have helped people grow businesses into large corporations, watched dreams come true, and even seen people retire. But I have also experienced what every Entrepreneur has also seen, failure.

One of my current ventures is on the edge of really taking it to the next level. I can feel it. I can see it every day in emails, the marketplace, and even the people around me. I can feel the electricity in the air. While this excites me, I feel a need to grow myself personally. Seeking out new stimulus, new ideas, and furthering the foundation I have in practical experience, along with education theory interests me greatly. That is why I have decided to go back to St. Edward’s to get my MBS in their Entrepreneurship program. Fitting.

Currently ranked #20 in the West for Masters Granting Institutions (http://www.usnews.com/sections/rankings), St. Edward’s is a wonderfully groomed campus, ideally located, with a tenured faculty that interacts directly with the student body. The value of the MBA is obvious when you inspect a resume. However, since I plan to never interview for a “job” ever again, the degree itself is less valuable to me. The experience, the actual education, and the people I will meet along the way are the true value I seek.

Never Above, Never Again

When your company’s data is critical, locating your servers and infrastructure in a collocation facility can limit liability, give you the uptime guarantee you need, and provide added value for your business. They are scattered around the country all pushing many of the same “vale adds” for your business. However, a few of them have a slight differentiator like being located in a former underground manmade cavern.

This past week I visited eCavern (http://www.ecavern.com). A collocation facility located in the city limits of Louisville Kentucky. This is unique in that the facility is both underground, and centrally located within a major metropolitan area. Louisville is a great location for collocation and hosting facilities. The city is home to several of them. Before last week, I would also say this is a relatively stable geological area until we felt an earthquake that occurred in St. Louis (http://folkworm.ceri.memphis.edu/recenteqs). This aside, the facility was met without harm.

The tour was pretty remarkable. We drove down a ramp into the former entrance of the mining facility (under a K-mart of all things) and were met by security guards who had us sign in and park our vehicle. We were them allowed entrance into the facility only after visual recognition of one of the Principles in the company. What was on the other side I was not prepared for; an office build out with more money per square foot than many office spaces I have seen.

The tour of the server facility was rather brief due to its only recent launch. They have a small client list and were very careful not to mention any names. The more entertaining part of the tour for me occurred when we piled into an electric powered industrial golf cart and drove some of the partially occupied three million square foot chamber.

Since I am not endorsing the product per say, I will not include any pricing information but I am sure it can all be found on the website. We met with the President of the company, Mark. He has a great video that can be found on the site explaining the entire product.

If you are a small business owner, and you house your own data, you are asking for problems with your clients. Find a collocation facility close to your IT personnel, and allow someone else to
manage your uptime guarantee.

Gentrification

14. The restoration and upgrading of deteriorated urban property by middle-class or affluent people, often resulting in displacement of lower-income people.

Recently my business partner and I for Order Experts moved our office to the “Eastside” of Austin, Texas. This traditionally lower income area of town is undergoing a renaissance of sorts bringing the artistic community, new development, and retail to an area that can hardly afford to keep the streets safe. Why did we move there? It was close to downtown, and affordable.

Like all instances of gentrification, the area is mixed with recently renovated or entirely new development, with other existing buildings that range from condemned to being perfectly suitable for a family or small business. However, this mixture of middle and lower income populations rarely coexist without friction.

At my office, our frontage is all glass and faces East Cesar Chavez Street in Austin, Texas. We are greeted daily with large snot filled collections of saliva on the glass, shouts from cars ranging from “Fuck you Yuppies!” to “Die white boy”. Last week there was a new “posting” on the light pole at the intersection of our office.

Since I have employees, I had to call it in to the Police. I was met by two officers who found the situation unremarkable, but were at least impressed that they didn’t have to explain to me the local situation. I was a little surprised when I found that both Police Officers were excited about the spread of gentrification, but I guess for them the result has a direct impact on lowered crime.

As I sit in my office tomorrow, and I watch the large collection of middle and high school aged students walk by when school lets out, I will again notice that they are all wearing either black or white because their school is too worried about gang colors to allow the personal freedom of expression. I will again notice that not a single one of them is Caucasian. And I will again watch as one of them spits on the window, or throws a rock at the sign outside our office.

While I have made no points or amazing conclusions in this post, I will say this: Gentrification brings out many problems with our communities. And while the result may improve the local area, the reason is not the new buildings, or the improved services. It’s the literal change in the local population. And that is about the worst possible solution I could envision.

Beware Big Business, Big City

Remember when Intel was coming to downtown Austin? How about the other large employers drawn to Austin with tax incentives such as AMD? Well some of them made it, and others… well others left us with concrete scaffolds perfect for Lapis Light (http://www.bluelapislight.org) show.

What about Computer Sciences Corporation? Well, take a look at our beloved “green” City Hall. Built partly with money from CSC, it is now flanked by two buildings that CSC never fully took over. But fear not, recently, Silicon Labs took up residency in one of the buildings. This, after Microsoft pulled the plug on another CSC building tenant, Digital Anvil. Ever wonder how all the small shops along the new 2nd street district can make it? That’s an easy one: Tax incentives. But at least there is something there, and the City leadership realized it needed to act.

Sometimes Big Business can leave a city with an eyesore that only creative minds like Lapis can do anything with. Thankfully the City has decided to erect a new building on this city block, the new Federal Courthouse. But on the other hand, sometimes Big Business can leave us with improved infrastructure like CSC did. I think a lot of this has to do with the leadership of the City, and how well they interact and negotiate with large businesses.

I wonder, now that Google has secured space in the Scarborough building at 6^th and Congress, what did the City get out of this deal? Probably nothing since they are leasing existing space. My point is… the city should be leveraging these businesses towards responsible growth for Austin. Consider, what objectives can the city achieve with the W, or with The Austonian? Large footprint developments like this can really shape a city the size of Austin.

Vacant Land and New Construction

Working with a lot of investors and builders gives me ample experience in dealing with vacant land. Recently, I was discussing ways that buyers could reduce the cost of purchasing a newly constructed home with a co-worker of mine. We came up with a lot of the typical incentives that builders use to lure buyers such as: Rebates, Home Warranties, Preferred Lenders, Free Appliances, and even Golf Memberships. While all of these things are nice, if the bottom dollar is a concern for you, there is an obvious way to save money that a lot of buyers seem to miss; purchasing the land yourself.

One area where a builder makes their money is finding a plot of land to build on, cheap. I see a lot of builders spending considerable amounts of time finding that special lot. But I ask myself, why can’t a buyer do the same thing? The simple answer is they can, it’s really just a matter of knowing what to look for, and having the time do it. While it does take away some of the profit, I have found that very few builders will shy away from an opportunity to build a home for a buyer that brings their own plot of land.

There are many important considerations when buying a plot of land to build on. This is one area that a buyer does not have to worry about when using a full service home builder. For example, certain trees can be restricted and may not be able to be removed. Another problem that builders face is the flood plain. And finally, City code for set back and easements can really restrict your building potential.

Building a home can be a lot of fun, but it can easily turn into a nightmare. If there is a time you value the expected, it would be when building a home. If you are going to purchase land for the purpose of building on it make sure you do your homework, and make sure you are working with a Realtor that has done it before.

Condo Inventory in the Austin Market and Indirect City Controls

One of the questions I keep hearing from a lot of my buyers is, “When will the supply exceed the demand in the downtown Austin condo market?” And the honest truth is no one is sure, or if it will. But there are a lot of factors in place that people are not considering.

Perhaps the largest hidden factor that most consumers and even lenders and realtors are not considering is the cost control that the City of Austin exhibits over developers in the downtown area. I am not talking about hard costs like concrete and steel which are also climbing, or the permitting costs, or even the hard dollars the City will ask for to use for “general improvement” but the infrastructure charges. For example, let’s say you wanted to develop a tower in the parking lot on West between 5^th and 6^th street; A great location for a new tower. The problem is, the City has already upgraded and installed new infrastructure for other approved and planned building in that area. For you to bring a new tower into the equation throws everything off. The City combats this with higher infrastructure costs. For your new tower, the cost of infrastructure such as water, waist, and power could be many times more expensive than the guy across the street that had City approval years prior.

This is an example of one inventory control that people are not taking into consideration. There are many other factors governing the Downtown Austin Condo market that I think people are missing such as the local economy, city incentives, improved safety, State Legislature Offices, and new business.

Purchasing real estate always carries a degree of risk. You have to decide for yourself if you are willing to take that risk in exchange for the actual or perceived reward. As a buyer you have to remember, caveat emptor, “let the buyer beware”.