5Aug
Debt Ceiling

America Needs To Pivot

The more I watch, read and listen to the difficulties that the USA is going thru, the clearer it is to me that as a Country, we are not doing our best. To the contrary, it feels like at times we are doing our very worst. Running a Country really is a lot like running a business. So, along those lines, I’m going to talk about the current state of the USA in business-like terms.


Customers aren’t very interested in what we’ve built I’m afraid. In a classic, old-school entrepreneur move, we’ve built something no one really wants. Why? Because the builders aren’t innovative. They don’t think creatively. They are old, tired and out of touch. There is no user testing! The Government really should run like a business and for the most part, stick to what we are good at. Great companies look to get better at specific niches they know about. The USA needs to learn how to make customers (tax payers) happy while making a profit. Profit? That is a dirty word in our current status it seems. In business, there really isn’t such a thing as a ‘deficit’. There is profit, there is loss.

Why doesn’t the USA look for new ideas to make money? A company tries to figure out how to grow revenues and profits by creating more products and/or services that their customers want. Instead, the USA is the IBM of old. We have a huge grip on #1 and we are going to ride it all the way to the bottom.

We are about out of runway, too. Revenues (which I hate calling taxes “revenues” at all) are declining while expenses are increasing – yet we are losing market share. Just this week, the US debt increased more than it ever has in a single day ($285 BILLION IN ONE DAY!). The USA is chasing every vertical channel you can imagine; many of which have a long and storied history of negative ROI.

Some of our best talent cannot get here while other talent is leaving, or, worse yet, is being asked to leave. We are lead primarily by “management” that is old, boring, and out of touch. They don’t innovate, they stagnate. Lean startup? Try bloated old machine. Good luck trying to convince someone to invest in a model like this. WebVan eventually ran out of cash and no one was there to help. The USA is headed that same direction. Guess what? It’s well deserved. Good investors don’t throw good money after bad. There is not a track record of good financial stewardship with the funding rounds the USA has raised, so why should we get more? We shouldn’t. Not as long as we are going to continue down the same path, with the same products, with the same management. With all of those “sames”, we are of course bound to get the “same” results!

Newsflash — those results STINK.

If I were describing a company like I describe the USA, it would be one that is on its way out of business. That is why America needs to pivot. What does that mean, exactly? This is what I think. I really do want your comments though at the end of this post. What do you think? What did I miss? In the meantime, here are my thoughts on how the USA can make a move towards actually changing for the better.

1 – We need more youth at the top. By youth, I do not mean inexperience. Time doesn’t guarantee experience, though. Previous success and failure are much better indicators. There are a lot (perhaps more than ever) of really successful, interesting, innovative and super intelligent people in this Country under the age of 40. There are of course plenty that are over 40, but politics has enough of them involved already. I want to see the great technology and business leaders (most of whom are in their 30′s, with a few even in their 20′s) of America at the highest levels of leadership in the USA. That’s right, if the right candidate (insert big tech name here) ran for POTUS, I’d vote for them even if they were 32 years old. Would you?

2 - No more spending if we don’t have the money. It’s time we act like a business. If our runway is short, we should cut expenses. It will hurt. In fact, it will suck. Many people’s lives will be changed for the worse. But if we were a business, and we were out of money, we couldn’t borrow more. Banks don’t lend to companies on the precipice of bankruptcy. Why do they lend to us? Because we are the prettiest of the ugly choices. That isn’t saying much though, is it? Regardless, it’s time to make tough choices and get expenses in line with incoming cash.

3 – INNOVATE! An over used term for sure, but definitely one that could be applied to what we need at every level of Government. Technology could be used at so many levels to create new efficiencies and save this Country billions, and probably even trillions, of dollars. Innovators innovate though. Who are our innovators in the leadership of Washington?

4 – I like Obama as a Father and a husband. I think he is a good guy. He has no clue how business works though. He is not business friendly. In fact, he is quite the opposite from my perspective. Obama may be the worst President for business that I’ve ever seen. He is so fixated on getting wealthy people to pay more taxes that along the way he is killing business growth, innovation and the lifeblood of America – the entrepreneur! Talk to any business owner about Obama Care and see what I mean. We need a President that is an advocate for business. If you want the economy to improve, empower businesses to grow – it’s that simple. The entrepreneurs will take care of the rest.

What else can we do to jump-start this Country? We are on life support. It’s time to get a donor! Seriously, what do you think we need to do in order to get things back on track? Agree with my assessment above? Disagree? Comments please!

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About Alex Lawrence

Alex has been a successful entrepreneur for 20+ years. His current venture Lendio ranks #34 on the Inc. 500 list. Alex earned a BS degree at the University of Utah and his MBA at Weber State University, where he is Vice Provost and Director of the Entrepreneurship Program. If you want to talk with Alex about business and entrepreneurship (or other questions), email him (alex AT startupflavor DOT com), or you can find him on Twitter @_AlexLawrence.
  • Aneil

    Our government is certainly broken and badly needs innovation, but you really think that his focus on returning tax levels to Clinton-era levels is the problem?  It’s pretty clear that we’ve got a demand problem, no?  Banks and corporations are sitting on cash and refusing to lend, while consumers are cutting back.  Obama may talk about progressive policies to placate his base, but ultimately he folds.  Despite the noise of Tea Party types, Boehner claims he got 98% of what he wanted and Ross Douthat has taken to claiming that Obama actually wants a right-leaning budget deal: http://www.nytimes.com/2011/07/11/opinion/11douthat.html

    And on Healthcare?  Wasn’t this a Republican proposal originally – I think Bill Kristol proposed this in the 90s, didn’t he?  Obama ruled out single payer from the start and negotiated away the public option with health care companies before the public debate, despite strong majorities supporting both.  (Yes, you read that correctly – here’s a compending of polls from respected sources: http://www.medicareforall.org/pages/Chart_of_Americans_Support and http://www.washingtonpost.com/wp-dyn/content/article/2009/10/19/AR2009101902451.html).

    The vast majority of the debt was accumulated under GWB, our “MBA president”, and the financial crisis came on the heels of his 8 years.   I’ll agree with you that Obama doesn’t know how to lead, but after the mess created during Bush’s 8 years, calling Obama the worst president in history and pinning slow innovation and business growth on him just doesn’t wash.

    • alex_lawrence

      Hi Aneil,

      Thanks for taking the time to come to my blog, read the post, and share with such a thoughtful reply. My take on your response:

      You focused on only one part of my post. I certainly do not think that there is only one problem, or one person responsible. I am neither Republican nor Democrat. I vote person, not party. This mess is a combination of many people making a series of bad decisions for a very long time. It’s going to take a series of good decisions for a very long time to rectify it as well. I didn’t call Obama the worst President in history – just the worst one I’ve seen in my life as it relates to his inability to work with business. There is a difference.

      Again, thanks for the links and the thoughtful reply. I hope you’ll come back and do so again.

  • http://twitter.com/_KenKaufman Ken Kaufman

    I couldn’t agree more. In fact, I was thinking about writing a similar post. Banks do not lend to companies carrying the debt load of the US. America’s current ratio reeks of insolvency, it is way over-levered (meaning negative economic results are magnified), and it’s debt coverage and fixed charge coverage ratios are as out of whack as any company I’ve seen. Pivot it must, in so many ways.

    Alex, great, thought-provoking post. 

    • alex_lawrence

      Yep, using business metrics, we are bankrupt.

      Thanks for commenting here, Ken. I follow you on Twitter and read your posts so I’m glad you took the time to post here.

  • http://twitter.com/ryankendrick Ryan Kendrick

    When you have a bunch of senior executives (our reps) who are not held accountable by the shareholders (citizens), status quo will persist. We let them get away with driving us into the ground financially, and the only time we boot them out of office is when they send an inappropriate picture to someone.

    And while “customers” won’t be very interested in our structure, they are most certainly interested, envious, and (literally) dying to have our product, which is still the most desired and most innovative product on the market: freedom.

    The passage of HR 5297 has aided small business lending, and while a TON of work still needs to be done, it was a positive step in the right direction by the Obama administration.

    But you’re right: we’re like the ostrich with its head in the sand regarding our long-term viability as a country. Ignorance is bliss, right?

    • alex_lawrence

      LOL about booting them only when they are caught sending photos. True though! Ignorance used to be bliss. Now it is a painful reality.

  • http://twitter.com/DustinNay Dustin Nay

    I agree!  We need this type of thinking in office– I’m really sick of the rhetoric from both sides… and the sad thing is that the people are perpetuating the rhetoric.  We have liberals on one side spewing garbage about how horribly out of touch conservatives are, and we have Tea Party fanatics on the other side saying that liberals are stupid, not business-minded, etc.  I think this partisan divide is mostly a mental block, created by some crazy, power-hungry campaign managers, fueled by the media (both sides), and devoured by the controversy-craving American public.

    What we need is no-nonsense, get-the-job-done leadership.  Unfortunately, I’m not sure the candidates are willing to be authentic with their platforms, I’m not sure the media is ready for journalistic integrity, and I’m doubting the American public is smart enough to see through all the crap to make an intelligent decision.

    But I completely agree with you Alex.  Maybe we need to amend the constitution to allow some younger than 35 to be elected president?

    • alex_lawrence

      Exactly why I don’t vote with one party or another. I’m tired of partisanship being the first consideration and constituents being the second.

  • http://www.igobydoc.com igobydoc

    Great post Alex, you me fired up a bit. So here is my 2 cents… or maybe a buck.

    I am not sure I blame Obama, because what decision has he actually made? Seems like more than any other president, he is the the most “Obvious” puppet of the house and senate. Does he, or can he, actually do anything without being shut down?

    We elected him for change, but the republicans refuse… they dead lock on anything he ran for, and the sad part is, Obama caved! Hell all the democrats cave as well. Bunch of pusses if you ask me!How about one party? These parties are so dead set on old ideas and spew the same crap, that when they speak no one wants to listen. It is always the SAME political BS! Not to mention, it seems like no matter when a politician opens their mouth, it is just complaining, and positioning for the next election. Hey Washington… you have been elected, do your damn job and stop worrying about the next election. Get results you meatheads!

    I like the idea behind the health care act, but what we got is not even close to what was originally proposed. I sit here, diabetic with some health issues, and all I can say is it is cheaper to be dead than to obtain affordable heath care. Even now that I am (thankfully) employed with health care benefits, the cost coming out of my check is INSANE and I have to wait 12 months before anything to do with my diabetes will be covered. Thanks health care act! And don’t even get me started on credit and the inability to get a loan!

    Next up… the stale old farts in congress. I say we sweep these oldies out, and put in all new fresh blood. The president get’s 4/8 years… why do these guys get lifetime seats (or so it seems)? On another note, these people the “customers’ elected have bad ass benefits, fat paychecks, additional perks, and this month OFF! Hey can I take a month off and still make bank? Not hardly. Especially with the economy the way it is, the LAST thing any of them deserve is a day off, let alone a month! What all these “politicians” deserve is a big fat PINK SLIP! Fire them all! Show the world that “we the people” are fed up with the hole they are digging is into. Get people into these positions who actually want to make a difference for the country, not just for their financial well being.

    Better yet… have these politicians work like we work. They should have to set goals, deadlines, be reviewed, and be accountable… just like you and I are. If they fail to deliver, they are let go, just like we would be. I bet we could replace the whole bunch for at least 1/2 the cost we have now, as I bet many Americans would be thrilled to work for one third less than these over paid “servants” get paid. Another thing, why not just lay some of the government workers off too. Currently working for the government seems to be the only real job security one could have. (Hell I applied for the Gov at one point, mainly just for health care). The America “business” can be bankrupt and your department can be losing money hand over fist, yet you still get to keep your job, and receive all the killer benefits. Sure these layoffs would hurt many people financially… but when you gotta trim the fat, you gotta trim the fat!

    America (customers) need to wake up, and decide to take the government back. I am so frustrated every single day with how these idiots run this country I want to scream. So the question is, if not them then who? Would you run for office to make the changes needed? Does it take a particular type of person, last name, financial background to be in politics? Or could it actually be ran by the “people” for the “people”?

    End of rant.

    Doc

    • alex_lawrence

      Doc –

      Thanks for taking the time to share here. I don’t consider myself Democrat or Republican as I have voted for both for President. I always vote person, not party. I definitely am not an Obama hater. I just feel like he is not a business-friendly President. The health care act is a tough one. I watched cancer drain my parents dry until my Dad finally succumbed to the disease. It was horrible as he’d paid for good health insurance all of his life. Having said that, ask business owners the impact mandatory health insurance will have on them. If you think unemployment is high now, watch what happens when this cost is added to a small businesses bottom line. I don’t think healthcare should be a required benefit for employers to offer. If you don’t get the benefits you need from an employer, seek employment from one who does. I think that is the better, albeit still not easy, solution. Regarding your diabetes, is it something that if you ate better and lost weight you could see improvement on? If not, that sucks! Totally agree with you about term limits. I can’t stand professional politicians. They are so out of touch. I’ve thought about running for office but I’m afraid I’d lose my edge :)

      Thanks again for taking the time to share your thoughts. Keep fighting for more!

      • http://www.igobydoc.com igobydoc

        Hi Alex,

        Thanks for the reply! I am with you, as I do not consider myself Democrat or Republican either. Sorry to hear about your dad… I watched my mom go to battle with diabetes, and I believe it was the health “care” system that killed her. But that is a completely different topic.I agree, business owners should not have to bear the burden of covering health. In my old family business, we had 40+ employees we paid health for, and it was costly… that’s for sure. We watched the costs go up year over year.I went over 10 years with no insurance as I could not afford it, thanks to my diabetes. Now that I have it, I have a 12 month wait, crazy deductibles etc. Absolutely I could do better at maintaining my disease, and I have done a decent job at that, but I guess my point was, it would just be nice to have affordable health care. There has got to be a better way.If you run, I’ll vote for ya! Doc

  • http://twitter.com/JamesRClawson Jim Clawson

    America is definitively a poor example of a self reliant nation that it used to be.  How can we continually borrow and think that everything will be ok?  Hopefully we will be able to get ourselves out of this mess and become again the thriving Country that we once were!  @ipayables:twitter  @JamesRClawson:twitter

    • alex_lawrence

      Totally agree, Jim. I think we can and we will. It won’t be without pain first though (as evidenced by today’s stock market drubbing).

  • Benjamin Rollins

    Nice post and excellent points. I also think Thomas Friedman’s comments from his August 6th are spot on: “..we’ve let our five basic pillars of growth erode since the end of the cold war — education, infrastructure, immigration of high-I.Q. innovators and entrepreneurs, rules to incentivize risk-taking and start-ups, and government-funded research to spur science and technology.” http://www.nytimes.com/2011/08/07/opinion/sunday/Friedman-win-together-or-lose-together.html?ref=thomaslfriedman

    • alex_lawrence

      Thanks Ben. I had read that article and loved it as well.  Couldn’t agree more.

  • http://www.cavm-ombc.ca The Virtual office guy

    No way denying that taxing businesses will slow companies. However, companies outsource all their work to Asia. So it seems a bit hypocritical to blame people who want to tax the rich by saying they will hurt the work force.

    The problem is workers do not see themselves as companies. Because if they did, they would think twice before asking for higher salaries. They would actually try to be better employees. Companies, entrepreneurs, and workers are just as greedy. They all want more for less. This is what is causing all the problems

  • bpcahoon

    Alex,

    Just found your blog and I’m excited to start following.  I’m an entrepreneur down in Utah County.  We built a company over the past 5 years and just were able to exit.  Quite a ride!

    Anyway, on healthcare, as a small business owner I see a few problems…

    1.  Healthcare costs and insurance rates are ridiculous.  6 stitches cost me $1200 this past year.  As a small business we saw our rates rise 30% every year.  The answer by the right is competition, but in healthcare it is VERY difficult to find out what they are going to charge you.  It seems like competition has gotten us to the mess we are in.

    People with rich insurance plans abuse the system by over use and people with no insurance abuse the system by going to the emergency room and making the rest of us pay.

    2.  People don’t start businesses because of the fear of losing their healthcare benefits.  I worked for a very large company with great benefits. The reason why most of them don’t leave an start businesses is the fear of losing healthcare.

    It seems like we could generate a lot more companies if healthcare wasn’t such a big worry.

    3.  Insurance companies are out of control with personal insurance.  We were denied by personal insurance companies because my wife 10 years before had taken some infertility pills.  They can drop you or raise your rates at any time.  They can also retroactively drop you if you missed anything on the form. 

    4.  The excuse is that we have the best healthcare system in the world, but the facts don’t bear that out.  We actually pay more for everything but have worse outcomes.

    5.  The U.S. is the only developed nation that you can actually go bankrupt by getting sick.  Your Dad’s example is tragic and doesn’t need to happen.  Is Atlast Shrugged really the way we want to take care of sick people?  I’m all for making money, but we have a moral obligation to take care of the poor.  Right now it feels like we are doing this the wrong way.  Why pay more by sending them to the emergency room. 

    For my family I want portable, reasonable, HSA-like, health insurance that I can take to any job.  For the poor I feel a moral obligation to help out.  99% of rich people are rich because of the environments they were raised in.  I know there are exceptions, but we have an obligation to the poor.

    If you don’t like Obamacare, what is your recommended solution? 

    I really am interested to hear your opinion.  I’ve been shocked that more small business owners didn’t support health care reform.  It seems like insurance reform is a good thing for small business, so I’d love to hear what you think.  I’m definitely not out to look for a fight.  I’m genuinely interested in what your ideal solution would look like.

    Thanks!

    • alex_lawrence

      Wow, just saw this comment. Sorry for the delay. Lots of questions and comments and thoughts here. Perhaps we should meet?

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