The Case Of The Missing Equity! … Part II
Mar 9th, 2016 by LOONEYEXECUTIVE

A true story taken from the (Mis-)Adventures of The Looney Executive.


If you missed The Case Of The Missing Equity – Part I, it might help to catch up on the chaos of this tale and then come back for the rest!



So all of that insanity set the stage for a chaotic, unfocused, middling, small business pursuing government contracts. Having advised a handful of distressed small businesses I’d become somewhat of a distressed biz profiler. I’d seen the story before. And the evidence was laid out in plain sight for all to see.


  • No core strategy.
  • No focus.
  • Poor leadership.
  • No bread and butter clients (i.e., clients that brought consistent revenue).
  • No nothing else that was superior or unique or special that could be exploited.
  • Chaos all around.


Since he and I shared an office I’d been talking to him on a daily basis. I knew the strategy because I was helping to develop it, or at least I tried. He changed it almost weekly. This was an act of desperation. And I understood. I’d been in the desperate zone myself. But my strongly encouraged advice of developing and executing a core strategy went unheeded.

One week the focus was on applying for government certifications. The next it’s on contract bidding for items outside of his niche. We bid on a few contracts. Won none of them. Winning government contracts is a volume game. The competition can be fierce. So in order to be successful, you need to produce lots of proposals. It was a jungle where only the strongest, and best-connected, could thrive. We also discussed a few unique ideas that we could launch. These were ideas that would bring his thinking more in line with that of a tech startup founder. But Ricky just wasn’t of the mindset to think, and act, too creatively. On top of it all, Ricky was focused on his PhD studies. So he’d spend large parts of days doing school work and not addressing the severely damaged ship careening toward a fiery crash.

And yet part of the promo (before I arrived) included such typical and overused mantras as “highest quality”, “number one company”, “most experienced” … huh?

Even with that I was a little surprised when one day, out of the blue, he broke the news of layoffs for some of his small staff, including me. My surprise was not the layoff itself, but that he didn’t give a heads up, and frankly that it didn’t happen sooner. But he offered what he thought was a carrot to keep us engaged. He offered us an equity stake but …


There was no “there” there.

There was nothing original that was being produced.

There were no long-term contracts.

There were no patents or other valuable intellectual property.

There was no A+ management team.


And there was a lack of trust too.

On more than one occasion Ricky told a staff member that paychecks were on the way when they hadn’t even been mailed yet. He was buying time. Not communicating with staff. Operating on the edge. Sometimes when the landlord came by to collect, Ricky would pretend to not be there. Why the landlord felt the need to collect in person was an interesting phenomenon in itself. Perhaps he too had been told one time too many times that the check was in the mail.

As the team gathered in a meeting to discuss this dire situation, I just asked a couple of entirely reasonable questions. I didn’t want to say outright that equity-for-work was a damned horrible idea and embarrass him. But I needed to know. When I asked the legitimate question of how much he currently valued the company, he blurted out an exorbitantly high number. When I followed up with the question of how he arrived at that number, he became a bit irritated and defensive. He said that he could create any value he wanted.

Clearly he was delusional. I didn’t see this as an outright attempt at fraud. He was desperate. He wanted to think that his hard work over the years translated into something of great value. Unfortunately, like for most of the hard-working 49er’s of the California gold rush, it didn’t.

This model he’d chosen to pursue was a dead end. He may get a few contracts here and there. But without a clear focus, a good strategy, and great leadership he was destined to pilot this ship aimlessly through the coldness of space until it eventually simply crashed.


After evaluating the situation my advice was simple:

  • Shoot this miserable, suffering beast as a means to a merciful death.
  • Kill it quickly and decisively. He, and it, would not have to suffer any more.
  • Get a job. Save money. Pay off the bills.
  • Develop better ideas.
  • Start fresh in a couple of years.
  • Better yet, pursue acquisitions as a path back to entrepreneurship.


But if he was crazy enough to keep going as a startup entrepreneur … start over with a core strategy around one or two unique ideas in a space that was not a low-profit, commoditized jungle.

Ricky did get a job for a while. But, ignoring my advice, he kept the company open for business doing the same thing. A couple of years later, after I was gone from the DC area, he told me he had moved into a new office park. Same business model though. I always wish him the best. I hope he succeeds.

But the old saying is true … sometimes you just can’t teach a stubborn old dog new tricks.


Blake Glenn shares his looney perspectives, stories, and mis-adventures in The Looney Executive blog. He has interviewed hundreds (or at least tens) of people via  The Looney Executive Podcasts and former TV show. He’s the founder of a tech group called IgniteTech, and claims to be a direct descendant of the original Looney Executive – Because there must be SOME explanation … right?


If you dare, I can be reached the old school way …


P.S.  I’m actively recruiting test contestants for my business game show experiment. Interested? Please contact me so I can add you to the player pool!



The Case Of The Missing Equity! … Part I
Mar 1st, 2016 by LOONEYEXECUTIVE

A true story taken from the (Mis-)Adventures of The Looney Executive.


Way back in 2008 I worked briefly for a very small tech company. The founder, and sole owner, was a friend of mine. We met in college. Let’s call my friend Ricky. Over the years Ricky and I both tried our hand at entrepreneurship. His sole focus has been on trying to build a company around bidding for government contracts. He didn’t have a “Silicon Valley” mindset. He wasn’t focused on developing original, “disruptive” ideas that targeted a unique “space” and led to billion dollar IPOs – just simply bidding on government contracts. The DC/Northern Virginia/Southern Maryland region is ripe with so many entrepreneurs chasing the same elusive but potentially profitable dream.

At the time, Ricky desired someone to come in and provide a much needed dose of strategy and marketing for his fledgling, middling enterprise. So he asked me to help out. Over the years, as we discussed our entrepreneurial adventures, I never got a clear sense of his focus. And when I actually went inside the company I saw some things that surprised me. First, he wasn’t running his business full time. He was actually working for a large aerospace company part time. In understood this of course. You have to pay bills. And he had kids to support. But he was driving to Philly for his job. That was a 2-hour drive one way. Good thing it was part-time.

Secondly, he was bidding on supplying low-margin, commodity electronic items of all types to government agencies. As I found out in short time, literally anyone could do this. Being an expert in electronics was unnecessary. Just connect with a distributor, set up in your home, go to certain web sites for the solicitations, apply for a certification or two, put pen to paper (metaphorically of course) to bid for contracts, and voila! – you were a new very low-overhead competitor. The barriers to entry were pretty non-existent. So, because he leased a fair amount of office space, Ricky was already at a disadvantage.

Thirdly, a massive storm cloud had overtaken his operations. Let me explain. Shortly before I arrived, there was some major internal drama. Ricky fired one of his employees. Let’s call her Diane. Diane had set up her own operation using HIS equipment in order to compete against him for the same bids. But wait, there’s more.

Diane was also the sister of Ricky’s former long-time girlfriend (and mother of his 3 children), Tanya. Tanya also worked for Ricky. And she had convinced him to hire her sister Diane against his better judgment. Diane had been relieved of her previous job under cloudy circumstances. It appeared to be some level of financial misconduct, maybe embezzlement. This woman already had a history of corrupt-minded activities, which is why Ricky didn’t want to hire her. But he did it to appease Tanya. Tanya thought it would be a fresh start for Diane. Well as the saying goes, it’s hard to teach an old crook new tricks, unless they’re crooked tricks.

After Diane’s treachery, the nuclear fallout from this fiasco also emptied into family relationships as Diane and Tanya went on the warpath against each other, dragging their siblings and parents into the fray. Those extended family gatherings must have been so very interesting.

And there was a bit more intrigue going on that Ricky had actually created himself. On behalf of his employer, his job was to work with small businesses that provided products and services to the company. Over time he developed relationships with several vendors. One of those vendors built proprietary cables for Ricky’s employer. One day the owner decided to sell his little venture. And Ricky decided to buy it … without his employer’s knowledge. In short time his employer discovered that Ricky had acquired one of its small suppliers. So this employer was paying him, already an employee, to make cabling products for them through the guise of the company he acquired.

And how did they find this out?

Well Diane of course. She called and told them. Diane may be going down in flames but she certainly wasn’t going alone!

But Ricky’s employer couldn’t prove that he’d done this. They called his office a couple of times. But they got nowhere. Ricky was smart enough to operate the acquired company under its original name. Soon however, Ricky was relieved of his part-time gig. Unless, a company arranged an Enron-like bifurcation of subsidiaries, ferreting out the true ownership of any venture would take just a little digging.

Whew! Is your head spinning too?

Not to worry. Let’s take a breather. I’ll finish this story in Part II of “The Case Of The Missing Equity!”

By that time I hope your head-spinning, and dizziness, will have subsided.


Blake Glenn shares his looney perspectives, stories, and mis-adventures in The Looney Executive blog. He has interviewed hundreds (or at least tens) of people via  The Looney Executive Podcasts and former TV show. He’s the founder of a tech group called IgniteTech, and claims to be a direct descendant of the original Looney Executive – Because there must be SOME explanation … right?

If you dare, I can be reached the old school way …


P.S.  I’m actively recruiting test contestants for my business game show experiment. Interested? Please contact me so I can add you to the player pool!


Jimmy’s Descent Into Hell: A Cautionary Business Tale … Part III
Oct 13th, 2014 by LOONEYEXECUTIVE

A true story ripped from The (Mis-)Adventures of The Looney Executive

– By Blake Glenn


Just finding us?  Catch up on Part I and Part II of the story.


A Murder – Suicide in Van Nuys!

Say It Ain’t So Jimmy!

After Jimmy had been coming to our sessions for a few weeks, I noticed something striking about him. He looked so different. His look of suicidal desperation was gone (though he was certainly still a little desperate … just not so much suicidal). The blood no longer rushed to his face, turning him into a talking beet.

But perhaps most importantly, I no longer had to keep the SBDC staff on high-alert. I no longer was afraid that I would make the back page of the LA Times as the victim of a murder-suicide!

I could just imagine the 6:00 news anchor making the announcement:

“This is Tim Weathorford Tisdale bringing you the 6:00 o’clock news.”

“This just in … In Van Nuys just moments ago, a crazed and desperate small business owner brutally attacked a business consultant before taking his own life.”

“Apparently the emotionally distressed owner beat the unsuspecting consultant upside the head with a stack of financial statements, rendering the poor man completely senseless. The victim staggered into the hallway of his office where he collapsed, several months of financial statements were triple-stapled to his scalp. I can’t verify this, but sources close to the situation say the consultant also had at least a half dozen cash flow statements protruding from his rectum.”

Financial Graph







“My God! Ladies and gentlemen I’ve never seen anything like this. It’s senseless barbaric brutality …”

“Then the killer ripped a computer monitor from the wall and smashed it into his own head. Both men were rushed to the hospital. The owner and his business were pronounced Dead-On-Arrival.”

“In a heroic effort, the doctors enacted an emergency surgical procedure to remove the financial statements from the consultant’s skull. Although he had a heart attack on the operating table, at this moment the victim is still waging a desperate battle for his life as the cash flow statements are being delicately removed by North Hollywood’s top proctologist.”

“This is such a tragedy. I’m sure the consultant was only making a valiant and desperate attempt to help keep the anguished, distraught small biz owner from going under. Such a senseless attack is nothing short of … a tragedy. These days being a small business consultant is such a dangerous and thankless job.”

“Oh well.”

“In more breaking news … 12 year old Cinnamon Johnson narrowly won the West Hollywood spelling bee, just edging out 11-year old Wilbur Montgomery …”






Closing This Case

Many firms in Jimmy’s highly fragmented industry were in similar circumstances. I saw this as an opportunity for him to possibly roll up 2 or 3 rivals via acquisitions. So I suggested this as a long-term option. Once he regained his health, he could pounce on weaker rivals with buyout offers. He could then root out overlap, cut costs and create a larger, more stable, and more profitable firm that had a better chance of surviving and thriving. I offered to help him in researching and exploring this further.

But Jimmy would have none of this. He was no opportunistic predator. Sure, he understood what I was saying. And it made lots of sense intuitively. He just didn’t really have the heart or ambition to go on a takeover spree and become a poor man’s Carl Icahn. You see he was the classic small business owner. He felt fine at $1,200,000 in revenue and $200,000 – $300,000 in take-home cash, plus perks. He lived a certain lifestyle. He had no real growth ambitions to speak of. He just wasn’t an entrepreneur. He felt comfortable just where he was … operating as a commodity business, always trying to best the price of a competitor.

The bottom line is this, once Jimmy saw what was happening with his cash flow, he felt a hell-of-a-lot better. He knew the expenses he had to manage closely and how much loss or profit to expect.

Cash Register




So What’s The Lesson In All Of This?

Well, there are a couple of key lessons you can take away from Jimmy’s experience.

1.  Stay Out Of A Commodity Business

Anytime there’s lots of competition and sales is based almost solely on the price of your product, you’re in a commodity business. You’ll have low margins. And your revenue will based on trying to achieve a high volume. That’s a rat-eat-rat world not worth the effort … if you can avoid it. Aside from a complete exit from the market, coping methods could include (a) Moving into related higher margin products; (b) Creating premium priced services to package with the commodities; (c) Buying up competitors to eliminate competition, reduce  expenses, and force up prices.


2.  Know Your Financials

The bottom line is that you need to keep a strict handle on your revenue, expenses, profit, and cash flow so that in good times or bad, you know the financial condition of your company. You’ll see the trends as they’re developing. And, as revenue and profit dip, you’ll know where you can cut back expenses if necessary

Let me offer a little more creative twist on this lesson:

 “If you’d just keep a better handle on all of your cash … You could end up saving your’s and someone else’s precious ass.”

“And frankly, the ass you save could be mine!”


You’ve just read a tale from “The (Mis-)Adventures Of the Looney Executive!” …  A series of biz stories from Blake Glenn.


The Looney Man






Blake Glenn shares his looney perspectives, stories, and mis-adventures in The Looney Executive  blog. He has interviewed hundreds (or at least tens) of people via  The Looney Executive Podcasts and former TV show. He’s the founder of a tech group called IgniteTech, and claims to be a direct descendant of the original Looney Executive – Because there must be SOME explanation … right?.

If you dare, he can be reached the old school way …



P.S. – If you’re really interested in growing the tech startup scene in SW Ohio, you’ll want to join the IgniteTech Meetup Group.  Join the group. Come out to our events. Bring your energy and ideas. Build your connections.

Join us on this adventure. And help us to create a great story!


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