Long time ago I watched a very neat commercial in which a lady rides on the passenger seat and scares another driver when she purports to turn the wheel toward the driver’s direction, leading him off road. A couple of weeks ago I bumped into the commercial again. You can see the commercial here: http://www.youtube.com/watch?v=0JrWyfL7QUI. The funny situation made me think about a similar issue I have seen along the years.
For reasons that differ from one entrepreneur to another, many businessmen rely on unqualified professionals to deal with the needs of their business. Some would have a long term friend who has some knowledge of tax to do their tax return instead of using a licensed CPA or similar; others would have a CPA to incorporate a company and put together all the corporate documents; while others rely on their own instincts to negotiate a contract. The other day I heard from a lawyer specialized in personal injury litigation that he was negotiating a joint venture contract on behalf of one of his clients. Last week a trial lawyer told me he was going to do mergers and acquisitions deals because he had five or six previous experiences collecting fees for a business broker, who also was not even an attorney, and he felt qualified for this type of deals. I have even seen an entrepreneur who not only deals with his own legal needs without being a lawyer, but also gets calls from other people asking help with their own legal issues.
These entrepreneurs are no better off than the driver who was scared by the lady holding a wheel on the passenger’s seat. Without closely observing the situation, the driver was misled by someone purporting to be driving the passing car. Not making use of the qualified professional to deal with their needs will sooner or later lead them to the side of the road.
There is no doubt one can have some knowledge of negotiation techniques. It is also obvious that one can read a contract and understand what certain things mean. However, without the proper training, the risk of leaving something important outside the discussions or the document may backfire on the business and leave an unnecessary mark or loss. And it happens more often than not.
If the use of adequate and qualified professionals was important before, the current harsh economy only boosted the need of limiting risks and reducing losses. People don’t go to the dentist to treat their back pain, or to the neurosurgeon to fix their house, nor do they fly a jet without the proper training. It still astonishes me when they do that to their legal needs.
Friday, August 13, 2010
Monday, June 28, 2010
Negócios no exterior: existem diferenças?
Back on November 2007, I wrote a short article that was published at the then existing Gazeta Mercantil, the Brazilian version of WSJ. It was obviously in Portuguese, and I believe it still resonates today. So, here it is, in its original content:
Há alguns anos o fluxo de negócios do Brasil para o exterior tem crescido significativamente. A cada dia, mais e mais empresas brasileiras seguem o caminho do exterior alcançando o mundo até mesmo como um reflexo do crescimento e sucesso dos negócios no Brasil. Mas, fazer negócios no exterior é muito diferente de fazer negócios no Brasil. De uma forma geral, empresários brasileiros reconhecem essa máxima.
No entanto, curiosamente poucos são os que conseguem realmente ter a percepção de que esse fato é uma realidade muito mais dura do que se espera ou imagina. Quer sob o ponto de vista de expansão de negócios, quer sob o ponto de vista de captação de investimentos, os cenários são totalmente distintos e a esmagadora maioria das empresas brasileiras não está preparada para enfrentar o grau de sofisticação exigido pelos mercados de primeiro mundo.
Existem fatores críticos que envolvem essa diferente relação. Por uma questão cultural, no Brasil prevalece a máxima de que “importa quem você conhece e não quem você é”. Sob essa ótica, negócios tendem a ser fechados primeiramente com base em relacionamentos e não em qualificações. Se você conhece o executivo de uma companhia, ele deve facilitar a contratação da sua empresa. Se você faz uma propaganda bonita, paga caro para uma supermodelo vestir seu produto, sua marca engrena fácil.
No exterior, especialmente nos Estados Unidos e na Europa, o raciocínio é exatamente o contrário. Os negócios acontecem por conta de capacitação, qualificação e reputação. E, estabelecer reputação, não é simples, especialmente pelo atual bombardeio de informações existentes no mercado.
O mercado norte-americano, assim como o europeu, é sofisticado tanto para fazer negócios e promover uma marca, quanto mais para captar investimentos. Com tantas opções no mercado, nenhum investidor vai se interessar por uma empresa se não for algo reconhecidamente valioso.
Investimentos acontecem com base na reputação, capacitação, qualificação e solidez de um negócio. Vejamos a transação relativamente recente da Cosan, por exemplo: fizeram um IPO nos EUA na expectativa de captar US$ 2 bilhões e acabaram levantando US$ 980 milhões, 50% abaixo do esperado, o que pode ser considerado um fracasso sob o ponto de vista estratégico. Mais do que isso, as ações acabaram valendo menos que as que circulavam no Brasil à época. Para complicar, esse resultado desestimulou outras empresas do setor a virem ao mercado americano captar recursos. Algumas empresas acreditam que o caminho da Bolsa é o mais adequado por uma série de razões, quando na verdade pode não ser. Em um mercado sofisticado, existem alternativas interessantes que podem ser mais baratas, mais eficazes e mais vantajosas para situações como essa.
Há alguns anos o fluxo de negócios do Brasil para o exterior tem crescido significativamente. A cada dia, mais e mais empresas brasileiras seguem o caminho do exterior alcançando o mundo até mesmo como um reflexo do crescimento e sucesso dos negócios no Brasil. Mas, fazer negócios no exterior é muito diferente de fazer negócios no Brasil. De uma forma geral, empresários brasileiros reconhecem essa máxima.
No entanto, curiosamente poucos são os que conseguem realmente ter a percepção de que esse fato é uma realidade muito mais dura do que se espera ou imagina. Quer sob o ponto de vista de expansão de negócios, quer sob o ponto de vista de captação de investimentos, os cenários são totalmente distintos e a esmagadora maioria das empresas brasileiras não está preparada para enfrentar o grau de sofisticação exigido pelos mercados de primeiro mundo.
Existem fatores críticos que envolvem essa diferente relação. Por uma questão cultural, no Brasil prevalece a máxima de que “importa quem você conhece e não quem você é”. Sob essa ótica, negócios tendem a ser fechados primeiramente com base em relacionamentos e não em qualificações. Se você conhece o executivo de uma companhia, ele deve facilitar a contratação da sua empresa. Se você faz uma propaganda bonita, paga caro para uma supermodelo vestir seu produto, sua marca engrena fácil.
No exterior, especialmente nos Estados Unidos e na Europa, o raciocínio é exatamente o contrário. Os negócios acontecem por conta de capacitação, qualificação e reputação. E, estabelecer reputação, não é simples, especialmente pelo atual bombardeio de informações existentes no mercado.
O mercado norte-americano, assim como o europeu, é sofisticado tanto para fazer negócios e promover uma marca, quanto mais para captar investimentos. Com tantas opções no mercado, nenhum investidor vai se interessar por uma empresa se não for algo reconhecidamente valioso.
Investimentos acontecem com base na reputação, capacitação, qualificação e solidez de um negócio. Vejamos a transação relativamente recente da Cosan, por exemplo: fizeram um IPO nos EUA na expectativa de captar US$ 2 bilhões e acabaram levantando US$ 980 milhões, 50% abaixo do esperado, o que pode ser considerado um fracasso sob o ponto de vista estratégico. Mais do que isso, as ações acabaram valendo menos que as que circulavam no Brasil à época. Para complicar, esse resultado desestimulou outras empresas do setor a virem ao mercado americano captar recursos. Algumas empresas acreditam que o caminho da Bolsa é o mais adequado por uma série de razões, quando na verdade pode não ser. Em um mercado sofisticado, existem alternativas interessantes que podem ser mais baratas, mais eficazes e mais vantajosas para situações como essa.
Monday, June 21, 2010
Watch the Brazilian buyers...
I have been predicting this for the last 5 years. As a matter of fact, Brazilian companies have been increasinlgy stepping into the US and World economies since early 2000. In late 2003 only 40 Brazilian companies were listed at the SEC (either with ADRs or other securities). Today, there are over 150 of them and the number has been growing steadily, especially after the 2008 boom of IPOs in Brazil.
Check this interesting article out at today's MSN Slate: http://www.slate.com/id/2257361/
Some are even stepping up and saying Brazil is on its way to becoming 5th-largest economy in the World (see it here: http://www.theinformationcompany.net/brazil-%e2%80%98on-way-to-becoming-5th-largest-economy%e2%80%99/.)
No matter how you look at it, Brazil is growing and soccer is only one of the things it has mastered...
Check this interesting article out at today's MSN Slate: http://www.slate.com/id/2257361/
Some are even stepping up and saying Brazil is on its way to becoming 5th-largest economy in the World (see it here: http://www.theinformationcompany.net/brazil-%e2%80%98on-way-to-becoming-5th-largest-economy%e2%80%99/.)
No matter how you look at it, Brazil is growing and soccer is only one of the things it has mastered...
Friday, June 18, 2010
Fightbacks
Last night I watched the LA Lakers win the 2010 NBA Championship with a surprising turn around. The previous 6 playoffs games were challenging for both teams and Game 7 could not be different. The first three quarters did not look good for the Lakers as they tried to penetrate the tough Celtics defense. At the fourth quarter, though, the Lakers managed to put the tension aside, relaxed and collectively brought their game together. Coming from 13 points behind, they changed the history of the game and ended up topping the ancient rival with a final 4 points advantage.
Today, the US soccer squad was spinning gears during the first half of the game just to see the Slovenian team score two surprising goals. The second half, however, was a completely different story. The Americans returned with a much fueled energy as well as combative approach and scored three times, but had one of the goals disallowed by a rather questionable referee’s decision, retrieving the 2-0 deficit to attain a draw. The World Cup is not over yet and the result is certainly not what they hoped for, but the Americans still have the chance of advancing to the next phase of the tournament.
The world economy is facing one of the most challenging moments of the modern history as businesses hurt, barely survive or shut their doors. Yet, there are some who find ways to overcome the hurdles and succeed. Make no mistake about that – there are companies today that have been able not only to hold themselves alive but grow. The difference that stands out for these companies is precisely the same the LA Lakers and the US squad have shown us.
Both the Lakers and the USA team had to look into their own strengths to identify what they needed to overcome the struggling circumstances. At that key turning point, they were able to find their unit, and that inspire their comeback. Exciting as it is for their millions of fans, it is not only impressive, it also gives us a very interesting lesson. The economy is pulling the plugs from all businesses in life-support. Sitting and waiting for the business to come back alive on its own will only make things worse. Look inside to identify strengths, get your energy renewed and fight back. May we all learn this outstanding lesson!
Today, the US soccer squad was spinning gears during the first half of the game just to see the Slovenian team score two surprising goals. The second half, however, was a completely different story. The Americans returned with a much fueled energy as well as combative approach and scored three times, but had one of the goals disallowed by a rather questionable referee’s decision, retrieving the 2-0 deficit to attain a draw. The World Cup is not over yet and the result is certainly not what they hoped for, but the Americans still have the chance of advancing to the next phase of the tournament.
The world economy is facing one of the most challenging moments of the modern history as businesses hurt, barely survive or shut their doors. Yet, there are some who find ways to overcome the hurdles and succeed. Make no mistake about that – there are companies today that have been able not only to hold themselves alive but grow. The difference that stands out for these companies is precisely the same the LA Lakers and the US squad have shown us.
Both the Lakers and the USA team had to look into their own strengths to identify what they needed to overcome the struggling circumstances. At that key turning point, they were able to find their unit, and that inspire their comeback. Exciting as it is for their millions of fans, it is not only impressive, it also gives us a very interesting lesson. The economy is pulling the plugs from all businesses in life-support. Sitting and waiting for the business to come back alive on its own will only make things worse. Look inside to identify strengths, get your energy renewed and fight back. May we all learn this outstanding lesson!
Thursday, June 3, 2010
Brazil's GDP
The largest economy in Latin America expects a 7.5% GDP growth in the first quarter: http://www.thestreet.com/story/10772692/1/brazil-expects-strong-1st-quarter-gdp-growth.html
Tuesday, June 1, 2010
Portuguese Barn Stories
Last week I received an e-mail talking about a New York businessman who had supposedly bought a real estate property in Portugal. The previous owners had passed away 15 years ago without heirs and the property had been vacant since, so taxes were due and the sale’s price was used to cover them. This Portuguese countryside farmhouse had an old barn with welded steel doors nobody actually knew what was inside. The story went on to say that the new owner cut through the welds just to find over 100 classic cars with total worth of $38MM. And there were pictures showing the dusty, rare collection of cars.
Some of you have already heard this story, as it started circulating back in 2007. Over the years, people got creative and the story grew. Obviously, this is a typical example of misleading information based on true facts. The cars are real, the story is not. See more here: http://www.intuh.net/barnfinds/
It strikes me how easy we fall into such distorted stories. The same exact thing happens in the business world. I could tell dozens of true stories of clients and people I know who invested in promising deals only to discover the investment was gone long before they realized it. Usually, it all starts with a friend who approaches you with a very good business idea that requires little investment compared to the huge potential. You have the money, he has the idea: perfect match. Letting aside dishonest components, most of the time lack of experience in launching or operating the business appropriately is the number one reason for a business failure.
Don’t get me wrong, it is possible to turn an opportunity like this into a successful and profitable business. And there are plenty of good examples out there. But, in a very complex and ever changing world, doing business successfully is always a challenge. To overcome the hurdles one must be prepared. Large corporations have Directors subjected to fiduciary duties who are usually careful in evaluating each and every opportunity before making any move. They hire attorneys, CPAs, investment and business specialists, just to make sure they fully understand the situation. And even then, from time to time they do make mistakes. Small and mid size companies not always surround themselves with the adequate information and protection. And that opens the door to rely on distorted information, made up worksheets, Portuguese barn like stories. Before investing in any business, take the time to evaluate the opportunity, or hire someone truly qualified to help you with such a task. Trust me, it pays off as it is always better be safe than sorry.
Some of you have already heard this story, as it started circulating back in 2007. Over the years, people got creative and the story grew. Obviously, this is a typical example of misleading information based on true facts. The cars are real, the story is not. See more here: http://www.intuh.net/barnfinds/
It strikes me how easy we fall into such distorted stories. The same exact thing happens in the business world. I could tell dozens of true stories of clients and people I know who invested in promising deals only to discover the investment was gone long before they realized it. Usually, it all starts with a friend who approaches you with a very good business idea that requires little investment compared to the huge potential. You have the money, he has the idea: perfect match. Letting aside dishonest components, most of the time lack of experience in launching or operating the business appropriately is the number one reason for a business failure.
Don’t get me wrong, it is possible to turn an opportunity like this into a successful and profitable business. And there are plenty of good examples out there. But, in a very complex and ever changing world, doing business successfully is always a challenge. To overcome the hurdles one must be prepared. Large corporations have Directors subjected to fiduciary duties who are usually careful in evaluating each and every opportunity before making any move. They hire attorneys, CPAs, investment and business specialists, just to make sure they fully understand the situation. And even then, from time to time they do make mistakes. Small and mid size companies not always surround themselves with the adequate information and protection. And that opens the door to rely on distorted information, made up worksheets, Portuguese barn like stories. Before investing in any business, take the time to evaluate the opportunity, or hire someone truly qualified to help you with such a task. Trust me, it pays off as it is always better be safe than sorry.
Friday, May 28, 2010
Why I started a blog?
I am still asking myself this question. You see, most bloggers have something they want to say, they have a need for spreading their message or defending their points. I too have many points I would like to defend and messages I want to disseminate. But that was not the reason why I decided to start a blog.
At first, I was reluctant on starting something that would require a lot of efforts and dedicated time to keep such endeavor up and running. And those close to me know that I hate leaving something behind, outdated or halfway done. But then, like one of these things in life, yesterday I found myself with this fixed idea of taking up the challenge.
The world is rapidly changing and technology is a huge component of the modern history. The need to keep yourself updated overwhelmingly forces one to take steps he never thought about. I remember many years ago early on my career, witnessing a senior partner at the firm I used to work with on the top of his 80s seating on a computer to answer client's e-mails, surf the Internet, search the case law. With many partners, associates, assistants and paralegal to work for him, this successful, accomplished gentleman shown me a remarkable attitude: there is no age to stop learning. And he is still active and energetic to this day.
However, none of these are reasons for me to start blogging. As you can see on the description above, I have not defined the focus of the blog. My intention is to keep my eyes on business and legal strategies. After all, I am a corporate attorney with a business mindset, and I can’t go too far from that. And there are many small and mid size companies in need of good help. Am I saying that I started this blog to help small and mid size companies? Well, not necessarily. I have realized that when you share your ideas and thoughts with someone, you are the one who is mostly benefited. So, I guess the blog has the primary goal of helping myself.
There you have it. I have started this blog to help you and me. I am not going to blog everyday, but I promise to keep it up with many interesting things. I hope you enjoy!
At first, I was reluctant on starting something that would require a lot of efforts and dedicated time to keep such endeavor up and running. And those close to me know that I hate leaving something behind, outdated or halfway done. But then, like one of these things in life, yesterday I found myself with this fixed idea of taking up the challenge.
The world is rapidly changing and technology is a huge component of the modern history. The need to keep yourself updated overwhelmingly forces one to take steps he never thought about. I remember many years ago early on my career, witnessing a senior partner at the firm I used to work with on the top of his 80s seating on a computer to answer client's e-mails, surf the Internet, search the case law. With many partners, associates, assistants and paralegal to work for him, this successful, accomplished gentleman shown me a remarkable attitude: there is no age to stop learning. And he is still active and energetic to this day.
However, none of these are reasons for me to start blogging. As you can see on the description above, I have not defined the focus of the blog. My intention is to keep my eyes on business and legal strategies. After all, I am a corporate attorney with a business mindset, and I can’t go too far from that. And there are many small and mid size companies in need of good help. Am I saying that I started this blog to help small and mid size companies? Well, not necessarily. I have realized that when you share your ideas and thoughts with someone, you are the one who is mostly benefited. So, I guess the blog has the primary goal of helping myself.
There you have it. I have started this blog to help you and me. I am not going to blog everyday, but I promise to keep it up with many interesting things. I hope you enjoy!
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