By now, most of us have heard of essential fatty acids (EFAs) and their potential health benefits. They’re said to sustain cognitive function and memory, benefit the heart and immune system, aid in cell reproduction and repair, and even help balance hormones. Fish oil, duly noted by the medical community as having similar benefits, contains high levels of omega-3 essential fatty acids, thus establishing the link between a daily regimen of fish oil and good health. Fish oil is sold in the U.S. as a dietary supplement and comes in both liquid and capsule form.
What are essential fatty acids?
Essential fatty acids are unsaturated fats typically found in the oils of vegetables, certain nuts and seeds and some fish. They’re said to benefit health more than the saturated fats found in meat and dairy products and may even have a positive impact on cholesterol and triglyceride levels in the blood. Essential fatty acids are referred to as "essential" because they must be obtained through diet and are essential to the normal growth and function of muscles, nerves, cells and organs in humans. There are two families of essential fatty acids, omega-3 fatty acids and omega-6 fatty acids.
Omega-3 fatty acids – the fatty acids found in fish oil
Omega-3 fatty acids are a type of polyunsaturated fat present in many coldwater fish including trout, salmon, sardines, anchovies, herring, mackerel, tuna and cod. The two most potent forms of omega-3 fatty acids are eicosapentaenoic acid (EPA) and docosahexanoic acid (DHA), both known as "good fats" – unlike saturated fats, which when consumed in excess can lead to cardiovascular problems, neural and brain disorders.
EPA helps to produce the prostaglandins (hormone-like substances) which help control blood-clotting and arterial functions. EPAs may also help to lower serum triglyceride levels.
DHA is a major component of human brain and retinal tissue and aids the transmission of nerve impulses.
The term "omega-3 essential fatty acid" has become synonymous with "fish oil" in modern American marketing literature.
Sources of omega-3 essential fatty acids other than fish oil include, but are not limited to:
• Avocadoes (whole or oil)
• Brazil nuts
• Flaxseed
• Flaxseed oil
• Fortified milk products
• Hempseeds
• Hempseed oil
• Omega-3 eggs
• Pumpkin seeds
• Sesame seed
• Soybean oil
• Walnuts
• Wheat germ oil
Omega-6 fatty acids – not found in fish oil
Omega-6 EFAs are found in animal products such as dairy and meat and are common in cooking oils such as safflower, olive, sunflower, hemp, soybean, pumpkin, sesame, walnut and flaxseed oils. Too many omega-6 EFAs, say nutritionists, can throw off the balance of prostaglandins and lead to health problems. Experts recommend a ratio of three parts omega-3 essential fatty acids to every one part omega-6 fatty acid in the diet. Research indicates that Americans consume far more omega-6 fatty acids than omega-3 as a result of overindulging in fried foods, red meat and cheese.
Omega-6 fatty acids are dependent on interactions with omega-3 essential fatty acids in order to benefit good health, which is why a balance of the two is crucial in the diet. The American Heart Association cautions against a high dietary intake of omega-6 fatty acids as it can lead to the development of gallstones and promote tumors.
Prostaglandins
Prostaglandins encompass a number of hormone-like substances found in every cell in the body. They’re critical to the dilation and constriction of blood vessels, the contraction and relaxation of muscles, the regulation of blood pressure and the modulation of inflammation. Prostaglandins are needed for overall good health and maintenance and must be replenished constantly. It’s easy to understand why having a good balance of prostaglandins in the body is essential to well-being.
Where does fish oil come from?
Most fish oil is extracted from the fatty flesh of the fish, unless a product specifically states otherwise, as is the case with cod liver oil or shark liver oil – extracted from fish liver. Nutritious fish oil is usually derived from deep, coldwater fish and those swimming in the wild (wild fish eat other fish and marine animals and vegetation to survive, whereas farm-raised fish are typically fed some type of less nutritious, less expensive, commercial-grade pellet). Some experts say the best fish comes from the deep Atlantic of Norway and other Scandinavian countries: the deeper and colder the water, say experts, the less chance of toxins such as mercury, lead, dioxins, furans and PCBs occurring in the fish oil. Fish from eastern Pacific waters is known to contain elevated levels of mercury.
Fish oil supplements – good ones / bad ones
"Product disclosure" is the operable phrase when seeking out nutritious fish oil supplements. From what kind of fish is the oil extracted and from where is it extracted naturally through pressing or with a centrifuge; or are petrochemical solvents such as hexane used to extract the oil from the source? How is the fish oil refined? Is it molecularly distilled, which to date is the most reliable form of fish oil purification, or does the label read something like "extra-distilled" or "super-distilled?" Such terms have no bearing on quality or safety. Because the hundreds of thousands of fish oil supplements on the market remain unregulated by the FDA, the safety, consistency, efficacy and strength of these products varies immensely among brands.
When reading fish oil supplement labels:
• Make sure the type of fish from which the fish oil is extracted is listed.
• Look for terms "coldwater," "deep water" and "wild" as opposed to "farm-raised."
• In what ocean or hemisphere was the fish caught? North Atlantic, deep, coldwater is said to be the most nutritious.
• Make sure the fish oil is molecularly distilled, which better ensures the absence of PCBs, heavy metals and other contaminants.
• What parts of the fish were used? Fish oils extracted from fish liver may be higher in heavy metals and contaminants.
• What fish oil extraction method was used? Cold or modified expeller pressing means that the oil was produced without damaging temperatures or unnecessary pressure.
Marketing claims that have no defined meaning in relation to fish oil supplements, and which often mislead consumers, include:
• Ultra-pure
• Professional grade
• Pharmaceutical grade
• High-potency
• Super-distilled
• Natural
• Extra-distilled
• Best
• Finest
• Highest quality
• Pure
• Purest
• Purified
Essential fatty acid health benefits and risks
Few argue the benefits of fish oil and essential fatty acids in the diet. Clinical studies have demonstrated that the omega-3 fatty acids can benefit cardiovascular health and that "good unsaturated fats" derived from vegetables and fish are far more nutritious than "bad saturated fats" which come from red meat, animal products and dairy. The cardiovascular benefits to balancing omega-3 and omega-6 fatty acids in the diet include lowered serum cholesterol, decreased serum trigylcerides and reduced platelet aggregation. Although many fish oil supplement companies claim that fish oil supplementation may aid brain function and strengthen the immune system, a complete body of evidence has yet to be produced.
Along with the health benefits of fish oil come some risks, most associated with taking too high doses of fish oil or having dangerously high levels of omega-3 and omega-6 essential fatty acids in the blood. Some of these risks can include:
• Thinning of the blood and reduced ability of the blood to clot.
• Increased risk of bleeding.
• Too large doses can increase glucose levels in persons with already elevated blood sugar levels.
• In excess, fish oil may suppress the immune system.
• Increase the occurrence of nosebleeds and easy bruising.
• Upset stomach, nausea, diarrhea and belching.
• Poisoning from heavy metals, PCBs, dioxins and pesticides.
Experts and nutritionists are convinced that the health benefits of fish oil far outweigh the risks. However, many warn that fish oil shouldn’t be taken with blood-thinning medication such as warfarin or aspirin and shouldn’t be taken by anyone with bleeding disorders or uncontrolled hypertension. It is highly advisable to consult a physician before supplementing a diet with fish oil.
EPAs, DHAs, efficacy and the FDA
In September of 2004, the FDA announced they would allow a qualified health claim for reduced risk of coronary heart disease for conventional foods that contain EPA and DHA omega-3 fatty acids as outlined in FDA’s "Interim Procedures for Qualified Health Claims in the Labeling of Conventional Human Food and Human Dietary Supplements." Notwithstanding inconclusive research at the time of release, the FDA said it would exercise its enforcement discretion with respect to the following qualified health claim:
"Supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease. One serving of [name of food] provides [x] grams of EPA and DHA omega-3 fatty acids. [See nutrition information for total fat, saturated fat and cholesterol content.]"
In 2000, the FDA announced a similar qualified health claim for dietary supplements containing EPA and DHA omega-3 fatty acids and the reduced risk of coronary heart disease (CHD). The FDA recommends that consumers not exceed more than a total of three grams per day of EPA and DHA omega-3 fatty acids, with no more than two grams per day from a dietary supplement.
Be sure to shop at www.vitacost.com for all your essential fatty acid and fish oil needs!
References
1. Supplement from the sea: the fat from fish oil can benefit your heart, eyes, joints, and brain. Tom Weede. Natural Health. Oct 2007 v37 i9 p105 (2).
2. Omega medicine. Is fish oil good for what ails you? Bonnie Liebman. Nutrition Action Healthletter. Oct 2007 v34 i8 p1 (5).
3. The government’s big fish story: Pick the perfect fish oil supplement. Men's Health. July-August 2007 v22 i6 p158.
4. Fish oil and brain development. Alan R. Gaby. Townsend Letter: The Examiner of Alternative Medicine. Oct 2007 i291 p49 (2).
5. Effects of fish oil supplementation on myocardial fatty acids in humans. R.G. Metcalf, M.J. James, R.A. Gibson. Alternative Medicine Review. Sept 2007 v12 i3 p307 (1).
6. Essential fatty acids. Douglas Dupler and Teresa G. Odle. The Gale Encyclopedia of Alternative Medicine. Ed. Jacqueline L. Longe. 2nd ed. Detroit: Gale, 2005. 4 vols. Updated July 1, 2006.
7. Mighty omegas (ways to score more essential fats). Nancy Duncan. Women's Health. Dec 2006 v3 i10 p47.
8. Essential fatty acids and eicosanoids: their role in preventing inflammation, cardiovascular disease and cancer. James Meschino. Dynamic Chiropractic. Dec 3, 2007 v25 i25 p28(3).
9. Fish oil. Mai Tran and Teresa Odle. The Gale Encyclopedia of Alternative Medicine. Ed. Jacqueline L. Longe. 2nd ed. Detroit: Gale, 2005. 4 vols. Updated July 1, 2006.
10. On call: Fish oil revisited. Staying Healthy from the Faculty of Harvard Medical School. August 21, 2006 pNA.
11. By the way, doctor: How much fish oil should I be taking? Staying Healthy from the Faculty of Harvard Medical School. August 21, 2006 pNA.
Sunday, February 24, 2008
Business And Finance
Your business plan is typically the first impression potential lenders of investors get about your business idea. Even with a great product, team, and customers, and you are unable to convey to properly convey your image, it could be the last impression if your plan has some of the following, common mistakes.
Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.
1. Financials
Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.
Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.
While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.
No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?
If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.
Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.
For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.
No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.
2. Marketing
Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.
If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.
Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.
One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.
While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.
We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.
Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.
3. Organization
Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.
Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.
Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.
Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.
Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.
Keep the technical details out of the business plan and in the white papers.
Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.
Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.
An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!
Use operating plans, white papers and marketing plans for the in-depth details.
Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.
Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.
4. Execution Mistakes
Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.
Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.
Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.
Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.
Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.
1. Financials
Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.
Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.
While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.
No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?
If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.
Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.
For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.
No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.
2. Marketing
Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.
If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.
Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.
One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.
While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.
We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.
Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.
3. Organization
Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.
Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.
Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.
Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.
Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.
Keep the technical details out of the business plan and in the white papers.
Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.
Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.
An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!
Use operating plans, white papers and marketing plans for the in-depth details.
Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.
Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.
4. Execution Mistakes
Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.
Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.
Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.
Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.
Business And Finance
Your business plan is typically the first impression potential lenders of investors get about your business idea. Even with a great product, team, and customers, and you are unable to convey to properly convey your image, it could be the last impression if your plan has some of the following, common mistakes.
Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.
1. Financials
Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.
Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.
While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.
No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?
If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.
Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.
For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.
No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.
2. Marketing
Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.
If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.
Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.
One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.
While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.
We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.
Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.
3. Organization
Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.
Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.
Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.
Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.
Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.
Keep the technical details out of the business plan and in the white papers.
Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.
Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.
An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!
Use operating plans, white papers and marketing plans for the in-depth details.
Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.
Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.
4. Execution Mistakes
Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.
Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.
Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.
Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.
Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.
1. Financials
Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.
Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.
While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.
No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?
If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.
Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.
For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.
No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.
2. Marketing
Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.
If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.
Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.
One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.
While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.
We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.
Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.
3. Organization
Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.
Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.
Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.
Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.
Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.
Keep the technical details out of the business plan and in the white papers.
Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.
Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.
An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!
Use operating plans, white papers and marketing plans for the in-depth details.
Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.
Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.
4. Execution Mistakes
Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.
Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.
Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.
Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.
Web 2.0? Or Is It More Like Web 16.0?
It has become difficult to keep up with the meanings of all the new phrases and terms generated by modern technology. One of the most commonly used phrases on the world wide web (www) today is "Web 2.0." It seems like every web solutions company is using this phrase to sell its stuff. So to the average Joe who's not a geek, what is "Web 2.0"?
Well according to Wikipedia, the free online encyclopedia…
"[T]he phrase Web 2.0 can refer to a perceived second generation of web-based communities and hosted services — such as social-networking sites, wikis, and folksonomies [collaborative tagging schemes] — which aim to facilitate creativity, collaboration, and sharing between users. The term gained currency following the first O'Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but to changes in the ways software developers and end-users use webs. According to Tim O'Reilly, 'Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform.' Some technology experts, notably Tim Berners-Lee, have questioned whether one can use the term in a meaningful way, since many of the technology components of 'Web 2.0' have existed since the early days of the W!
eb."
There is no doubt the www has advanced significantly since inception, but there really is no new version of the www. It is simply much more useful to the everyday person.
However, if we counted each major innovation as a whole number and each minor revision as a tenth, we would already be into double digits. So why are we calling it "Web 2.0"?
If you have seen the latest Die Hard movie, or ever bought software for your computer, you will understand why we are not in Web 2.0. Even if we call it Die Hard 4.0 or MS Office 2007, it's still basically the same movie or tool. So what we are really experiencing now is more like Web 16.0.
If you have an in-depth, honest conversation with your web designers, they will tell you that Web 2.0 is a myth. So to explain how we got to Web 16.0, here's a history of the most significant events on the www.
WEB 0.1 -- 1958 – SAGE – Radar systems are first networked
WEB 0.2 -- 1960 – Packet switching is first created
WEB 1.0 – EMAIL – "A New Way to Send Unsolicited Mail Is Born"
Although the exact history of Email is a tad murky, it is generally accepted that it appeared in 1965, and was created so that people accessing a mainframe could communicate with each other. This was the first step in the interconnection of people, facilitating almost instant communication at no cost to the user.
WEB 1.1 -- 1967 – Markup language is created
WEB 1.2 -- 1969 – ARPA – A link is established between computers
WEB 1.3 -- 1696 – ARPA Net – First packet-switched network created
WEB 2.0 – WYSIWYG – "What You See Is What You Get (sometimes)"
With the invention of WYSIWYG in 1970, users could now be presented with a basic display of what their finished product would look like, as they were working on it. This removed the need to memorize complex code.
WEB 2.1 -- 1970 – ASP – First Application Service Provider (SAAS)
WEB 2.2 -- 1970 – Style sheets are created
WEB 2.3 -- 1971 – @ is created to separate hosts and users
WEB 2.4 -- 1973 – TCP/IP is created to simplify networking
WEB 2.5 -- 1973 – First connection to another country established
WEB 2.6 -- 1974 – The term "Internet" is adopted
WEB 2.7 -- 1976 – X.25 – The first network standard is approved
WEB 2.8 -- 1978 – International packet switching service created
WEB 3.0 – USENET– "The Black Market of the Internet"
Usenet was established in 1980 to offer mail and file transfers as well as give personal users access to news. Usenet is in fact a large network of servers all in communication with each other; a user posts something to the local server and that item is passed along to the other servers. Usenet was a major turning point because users could finally have an open conversation with anyone on the net, without needing to specifically know the user (unlike Email). The downside is that with a sometimes un-policed net capable of file transfers, the Usenet of today is a haven for piracy of all types, where anything you can imagine is accessible.
WEB 3.1 -- 1979 – Email is made available to personal computer users, millions of Nigerian Princes suddenly need public help
WEB 4.0 – REAL TIME CHAT – Going Outside Deemed "Obsolete"
Real-Time Chat was created in 1980 following users' frustrations with Usenet articles sometimes taking 24 hours to be updated. This signaled a turning point: online conversations became instant, albeit isolated into segregated groups.
WEB 4.1 -- 1980 – First ISPs created providing dialup internet
WEB 4.2 -- 1981 – TCP/IP becomes a standard
WEB 4.3 -- 1981 – US/Europe/Canada/Hong-Kong/Australia connect
WEB 4.4 -- 1983 – TCP/IP becomes the only standard
WEB 4.5 -- 1983 – First wide area network using TCP/IP operational
WEB 4.6 -- 1985 – FTP – The File Transfer Protocol is created
WEB 4.7 -- 1988 – IRC – Internet Relay Chat is created
WEB 4.8 -- 1988 – Bulletin Board Systems and Forums created
WEB 5.0 – HTML/HTTP/Web Pages – "It Has Begun…"
Around 1980, many researchers were using the internet, but they had no single way to create/display "documents" (web pages). Physicist Tim Berners-Lee and his colleagues needed a simple system for creating/displaying documents, but found that existing systems were too commercial, platform-specific or complicated for the average user. So they created their own relatively simple system, consisting of browsing software called "WorldWideWeb," a protocol for transmitting the information (HTTP) and a document annotation convention called "Hyper Text Markup Language" (HTML). This meant anyone could now create web pages using their simple language.
WEB 5.1 -- 1989 – Images can now be animated, oh the horror!
WEB 5.2 -- 1990 – The network now covers the entire world (publicly)
WEB 6.0 – Search – "Did You Mean: Google?"
Before 1990, there was no way to find a page; you had to know the specific location. Around 1991, search engines began indexing (storing) the content they found, giving users the ability to search for a page even if they didn't know the page's location.
WEB 6.1 -- 1991 – DNS – Dynamic Naming System is created
WEB 6.2 -- 1991 – The first text-based browser is created
WEB 7.0 – DHTML – "Because Non-Scrolling Text Is Boring"
The web was static until Dynamic HTML (DHTML) was created. DHTML introduced client-side scripting, allowing authors to include code in their web pages that performed an action upon being downloaded onto a user's computer. DHTML introduced rollover buttons and drop-down menus on web pages. It goes a long way to making the web more personalized.
WEB 7.1 -- 1993 – The first graphics based browsers are created
WEB 7.2 -- 1993 – Screen casts are first created
WEB 7.3 -- 1994 – Wikis are created; Britannica begins holding its breath
WEB 7.4 -- 1994 – The World Wide Web Consortium is formed
WEB 7.5 -- 1994 – CSS – Cascading Style Sheets created
WEB 8.0 – ONLINE DIARIES – "Teens Reportedly Misunderstood"
Online diaries were first created in 1994 as a means for people to store their diaries online for personal or public reading. Writers could now reach almost anyone worldwide at practically no cost, and everyone could create editorials on whatever subjects they liked, without fear of censorship.
WEB 8.1 -- 1996 – The first social bookmarking site created
WEB 9.0 – RANKED RESULTS – "The Online Popularity Contest"
Search engine results helped find things, but many of the results were useless or had nothing to do with the keywords used. As of 1996, search results started to be ranked based on a multitude of things, like how popular a page is. This made searching faster and easier, and significantly less painful.
WEB 9.1 -- 1996 – Flash is created, whole websites can now be animated
WEB 9.2 -- 1997 – The term "Blog" is adopted
WEB 10.0 – HIRED BLOGGERS – "Wow Isn't Product X Great!"
As of 1997, personal diaries began to evolve to what became known as "blogs." Many corporate websites and personal homepages had (and still do have) news sections, these were traditionally updated manually in a back-end system. With the advent of blogs, the commercial sector jumped in, seeing a new marketing medium.
WEB 10.1 -- 1998 – The first audio news site is created
WEB 10.2 -- 1999 – The first web-based operating system is created
WEB 11.0 – RSS – "Newspapers Deemed Obsolete"
Really Simple Syndication (RSS) was created due to the lack of a universal feed format. The creation of RSS means that users could now "subscribe" to feeds containing video, audio, text, or graphics. Users no longer had to trawl the web for new information, they could "subscribe" to a feed and have it sent to them directly.
WEB 12.0 – REMOTE SCRIPTING – "Waiting For 4 Seconds Now History!"
Remote scripting allows scripts running inside a browser to exchange information with a server, so that scripts could be triggered locally, processed remotely and have information returned directly to the browser. This made the web faster and easier to use, and removed the need to refresh the page for simple tasks like sorting.
WEB 12.1 -- 2001 – Blogs evolve from online diaries
WEB 13.0 – PODCASTING – "Now Everyone Can Avoid Listening To You By Choice Rather Than Circumstance!"
Podcasting originated as a portmanteau of the iPod® and broadcasting, although "portable on demand broadcasting" has now become the widely-accepted definition. Originally Podcasting was created to allow individuals to distribute their own radio shows, but it has become popular for a wide variety of things, from educational materials to the latest gaming news. Podcasting opens up distribution of audio content to anyone with a server, with users "subscribing" to the RSS feeds that appeal to them.
WEB 13.1 -- 2002 – Folksonomy is created, giving rise to "tags"
WEB 14.0 – VIDEO PODCASTING – "Web-Based One-Sided Conversations"
Shortly after Podcasting became popular, video Podcasting was created as a means to send the equivalent of TV episodes to users. Though similar to podcasting, the content was not limited to just "TV episodes". Video Podcasting opens up the video medium so that making a TV show is possible for anyone.
WEB 15.0 – VOIP – "High Tech, Dodgy Sounding Free Calls"
With the Voice Over Internet Protocol, telephone audio is sent over the internet, rather than a traditional phone line. This removes almost all cost involved, and also removes the need to have a physical phone line. What this means for consumers is calling becomes much simpler, easier and significantly cheaper.
WEB 16.0 – SAAS – "The Industry Makes a SaaS of Itself."
Software as a Service (SaaS) is just a new term for a concept that has been around since the dawn of the internet (ASP from 1970). SaaS refers to using a piece of software run/provided through the internet, and instead of paying a large one-off purchase price, you "rent" the software for as long as needed. So while SaaS is the buzzword of the day, the concept is decades old.
..The CONCLUSION?
So if you follow the basic rule that each total upgrade is a new ".0" then we are nowhere near Web 2.0. The story is really one of falling price, increasing reliability and bandwidth, coupled with ubiquitous access.
Simply put, "Web 2.0" is just shorthand for the development process outlined above. Bottom line, the web really becoming what the web really always should have been.
Well according to Wikipedia, the free online encyclopedia…
"[T]he phrase Web 2.0 can refer to a perceived second generation of web-based communities and hosted services — such as social-networking sites, wikis, and folksonomies [collaborative tagging schemes] — which aim to facilitate creativity, collaboration, and sharing between users. The term gained currency following the first O'Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but to changes in the ways software developers and end-users use webs. According to Tim O'Reilly, 'Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform.' Some technology experts, notably Tim Berners-Lee, have questioned whether one can use the term in a meaningful way, since many of the technology components of 'Web 2.0' have existed since the early days of the W!
eb."
There is no doubt the www has advanced significantly since inception, but there really is no new version of the www. It is simply much more useful to the everyday person.
However, if we counted each major innovation as a whole number and each minor revision as a tenth, we would already be into double digits. So why are we calling it "Web 2.0"?
If you have seen the latest Die Hard movie, or ever bought software for your computer, you will understand why we are not in Web 2.0. Even if we call it Die Hard 4.0 or MS Office 2007, it's still basically the same movie or tool. So what we are really experiencing now is more like Web 16.0.
If you have an in-depth, honest conversation with your web designers, they will tell you that Web 2.0 is a myth. So to explain how we got to Web 16.0, here's a history of the most significant events on the www.
WEB 0.1 -- 1958 – SAGE – Radar systems are first networked
WEB 0.2 -- 1960 – Packet switching is first created
WEB 1.0 – EMAIL – "A New Way to Send Unsolicited Mail Is Born"
Although the exact history of Email is a tad murky, it is generally accepted that it appeared in 1965, and was created so that people accessing a mainframe could communicate with each other. This was the first step in the interconnection of people, facilitating almost instant communication at no cost to the user.
WEB 1.1 -- 1967 – Markup language is created
WEB 1.2 -- 1969 – ARPA – A link is established between computers
WEB 1.3 -- 1696 – ARPA Net – First packet-switched network created
WEB 2.0 – WYSIWYG – "What You See Is What You Get (sometimes)"
With the invention of WYSIWYG in 1970, users could now be presented with a basic display of what their finished product would look like, as they were working on it. This removed the need to memorize complex code.
WEB 2.1 -- 1970 – ASP – First Application Service Provider (SAAS)
WEB 2.2 -- 1970 – Style sheets are created
WEB 2.3 -- 1971 – @ is created to separate hosts and users
WEB 2.4 -- 1973 – TCP/IP is created to simplify networking
WEB 2.5 -- 1973 – First connection to another country established
WEB 2.6 -- 1974 – The term "Internet" is adopted
WEB 2.7 -- 1976 – X.25 – The first network standard is approved
WEB 2.8 -- 1978 – International packet switching service created
WEB 3.0 – USENET– "The Black Market of the Internet"
Usenet was established in 1980 to offer mail and file transfers as well as give personal users access to news. Usenet is in fact a large network of servers all in communication with each other; a user posts something to the local server and that item is passed along to the other servers. Usenet was a major turning point because users could finally have an open conversation with anyone on the net, without needing to specifically know the user (unlike Email). The downside is that with a sometimes un-policed net capable of file transfers, the Usenet of today is a haven for piracy of all types, where anything you can imagine is accessible.
WEB 3.1 -- 1979 – Email is made available to personal computer users, millions of Nigerian Princes suddenly need public help
WEB 4.0 – REAL TIME CHAT – Going Outside Deemed "Obsolete"
Real-Time Chat was created in 1980 following users' frustrations with Usenet articles sometimes taking 24 hours to be updated. This signaled a turning point: online conversations became instant, albeit isolated into segregated groups.
WEB 4.1 -- 1980 – First ISPs created providing dialup internet
WEB 4.2 -- 1981 – TCP/IP becomes a standard
WEB 4.3 -- 1981 – US/Europe/Canada/Hong-Kong/Australia connect
WEB 4.4 -- 1983 – TCP/IP becomes the only standard
WEB 4.5 -- 1983 – First wide area network using TCP/IP operational
WEB 4.6 -- 1985 – FTP – The File Transfer Protocol is created
WEB 4.7 -- 1988 – IRC – Internet Relay Chat is created
WEB 4.8 -- 1988 – Bulletin Board Systems and Forums created
WEB 5.0 – HTML/HTTP/Web Pages – "It Has Begun…"
Around 1980, many researchers were using the internet, but they had no single way to create/display "documents" (web pages). Physicist Tim Berners-Lee and his colleagues needed a simple system for creating/displaying documents, but found that existing systems were too commercial, platform-specific or complicated for the average user. So they created their own relatively simple system, consisting of browsing software called "WorldWideWeb," a protocol for transmitting the information (HTTP) and a document annotation convention called "Hyper Text Markup Language" (HTML). This meant anyone could now create web pages using their simple language.
WEB 5.1 -- 1989 – Images can now be animated, oh the horror!
WEB 5.2 -- 1990 – The network now covers the entire world (publicly)
WEB 6.0 – Search – "Did You Mean: Google?"
Before 1990, there was no way to find a page; you had to know the specific location. Around 1991, search engines began indexing (storing) the content they found, giving users the ability to search for a page even if they didn't know the page's location.
WEB 6.1 -- 1991 – DNS – Dynamic Naming System is created
WEB 6.2 -- 1991 – The first text-based browser is created
WEB 7.0 – DHTML – "Because Non-Scrolling Text Is Boring"
The web was static until Dynamic HTML (DHTML) was created. DHTML introduced client-side scripting, allowing authors to include code in their web pages that performed an action upon being downloaded onto a user's computer. DHTML introduced rollover buttons and drop-down menus on web pages. It goes a long way to making the web more personalized.
WEB 7.1 -- 1993 – The first graphics based browsers are created
WEB 7.2 -- 1993 – Screen casts are first created
WEB 7.3 -- 1994 – Wikis are created; Britannica begins holding its breath
WEB 7.4 -- 1994 – The World Wide Web Consortium is formed
WEB 7.5 -- 1994 – CSS – Cascading Style Sheets created
WEB 8.0 – ONLINE DIARIES – "Teens Reportedly Misunderstood"
Online diaries were first created in 1994 as a means for people to store their diaries online for personal or public reading. Writers could now reach almost anyone worldwide at practically no cost, and everyone could create editorials on whatever subjects they liked, without fear of censorship.
WEB 8.1 -- 1996 – The first social bookmarking site created
WEB 9.0 – RANKED RESULTS – "The Online Popularity Contest"
Search engine results helped find things, but many of the results were useless or had nothing to do with the keywords used. As of 1996, search results started to be ranked based on a multitude of things, like how popular a page is. This made searching faster and easier, and significantly less painful.
WEB 9.1 -- 1996 – Flash is created, whole websites can now be animated
WEB 9.2 -- 1997 – The term "Blog" is adopted
WEB 10.0 – HIRED BLOGGERS – "Wow Isn't Product X Great!"
As of 1997, personal diaries began to evolve to what became known as "blogs." Many corporate websites and personal homepages had (and still do have) news sections, these were traditionally updated manually in a back-end system. With the advent of blogs, the commercial sector jumped in, seeing a new marketing medium.
WEB 10.1 -- 1998 – The first audio news site is created
WEB 10.2 -- 1999 – The first web-based operating system is created
WEB 11.0 – RSS – "Newspapers Deemed Obsolete"
Really Simple Syndication (RSS) was created due to the lack of a universal feed format. The creation of RSS means that users could now "subscribe" to feeds containing video, audio, text, or graphics. Users no longer had to trawl the web for new information, they could "subscribe" to a feed and have it sent to them directly.
WEB 12.0 – REMOTE SCRIPTING – "Waiting For 4 Seconds Now History!"
Remote scripting allows scripts running inside a browser to exchange information with a server, so that scripts could be triggered locally, processed remotely and have information returned directly to the browser. This made the web faster and easier to use, and removed the need to refresh the page for simple tasks like sorting.
WEB 12.1 -- 2001 – Blogs evolve from online diaries
WEB 13.0 – PODCASTING – "Now Everyone Can Avoid Listening To You By Choice Rather Than Circumstance!"
Podcasting originated as a portmanteau of the iPod® and broadcasting, although "portable on demand broadcasting" has now become the widely-accepted definition. Originally Podcasting was created to allow individuals to distribute their own radio shows, but it has become popular for a wide variety of things, from educational materials to the latest gaming news. Podcasting opens up distribution of audio content to anyone with a server, with users "subscribing" to the RSS feeds that appeal to them.
WEB 13.1 -- 2002 – Folksonomy is created, giving rise to "tags"
WEB 14.0 – VIDEO PODCASTING – "Web-Based One-Sided Conversations"
Shortly after Podcasting became popular, video Podcasting was created as a means to send the equivalent of TV episodes to users. Though similar to podcasting, the content was not limited to just "TV episodes". Video Podcasting opens up the video medium so that making a TV show is possible for anyone.
WEB 15.0 – VOIP – "High Tech, Dodgy Sounding Free Calls"
With the Voice Over Internet Protocol, telephone audio is sent over the internet, rather than a traditional phone line. This removes almost all cost involved, and also removes the need to have a physical phone line. What this means for consumers is calling becomes much simpler, easier and significantly cheaper.
WEB 16.0 – SAAS – "The Industry Makes a SaaS of Itself."
Software as a Service (SaaS) is just a new term for a concept that has been around since the dawn of the internet (ASP from 1970). SaaS refers to using a piece of software run/provided through the internet, and instead of paying a large one-off purchase price, you "rent" the software for as long as needed. So while SaaS is the buzzword of the day, the concept is decades old.
..The CONCLUSION?
So if you follow the basic rule that each total upgrade is a new ".0" then we are nowhere near Web 2.0. The story is really one of falling price, increasing reliability and bandwidth, coupled with ubiquitous access.
Simply put, "Web 2.0" is just shorthand for the development process outlined above. Bottom line, the web really becoming what the web really always should have been.
Thursday, February 21, 2008
totally advanced
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