Advanced Spreadsheet Use

1. Advanced Spreadsheet Use

2. Advanced Spreadsheet Use Head/analysis Heart/passion Gut check/faith

3. Advanced Spreadsheet Use Measuring returns Project return Invest $100,000,000 Profit $15,000,000 15% pa

4. Advanced Spreadsheet Use ROE Case 1 Invest $100,000,000 Finance 75%, 4.5%, 15 years Profit ≠ $15,000,000 EBITDA http://www.old.dramatispersonae.org/images/roe-case-1.xls

5. Advanced Spreadsheet Use ROE Case 2 Invest $100,000,000 Finance 75%, 9%, 15 years Profit ≠ $15,000,000 EBITDA http://www.old.dramatispersonae.org/images/roe-case-2.xls

6. Advanced Spreadsheet Use ROE Case 3 Invest $100,000,000 Finance 75%, 9%, 8 years Profit ≠ $15,000,000 EBITDA http://www.old.dramatispersonae.org/images/roe-case-3.xls

7. Advanced Spreadsheet Use ROE Target range Large cos 20% to 24% Students 20% to 30% (architects 14%) Credit card cos 18% to 39% VCs 30%+ Vultures 35%+ Maximum allowed under CDN Criminal Code = 60% pa including extra charges or service fees

8. Advanced Spreadsheet Use ROE Owners of Winnipeg payday lending co charged Investigation reveals people paying criminally high interest Det-Sgt Terlinski says co allegedly charging rates of several thousand per cent http://www.cbc.ca/news/canada/loan-company-charged-in-criminal-interest-rate-case-1.601087

9. Advanced Spreadsheet Use ROE Decreases with age

10. Advanced Spreadsheet Use ROE Canada housing

11. Advanced Spreadsheet Use ROE Canada housing Compound Growth Rate in Average Canadian House Prices 1980-2012 Year Avg Price Compound Growth 1980 $60,000.00 2012 $370,000.00 5.85% p.a. 32 $310,000.00 E&OE/Approx

12. Advanced Spreadsheet Use ROE Canada housing http://www.old.dramatispersonae.org/images/simple-housing-example-roe.xls

13. Advanced Spreadsheet Use Leverage– ten main sources great HR using OPM forced savings innovation capital equipment

14. Advanced Spreadsheet Use Leverage– ten main sources location network effects biz models/marketing channels reduce problem from one to many to one to a few branding, co-branding, co-opetition and co-creation inflation

15. Advanced Spreadsheet Use Leverage– ten main sources HR/hire up

16. Advanced Spreadsheet Use Leverage– ten main sources OPM/as long as cost of OPM < project returns

17. Advanced Spreadsheet Use Leverage– ten main sources Forced savings http://www.old.dramatispersonae.org/images/forced-savings.xls

18. Advanced Spreadsheet Use Leverage– ten main sources Forced savings

19. Advanced Spreadsheet Use Leverage– ten main sources Forced savings Principal v interest curve/bank term limit may reset clock

20. Advanced Spreadsheet Use Leverage– ten main sources Forced savings P v I

21. Advanced Spreadsheet Use Leverage– ten main sources Financial engineering Treat investors at least as well as promoter http://www.old.dramatispersonae.org/images/bmc-financing.xls

22. Advanced Spreadsheet Use Leverage– ten main sources Financial engineering Treat investors at least as well as promoter Sweat equity 10% to 25% All shareholders equal Otherwise, it’s a form of debt

23. Advanced Spreadsheet Use Leverage– ten main sources Innovation All of life experiment until proven otherwise Try something, works, do more Try something else, doesn’t work, stop As soon as implementation begins, experimentation starts/change happens

24. Advanced Spreadsheet Use Leverage– ten main sources Innovation/list of 30 accidental discoveries changed world a. penicillin b. post-it-notes c. strikeable match d. the lever e. plastic f. velcro

25. Advanced Spreadsheet Use Leverage– ten main sources Innovation/list of 30 accidental discoveries changed world g. law of gravity h. radioactivity i. microwave j. mauve color k. dynamite l. pacemaker m. anesthesia

26. Advanced Spreadsheet Use Leverage– ten main sources Innovation/list of 30 accidental discoveries changed world n. teflon o. saccharin p. x-ray q. vaseline r. vulcanized rubber s. chicken cholera vaccine

27. Advanced Spreadsheet Use Leverage– ten main sources Innovation/list of 30 accidental discoveries changed world t. nuclear fission u. LSD v. safety glass w. making fire x. cave painting ochre y. cellophane

28. Advanced Spreadsheet Use Leverage– ten main sources Innovation/list of 30 accidental discoveries changed world z. chirality (right and left-handed chemical molecules) aa. gunpowder (blasting gelatin) bb. nylon cc. DNA dd. density Luck plays role—scientific, business, artistic even political but harder you work, luckier you get…

29. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing business models, whether they work as planned or require modification beta product launches, what reaction markets have battle plans, whether they work as planned or require modification catalysts, whether they speed things along or not weather, too unpredictable to be meaningfully forecast

30. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing weather, too unpredictable to be meaningfully forecast

31. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing Canada’s 2013 federal budget finance minister Jim Flaherty announced additional $248 million over five years to strengthen Canada’s meteorological services billions spent on weather forecasting weather channel huge hit apparently, watching floods, fire, tornadoes, hurricanes, other disasters profitable and fun (as long as happening somewhere else)

32. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing Overall success rates generally 77% better than flipping coin accuracy in Palm Beach higher than for northern shelf city like Ottawa where much more variability in climate differences small, perhaps 75% versus 79% so far, so good

33. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing but real issue not whether Meteorological Service of Canada accurately predicts high temp tomorrow (within three degrees, generally accepted range) or whether it will rain or snow or hail or flood… real issue is can they predict when a change will occur?

34. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing freakonomics blog, JD Eggleston, in study of local weather for Kansas City, found forecaster who always and arbitrarily predicted never rain right 86.3% 3 of KC’s local TV channels 1-day out success rates— 87% difference unlikely to be statistically significant http://profbruce.tumblr.com/post/58779699201/how-accurate-are-weather-forecasts-in-canadas

35. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing economic policies, whether the law of unintended consequences invoked children, how they respond to discipline and incentives motivation, how to get a team to work together HR, who to recruit taste, what you like/don’t like in clothes, fashion, food, film, music, people

36. Advanced Spreadsheet Use Leverage– ten main sources Innovation/things you can only learn by doing sports, how to ski, snowboard, hang glide, windsurf, golf, sail, ride a bike, play tennis, skateboard… party and events, what works, what doesn’t YouTube video, what goes viral, what doesn’t film, music, novel, what hits/what misses… Stan Jaffe

37. Advanced Spreadsheet Use Leverage– ten main sources Capital equipment/hand looms to automated ones

38. Advanced Spreadsheet Use Leverage– ten main sources Location/by occupying one location, automatically exclude everyone else

39. Advanced Spreadsheet Use Leverage– ten main sources Network effects/law of large nos USD Telephone Fax Email Browser Google Skype Amazon Network effects/community forms through SM • Reddit • TechCrunch • Twitter • Facebook • Digg (before iterations) • YouTube • Kiva • LooseButton • Khan Academy

40. Advanced Spreadsheet Use Leverage– ten main sources Biz models/marketing channels reduce problem from one to many to one to a few Project Wonderful/reverse out pricing work to advertisers Virtual homebuilder/reverse out design to consumers, bidding/scheduling to trade contractors Grade A Techs/matching suppliers (techies) with consumers Apple stores Amazon resellers

41. Advanced Spreadsheet Use Leverage– ten main sources Branding, co-branding, co-opetition and co-creation Apple macbook pro $3,500 Windows machine $900 Threadless consumers vote on t-shirt designs

42. Advanced Spreadsheet Use Leverage– ten main sources Branding, co-branding, co-opetition and co-creation well respected brand creates opportunity to sell successfully work hard (for years) to establish reputation for good work, high ethical standards and trustworthiness trust creates environment for you where clients send you more and more work trust creates environment where clients refer other clients

43. Advanced Spreadsheet Use Leverage– ten main sources Branding, co-branding, co-opetition and co-creation trust gives breathing room when make a mistake trust creates personal brand for you individually, independent of firm change firms, many clients follow trust creates brand brand creates opportunity to turn market into sales

44. Advanced Spreadsheet Use Leverage– ten main sources Branding, co-branding, co-opetition and co-creation Marketing  Branding  Trust  Sales  Profits  Marketing  …

46. Advanced Spreadsheet Use Leverage– ten main sources Branding, co-branding, co-opetition and co-creation Clarica Life Insurance (now a Sunlife Financial member)

47. Advanced Spreadsheet Use Leverage– ten main sources Inflation/go where all boats are rising Nano tech AI Digital data Green PB4L 3-d printing Entertainment Inflation/go where all boats are rising • Power • Transportation/hyperloop http://www.youtube.com/watch?v=IlnlkMbukmA • Farm-in-a-box • Mega-cities • Continuing ed • Entrepreneurship • Curation

48. Advanced Spreadsheet Use Leverage– ten main sources Inflation/go where all boats are rising Customer service Authenticity Land Financial planning ESL Self-help Coaching Inflation/go where all boats are rising • Mentoring • Elder care • Yoga/physiotherapy • Marijuana/wine/foodie • Design • Fashion/clothing • Future will surprise us

49. Advanced Spreadsheet Use Cap Rate Most real estate professionals use Cap Rates to compare one project with another Cap Rate (Capitalization Rate) is approximate measure All financial measures are

50. Advanced Spreadsheet Use Cap Rate Cap Rate determined by dividing Operating Income of property by Selling Price Inverse of Cap Rate is approximation for number of years to earn back capital Widely used in commercial real estate sector Higher Cap Rate, better for Buyer/worse for Seller