Business Lessons from the Rainforest Wealth Lessons from Nature pdf

I have been directly involved in three business ventures, starting-up and owning two of them.The structure of the rainforest like that of the market is layered.. Like the trees in the ca

Business Lessons from the Rainforest

Wealth Lessons from Nature

BY

DR Nzewi Dozie

SMASHWORDS EDITION

PUBLISHED BY DR Nzewi Dozie on Smashwords

Business Lessons from the Rainforest

Wealth Lessons from Nature

Copyright © 2012 by DR Nzewi Dozie

All rights reserved No part of this publication may be reproduced or transmitted in any form

or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of DR Nzewi Chukwudozie, 48 New York Avenue NW, Washington, DC 20001 (571)-268-3465.

Acknowledgement.

This is to acknowledge the owners of the photographs used in the cover of this book

1. For the photograph Daintree Rainforest originally uploaded by Adz at

en.wikipedia Released under GNU Free Documentation License.

Introduction

The rainforest is the richest ecosystem on the planet, with half of its entire species, and most of its fresh water There are more species of fish in the Amazon than all the entire Atlantic Ocean, more in one pond than all of the British Isle One hectare (3.7 acres) may contain 750 species of trees and 1500 species of other higher plants They

High levels of rainfall are what make the rainforest so rich The soils are actually leached shallow and very being washed by the heavy rains for millennia They lie in the tropical convergence zone where winds from the northern and southern

hemispheres having picked-up moisture along their journey over half the planet meet and dump the water

The rainforest is a self-sustaining system of production and consumption It is big and has no cycles of recession It’s is very diverse with all kinds of relationships among its players: competition, cooperation, and collaboration If you are a business you have your equivalent in the bush and it has lessons for you The scale of the rainforest is massive so it is easy to observe and the inferences made with confidence I have been directly involved in three business ventures, starting-up and owning two of them.The structure of the rainforest like that of the market is layered There are four layers: the emergents, the canopy, the understory and the forest floor There are the animals and the microbes which operate in all layers They are the equivalent of regulatory authorities Regulatory authorities operate in all layers of the market

The Emergents.

These are the tallest trees of about 50m in height, up to 80m They are the smallest group, and are exclusive They are the Fortune 500 companies They are above the canopy and do not compete for sunlight, but have to stand the wind, brave lightning, endure animals and avoid the chainsaw

The Canopy.

This is the second highest layer, where the branches touch from tree to tree so close that it’s a green ceiling denying sunlight to those beneath It is the competition zone characterized by a day to day battle to see the sun It is a day to day battle to be seen by customers and maintain the brand In this market any lag in height could be permanent, even fatal The trees try to keep up with each other to get sufficient sunlight There is no worry about the weather; they share the risk, and together

underground in their roots(tubers), some don’t form seeds, they will grow from stems and cuttings This is the niche market Some plants climb the giants to reach the sun, twisting around him, sometimes very aggressively; sometimes sinking roots into his stem, there are lessons here for the small business Some plants are not that

aggressive but just grow on debris that gathers on the giant

The Forest Floor

Littered with dead leaves and decaying branches this is the recycling business It is very efficient and work dispatched very quickly Fallen branches go quick, devoured

by an army of microbes which include bacteria and fungi, yielding organic material to reconstitute the soil and supply the higher layers Here you will see big mushroom growing on dead tree trunks So recycling could be a big operation However the microbes do most of the work

The animals of the forest are the stabilizing factor preventing “bubbles” If the forest

is prospering extra-ordinarily in a boom fashion the population of the animals which feed on its products increases and puts a check on the growth preventing a bubble This way the animals remove excess liquidity to prevent “overheating” The

Humans have lived in equilibrium with forests and still do in many places However forests in general are under threat from human activity like illegal logging, poaching, and change of land use for agriculture (e.g to grow crops for “green’’ fuel or

Amazonian soybean) or for settlement This is equivalent to the cataclysm of

changing the economic system, like the Bolsheviks did in Russia early last century, a failed project that neither provided enough food nor fuel but left a gullaged

dissatisfied populace who went back to “natural use” in a reverse revolution that sank the artificial enterprise, the Soviet Union The forest is a natural enterprise

Capitalizing it kills it It should be run as a mixed economy with clear regulations if it cannot be left alone

Friendly tax schedules brings in investment and has been used to unleash specific industries like IT and green technology in many places, or promote an economic zone like Dubai in the UAE and Cotonou in West Africa Conversely many businesses have left Cameroon in central Africa because of extreme taxation Just like human

encroachment forces animal life to migrate from the forest, government policy may force business to migrate to other markets Human activity was going to kill a forest

in the Dust Bowl but for tree planting

Disease.

Forests are more resistant to sporadic disease and pests than agricultural vegetation

I certainly have never heard of a forest or a species in it failing from a disease

outbreak The intense cross-pollination is certainly protective The diversity within the forest is also protective for one species may be repelling a pest that afflicts

another while benefitting from it adding nitrogen to the soil Similarly a diversified economy is more resilient, so is a business with multiple streams of income It is certainly good it cross-pollinate an investment portfolio with as broad set of assets

Fire

Fire is a major event in the life cycle of forests The loss is great but they always recover fully If they were frequent they could permanently damage the forest The

thorough a purging An economic depression is like a bad inflammatory process,

necessary for healing, but so exaggerated that the patient is threatened to die from it rather than the disease.

The Emergents.

1. They operate in a capital intensive industry like oil prospecting and extraction

of which Chevron and BP are examples or the aircraft manufacturers

2. They have been around a long time , for example HSBC( started in 1865)

3. They dominate their market overwhelmingly or had little competition, for example the technology companies Facebook and Google

4. Or they are state owned These are often monopolies servicing whole countries with direct government help

State-owned behemoths

These are state-owned companies commonly in the area of utilities or mineral extraction They are power companies, water supply companies or national oil companies, other mining companies, rail companies, agricultural companies and such like These were much more common in the days before economic deregulation and privatization They were staple in communist and socialist systems, and also utilized

by nationalistic governments to gain control over sectors of their economies to the exclusion of foreign players This they accomplished through nationalization The companies were also attributed a national security function: they were used to exclude foreign persons from “sensitive” sectors with national security significance And finally they were used to help conserve the balance of payments of the countries that owned them Imagine a foreign operator providing utilities in a country as a monopoly or at the mildest with great dominance, it amounts to a drain pipe on the foreign exchange of the host country The solution to this was a nationalized

The capital intensive sector.

Some sectors of the economy are inevitably capital intensive making firms that operate in them large out of necessity A good example is the oil sector where drilling

is very expensive The terrain for their work can be difficult, with off-shore rigs required in some situations The volumes of commodity moved are very huge and require expensive infrastructure like pipelines Further processing requires very expensive plants (refineries) Thus oil companies are huge operations requiring a great deal of capital investment Airline manufacturers are a second group of companies that are huge by necessity Their product is highly complex, possessing a great many component parts, with their being stringent regulations to meet Aircraft are expensive products, so are the plants and processes to make them Thus aircraft makers like Boeing and Airbus are among the biggest companies in the world

Little competition.

A company that develops software has copyright to it for a stipulated period during which it can exploit it for profit exclusively When there are no comparable substitutes then the company can have very profitable pricing and optimal sales Thus the company can grow very rapidly, and needs to grow rapidly to satisfy demand Microsoft and the Windows operating system exemplified this in the 90’s Secondly the nature of the product and structure of the market means that as massive as the market is there will be only a limited number of companies making products because

of the need for compatibility (different products being able to interface and function with one another) Compatibility with the gadgets of family, friends and colleague at work is a very important matter among consumers People usually consult members of their circle before making the decision about which tech product to buy So a limited number of companies emerge most popular If the market is so huge and there will be but a few companies operating it they (each) have to be gigantic

Microsoft grew on shrewd business practices to dominate a new field No company could take on it blow for blow For it swung hard and heavy, closed-up distance

Now there is a move to unify titles Google use to be a browser, now it’s an email service selling books and offering free internet phone calls, also selling software and apps, managing music and running mobile telephony The actors in the sector seem to seek a model that provides a comprehensive service to their customers so they have

no need to look elsewhere Everything they need in one place A one stops shop.The competition between the American aerospace company Boeing and the its European counterpart Airbus Industrie illustrates this strategy to accommodate each other rather than mutually annihilate each other seen at the top of the food chain Competing for the long distance flight market, Airbus was going to make a buzz by making the biggest airliner ever; which was going to convey huge numbers of people

to regional hubs from where to continue their journeys Boeing chose to go farther, providing direct flights to centers for which passengers may have otherwise had to change planes Airbus offered airlines cheap through scale of capacity Less cost moving large numbers of ready passenger plus the spectacle, wonder, excitement and attraction of the biggest airliner ever, the A380 Boeing offered airlines cheap through scale of range Eliminating the need to change planes

Lesson from the rainforest

The way the emergent trees carry out business lends lessons to the big conglomerates.

1. The focus of their growth activity is strengthening their stem and root system Compared to their size their foliage is not impressive as they usually consist of

a few branches, sub-branches and unimpressive leaves Their flowers and fruits are equally bland They do no invest much in these This is the strategy: they are by nature tall trees and have their foliage well above the canopy so they get sunlight absolutely without any encumbrance This is the equator where sunlight is abundant so they do not require too many leaves to catch the sunlight they need The smaller foliage also minimizes the drag of the wind on the tree The biggest challenge facing this group is staying- up at that height So they focus on reinforcing their stems and roots They are as good

as the stem and roots that bear them The goal of this strategy is to endure, while for other plants that produce beautiful flowers and sweet fruit it is to produce as many progeny as possible before when they fall The emergent plant is there from century to century, strengthening its stem and roots, increasing in girth by the year… and yes dispersing seed and making progeny

It may not have fruits for the animals but certainly the lumberman appreciates the work done building the great boughs.

2. The giant conglomerates do not face mortal competition Their market share

is pretty secure In a way they have already beaten the opposition The issue for them is staying big not staying up They do so by strengthening their base through mergers and acquisitions and new product offerings They also strengthen their base by lending out their franchise Mergers and acquisitions bring economies of scale: the same processes are done at lower unit cost, and

3. These are the pitfalls of being distinctly huge over your neighbors in the rainforest They could suffer a lightning strike A big company like a big ship could go down quite quickly and suddenly A lightning strike could set the tree ablaze or destroy it in a less dramatic fashion This has been seen in the stock market when a company’s stock goes into free fall, often as a result of a single event in the life of a company A French bank was plunged into crisis after one it’s traders lost two billion dollars It is hard for the tall trees to protect themselves against lightning being distinctly taller than the canopy Huge companies who must necessarily place massive funds under the control

of single individuals must set up early warning mechanisms and also take out insurance.

4. The same scenario elucidated could happen following an erratic decision by top management The British media agency The News of the World sank pretty quick following poor judgment about what is allowed and not allowed

in the practice of sourcing news This profitable news agency had to be scuttled as this one practice it was engaged in proved pretty toxic It was reverse role play when journalists used Gestapo or KGB methods I wondered whether the voluntary disbandment of the media house was done to prevent the light being shone long on the whole it was part of To dispel focus A gangrenous member was cut off and it would not be known the state of the rest of the body I was surprised such a valuable venture as The News of the World was preferably sunk as against being sold It was like the news agency was struck by lightning

5. A steadier problem the tall trees have to face is wind…sometimes storms These are quite frequent in the wet season when torrential storms seem to want to tear whole trees apart The trees weave from side to side wrestled by the rainstorm spreading out its branches like the fingers of one hand as if to wrench the very life out of it This happening to a standalone tree giant well above the canopy is a ghostly sight…almost sickening The giants have to put

up with storms Like BP had to do last year with the deep water horizon oil spill in the gulf Mexico It was a global storm that caused the head of BP to

Social responsibility

It is now almost an expected part of the package for companies to be involved in social projects and philanthropic activity The common coinage used is to “give back” It’s been long in practice for companies to support social causes Sometimes in self-interest and a few times without it being obvious what the fit stands to gain Today it is almost expected of companies to be involved in this activity: scholarship awards, endowments, health courses etc Some pay a percentage of sales, like a voluntary sales tax Indeed the practice is now so entrenched that in some host communities what companies are subject to amounts

to coercion I know of incidents when thuggery has been used to extract charities from companies Agents of the community mounted a roadblock barring passage of vehicles of this company which meets its statutory obligations How many times does a company have to pay for the cost of its legitimate activities on the environment and the local community’s land? How many times does it have to pay using roads, ports, and power and telecommunication lines? It is important to blow the whistle on this piracy going on against businesses world-wide These companies are big defenseless ships marooned in foreign locations, flying foreign flags Being great agglomeration of resources they become the victims of organized buccaneers and thieves often in alliance with local chiefs Disguised as community activists they extract protection monies from these businesses Their communities never see the funds so the dissatisfaction continues Even kidnapping

of staff of these companies has been used in the Niger Delta The limited civil war that broke was due to the privateerism that had been at play in that wild, wild south

This is not to say there have not been violations by companies on the rights of local communities But where this has happened there are proper channels and due processes for seeking redress It could be hard to deal with the clout of some multinationals government may not be representative Yet there is no place wantonry that serves only the interests of malignant elements not the community Companies must pay compensation when they violate people’s rights Charges should be pressed where crimes may have been committed The problem is government who collects taxes and royalties but do not benefit communities If government did its duty business would not need to pay twice

The Canopy

Here is where the competition is stiffest The trees compete for sunlight In the market it is

a competition for market share First they have to be seen by potential clients so they advertise intensively It is a delicate balance where loss of focus could cause a terminal lag Falling short at this level of the forest deprives from sunlight and leads to poor tree health An occasional tree would be seen to be lanky and sickly as it races upward in the shadow of another, sometimes even bent, seeking the sun The biggest problem facing firms at this level of the market is competition; it is a fight to the death They compete for customers, suppliers, staffing, location and any necessity or privilege important for that line of business In the rainforest there are no fanciful strategies than to send the root deep and wide, grow, grow, grow, and make a many leaves There are some advantages of being in the canopy It means that many risks are shared: like the risk of a lightning strike, of being felled in a storm: the trees standing together comprise a wind breaker so they protect themselves collectively They are one continuous layer of such that animals live and move among their branches as if were an elevated field So they make a great contribution to hosting an element of the forest, animals, which serves a function important to all

Lessons from the forest.

1. Middle-range companies must work actively to increase their customer base There are two approaches to this One is directly advocating among potential customers to promote their products This has been said to be about

persuading the audience that they need the product They may use audiovisual commercials, direct physical campaigns, or sponsorship of sports, television programs or artistic events They may have a marketing strategy incorporated such as a free trial There is usually an advertisement department and an appropriate budget dedicated to it.

2. The second strategy seeks to give the customer a better deal than found

elsewhere To offer them better pricing; better value for money

Advertisement contributes significantly to the final price of goods and services

3. Getting the roots down and wide The company must secure its supply chain because it cannot afford to default on orders Lost orders are lost to

competitors It must therefore order its inventory ahead of time, three

months ahead is a good period but studies should establish what the trends are It is also good to secure suppliers down with written contracts.

4. Since pricing is the most important competition point it is important to

appreciate that part of the measures to minimize production costs is to

minimize the cost of raw materials and supplies All other costs must also be kept as low as possible working in the canopy.

5. Players in the middle range of business must keep abreast of what is happening

in the market, especially what the competition is doing They then respond accordingly to remain at the edge of business

6. Finally there is still a place for cooperation among competitors Firms should cooperate where there is common interest Some things are best done as a group Scale is an advantage already high-lighted If companies in the same line of business cannot annihilate the competition (and the law is weighted against this) they must co-exist There are always determinants common to all Challenges they all have to deal with Working as a herd may enable them solves the problems more easily Indeed this may be the only way to ward off local government or state and federal regulation Even warring parties do enter into truces and cease fires, to continue belligerence at a later date Like the trees in the canopy collectively form a wind breaker canopy companies ought

to work together to develop common interests

include being deprived of sunlight as they are completely shaded by the canopy

overhead and being vulnerable to damage by animals (because of their size) The advantage they have is being completely shielded from storms, and from lightning.They solve the problem of low access to sunlight by a variety of measures Some are climbers, for example the yam plant They climb the stems of plants in the higher levels: the canopy and the emergent, by winding around them or through hooks, till they emerge in sunlight The cocoyam plant solves the problem by having large

telescopic leaves that seek to catch as much of the dim light that falls on them as possible

The plants solve the problem of being small and vulnerable to animals in a variety of ways Some make poisons that kill animals that dare nimble on them, a toxic cassava plant type, and a flowery Cocoyam do this Some produce irritants: the ordinary cocoyam plant does this and contact on the skin by its juice will cause irritating

itching It is even more irritating in the mouth Some like the banana plant depend on making suckers for propagation as it wouldn’t be possible to maintain seedy fruit so close to the ground to maturity, especially banana fruits! Hence the banana is a

seedless fruit They banana plant races to a fair height making a largely watery, turgid stem; fruits quickly and dies to create space for its suckers Among plants in this layer are biennials and annuals Biennials grow and fruit twice a year; annuals once a year The hazard of being mortally damaged by animals is so great that these plants elect to race and finish their lifecycle then die voluntarily Also some would store their reserves underground (the cassava, the cocoyam and the yam are all

tubers-underground stores) to prevent them being damaged or bringing damage to the plant by attracting animals

Lessons from the rainforest

The lesson from the third tier of plants in the forest is to provide what the bigger businesses cannot offer Competing with them is out of question It is clear that

plants in the understory layer of the rainforest try to make the most of their

prevailing situation and still achieve success The grasses feed the world These

include: wheat, barley, rice, sorghum, millet, corn, and such The tubers feed the tropics: yams, cassava and cocoyam To qualify for a place in this roll of fame the plant must be able to use sunlight to capture carbon from the atmosphere very

effectively and efficiently The grasses of the savannah, the prairie, the steppes and such open spaces do so But the title goes to the tubers that do the same from under

The tubers: yams, coco -yams and cassava make a good impact feeding the world They are the carbon packers of the rain forest Having to compete for sunlight yams are climbers , that way they reach the top of the canopy, the coco-yams don’t go for height, they have two or three permanent broad leaves like telescope dishes catching every light signal This design precedes the parabolic dishes of astronomic telescopes and satellite TV receivers The cassava makes no seed; channeling its effort towards storage (underground) of the carbohydrate it makes and like sugar cane (a C4 grass) can be grown from the stem It does not invest in permanent structures These

rainforest carbon packers cannot afford to make seeds or store carbohydrate above ground as the density of bird and animal life would not allow it The seeds or stores would be eaten

1. Offer what the big rival cannot offer Like hand made as against machine

made Your clientele is small, so take advantage of it Produce with extra quality, with the level of attention to detail that a machine could never muster and you will sell at a premium No competition Indeed the small business and the big business should not be in

competition unless it is the small business doing the hostility on a soft

underbelly that a big company allows to develop

1. Offer human touch A small target of customers means solutions can be

customized So know your customers and give them tailor-made solutions Follow-up and give them after sales support Bond with them as you work to see them succeed and they will to see you are fairly rewarded and are around

to continue helping them You have limited clientele, nurture it, groom it and keep it It is your advantage if you exploit it, your disadvantage if you don’t

2. Seek every opportunity to increase your customership Like the cocoyam’s broad leaves or like radar sweep zones in search of clients and let none slip through the net Like the yam take every opportunity to see the light Climb

on the shoulders of the internet to advertise (operate a web site, market on line) Climb on the shoulders of e-bay Use word of mouth Take declassified advertisement

3. Save like the cassava, expand like the banana The cassava plant makes no fruits but is spread through cuttings It saves everything Do not waste

resources Your capital base is small and can easily disappear The banana plant makes no seeds, it spreads locally Do not hurry to set up branches in other locations until your present store/office/workshop is fully maximized There are linking costs that will develop in running more than one business location Before you branch out be sure the figures add up Make sure your profit increases or your business is more secure

4. No foolish risks that could threaten the existence of the business You have to

be toxic to practices that can cause the business to go under Of-course like stealing from your business Remember your capitalization is small and can be easily wiped out

The forest floor

Here a general service is provided to the forest turning dead material into manure Plants utilize energy from sunlight to synthesize organic material like cellulose

(fiber), carbohydrates (starch), proteins and oils When plant material or animals die the forest floor takes care of business Saprophytes devour the dead plant or animal

organisms Ants and worms break down the dead material to finer particles and

increase the surface area available for the microbes and mushroom to act This

recycling process is critical to the existence of the rain forest as the soils are very poor being shallow and leached by the heavy rainfall Nutrients must be recovered from the dead plants and animals or the forest will not be The recycling sector of the forest is very advanced, sophisticated and rapid So it should be with human societies especially cities, for humans produce much more waste per head What a waste it would be not to take a cue from the forest

Recycling is still a novel idea in most of the world (though it’s going on in nature all around) How many recycling companies are listed on the stock-exchange? It is a veritable sector to grow a business in, especially in the developing world The

potential here is like it was in the IT sector in the early to mid –nineties In the

market the forest floor represents the businesses which provide the services for other companies Who provide bags for retail shops, components the automobile giants, pipes and such for the oil giants, researchers and recruiters, banks and insurers… small contractors that do things for businesses that businesses cannot efficiently do for themselves

This sector has no specific risks They expand when the forest expands and contract when the forest contracts When the forest expands, it produces more debris, the saprophytes feed on this and increase, this ensures the saprophytic function matches the need of the forest There is a negative feedback in operation here If the saprophytes lag behind the growth of the forest, debris accumulates and disease may break out Or a fire as tinder accumulates, ignited by heat or lightening

When the economy expands the support sector expands, when it shrinks the support sector shrinks This concern was one of the reasons why the America auto giants were bailed out during the credit crunch of the late 2000s Indeed the performance of the support sector could be used as an indicator of the health of the economy and as a control point to stimulate growth or check overheating and inflation This is already being done through the banking industry by controlling the supply of money or the cost of borrowing This is done through the instrument of the interest rate Insurance regulations could be used to remove carcasses from the system, by manipulating benchmark criteria for obtaining insurance This is happening passively as companies

Poor soils.

The success of rainforests in spite of poor soils mirrors the success of countries with little natural resource like Singapore and Japan It demonstrates the importance of recycling for one, the importance of good management and the importance of efficiency Indeed abundant mineral wealth could be a bane to development as it may produce a single-commodity economy and foment corruption as leaders scramble to steal from the sales of the mineral This was epitomized in the diamond war of Sierra Leone and Congo DR, and has been said to be the bane of Nigeria Discovery of oil wealth in Angola raised concerns, a paradox predicated on happenings in other places including Sudan The Kimberly process to regulate the sale of diamonds and prevent its use to fund wars demonstrates how serious a destabilizing factor wealth in the soil can be It is striking that those countries low in natural resources have economic centers with housing structured like the rainforest Skyscrapers, buildings of intermediate height, and low buildings Singapore has the highest number of skyscrapers It would seem that depending intensively on commerce and industry (the market) rather than the sale of a natural resource produced this structure, the different heights reflecting different sizes of businesses Thus this multilayered format may be the principle for any system that allows free intensive competition The single-resource countries still have rather flat city profiles They dig deep but don’t grow While in the market-driven countries spread flat and grow tall The shallow soils warrant the trees of the rainforest to have expansive buttresses that spread up to 30ft to keep them secure Roots the sizes of tree trunks that you can sit

on are not rare in the rainforest

1. Fully suitable for the environment in which they are operated to reduce down time.

2. Fully suitable to the uses to which they are put and be streamlined to the production process to give optimal efficiency

3 Like the leaves that follow the sun, follow the business everywhere it goes.

How to use lessons from the rainforest to start a business.

The rainforest is a free system, it is indeed freer than the market, and therefore its overwhelming success confirms that the free market is the optimal system Its model promises balance and abundance without bubbles and bursting These examples illustrate the application of the principles discussed so far

ENTREPRENEURSHIP

You want to start a business; the first thing is to determine what part the forest the business you visualize falls The emergents, the canopy, the understory or the forest floor Second do you have the resources required to play in that layer For example

Mr Smith has been working as an executive for a bank for ten years and has been seeing the finances of his clients It has been leaving a hollow in his belly comparing their profits with his wages He believes he can do it so he contemplates resigning to launch out on his own He thinks he could gather a team and muster the funds required to start-up a business making electric cables and fittings He had been managing the finances of a firm owned by a client his age whom he had got to know

at a personal level This friend was in the electrical wire and fittings business The

The realities are that Joe is using his savings for the venture and does not know the business very well

Advice: He has to find a river bank Here the vegetation is not dense and trees are sparse So there is no significant competition However there is no shielding from the wind and the river floods from time to time The grass is almost choking But there is sunlight, and plenty of water

Smith decides to start up in a locale where there is no competition but he must trade this off with their being little logistics He decides to strain against predictable challenges like poor supply networks, poor market links, than combat suffocating competition If his business dies it would be a slow death and he will have time to make changes or run In the thick of it, inside the city, he may never take off The high cost of logistics could easily smother his business From the periphery he’ll have the time to learn more about the business and possibly develop a niche that takes advantage of being away from the rest Per chance turn disadvantage to advantage

If he succeeds he’ll have the advantage of a pioneer in the locality of his startup He’ll be a prominent fixture in its commercial landscape; capable of securing it’s resources like choice locations for himself He’ll be ahead of any new comers in local knowledge, business connections and political links It may take a while though to get there

Jasmine is a skilled teenager with bright ideas and great IT skills She’s had a blog since age nine, has lived a good part of her other nine years on the internet Maturing she’s having more responsible ideas about using her talents she wants to start a commercial internet company, but the field is obliterated by Facebook, you tube, Amazon and an endless list of behemoths and she has no money She climbs on the giants She starts a site where people contribute stories about celebrities, posting pictures She spends hours daily hunter-gathering celebrity news from the giants’ websites and others and retelling them on her site She gathers links to freebies and posts them for her visitors, uses word of mouth and every legal tactic to spread the word Eventually advertisement comes and it includes products from celebrity: their material, memorabilia and events She entered the forest at the understory level and climbed on the giants there before to sunlight

if they branch out into the software and apps business, social networking, and on-line retail These are all in her environment

The first step is to find out what level of the forest the prospective company will operate in and conduct it accordingly A little use of the imagination would be helpful Imagine you are a banana plant in the understory layer with broad leaves to capture light and you have no seed, but grow by sprouting out new suckers You produce a sweet fruit twelve feet above ground What are you gonna do? Advertise or not? You won’t! You won’t spend resources growing a wooden stem It would take too long No! You make a stem that is fleshy and watery (that allows you to grow fast) leaving the making of your fruit to the very end of your growth period when you have the most clearance from the ground At twelve feet above ground you produce bunch

of sweet fruit and bow out (giving the new suckers room) This way you are famous around the world Bananas make no seed but they proliferate through every household and compound, wild bush and farm and a thousand plantations

The banana raises the question of advertising Must everybody advertise? Even when you cannot keep up with demand? When there is no promise of it increasing sales, like when the competition is far ahead and too strong? Why don’t you just put the advertising budget to use enhancing your product, or developing an altogether new product This is the strategy of Apple in its struggle with Microsoft

Most fruit trees are in the canopy or understory The emergents generally make bland unattractive fruit Trees like mangoes, guavas, and oranges overcome the threat of their progeny being consumed by making lots of seeds in lots of fruit The papaya plant makes very many seeds in not many fruits, the coconut hide its seed in strong hide There is only fibrous covering, no fruit The white pulp is the inside of its seed and you must crack open the hard shell to reach it, in which case you are eating seed This seed will float on the ocean to germinate when it makes a landing on the shore, sometimes on islands Thus the coconut is the tallest plant on many tropical islands The coconut is an emergent, making only fiber and no flesh it needs no seed disperser Fruit is a form of inducement to have animals a plants seed, just like nectar is a reward to have insects pollinate a trees flowers These inducements

resemble the bribes government officials in developing countries sometimes demand

in return for helping Western companies win contacts It is good that this practice now constitutes a crime in some of the home countries of the companies

Another successful palm is the oil palm Almost identical to the coconut it produces many fleshy fruits around a hard nut, as hard as the coconut but much smaller The fruit is embedded in very sharp spikes so the fruits cannot be retrieved A human cannot do so with bare hands without getting injured (unless the fruit had become so ripe until it was soon going to come off

the bunch) Uninterfered with the tree drops fruit as they ripen; a few at a time to maximize dispersal The fruity flesh around the hard nut is reward for the work of dispersal The oil palm and the coconut palm are virtually indistinguishable trees yet one requires animal seed dispersal and the other natural forces like ocean currents Different approaches to solving the same problem The lesson for business here: seek for best fit as much as possible

Why does the oil palm choose to pay a commission to have its seed dispersed and not the coconut? It is because of the nature of their natural habitat The coconut builds boats for its seed to sail around the world; the oil palm tempts squirrels to take a bite The coconut is a shore plant, where there is little undergrowth or the seed falls into the sea In the forest the seed would not be dispersed because it’s too big and too heavy (larger than many dispersers) The oil palm therefore makes seeds that can

be moved by small animals and birds and gives them a reward to do so So business needs tailor-made solutions

When the economy is optimal and the market free there will be businesses of all kinds and shapes making money out of every kind of advantage: huge tree trunks or broad leaves, many fruits or poisonous stems, underground stores or water stems, last-day sales (bananas) or spiced up shoots( the onion) Something for everybody

a bull market is the tempo When the prospect of profit is good there mood in the market is high When the risks are high the market is downcast How else billions lost one day could be recovered the next day but in perceptions The value of the market

is viewed through the colorful prism of the mood Good mood gain in value, bad mood loss of value The mood was bleak during the crash of the late 2000s With the giants falling in a Titanic cascade, one every week, it was a ground zero in Wall Street and people fled with what remained of their dwindling portfolios Bankers packed their briefcases

It was literally last day at work If the mood in Wall Street in 2008 wall set in music it would have been a dirge

I did not lose any money though Surely the next crash is on its way The next crash

is always only a matter of time I believe managing money is a do–it–yourself thing How could one hand over his life savings to a faceless group of directors and board who are also in it for themselves? It’s not their money and they will play roulette to make buck How else is a billion dollars lost this hour recovered the next than by turning a wheel? Of course it is not quite like this However if your portfolio is too large for you to manage and hold a day job then your portfolio should be your day job If you do not make as much as your money manager did it is because you are careful When the next crash comes you’ll hit a jackpot Manage your money yourself

if you can There no bubbles or crashes in the rainforest Too rapid growth stimulates the animal population to increase This increases the consumption forest products so the rapid growth is checked and does not develop into a bubble

Yakub an Afghan refugee was looking to start a business in Pakistan He chose what

he knew: the transit business conveying passengers over distances 50km or less He bought a bus and registered at the City Council bus station The arrangement was that bus operators took numbers as they came in the morning which was their turn to load Turn one loads first, turn ten loads tenth There were nineteen bus owners not counting those who went for repairs With only about ten hours of daylight available for loading and it taking over an hour to load one vehicle it meant that about half of all turns lapsed into the next day So the bus owners worked only every other day or less This is a recession Disappointed, Yakub left the City Council bus station to hire a store-front where he ran an independent bus station It took only ten minutes to load

Lesson: The difference between a boom and a recession is simply psychological: the consumers’ willingness (confidence) to buy goods and services, banks willingness to lend, the willingness of business to invest The market environment determines the prevailing attitude The example illustrates how a small adjustment in the market environment can change attitudes.

Big government and small government

A good way to measure how bloated a government is what proportion of its budget it spends

on recurrent costs like salaries How much of the dollar or any currency is left to directly produces the desired effect is another way to judge it It can also be judged by comparing how much it costs the private sector to achieve the same goal There are governments in small countries spending 70 percent of their budget on running costs Like building a one hundred thousand dollar house and spending seventy thousand on the workers It certainly won’t go very far Some of the workers would be idle most of the time and a common sight in the government offices of many countries This is in sharp contrast with what exists in the forest Its animal life are its regulators (the regulator is always higher up in the food chain) Yet they are not obvious in the rainforest It will take deliberate searching to find the animals

of the rainforest.

Lesson

The regulators of the market should not be obvious Most arms of government should not be obvious The exception is the police, schools and hospitals When the regulators of the economy or government become obvious there is need for a review of efficiency and freedoms.

Where do I put my money?

Put your money on yourself This is the practice in the rainforest Plants do not delegate their resources to second or third parties

Lesson

is just a hypothesis but it should be a good working hypothesis The implication is to

be careful with your money Anyhow you have to trust people A second option is to participate in investment cooperatives- groups of laymen investors who jointly supervise their investments The essence is to avoid middlemen

Middlemen like fund managers taker a premium and reduce your profit, even when they may not be doing a good job They may not be doing anything you cannot do yourself Worse they may be doing what you wouldn’t do Taking too much risk You should also not grope in the dark but do all you can to improve your competence at

investing, like participating in seminars and workshops, and reading books When in doubt consult an expert, even for a fee

Secondly it is possible to avoid the stock exchange altogether which without doubt has a casino component There is a lot of speculation going on In real business with physical nuts, bolts, and an address it is hard to lose everything If a business fails the proprietor often will salvage some parts of it Therefore it is good to consider starting a physical business which you run as your second job or your first job, for that matter Modern technology makes it much easier to manage a company remotely You could see it’s accounts everyday if you choose to from the comfort of your bedroom on a computer You could make transactions from anywhere, even from another continent using even a mobile phone Likewise it is not necessary to be physically present to hold meeting, or to speak face to face.

As for Wall Street bonuses, they are very emergent You don’t muzzle the ox that threads the grain If these people process billions upon billions it is only fair they should share in it They do very important work which requires the highest level of integrity They must be compensated to have a good life to stave off corruption If someone thinks they are overcompensated he should consider the cost of corruption And why the fuzz, they “don’t pay themselves” Someone thinks they are worth the pay If it were not so others would be in the jobs for less Look what was found at Westminster were MP’s had been dipping into the public till and making exaggerated claims See how many people play the lottery

SEASONS: In the rainforest flowering, fruiting and breeding are seasonal Some plants are annual (complete their life once a year), some are biennial (complete their life twice a year) Most trees are perennial (permanent) The life of plants is integrated with the seasons The seasonalities are because the rains are seasonal; a pollinator, like a particular insect, breeds at a specific time; because a particular flower is in

Some businesses are seasonal because demand for their products are seasonal; their raw materials are seasonal; or the climate allows their activity only during a particular season of the year Like companies that need the waters of a lake frozen for their trucks to pass, or ships that need sea ice to thaw, or loggers whose roads turn to mud in the wet season Every business must integrate seasonal trends in its planning to maximize performance Christmas is a common season for many sectors especially retailers It is an example of how a season could be exploited to the benefit of business Businesses must study the trends through the year for seasonal opportunities to exploit There may be a gain to be made and a loss to be cut Performance can be notched up a few percentages

Diversity

The rainforest is a system which optimizes diversity There is every possible kind of plant based on every possible kind principle built up in every kind of way If the rainforest were the market there will be Mercedes cars with Toyota engines right off the line, Fords with BMW transmissions… all kinds of blends There are all ways of being in the forest; each taking advantage of a narrow advantage to exist and propagate itself The porcupine survives in the midst of lions by means of protective spines it bears on its back This is its principle for existing The tortoise caries a shell

by which it protects itself The elephant is big and unassailable, still another principle for existing

Lesson

What is the rationale for your business? What is your principle for existing in the market place? It is important to seek unique advantages for your business… two, three, four or five which give you specific advantage in the market place This is what will guarantee the success of your business It may be there as part of your business plan but it may not There may be nothing unique about your business at all that makes customers come in and not go to your competitor That would be terrible It says you are totally dependent on chance to bring some customers to you

If the competitor has unique advantages over you then the odds are indeed stacked against you You must remedy the situation immediately Possible unique advantages are:

1 Cheaper prices.

2 Guaranteed high quality

3 Ethical production practices.

4 Good environmental record.

5 After sales services

When inorganic fertilizer used in industrial agriculture runs off into the ocean often

it has produced a red bloom of phytoplankton growing excessively and using up the oxygen in the water so that fish suffocate If Aid is given to the rainforest in the form of inorganic fertilizer we could expect a similar reaction: one species growing out of balance and suffocating others The political class of developing countries becoming super rich and suffocating their citizens

Lesson

Aid can be deleterious to growth.

This is not to say there is no place for aid There certainly is American aid is saving lives from HIV/Aids as I write This is a missed legacy of President George W Bush He saved tens of thousands of lives of HIV/Aids, malaria and tuberculosis victims And saved their countries a good measure of economic and social ravaging He made Aids look better: adding some weight and dressed in nice clothes Where went the pictures

of skinny bones and lifeless eyes? George W Bush did the most to put them away through PEPFAR (President’s Emergency Plan for Aids Relief) He also made a personal contribution, he danced!

PEPFAR turned HIV from a death row for thousands to hospital wards of hope It is still the bed rock of HIV control in many countries in Africa

But apart from the lives saved it introduced a system of financial accountability new

to most of the developing world The standards where so strict there was almost culture shock An African political leader can assign monies at a whim He does not need to show support documents for the phone calls and taxi fares or lunch, he

certainly does not have to show evidence of a bidding process for purchases worth

$300 of more He does not have to show the programs he put money to produce the desired result PEPFAR took ‘first world” fiscal controls to the third world and is training a set of professional, though small, in a new better way of accounting and management

Misdirected aid breeds a class of sharks feasting on the populace PEPFAR is channeled through religious organizations mostly and not at all through government

Lesson

The lesson from the forest is to follow every pathway to development Aid and trade; raw materials, manufacturing and services; free trade in some sectors, protectionism in others

CORRUPTION: Corruption breaks the cycle of money In the rainforest plants use energy from the sun to make complex substances like starch, oils and protein which they use to build their tissues They make seeds to propagate the system, and when they die they are broken up and all the entirety of the estate bequeathed to the public It is a life of service to the forest If a plant were a business person a tribute would read like this: He worked hard from sunrise to sunset building his company, he worked with as many partners as he could find, he was generous to his enemies, he never slacked at giving out seed money to help start companies anywhere there was one to be started And when he died he gave all away Corrupt persons steal wealth out the economy and generally put it to uses that are economically inferior: private as against public, consumptive as against investing Often they take it outside the economy altogether.

It has been said that the purpose of organisms is to pass their genes to the next generation But what good is that when they die and don’t know about it? What function is passing on genes to the next generation to the parent organism This is philosophically flawed and illogical The unit in operation here

is the ecosystem not the single organism It is simply managing the wealth of its gene pool Even beyond this t he abundance of its phenotypic manifestations Genes are only a code, the building plan It is the ecosystem perpetuating itself in strength, wealth and beauty Every member of the ecosystem serves this purpose in life and in death.

Lesson

The animals and plants in nature is utterly selfless This is seen when nature is regarded as one functioning whole Looking at individual organisms we see violence Humans clearly not in service to nature The whole of nature is our prey We learn from nature (and from the rainforest) of the need to be

in service to a greater whole We need to be in service to our communities

Our superintendence over nature (being able to take it captive and use it to ruin, abuse it) says we are above it and not part of it Our refusal to use violence against ourselves says the same for violence is a currency in nature Finally our realization of the need to manage nature to last (sustainable development) confirms we are in possession of it.

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