By Chris Bennett, founder of NetInterests

There are two basic reasons to taking a different approach to addressing a problem or opportunity:

• The current approach is not working to satisfaction.
• There is a belief that either valuable experience(s), insight(s) or benefit(s) will be realized.
  

The focus of this column will be on business - but it can be applied throughout life.  The format will be based on a "KISS" Model (keep it simple & succinct).  It will start with a problem statement, suggest alternative methods to addressing the issue, and then provide an exemplary case study of how one organization/person applied a comparable means to getting a positive result. Along the way I may include brief humor and / or personal experiences.  My goal is to stimulate your problem solving creativity and to prompt you to share the results of "thinking different" with the Digital Harbor Community.

Thinking Different - Release 1.0 - Raising Money

In business the notion of raising money is based on a belief that someone may give us money in exchange for a product or service in which they place some value.  This applies to raising capital from investors, where they get an interest in an organization.  Also, it applies to customers that receive the ownership or use of a product or service.  If we simplify it into a formula we have

Want Money <-> Something of Value <-> Provide Money

What if we take a different approach to this problem?  I've listed a number of examples at bottom.  Let's focus on the basics here.

• First, what if we simply asked for money without providing anything that "we" think to be of value?  Why… because the provider of the money may derive value in the act of giving it.

  o When was the last time someone asked you for a quarter for a phone call and you gave it to him or her?  Did you get anything of value in return?  No and yes.  No you did not receive a product or service of value in a traditional sense. Yes, you satisfied an inner desire to comply with the person's request.  Perhaps you like them, or you're in a good mood, etc.  The point is that for you the money was inconsequential and the feeling from giving it had intrinsic value.

• Second, how about giving someone something of value and not asking for money.  What's that you say?  Is he deranged?  No, and Hotmail and viral marketing prove the concept.
  
  o The recipient will tell others about your generosity and is likely to use the value.  You may charge a price for refills to the original recipient or to the people that hear about the value.  The key question for you is can you accommodate the amount of time it takes for the word to spread about the value you are providing.

• Third, perhaps you decide not to take money?  Instead, you offer value and take something non-monetary that has a greater value instead.   This is the barter model.

o For example, if your organization makes widgets and needs a minimum of $100,000 to develop software and another organization has the capacity to donate up to $250,000 in software development - which would you take? The $250,000 in development services appears to be ideal.  You'll need to think it through and to address issues like intellectual property and accounting, but this could be a winning approach.  

In fact, my company used the barter approach to get the use of a $50,000 server from a leading hardware and software vendor, for our internal development.

I think you get the idea. It is quite possible that changing… or even destroying the old paradigm or thinking can deliver the results you need. Below is a list of other "Think Different" ideas for raising money that were uncovered during the research for this article.

Trade Credit - often used in retail, this may allow you to receive product/services from suppliers as a loan against your payment, after you generate sales.

Use a Contract, Purchase Order or a Letter of Intent - again, if you have a supplier and a big contract or order, they might allow you to borrow goods or services against the future business.

Factoring - some organizations will buy your accounts receivable, often for a discount and/or fees. Get professional advice and think-through this approach before using it.

Bank Financing of Receivables - some banks may lend against receivables (not to be confused with "factors", who purchase the receivables).  Your banking relationship might open this door for consideration.

Tap Personal Resources and Credit Cards - this is a standard that entrepreneurs know well.  Be careful and consider the consequences.

Defer Payments - some organizations may allow you to defer principal payments or certain amounts.  This keeps more $ for your use for a period of time.

Ask For Refunds - if you purchased something then you might be able to get all or a part of your money back, assuming you meet any criteria applicable.

Request Access To Deposits - some vendors may allow customers to apply deposits to their next bill, if they meet certain criteria.

Dip Into The Pension Plan - get advice from financial, significant stakeholder and legal sources first, since this one has cost and "fine print" that should be considered.

Barter For Goods and Services - see above for an example.

Borrow Against Patents, Trademarks And Copyrights - every organization and knowledge worker should have a portfolio of intellectual property - with those of importance being protected appropriately.   I understand a major IT company earns about $1B from its intellectual property portfolio annually.

Turn A Loss Into A Gain - ask your accountant or the IRS if, and how, you might be able to allow an investor to benefit from financial loss on your books - which might help them to reduce their taxes and to stay in compliance with the letter and spirit of the law.

Sell your product / service / knowledge to a customer - this approach is the most basic and usually it does not require you to exchange any ownership in your organization.

The next article will focus on thinking different about the creation of a business or project idea.  Your constructive feedback is welcome.   Best wishes for "different thoughts"!

Chris Bennett founded NetInterests, an early-stage company at the University of Maryland's MTECH incubator (www.mtech.umd.edu/TAP/companies.html) and consults for HKSBS (www.hksbs.com/about/bios/cbennett.php).  E-mail cbennett@hksbs.com

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