WHAT HISTORY HAS TAUGHT US

1
WHAT HISTORY HAS TAUGHT US

• Taking advantage of an
• economic downturn

2
What History Has Taught Us

• More people became millionaires during the Great
  Depression than any other time in U.S. history.1
• 10 Million new millionaires by 20162

• The Next Millionaires, Official Website of
  Economist/Entrepreneur/Professor Paul Zane
  Pilzer, ZCI, 2005, 20 June 2009
  lthttp//www.paulzanepilzer.com/tnm.htmgt.
• Great Depression Millionaires, HubPages, 2009,
  20 June 2009 lthttp//hubpages.com/hub/Great-Depre
  ssion-Millionairesgt.

3
What History Has Taught Us

• No better time to start
• Costs are lower
• Consumers look for alternatives
• Consumers look for stability

4
Start Ups

1935
5
Start Ups

1939
6
Start Ups

1930
7
Start Ups

1932
8
Start Ups

1930
9
Start Ups

1930
10
Innovation
When the going gets tough the tough
innovate. Andrew J. Razeghi

11
1930s Innovators

Nothing stands between a man and his Lazyboy
12
1930s Innovators

Sales up 30 from 1929 - 1933
13
1930s Innovators

A sandwich, just isn't a sandwich
14
1930s Innovators

Sales down 66 - 5 plants - Checkers
15
1930s Business as usual

Crushed with marketing
16
1930s Business as usual

• Made customer service a priority
• Sought opportunities for long term growth
• Continued advertising and marketing
• Made sound decision based on market research
• Made conservative investment decisions

17
Todays Perception

• Media and fear drive hunker down mentality
• Business
• Consumers
• Business failure rate is high
• Consumers are not buying
• Price is most important
• People are out of work
• Economy is drastically shrinking

The Sky is Falling
18
Todays Reality

• Hunker down mentality creates unmet needs
• Successful companies are seeking opportunity
• Business Failures
• Peak in 1930s at 1.54
• Peak of Dot Bomb at .75

19
Todays Reality

• Consumers are buying!
• January retail clothing sales up 2.8 vs 20081
• January electronics and appliance sales up 1.2
  vs 20081
• February homes sales in Texas 13,312 2
• February single family building permits issued
  in Texas 4,1383
• Texas home sales peaked in 2006!4
• 1993 116,304
• 2006 292,805
• 2007 275,584
• 2008 232,101

1. Retail sales show improvement, Cnn.com, 21 Mar.
   2009, 20 June 2009 lthttp//tips.blogs.cnn.com/200
   9/03/12/retail-sales-show-improvement/gt.
2. February Existing Home Sales, Prices Decline,
   Houston Properties, Paige Martin, 2009, 20 June
   2009 lthttp//www.houstonproperties.com/node/753gt.
3. How is the Texan economy doing? Texan Economy,
   Lorenz Lammens Markings, 20 June 2009
   lthttp//lorenzlammens.com/business-loans/334-texan
   -economy.htmlgt.
4. Texas MLS Residential Housing Activity, Real
   Estate Center at Texas AM University, 2009, 20
   June 2009 lthttp//recenter.tamu.edu/Data/hs/hs800a
   .htmgt.

20
Todays Reality

• What is a luxury to one generation is a necessity
  to the next!
• Neimans,1 Saks2 and Nordstroms3 February Sales
  900 Million
• Coach 1st quarter 2009 year over year 740
  Million / 744 Million4
• Chubb 1st quarter 2009 year over year 2.83
  billion / 2.98 billion

1. Neiman Marcus sales drop 20.9 percent in
   February, Financial Reporting, National
   Jeweler, 9 Mar 2009, 20 June 2009
   lthttp//www.nationaljewelernetwork.com/njn/content
   _display/majors/financial-reporting/e3ia82652ffac5
   6b32ea6ca89b6220b7265gt.
2. Saks sales down 26 percent in February,
   Financial Reporting, National Jeweler, 5 Mar
   2009, 20 June 2009 lt http//www.nationaljewelernet
   work.com/njn/content_display/majors/financial-repo
   rting/e3i8063110914089689d266377eb823f648gt.
3. Nordstrom February sales plummet, Portland
   Business Journal, 5 Mar 2009, 20 June 2009
   lthttp//portland.bizjournals.com/portland/stories/
   2009/03/02/daily54.htmlgt.
4. Quarterly Report Pursuant to Section 13 or 15(d)
   of the Securities and Exchange Act of 1934 For
   the Quarterly Period Ended March 28, 2009, Form
   10-Q Coach Inc. United States Security and
   Exchange Commission, 27 June 2009
   lthttp//www.sec.gov/Archives/edgar/data/1116132/00
   0114420409024219/v148033_10q.htmgt.
5. Quarterly Report Pursuant to Section 13 or 15(d)
   of the Securities and Exchange Act of 1934 For
   the Quarterly Period Ended March 31, 2009, Form
   10-Q The Chubb Corporation. United States
   Security and Exchange Commission, 27 June 2009
   lthttp//www.sec.gov/Archives/edgar/data/20171/0000
   95012309008425/y76960e10vq.htmgt.

21
Todays Reality

• Employment
• In February 2009 141,748,000 People Employed in
  U.S. 8.1 Unemployed1
• In February 1999 133,144,000 People Employed in
  U.S. 4.4 Unemployed2
• Legal Immigrants to the U.S. From 1998 to 2007
  9,359,4793

1. The Employment Situation February 2009,
   Employment Situation News Release, Bureau of
   Labor Statistics, United States Department of
   Labor, 6 Mar 2009, 20 June 2009
   lthttp//www.bls.gov/news.release/archives/empsit_0
   3062009.htmgt.
2. The Employment Situation February 1999,
   Employment Situation News Release, Bureau of
   Labor Statistics, United States Department of
   Labor, 5 Mar 1999, 20 June 2009
   lthttp//www.bls.gov/news.release/history/empsit_03
   0599.txtgt.
3. Yearbook of Immigration Statistics 2007, U.S.
   Department of Homeland Security, 4 Sept. 2008, 20
   June 2009 lthttp//www.dhs.gov/ximgtn/statistics/pu
   blications/LPR07.shtmgt.

22
Todays Reality

• Gross Domestic Product1
• 1980 2.8 Trillion
• 1990 5.8 Trillion
• 2000 9.8 Trillion
• 2008 14.3 Trillion

1. Table 1.1.5. Gross Domestic Product, National
   Income and Products Accounts Table, National
   Economic Accounts, Bureau of Economic Analysis,
   U.S. Department of Commerce, 25 June 2009, 27
   June 2009 lthttp//www.bea.gov/national/nipaweb/Tab
   leView.asp?SelectedTable5ViewSeriesNOJavanoR
   equest3PlaceN3PlaceNFromViewYESFreqYearFir
   stYear1980LastYear20083PlaceNUpdateUpdateJ
   avaBoxnoMidgt.

23
Action Jackson

• Dont focus on the down arrows
• Improve your customer experience
• Increase your marketing
• Create product / solution differentiation
• Work Harder
• Do what others wont do
• Increase consumer awareness
• Must be consistent
• Make smart investments in growth
• Keep you eyes and ears open for opportunities