“If you don't want another Enron? Here's your law:
If a company, can't explain, in ONE SENTENCE....what it does....it's illegal.”
Lewis Black is a comedienne who practices making people laugh at the absurdity and hypocrisy that dominates modern American business.
To explain the Enron scandal, in October 2001, was one that led to the bankruptcy of the Enron Corporation and the dissolution of Arthur Andersen, at the time one of the largest audit and accountancy partnerships in the world.
The founder and his Financial Director developed a series of accounting loopholes, special purpose entities, and poor financial reporting, that enabled them to hide billions of dollars in debt from failed deals and projects. They were so successful they not only misled the board of directors, but at the same time they so confused Arthur Andersen that they simply ignored the issues.
Eventually in December 2001, it filed for bankruptcy. Its $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history.
That was until one year later, WorldCom went down for even more!
The world still didn’t learn and therefore in 2007 an even bigger collapse occurred, the subprime mortgage crisis.
In each case the directors of these companies didn’t know what was happening as their business models were so complicated nobody except the perpetrators understood what was happening.
It could not be explained in one sentence, 60 seconds or several hours!
This is why Lewis Black hit the nail o the head, if you can’t explain your business in, I believe, 60 seconds, it is too complicated for others to understand.
By others I don’t just mean investors, in a way it is more important that your customers understand what you are offering.
So again, I ask, can you describe your business in 60 seconds?