Business

If I had to start over…

by Jason on October 19, 2011 · 0 comments

reboot

Sometimes at the end of a long day my mind wanders, and I think about what I would do differently if I was starting my company today. It’s a tool for reflection, and a little bit of self-congratulation as I recognize some of the things I’ve learned in the past ten months or so.

But not everything in my list is based on what I know – there are a lot of items about getting help from specific sources.

Here’s a fun fact: every once in a while I talk to another business owner, and I want to help, I want to share, so I mention some big innovation that I just came up with. And the look I get back is priceless. It’s like the look you’d get if you told an Olympic athlete that you’ve been thinking about taking up running, and you’ve figured out (shh!) that regular workouts are really helping your time improve. New to you, incredibly obvious to everyone else in the field.

This kind of conversation happens almost every week for me.

So the great news is, I’m picking up new strategies and frameworks at an increasing rate, and it’s making a big difference to my business. The bad news is that most if not all of my sparks of brilliance aren’t big enough to light a cheap firecracker. But hey, they’re my sparks and I’m very proud.

(By the way, it’s not like I haven’t studied insanely hard for years, and I’ve actually implemented some of these ideas for clients in the past – it’s some weird mental block I seem to have applying them to my own stuff. Not sure why yet, but if you know, please drop me a line, it’s bugging the crap out of me!)

Anyway, knowing what I know now, if I was to start over I’d plan my desired outcomes a whole lot more clearly, and then I wouldn’t just plan backwards to figure out how to get there. That’s what everybody seems to teach. No, I’d take rough chunks of that plan and find people who know how to implement them – people who’ve already “invented” the magic steps that I need to figure out.

Now here’s the fun part of that “what would I do differently if I was to start over” exercise I mentioned at the beginning of this: what’s stopping me from acting as if I’m starting over?  You know, keeping the core business as it is but figuring out who can get me past the hurdles that I’ve managed to identify.

And for that matter, what’s stopping you?

Removing lapsed customers the web 2.0 way

by Jason on September 29, 2011 · 0 comments

facebook upgrade reminderI received a helpful reminder last night from Facebook that they’re about to make some major breaking (but, it should be noted, well-publicized) changes to their app requirements.  Specifically, some authentication code that used to work won’t anymore, and all apps will have to be hosted on servers with SSL certificates.

This is going to be interesting, since up until now, if you had web hosting somewhere, you had everything you needed to have, say, a custom Facebook tab on your company page.  Now you’ll need to pay for a cert, which might not even be available if you’re on a really cheap shared server plan.

I imagine that there will be a few phones ringing on the 1st.  But maybe not October 1st.  The fact is, after a platform’s been around for a while, a lot of “experiments” get left by the wayside, basically abandoned, so for many they might not realize there’s a problem for some time.  For others, this will provide a welcome relief in the form of an excuse to kill off an ill-conceived initiative.

For others, though, there may be trouble if they’ve outsourced the work long ago and need some changes made in a hurry.

Apple has a similar system in place for their app store.  If you don’t pay the annual fee, your apps no longer appear in the store, a fact that I know has surprised a number of independent developers who had free apps in place but didn’t feel like they had to remain responsible for them.

And just like with Facebook, I’m sure at this point every single day a company loses their app (but doesn’t necessarily know it) because it was released into the wild by a well meaning contractor who didn’t see fit to renew.

Two takeaways here: first, are your products and services available “forever,” without the need for users to take some form of action, financial or otherwise, to stay on the books? Forever’s a long time.  And on the other side of the fence, are you in control of your technical deployments?  Disaster recovery planning focuses on large scale events, but “I lost that guy’s phone number” is something that should (yet really, really shouldn’t) be on a lot more organizations’ scenario lists.

Triple-entry accounting: a hazard of consulting

by Jason on September 22, 2011 · 0 comments

(Nothing to do with accounting; just my favourite video about the number 3.)

I know very little about accounting, but I’m content to do sustained damage for a while longer before I dump a big box of mayhem on some bookkeeper’s desk.

One of the joys (and incredible dangers) of consulting on a fee-for-hire business, which still makes up the bulk of my company’s revenues, is the shift to what I call triple-entry accounting, which follows three key stages in the project life cycle:

You get the gig. Usually with a quote, either real or just estimated in your head. Ca-ching! Same as cash baby! That’s entry number one.

You do the work. That means the client now owes you that money that you’ve already spent, mentally or literally, from entry one.  That’s OK, new money’s about to come in.  Wait, isn’t this the same as–Ca-ching! Entry two.

You send the invoice. Often this comes a few days after the work is done, due to signoffs, etc.  But it’s kind of like a new entry, because Ca-ching, entry three! That cheque is surely in the mail!

And you (usually) get paid. This isn’t actually an entry in the lifecycle, not just because “quadruple-entry accounting” sounds lamer somehow, but because by now you’re so broke from having spent that money three times over you’re just happy the long nightmare is over. Until the next gig, which is hopefully well underway by now.

In his E-Myth series, Michael Gerber talks about how important it is for business owners to split their tasks into actual jobs that eventually other people can fill.  In our little workflow above, that’d be sales, execution, and, uh, money guy (I’m drawing a blank on the job that does the invoicing and cashing – owner?)

Beyond planning for growth, this is a context where a little self-induced schizophrenia can be an advantage, so at least you’re (hopefully) not spending the money 3 times before you even get it.  That said, a triple payday is often a huge motivating factor, even if it’s 66% imaginary.

Imaginary competition and surprise innovation

by Jason on September 20, 2011 · 0 comments

paranoidLast week I warned about the dangers of copying only what you see, because your competitor typically has a bunch of stuff going on in the back end that can mean all the difference in the world when it comes to business profits.

But what if, to quote Will Smith, the things you think you saw you did not see? What if your insights into the hidden aspects of a competitor are wrong? Can “imaginary competition” help you or hurt you?

There’s a story that’s been going around in my head for almost 20 years now from Michael Abrash, who was (and probably still is) a big name in the computer graphics field.  I can’t find a direct quote on this (I think I read it in an old issue of Dr. Dobbs) but this link sums up the story:

In the book “The Zen of Graphics”, Mike Abrash tells of how he worked with a guy who developed PC video card hardware. This was still comparatively early days, with no 3D and only a small amount of hardware acceleration. This guy had gone as far as he thought he could with the transistor count available to him on the custom silicon, but one day he heard that their competitor had added a command buffer. Now, our hero thought about what this meant, and he knew it had the possibility to free the CPU up from a wait loop, and had the potential to be a product killer, making his product look slow and outdated even before it had shipped. He knew he couldn’t compete with that, he had only a couple of dozen gates spare at most, but he put in a very crude double register, which would help, but he was afraid that his competitor’s hardware was going to absolutely murder them. As it turned out, the competitor’s product was nothing of the sort, and our hero’s product was vastly superior. All because he believed that someone else had done a better job with the same resources that he had.

There’s a bit of a “can you… work harder?” lesson in there, maybe, but I think the key takeaway is that companies need more paranoid warriors on staff. Paranoid to imagine crazy capabilities in your imaginary competition’s lineup, and warriors to refuse to lay down and die in response.

The Four Hour Work Week and the future of “Real Jobs”

by Jason on September 1, 2011 · 0 comments

cottage chairsLast week I ran my company from the cottage. I had decent enough internet, but I didn’t want to to be too good, since the point was to relax as much as I could while keeping the wheels turning.  Over the course of 9 days, I probably averaged close to the mythical four hour work week, most of which was spent emailing status updates and coordinating with staff, and I picked up a few lessons and insights along the way:

Lesson 1: hourly billing is broken. Well, it’s broken if you only work four hours a week, anyway – unless you can find a way to charge $500/hour.  The thing is, it’s actually possible to earn $500 (or more) an hour, with actual clients, if you’re paid on a results basis, but it can be trickier to convert some kinds of work to this model.  I have a direct response copywriting client where it’s super-easy to do this, but I also have custom programming clients where the mindset is more that they need someone to do what they do, but for coding, i.e. sit in a chair and work.  Except they only want to pay for the work parts, and not the other stuff that they and their co-workers do, like lunches, coffee breaks, and so on.  Which brings me to lesson 2:

Lesson 2: (many) salaried jobs are broken, or at least breaking.  It’s super-hard to hire someone in a lot of companies these days, and often for good reason, so more companies are reaching out to remote freelancers to fill gaps.  And it sounds like a sweet deal for the employer: like I said above, you only have to pay for the work being done, you don’t have to pay for breaks, idle gossip, meetings you get invited to “just in case” and other things that fill up the day. And on top of that, the hourly rates often work out to not much more than you’d pay a full time staffer!

The problem here, and I don’t think enough people realize it, is that they’re one corporate memo away from being replaced by more freelancers.

When you have in-house, full time employees, you’re paying for more than just the work that’s getting done.  And just to be clear, I know a lot of full time employees who work very hard, and I’m not knocking anyone here, just questioning some institutional issues. You’re paying the construction fees for a cohesive team, you’re paying human storage fees for institutional knowledge, and you’re paying a redundancy tax so that a few key people leaving at once doesn’t destroy everything you’ve built.

But I don’t know if the people at the top of the pyramid realize this as much as they should, and I don’t know if the people in the middle are fooling themselves if they think they’re high enough up that they can avoid the next round of cuts.  Just some more stuff to mull over the next time I sit back in the hammock overlooking the lake.

Giving people what they want, or swarm evolution

by Jason on August 31, 2011 · 0 comments

The Model T Ford

Ford was quoted as saying "If I'd asked the public what they wanted, they'd have said faster horses."

With my new morning workout routine I’m exposed to too many televisions in the gym, most of which are showing news shows.  I don’t listen to any of them (if I’m on a machine that can hold it I’ll watch a video on my phone, otherwise it’s an MP3) but I’ve had the opportunity to read an awful lot of headlines, and I can pseudo-scientifically break the news down into 3 main categories:

  • Something bad is happening that’s out of your control (bird flu came back yesterday, but also murders, financial meltdowns, etc.)
  • People are getting punished for the bad stuff they did.
  • Sports.

It amazes me that our economy is built upon millions of people starting their work days with this mindset, but the thing to remember is that, collectively, we chose this. News segments are chosen because they’re the ones that keep people from changing the channel.  I’ll never forget an interview I read in Wired in the ’90s with Steve Jobs where he said, oh wait, here it is:

When you’re young, you look at television and think, There’s a conspiracy. The networks have conspired to dumb us down. But when you get a little older, you realize that’s not true. The networks are in business to give people exactly what they want. That’s a far more depressing thought. Conspiracy is optimistic! You can shoot the bastards! We can have a revolution! But the networks are really in business to give people what they want. It’s the truth.

I think this happens for way more than just television.  When I look at advertising (particularly direct response sales letters, because they’ve actually been tested for results,) I sometimes wonder if the format, length, and embellishments are the way they are because they scientifically work the best, or if it’s because society has been conditioned to know that this is what a sales letter looks like.

In other words, in all things that are produced or designed, how many are successful because they’re what people have been trained to want, and how many are truly innovative?  And more importantly, how do really innovative products get traction without being relegated to the ones that the market “just wasn’t ready for” that pave the way for someone else’s advances five to ten years later?

Unlimited vacation

by Jason on August 9, 2011 · 2 comments

Vacation!

Guin tweeted a link to the Social Media Group‘s new HR policy for vacation time: take as much as you want. Paid.

Basically they stopped tracking it back in October, and while the sense is that people are taking more paid vacation time, that’s kind of the point, since they want to have refreshed employees (and use that as a competitive advantage, I’d guess,) but so far people aren’t booking months at a go, opting instead for weekends and afternoons.

This is one of those things that reminds me of web hosting’s “unlimited” bandwidth promises (and yes, those quotes are important, ha) since as the article points out, most employees anywhere have trouble taking their full allocation of vacation time anyway (back when I worked at a company that had such things, I know I had that issue, plus overtime, but anyway…)

It’s what I hope will be a sign of an overall trend to treating employees like grownups, but I doubt it would work in every industry. Actually, it’s not the industry so much as the culture within an organization.  If you’ve got a culture of clock watchers and people who make sure they get every second back if they stray 2 minutes into lunch on a call, then I could see some serious problems with open vacation.  On the other hand, if your organization’s culture is one where people know they’re being compensated for their commitment to the mission, chances are they’re already doing more than their contractual share anyway.

(Photo by nigelhowe)

Infinite innovation vs sufficient suckage

by Jason on May 24, 2011 · 3 comments

Sucking a straw

I only took one undergrad economics class but then I boosted that with stuff like Freakonomics, so I’m 100% qualified to talk about this today.

Some wireless carrier ads got me thinking today.  Rogers has this data sharing plan, which, if I’m not mistaken, lets you share your data plan across multiple devices for $10 extra per device per month, so basically $20 to get started, which I guess is what you’ve gotta do if you use non-iOS devices and can’t share your internet for free as part of the core feature set.

Now Telus has come out with their seven minute abs: if you go with them, you can share between a phone and a tablet for free, which is a $20 savings over Rogers for that scenario, assuming all other plan aspects are identical.

There’s no word from Bell (the other major carrier) but let’s assume they get on the train too, and offer something even better.  Well, something that’s slightly less crappy, anyway, given that Apple devices get this stuff for free.

It’s worth noting that this isn’t really competing on price, which tends to be a race to the bottom and usually doesn’t happen between established companies because they got where they are by realizing the whole bottom-racing thing. For this one, it’s one feature that they’ve done the math on and figured out how much it’ll cost in lost incremental revenue (and I suspect it’s not a lot of users that would use it anyway) without sacrificing their core ARPU (average revenue per user, yo.)

So what’s next?  Does Rogers up the ante, go to the innovation bucket, and make their plan more attractive in some other way?

I can’t predict the future all of the time, but in this case history is a good guide.  At some point, we’re going to make the magic transition from constant innovation to sufficient suckage.  The carriers will rationalize that they each suck sufficiently less than the other guy, in their own unbiased opinion, and things will stop getting better.  The price will be what it is, until someone else comes in and pokes something with the marketing stick.

I’m not even picking on the carriers that much here – this happens in almost every business.  Except maybe Apple, who I think could have closed their R&D lab for 5 years and still kept on top this year, but imagine what they might have done if someone else was close to them?  (If you’re not an Apple fan, you’ve probably got some other counter example.)  It’s pretty much standard practice, anyway.

But does it have to be?

Are we reaching a point where communications technology is intersecting perfectly with global availability of all kinds of resources is going to make the cost of infinite innovation actually achievable, at least in some industries?

Photo by bradleygee

Personal congruence with business goals

by Jason on May 18, 2011 · 0 comments

I’ve been thinking lately about personal congruence as a success factor.

I had a client last night reporting that he couldn’t see some ads on a page of his site.  More specifically, it was a “link to us” page and the sample banners weren’t showing up in Chrome.  And of course, they worked fine for me, because why make it easy?

After too much research in what turned out to be the wrong direction, I discovered that there is some kind of weird bug for some Chrome users where images don’t show up, but that wasn’t what this problem was – he was using an ad blocker plugin, so yeah, he couldn’t see his own ads.  I don’t mean that with any disrespect, it was just one of those head slappers that should have been identified a lot quicker than it was.

In this case, there wasn’t a compelling reason to have the sample banners be actual links, so I advised removing them, turning the banners into simple images, which would probably resolve the problem, but it brings to mind a different rule of thumb.

Are you asking your current and potential customers to do things you wouldn’t do?  In other words, do you have personal congruence with your work?

Another example, going back a few years to when I worked in telephony.  I was building a front end for a predictive dialler for a large company.  This is one of those machines that calls a bunch of phone numbers in advance, figures out if there’s a real human on the other end, and then routes the call to a rep to complete the transaction.  The plus side of a system like that is reps spend way less time dialling the phone and way more time doing actual business, but the down side is that the person being called has that annoying few seconds of silence that tells them they’re being called by a machine.

(Incidentally, I had no problems implementing this system, at least from a personal congruence perspective – it was for existing customers and delivered a valuable service in a cost-effective manner.  I was hardly ever home anyway, so it wasn’t going to affect me, but believe it or not I actually like talking to outbound sales reps from time to time.)

Anyway, the system got deployed, and reports of high abandon rates were starting to come in, which of course had to be a technical problem.  The conversation with the business sponsor went kind of like this:

“People are hanging up on our system before we can route the calls to a rep.  Fix it.”

“OK, you know when you’re at home and you get a phone call from a number you don’t recognize, and you say ‘hello’ and then there’s just silence?”

“Oh yeah, I hate those, I always hang up.”

(silence)

“Do you realize that’s what you built?”

“Yeah, but why are people hanging up?  There must be something wrong with the transfer.”

It’s easy to laugh at the silly pointy haired business sponsor, but she wasn’t pointy-haired, she just had a blind spot in her thinking, which was possibly enhanced due to the lack of personal congruence with what she’d been tasked to do.

People say that the most successful businesses are the ones where everyone’s 100% passionate about the product or service.  I don’t know if that’s absolutely necessary – maybe you just have to be really passionate about what you do in that company – but if you’re working towards a goal that you 100% do not believe in and would never recommend to your mom (assuming it’s in a market that your mom would like, but you get the idea,) you’re going to have a lot tougher time getting out of bed in the morning.

Entrepreneurship: hourly rates come from hourly costs

by Jason on May 11, 2011 · 0 comments

hourly ratesOne of the key lessons I’ve learned this year as head of my own service-based company is to figure out my hourly costs to better gauge my hourly rates.  Take all the company expenses (rent, staff, training, hosting, telecom, etc) for the month, add on some level of actual income, divide it by 20 for the daily target, and divide that by 8 for your hourly rates.

So many caveats apply to that formula.  Whatever you pick for the income component, it’s not high enough.  Dividing the month by 20 days means you’re not working weekends.  Oh, and dividing it into an 8 hour day, at least for our purposes, means you simply break even if you actually spend 8 hours a day on billable stuff.

But it’s a start.  And you know what happens?  You find out a baseline number, that’s unrealistically low while possibly seeming impossibly high, but yet it’s the hourly rate below which you simply can’t work without giving your money away.  If the number works out to $45 and you find yourself offered a $35/hour gig (numbers picked out of a hat to serve a variety of industries,) you now know that you simply can’t afford to take the job unless there’s something in it that you’re willing to pay $10/hour for the privilege, or you’re going to work overtime to make up the difference.

From there, magic things can happen.  And lots of things can’t happen, which, if you’re the kind of person who has trouble saying no, is a magic all to itself.

This is also an accelerator to moving into alternate revenue models.  Once you start to think about the value of an hour, if you can come up with products or services that don’t take direct work, or that leverage your time through groups or other mechanisms, all with the goal of covering some of those hours so you don’t have to, so you can spend the time doing transformational things that’ll bring in even more business.

Whether you’ve gt a job or a company, figure out your hourly rates.  Your real costs, that you have to cover in a 40 hour week.  The decisions you make after that might surprise you.

Photo by mcbarnicle

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