You can buy some at www.nothingforsalesite.com or read an article about it.
Takeaways:
The irony is that people and institutions that have money to invest are spending time and energy just LOOKING for places to put that money to use while at the same time, tens of thousands of businesses die every year because they don’t have enough funding. These two groups are passing each other like email sent to the wrong account. WHY? Because in many ways they don’t think alike. You know how an optimist sees the glass half full, a pessimist sees the glass half empty and an engineer sees that you’ve got twice as much glass as you need?
If you want to catch fish, you have to think like a fish, go where they hang out, give them bait they like. If you want to catch capital, you have to think like an investor, not just like an entrepreneur.
I’ve been on both sides of this issue and I know there’s a big difference in the way they think. Entrepreneurs see opportunity; they are optimists. They have to be to keep chugging along through all the hard work it takes to get a business off the ground. So they tend to see the reward that will come with success.
Lenders and investors approach things differently. I wouldn’t exactly say they are pessimists (otherwise they wouldn’t be investing in start-ups or young companies) but they are the types that might wear a belt along with suspenders. A person who has money to lend or invest is most interested in making sure they don’t loose that money. They tend to look at the risks where an entrepreneur sees only the reward.
So how do you catch a capitalist? You have to have a story (contained in your business plan) about your business that explains not only the potential upside, but shows that you’ve considered the down side. And not only that you’ve considered it, but also that you’ve done everything you can to minimize it. If you can’t do that, investors won’t care about the reward.
The price you pay for the money you need is in direct relation to the amount of risk. When you ask for money you have to tailor your story to the person you’re telling it to. I don’t mean you bend the truth, but you make sure the proposal contains the parts that they most want to hear.
Jon [didn't post last name] gives his experience on both sides of this coin on his blog.
Takeaways:
When I was in college in the early ’70s it was common for women not to shave their legs or wear make-up. We guys professed a liking for the “natural woman”. One day I noticed that my girlfriend looked remarkably striking. As I starred, I realized she’d put a touch of color to her eyes and lips, and added a bit of curl to her hair. I started to rethink my position.
When I first read Norm Brodsky’s piece saying marketing is a waste of money I agreed with him whole heartedly. But after reading his response to readers [not posted on their site yet - pg 63 March 2006 issue] I still agree, but I’m starting to refine my position.
Since college I’ve noticed many women whose makeup turns me off, and makes them less attractive than they could be. Marketing is the same way. It used to work (maybe heavy makeup did too). But now we’ve become more than immune to it, we resent being marketed to. It seems patronizing. And breeds distrust.
However, as any business owner knows, if you just build it they won’t come. You need to get the word out – but in the right way. A way that’s genuine and trustworthy. I see nothing wrong with presenting yourself in the best light possible. What’s ironic in marketing (and probably doesn’t work with makeup) is that acknowledging your faults and what you’re doing to improve them can actually present you in a better light than trying to hide them. Studies have shown [don't you just love that phrase?] that when you acknowledge a customer’s complaint and solve the problem right away – they become more loyal than customers who never had that complaint.
Marketing is Like Makeup Take-aways:
I couldn’t believe it! Here is an article about how to improve your penmanship. If only Mrs. Ziefert had read this when I was in her 5th grade class. Excuse my little detour into the personal here but it’s always bugged me that I write so fast that even I can’t read it half the time. Well I guess if that’s a major regret of my life, I’m doing pretty good.
Takeaways:
My wife runs our company from 1700 miles away, as I did before she took over. We use the phone, email and pcAnywhere to log into the computers. In “interesting times” someone needs to visit once every 6 weeks or so. When things are running smoothly we can visit as infrequently as every 4 or 5 months.
Ron Hart runs a company in southern California from his home in the northern part of the state. He goes down every two weeks.
Stephen McDonnell goes into the office one day a week.
How about you?
When telecommuting started to become an issue, you’d hear the argument that managers can’t manage if they can’t see what the employee was doing.
That’s pretty much gone by the wayside due to the fairy tale about the shoemaker and the elves, (or was it Peter Drucker’s Management by Objectives?) Anyway, the point is if you can’t tell how well someone’s doing by looking at their results, then you aren’t really managing them – you’re just taking attendance. Like how did the shoemaker know what the elves did all night? He didn’t see them do it, but he saw the shoes!
But, as in most business situations, the real world isn’t so simple. Now comes this post by a manager who calls himself Rands about how hard it is to keep a software team on the right track when someone is remote and you can’t bump into them in the hallway . And he asks for feedback from those who’ve been there.
Many of the comments he gets apply specifically to a software development situation. But it must be said that relationships can’t be built by email alone. And as Peter Drucker came to say, you often don’t know the objectives so you can’t manage by them.
I’d love to hear your experience either as a manager or a managee.
I’m not talking about MY best job ever – or yours. I’m talking about your employees.
The Black Sheep just celebrated their 20th anniversary. They threw a party for Nick (the owner) and invited a lot folks who’d worked there over the years. The party was hosted by a chef who used to work at the sheep, and left to buy out a second restaurant Nick started – but that’s another story.
The first thing Nick told me about the party was that his existing staff (especially newer hires) were able to “get the vibe.” It was great for them to talk to people who had worked there 10 years prior telling them, “I didn’t realize it at the time, but this is the best job I’ve ever had.”
How may of your ex-employees would say that?
How much effort do you spend trying to make it their best job?
I bet there’s a correlation.
In The World’s Greatest Banker Fred Gratzon tells the story of how his company outrgrew both his cash supply and his systems to track the growth. His banker finally justified an increase in credit by asking Fred “Do you feel like you’re making money?” When it happened again, the banker encouraged Fred to kite checks. This bought him time to get his systems in order, profit from the growth and take the company public. Fred’s post is an interesting read.
It’s not that I think people who write this kind of stuff actually lie. It’s just that their perspective on what really happened makes better business porn than it makes an example you can actually apply to your situation.
The lesson you can apply is one by Peter Drucker. He said that every time a company grows by 50% its existing systems become unworkable. And that it takes a year and a half to three years to develop new ones. The actual numbers (50%, 3 years) may vary – especially for smaller firms or faster growing ones. But the point is if you have a fast growing company, you need to be working NOW on systems that will support the size that the company will be down the road.
Where do you spend your time?
Geek Squad will fail even if the geeks do a great job, because the company doesn’t give the customer what they want AND because it gives them something they don’t want.
Geek Squad is the service that comes to your house to fix your network – rolled out nation wide by Best Buy.
Great idea. Solves a problem. I’m assuming their geeks are competent.
The problem is their marketing image is cute. And cute gets annoying. Especially when I’m already mad that my network is down. Call their 800# and you’ll have to listen to what feels like hours of a guy talking in a DRAG NET voice about how the squad works. Just connect me damnit! Stop giving me what I don’t want.
Then it won’t give me what I do want. They have set “packages.” Hook up two computers for this price. This much for each extra computer. But what if my computers are already hooked up and I want someone to tweak it? Or if I’m having problems moving the modem and switch to a new location? The woman on the phone tried to figure out a way to price what I wanted based on the boxes she had on her screen. OK I said, we’ll do it. THEN she told me they “wouldn’t have a geek in my area” till a week from Tuesday. Why didn’t she tell me that up front?!?!? I couldn’t wait that long.
I looked up David Blaise at PC Service Technologies. His website is still under construction (since 1995 it looks like) but he talked to me like a real person. Figured out how much I knew and what I didn’t know. Solved my problem quick and cheap. If you’re not near Milford, Connecticut I doubt he’ll “have a geek in your area” anytime soon.
If you can’t figure out how to scale quality then stay small.
Seth Godin has a great post on taking responsability. It ends with this wonderful line:
Is “I accept responsibility” the new “Your call is very important to us”? Probably.
And, for the record, a client once gave me a gift of Shari’s Berries. They were lucious. Thanks again, Rodger.
A pretty basic Management 101 article, but useful.
Here in Forbes. It starts like this:
The smart aleck employee who prides himself on doing as little as possible to scrape by will needle you by saying, ‘There are no bad workers — just bad managers.’
The genius-in-residence has a minor point. But the question remains: How do you motivate employees who don’t perform up to their potential?
You’ve got to visit Zillow.com if you have any interest in residential real estate. If you don’t care about real estate, jump down and read the end of this post.Launched by the guy who founded expedia, zillow it gives you price estimates and other details of any home in the country.
I’ve checked out properties I know around New Haven, Connecticut and the estimates were on the high side (25-50%). But ones I know in McKinney, Texas were priced right.
Andrew Tobias said “When I tried it on some Florida homes I know, the estimate was low but the level of detail was remarkable, and the ability to edit for corrections / improvements – well, knock yourself out.”
Your mileage may vary. But if I were a real estate agent, I’d prepare to go the way of the travel agent. You won’t be able to charge for access to information anymore. Sure some will pay for service, but (a) most won’t and (b) your service level better be in the top half of the top 1% if you expect to charge for it.
If you’re not in real estate but you charge for access to information in your field you’re not safe either. Zillow won’t hurt you but something else will. An accountant I know told me he thinks in a few years the IRS will be doing the taxes for most people.
Think about it – they already know what you make (your employer told them when they sent in the taxes they witheld). Your bank told them what you paid in interest deductions. For most people that’s about it. You could log on to their site, and after proving your identity, they would tell you what they think your tax return should say. You’d have the chance to approve or amend it and be done. So much for H&R Block and Turbo Tax.
So if I was an accountant, I’d be figuring out how to provide some value that can’t be so easily replicated as filling out a tax form.
The Essential Drucker : The Best of Sixty Years of Peter Drucker’s Essential Writings on Management (Paperback) by Peter F. Drucker
Almost everything that needs to be said about business management was said by Peter Drucker before anyone else. He coined the term “knowledge worker†before the Internet or even the PC was developed. Decades ago he talked about the need for personal development of business people. His writing is unusual in that it can be as useful to a business of 5 people as it is to one of 50,000.
If you have a desire to grow your company you must read this book. And I don’t often say must. Be prepared that as your company grows it will be different in structure not just in size. Your role and contribution must change as well. This book is not a “how to†for this process but the insight you will gain is quite powerful.
Drucker was nothing if not verbose. He has written 35 books and numerous articles. The Essential Drucker solves the problem of what to read when. It is a compendium of his works from 1942 to 1999, selected and arranged by him. “Is it dated?†would be the logical question to ask. The answer is, only in the most minor ways. His concept of entrepreneurship is not current, but quite useful. He uses it to refer to a business that is innovating rather than one that is just small. And talks a lot about how it takes different management and support to deal with an entrepreneurial company as opposed to an established one.
He writes mostly of a time when the changes to technology (and to business models that exploit it) were slower. That doesn’t make his insights any less powerful, but in some cases they need to be tweaked a bit. The tweaking would be easier if each chapter had the date of its original publication plainly visible. That is my only very minor complaint with this excellent book.
On a Sunday while the last of 24 inches of snow was still falling on the northeast, I got in an SUV and drove to Best Buy. Yes it was open. And I bought a router so I could get more than one computer in my house on the internet. It was on sale for $40.
Now this could be a post about how frustratingly complex even the simplest of computer networks is, or why they choose to break down (when I did not upgrade anything) after years of decent service.
But instead, I thought about how absurd it is that it was even possible for me to do what I did in those circumstances. Quite a tribute to the success of our species that so many people: the bored Best Buy sales people who outnumbered shoppers by far to the snow plowers to those who keep electricity and cable running at times like this, all have the luxury to go about some modicum of normalcy in the face of a huge weater event, rather than having to hunker down and wait till it blows over just to survive.
Hiring is one of the top 3 problems I see in companies. Sales and Data points are the others. This article from JoelonSoftware shows how they do it. For interns, no less.
Key take-aways would be:
One of the great things about being an entrepreneur is that you can indulge your personal peccadilloes and (if you don’t take them too far) justify them for business reasons. If they involve flying first class or an upgraded car, you can often write them off – thereby sharing the expense with all the other American taxpayers, many of whom are doing the same to you.
But it goes deeper than that. You can insist that widgets be made in purple as well as “normal” colors just because you like purple. If the purple ones outsell the green and red, you’ll say you were playing your hunch like all good entrepreneurs do. If they don’t you’ll blame market forces and look for something else you can sell in purple.
I’m reminded of a story about Henry Ford who was fixated on tractors when this incident took place. One winter day the Michigan weather prevented him from taking his latest prototype out for a spin in the farm lands. Luckily the Ford foundry had what amounted to a large dirt field under a huge roof. They used this to make molds (or patterns or whatever they’re called) in the dirt. Molten metal was poured into these molds, which hardened into car parts and such. Henry, looking for a place to ride his tractor realized he could test it out on that dirt under the roof in any kind of weather. Never mind that in the process he’d destroy thousands of dollars worth of molds that his employees had just dug into that dirt. As Henry took a break for lunch of caviar and pickled flamingo tongues, he was heard to remark, “It’s good to be the King.” OK, I made up that last sentence.
Of course, thinking that you’re right just because you think you are is a classic case of denial, and forestalls the reality check. Being the boss allows us to make decisions and take actions that can be at times only marginally justifiable and at worst destructive. Enron looked like a good idea to someone.
This can sometimes be a good thing – you’ve heard many stories of people persevering to pursue an idea that looked utterly foolish, only to become an overnight success. Of course, it usually takes 20 years of hard work to become an overnight success. Or the person who succeeded because she tried something without knowing the conventional wisdom that it just could not be done.
It can also, as you might suspect, be a problem. It is one or the things that makes us entrepreneurs so utterly unemployable (oops, maybe that’s not a problem). But when taken too far leads to hubris – see your Greek tragedies for the consequences of that.
Of course you’d never give your employees as much leeway to play their hunches as you give yourself, would you? Why not? There are companies that do – Google and 3M come to mind. No slouches there. So maybe you’re not in denial about your hunches, but what about those of your employees?
It’s my view that companies do best when management creates an environment where everyone is given a structure to try out their ideas and innovations – where we test them against reality, not personality, and use the best ones for the good of all.
Reality is the field we play in, but we can all use a bit of denial now and then.
This is not really my first post. I’ve dabbled with blogging before and want to include some of those posts to get this blog off on solid footing. I have changed the dates of those posts (they mostly happened before Feb 2006) but didn’t want to have a bunch of thinly populated archives. After Feb 28, 2006 the dates will be accurate.
Subscribe to this site's RSS feed.