Planning, Startups, Stories

Any Time, Any Place But Not on the Freeway

I admit it. I'm a hypocrite. I worry about global warming, and people, and how much humanity we waste every day in large cities all over the world with people stuck in traffic, moving their physical bodies from their homes to their offices, and back. I believe in the abstract in telecommuting as a good idea for not really saving the world, but delaying slightly its descent into chaos and destruction. So why am I a hypocrite? Because my own company discourages telecommuting.

I don't think I'm atypical. There are a lot of times when running a business means compromising with some extremes.

In my defense, we're in Eugene, Oregon, a college town of 150,000 where the commutes are way easier than in any freeway-clogged major urban area. Some of our people live outside the town 20 or 30 minutes away, but most of have fairly short drives, five or 10 minutes.

I paid my dues with commuting through heavy traffic (nine years in Mexico City, and 12 in Silicon Valley) so I've been sympathetic to the idea of telecommuting for years. For whatever reason my memory has stamped forever a time I was sitting in a taxi in Tokyo traffic, in the early 1990s, thinking about how much humanity was wasted every work day, in larger cities all over the world, sitting in traffic.

What brings this to mind today, with thanks to Steve King of Small Biz Labs for the tip, is  ABC News covering the virtual office and (implictly) telecommuting with a piece they called Any Time, Any Place Management. What's interesting to me isn't the story itself -- hey, most of us have known about telecommuting for a long time now -- but rather the recognition in the mainstream. ABC is noting that larger companies (they use IBM as an example) are opening up to this, bringing it into the mainstream.

Back then, stuck in traffic, maybe 15 years ago now, it seemed to me that this was an unrecognized major problem facing the urban portion of humanity, a problem that needs solving. At the time I was consulting extensively with Apple Japan, doing a lot of work from my office in Eugene OR, using email and telephone. I did have to go to Tokyo about one week a month, though, and I didn't like it. I particularly didn't like getting from one place to another in Tokyo when it involved any means of transportation other than walking or subway. And, for that matter, subway in non-rush hours.

I solved my commuting problem by moving to Eugene OR (subject of a recent post on this blog) but that didn't make me forget how bad it was to lose a couple of hours a day to traffic. However, here comes the compromise. In this company we like to have our people on our team together during the day, in our one location, mostly a bunch of cubes. We like the instant communication involved, the immediate contact, the sense of team. Programmers talk to other programmers, and marketers talk to other marketers.

Years ago we tried working with programmers in Pakistan, and although the people were competent, the outsourcing didn't work well for us because they were on the other side of the world, asleep while we were awake.

It does make a lot of sense for a lot of reasons. Think about trendy for a second, the problem of global warming for example, and then if some of the smaller things we do makes a difference, how about taking a significant percentage of people off of the road -- less fuel, fewer emission, aside from the wear and tear to the human spirit. Sure, telecommuting doesn't work for a lot of jobs like retail sales clerk or construction workers or traffic cops, but what percentage of the work force doesn't really have to go from one place to another to work? I used to think about that when caught in traffic. There should be a campaign, a global building of awareness, I thought.

One roadblock was the idea of acceptance by employers. Does somebody working from home contribute as much to a company as the poor commuter who moves the physical body from home to office and back again every day? Now, today, this ABC news story is a reminder that mainstream employers are increasingly more likely to accept the idea, and, back in the real world of small business, I'm not. Not, at least, except for some special cases and special circumstances.

Like I said, I admit.

-Tim

Great Writing, But It Ain't Necessarily So

I mean it: great writing and great blogging, short and full of meaning but, in my opinion, still wrong. It's intriguingly right most of the time, wrong only on rare exceptions, so perhaps it's more "not necessarily" than wrong. Before I go there, here is Marc Andreessen's Guide to Startups on How to Hire a Professional CEO:

Don't.

If you don't have anyone on your founding team who is capable of being CEO, then sell your company -- now.

That's it. That's the whole post. And that's brilliant, and I love it.

I think it's a great conversation opener and almost always true, but then I think of the companies whose founders we've never heard of because they were two or three geeks with great technical capability (for example) who were never intended to run a company. Or two or three sales geniuses, or one stubborn visionary.

Starting a company and running a company often take different talents. Bill Gates, Steve Jobs, Marc Andreessen, and the like are unusual. Eric Schmidt is CEO of Google and they're doing okay, and Microsoft has done alright under Steve Balmer.

I'd think that this beautifully-pithy sentence would have been better had he substituted the word "management" for "founding," as in ...

"If you don't have anyone on your management team who is capable of being CEO, then sell your company -- now."

Small change, and it's a very good point either way.

-- Tim

How Not to Get Hired Via Craigslist

Guy Kawasaki posted earlier this week both How to Get a Job on Craigslist and How Not to Hire on Craigslist, and Sabrina Parsons posted a related piece Honesty is Not Always the Best Policy. Then today I received the following email:

Dear Mr. Berry,

I ran across a Palo Alto Software job posting on craigslist today. After reading it it occurred to me that perhaps it's past time you fired your VP of Product Development (it's probably already too late).

Judging from his post I'd say he's about 25ish, knows very little about good software development practices, creating a true development team culture, and thinks very highly of himself. I could go on, but after reading his post (see below) you'll probably agree. My background is in software development. I've over 20 years experience developing software including [I think it better to leave out the details, but he lists a few key points of his knowledge and experience here] . Based on this posting this is the last place I'd want to work.

He goes on to complain, with rather heavy-handed punctuation and phrasing, about two specifics in the job posting: a reference to programmers as rock stars and the phrase "aggressive compensation."

So you be the judge. Would you want to interview this person? Could this possibly be a real effort to get a job? Have you ever heard of anybody getting a job by bashing the person hiring? I haven't.

I do give him credit for getting my attention. I noticed his email and I might not have noticed any other kind of communication, because I'm not looking for somebody, the VP Product Development is.

And I give him credit for reading this blog. He's referencing my post yesterday morning You Always Fire an Executive Too Late. I like people who read this blog. That's an interesting tactic.

And that post in fact references Marc Andreessen's post Hiring, managing, promoting, and firing executives, which includes the following paragraph:

Don't disqualify someone based on ego or cockiness -- as long as she's not insane. Great executives are high-ego -- you want someone driven to run things, driven to make decisions, confident in herself and her abilities. I don't mean loud and obnoxious, I mean assured and determined, bleeding over into cocky.

That paragraph notwithstanding, I don't think lists of tips on hiring people need to include the suggestion not to hire somebody who insults you, your company, or the executive who has the vacancy and listed the job. The VP Product Development in this case has been with the company 12 years and has delivered new 9 versions of Business Plan Pro on time and on budget. And, if my emailer who has apparently researched the company had just gone one step further, he would have seen that he was named VP just a few months ago. So we probably really like him.

All of which brings me back to the title of this post: how not to get hired via craigslist.

-Tim

An Entrepeneurial [SIC] Misspelling

Alright I admit it. I don't like grammatical errors and misspellings, I don't like them, Sam I Am, not one little bit. I've done some peeveblogging on this site along those lines. But when I'm wrong, I'm wrong.

I was happily heading for my blog at entrepreneur.com (Up and Running) tonight when I came across a strange and bewildering complete redo of not only my blog, but the whole entrepreneur.com site. Wow, how could that have happened, I asked myself. See if you catch it on the banner here.

Not easy to catch? No, I missed it too. There's an entire site, offering entrepreneur.com information -- or so it seems, I didn't explore much -- at "entrepeneur.com." That's simply a misspelling of entrepreneur. And a business opportunity.

Or is that buisness opportunity? Bussiness opportunity? Do Google searches on either one of these, see what happens, I dare you.  I fear that Palo Alto Software owns some domain names that catch misspellings of business plan.

So, in deference to blog discussions of the right domain names, let's hear it for entrepeneurs [SIC] who build businesses on the wrong domain names.

--Tim

Blog scraping? Mayflogging? Or just plain stealing?

Like so many others I'm gloating over Virgil Griffith's new Wikipedia scanner application unmasking the Wikipedia whitewashing of corporate, government, and PR interests. Bloggers and journalists are having a field day with it. Technorati shows 762 blog posts on it as I write this. Google shows more than 320,000 Web pages. And the wikiscanner home page has an honor role of mainstream news organizations picking up the story.

Go Virgil, well done.

Take a deep breath and well-earned pause. Then go after mayflogging. What's mayflogging? I was hoping you'd ask. It's what Wikipedia calls blog scraping. Copy a blog post, put it onto a temporary blog immersed in ads, and put up a flock of one-day parasite blogs to link to it and move it up in the Web searchers. Catch some Web searchers, get some clicks, make some money, and disappear.

I say we should call it mayflogging.  That's "mayfl" for mayfly, and "ogging" for blogging, and the additional "flogging" in the middle because it sounds painful and it should be. The mayfly is an irritating bug that lives for just a day or so and spoils an occasional warm May afternoon by a lake. I'm glad they don't bite but they do fly around your head and irritate the bejezus out of you, which of course is what these mayfloggers do. The illustration here, from Wikipedia, is a gang of mayflies covering a truck. Click on the image. It doesn't show well here small. It's ugly. So it's a lot like mayfloggers with a post.

It can get ugly very quickly. For example, the search results here to the right, from a Google blog search done today. Every one of the references you see takes a column first published at entrepreneur.com and repeats it word for word, without permission, as bait to get people to go to a temporary blog and click on some advertisements. It's like radar jamming, dozens of listings with those search terms embedded in the copy but no content except clicks for ads, or some article stolen from some other website and repeated ad nauseam to generate click through.

Why do you care? First because this is commercial pollution, it fouls blog searches with sludge. Think of the swamp gunk fouling up those Internet tubes. It eats up infrastructure and interferes with searching. Second because they're stealing your time. Third, if you're posting at all, they are stealing your content.
Yes, as you've probably already guessed, I wrote the entrepreneur.com article they're stealing in my example here.

Here's how it works: You write a piece and publish it or have it published somewhere. It looks like it will attract people looking for that topic in the search engines. These blog scrapers pick it up and copy it onto blogs, surrounding it with ads.  Then they create, using software designed to make that simple, dozens of instant blogs using a free blogging tool like Google's blogger. Those new blogs link to the target ad-soaked blog and push it up in the searchers. Then when normal people search for "sales forecast" they find the ad-soaked blog, which is using your work without permission, and, in many cases, against your interest. You probably don't like to see your soulful post surrounded by trashy ads. And when it comes right down to it, nobody asked you, but it's your work they're using.

I've seen my work surrounded by all kinds of creepy ads. Usually its canned rehash business plans, just a useless twist on sample plans; but last week I saw my sales forecast article surrounded by ads for singles, supposedly available women in my home town. That's a strange piece of sludge marketing, to be sure.

I'd like to object, but, like the mayfly that lives annoyingly for just a single day, these blogs are gone two days later.

Maybe Virgil can make the mayfloggers accountable. Cnet has a piece this month on how blogger Lorelle VanFossen reacts to mayflogging. They call it "please don't steal this Web content."

Lorelle VanFossen is passionate. An author, travel writer and nature photographer, she also has a popular blog about, well, blogging. Her pet peeve is online plagiarism, which she encounters nearly every day. "It's one of my favorite subjects," she said. "I make my living from my writing, and when people take it because they are ignorant of copyright laws--or think that because it's on the Internet, it's free--it makes me really mad. It's stealing content, in my mind."

What's to do about it? Governments obviously can't help. Google is apparently working on it, but it's a tough case because Google's free blogger facility is one of the frequently used tools of the mayfloggers. And how do they distinguish between an interesting new blog and a mayflog? Should the Google blog search algorithms discount something for just-created blogs with only a couple of posts? The Techorati blog search does something like that with what it calls an authority rating for a blog, but the mayfloggers get into Technorati too.

Unmasking the mayfloggers won't solve the problem, but it would help. I'm rooting for Virgil Griffiths, or anybody else out there with that kind of combination of know-how and initiative.

--Tim

You Always Fire an Executive Too Late

I've posted here several times on paradox in planning. This morning I'm fascinated by what Marc Andreessen calls the paradox of deciding to fire an executive.

It takes time to gather data to evaluate an executive's performance. You can't evaluate an executive based on her own output, like a normal employee -- you have to evaluate her based on the output of her organization. It takes time for her to build and manage her organization to generate output. Therefore, it takes longer to evaluate the performance of an executive than a normal employee.

But, an executive can cause far more damage than a normal employee. A normal employee doesn't work out, fine, replace him. An executive doesn't work out, it can -- worst case -- permanently cripple her function and sometimes the entire company. Therefore, it is far more important to fire a bad executive as fast as possible, versus a normal employee.

Solution?  There isn't one.  It's a permanent problem.

He continues with a quote from Andy Grove, co-founder of Intel, who noted that you always fire an executive too late. "If you did it fast enough that it wasn't too late, you wouldn't have enough data, and you'd risk being viewed as arbitrary and capricious by the rest of the organization."

I've cited Marc Andreessen's posts on startups several times in recent months, cataloging it in my mind, and somewhat on this blog, as an excellent take on the high-end elite startup that is a prime candidate for venture capital. His latest in that series, however, part eight on Hiring, managing, promoting, and firing executives, applies quite well to all business, across the range. It applies equally to the growing and healthy established small business, and, for that matter, the larger enterprise as well.

While you can find a lot of good advice on how to find an executive, how to recruit, and how to select, there's not so much on how to fire an executive.  I had an attorney who used to say that the time to fire a person was "as soon as you start asking yourself that question." Andreessen's is better: when you start asking the question, start gathering data.

In this post he also talks about how to manage an executive. It certainly hits home for me when he points out that you don't just build the team, you also have to manage.

"While respecting someone's experience and skills, you should nevertheless manage every executive as if she were a normal employee. This means weekly 1:1's, performance reviews, written objectives, career development plans, the whole nine yards. Skimp on this and it is very easy for both your relationship with her and her effectiveness in the company to skew sideways.

"This even holds if you're 22 and she's 40, or 50, or 60!  Don't be shy, that will just scare her -- and justifiably so."

This is the eighth in Marc's series on start-ups -- perhaps the best yet. 

--Tim
 

True Story: Missing Assets Equal to A Year's Sales

You don't think finance and accounting matter in small business? Here's a true story, and it's about a small business like the ones I write about, in fact one I was involved in, not a large publicly traded company. $3 million worth of assets went missing, but nobody took them. Where do you think they went?

It is sparked, I admit, by news of Dell, Inc. Last week the New York Times reported Dell to Restate More Than Four Years of Earnings. Here's a quick summary of that story:

Dell said that it would restate its financial statements for 2003 through the first quarter of 2007, concluding an internal investigation into accounting errors.

Dell said that the restatements would shave off between $50 million and $150 million in cumulative net income.

I know, that seems like standard large-company stock market stuff, but here's a true story of Creative Strategies International, which was then a medium-sized high-tech research and consulting company owned by Business International and based in San Jose, CA. Call it CSI. I should add that this story preceded the change in ownership to the Creative Strategies that is now the brainchild of Tim Bajarin, still exists, and is still in San Jose, CA. 

I need to emphasize this, because I like Tim Bajarin and he's done a great job with the company since he took it over. I'm pretty sure the corporate entity even changed, I know the ownership changed, so I assume there's no harm in telling an old story. And I think there might be a lesson here.

Shortly after I started to work there, there was an audit called by the parent company in New York. And, as you suspect from reading the title of this post, assets were missing. In fact, quite a sizable chunk of assets. In a company of 20 or so employees, selling $4 million or so per year, roughly $3 million worth of assets had disappeared.

Needless to say, the parent company was not amused. But there was no theft, no embezzlement, just bad accounting.

What do you think happened? Of course you have no idea, but let me give you a hint first, then think about it. The assets were accumulated research, not chairs or tables or computers or gold bullion, but research. Does that tell you the answer?

It turned out that CSI created what we called group studies, research studies that we'd design to cover some interesting new market in high tech, develop, finish, and then sell to multiple buyers. For example, a study in telecommunications would be created and developed and sold to 10 or 20 or more companies in the telecommunications markets. If you could sell a study that cost $25,000 to 20 companies for $5,000 each, they got a good study -- market forecasts, competitive analysis, etc. -- at a great price, and CSI made a healthy profit.

So have you figured this out? As the studies were created and developed, consultants were paid real money to research markets. They took real checks home and cashed them and paid mortgages and things. They also took planes to places and interviewed people, and purchased some secondary research, sometimes developed primary research, all of which cost money.

All of this spending should have been expensed as product development expense. It was just like computer programming in terms of tax treatment and standard accounting. You aren't really building an asset, you're incurring an expense. Product development is almost always an expense, even though it sometimes generates technology that goes into products that get sold for money.

Somebody doing the numbers assumed that since this would be cost of sales when the studies were finished and sold, and instead of calling this money development expense and subtracting it from profits, they'd call it assets, as if it were inventory, and subtract it from profits as direct costs.

It may have seemed logical at the time, but over time many of those group studies were started but not sold. If the sales were disappointing, instead of spending the full $25,000 and finishing the study when only two clients signed up for $5,000 each, they'd just dump the project.

And there's the rub: nobody went back to those supposed assets, the accumulated investment in product, and wrote it off. It remained on the books as assets, for several years, until the parent company audited. Nobody had purposely or intentionally done anything wrong, there was no fraud, no charges, no money recovered; just several very unhappy people.

I guess I'm some kind of weirdo, particularly as I was a literature major and journalist-writer before I got into business, but I like the business numbers and I think they're important. Maybe it's from stories like this one. No, I wasn't the accountant, I was one of the researchers, but I was also a vice president and those were bad times for all of us, not just the bookkeeper.

--Tim

College Intern's Lament

My youngest daughter, Megan, is on the Huffington Post again with a college student's lament about meaningless work for interns. Here's a quote:

Is this a rite of passage or a waste of resources? Obviously I'm biased, I'm 20 and I want to have internships where I can do more than file. I have a suggestion for the bosses of college interns: give us a chance and I bet you'll be surprised at what we can do. We may lack job-specific experience but we learn quickly.

Boring internships may be turning students off from entering the regular rat race. Instead, many students are looking to starting their own businesses. Our business idols are the founders of Napster and Google. We, perhaps unrealistically, want quick success not a long climb up a career ladder. An Inc.com article by Donna Fenn calls this generation "the most entrepreneurial generation in our nation's history" and The Intuit Future of Small Business Report predicts a rise in young people creating their own businesses. 

Instead of politely waiting for our turn to be in charge years down the line, we've learned that you have to stand out to get what you want. If going down expected routes doesn't produce results then we'll just have to go our own way.

Oh-oh, she's been doing the intern thing at Palo Alto Software. And she swears that her summer job is fun, that she's just being sympathetic to friends. What do you think, should we believe her?

And, more seriously, notice the underlying idea that you can build your own job to improve job satisfaction. And maybe I think of that because of my own story (from an early post on this blog);

I left a good job at Creative Strategies and started on my own, not because of something I wanted to build, not because of creative vision, but rather, because I thought I could make enough money to keep my family whole and do what I wanted.  I wanted interesting work, and I wanted to choose my work. I wanted to actually do the writing and research, not supervise others. It was important to me that what I spend hours doing was something fun -- I always found writing and planning and working numbers fun -- even though I didn't have the idea that this would create the empire. I was running away from boredom, not building castles.

--Tim

Don't Send a Ten Dollar Word to Do a Two Cent Word's Job

Here I am posting against bureacratese and MBA speak and I missed this on the Huffington Post this week:

They're utilizing "utilize" when they could just as easily use "use." They're talking about "selling solutions" when the company really makes and sells nuts, bolts, or ball peen hammers.

In the process, they're throwing away the common sense language of American business -- a language where people say what they mean, mean what they say, and make real money in the process.

There is pure business genius in simple language. Consider,  "Lather. Rinse. Repeat."

In "Lather" and "Rinse" we have a complete set of instructions for shampooing our hair. The genius -- the American business genius -- is in "Repeat." This one word, written in the imperative instructs us to double the rate of product consumption. Untold gallons of shampoo have gone down the drain because America, "repeats." Billions of dollars have been amassed and dispersed to stockholders.

And make no mistake about it. America doesn't "reutilize." It "repeats."

Peter Smith is mainly a humorist, I gather, but sometimes humorists are writers. It's a good reminder, and funny too. Here's the link to the story:

Link: Peter Smith: Don't Send a Ten Dollar Word to Do a Two Cent Word's Job - Business on The Huffington Post.

Second or third mover advantage

Seth Godin posts "The Netflix of ..." today on the value of being an original instead of an imitator. We have the general assumption of first mover advantage and first to market, and nobody wants to be a copy. However, sometimes it's better to be the second or third to market instead of the first.

Does that sound crazy? Back in my consulting days I had a client from Quarterdeck Office Systems who was very disappointed the week after VisiCorp had introduced VisiOn at COMDEX. Quarterdeck wanted to be first with a graphical user interface working over the operating systems of the day (remember DOS?) but VisiCorp beat them to it.

VisiCorp died less than two years later. Quarterdeck Office Systems went public nine years later, valued at $182 million (not so much these days, but in 1991 that was a lot of money). And my point, with that entrepreneur back then, is that sometimes second or third is better, because investors understand what you're talking about.

I followed up afterwards with a Palo Alto venture capitalist David Gold, over lunch. "Often it's better to follow somebody into the market", he said,  "because it's so much easier to explain what you're doing. We're just like so-and-so except that we do it this way, or that way, obviously some better way." That of course is a much better story than just plain "we're just like Netflix." Seth makes the point that Netflix' model tracks back easily to the nature of the DVD business, where being the "Netflix of purses or watches" doesn't generate immediately obvious images.

However, there is something to coming into the inflection point of the markets, when people understand what it is. Amazon.com was not the first website selling books, Google wasn't the first searcher (not even Yaho0). Neither Toyota nor Honda had the first hybrid auto. You've never heard of the first supermarket, but Safeway and  Kroger's followed along a little later. McDonald's came along after Automat, White Castle, and many others.

In the world of high tech and venture capital, Microsoft Excel wasn't the first spreadsheet integrated with graphics, nor was Lotus 1-2-3. Does anybody else remember Context MBA (there's a blast from the past ... do you think the "MBA" in its name hurt it?). The Macintosh wasn't the first graphical interface operating system either (does anybody remember Xerox Parc and the Xerox Star?). The first personal computers were Altair and MIPS, not Apple, Radio Shack, or Commodore. 

"Just like so-and-so, but better" is a nice pitch. Search Google for "'just  like', 'but better'" and you'll come up with 415,000 pages. 

So yes, being an original is much more satisfying, and if you can seize that advantage and keep it, it's great business. But being second or third works well too. It's sometimes easier to explain. 

-- Tim