« April 2008 | Main | June 2008 »
I'll be in live audio as the guest of host John Jantsch of Duct Tape Marketing this Tuesday as part of his Small business coaching expert series podcasts. That's Tuesday at 2 pm CDT, noon PDT and 3 pm EDT. The session is free but you need to enroll first (which is also free).
Paul Graham's May essay is Lies We Tell Kids.
Adults lie constantly to kids. I'm not saying we should stop, but I think we should at least examine which lies we tell and why.
There may also be a benefit to us. We were all lied to as kids, and some of the lies we were told still affect us. So by studying the ways adults lie to kids, we may be able to clear our heads of lies we were told.
Interesting. It's a long, thoughtful essay.
Good advice? In the first few weeks of my first real job, I was heading out to cover a student demonstration in Mexico City when my then boss, the bureau manager of UPI in Mexico City, told me: "Come back with the story, or not at all. If you don't get the story, don't tell me the reason why not."
Bad advice? That's harder, isn't it? Don't you have to be somewhat vindictive to remember bad advice?
More good advice (this one is a quote): "I don't know the secret to success, but the secret to failure is trying to please everybody." That's from Bill Cosby.
And this one, from David Kreps, who taught decision science at the time: "you have to know what knobs you have to turn."
And Hector Saldana, my favorite client during my middle career in consulting: "90 percent of success is just showing up." That wasn't his originally, but he used it often. He also told me once "good management is nothing more or less than knowing when and how to say no."
Fortune has a feature called The best advice I ever got. Twenty-five well-known people with a picture and a paragraph each. Chairmen and CEOs and celebrities and politicians. There's a comment area for the rest of us. Here are some quotes from some of them, (unattached from the people, by the way; that seems like a less distracting way to compile advice):
I've observed many CEOs, heads of state, and others in positions of great authority. I've noticed that some of the most effective leaders don't make themselves the center of attention. They are respectful. They listen. This is an appealing personal quality, but it's also an effective leadership attribute. Their selflessness makes the people around them comfortable. People open up, speak up, contribute. They give those leaders their very best.
Here is something to remember for the rest of your life: Don't spend your time on things you can't control. Instead, spend your time thinking about what you can.
Always assume positive intent. Whatever anybody says or does, assume positive intent. You will be amazed at how your whole approach to a person or problem becomes very different. When you assume negative intent, you're angry. If you take away that anger and assume positive intent, you will be amazed. Your emotional quotient goes up because you are no longer almost random in your response. You don't get defensive. You don't scream. You are trying to understand and listen because at your basic core you are saying, "Maybe they are saying something to me that I'm not hearing." So "assume positive intent" has been a huge piece of advice for me.
If you have something good to say, say it in writing. If you have something bad to say, you should tell the person to his or her face.
As soon as I saw it I started musing about bad advice. What was the worst advice you ever got? That would also seem interesting to me. And then, lo and behold, one woman included did in fact go for the worst advice instead of the best advice. Here's what she said:
The worst advice I ever got was, "Don't work with your husband [Pan Shiyi]. Marriage and business don't mix." You can't imagine how many people told me this. But it's such a narrow view of relationships. In our case I think our [real estate] business success springs from our friendship.
When you have two people trying to figure out problems together, one brings out new things in the other and vice versa. Aren't human beings meant to be inspired in this way? With us, Pan works in a very intuitive way--even though he's the man. I believe in women's intuition, but I am also a product of my Western training [Cambridge, Goldman Sachs]. And so we approach decisions in very different ways and play different roles. He tends to come up with big ideas--then I'm the one who goes around trying to test them. He's brilliant at sales. I worry about construction.
If the business fails, well, that puts a strain on the marriage. But what if it succeeds? That can enhance the marriage. When it comes to business and relationships, I don't buy this idea of diversification. It neglects comparative advantage. The best way to lower risk is to specialize: Put the things that you love into one portfolio.
What about you? Could you name the best advice you ever got? How about the best you ever listened to? The worst advice?
I'm sorry, that's an old cliché, but the thing about clichés is that they so often become that because they hug the truth. Consider this quote, from Nate Alder of Klymit Technology. He's talking about how his team approached venture competitions. 
In preparation for each event we would spend our nights at the hotel refining our presentation based off of practice round judges feedback and stay up rehearsing our presentation as opposed to going out late drinking with the rest of the students from other schools.
We have always treated this as a serious business from the beginning and not just an extracurricular activity we do for fun on the weekends but we have sacrificed a lot of personal time, social life, entertainment, grades, and even other job opportunities to make this company a success.
We just have so much fun with it that it makes up for all our other sacrifices. Before each event we always made sure we had gotten plenty of sleep, ate a health meal, always avoiding alcohol, tobacco, or any other substance that could impact our minds or bodies. All these things combined really helped us stay relaxed and focused to perform well and have a lot of fun doing so.
Hmmm ... I think we've got something there. Work hard? Success? Correlation.
I saw Klymit three times last month in my month of judging venture contests. They took second place at Rice University, tied for first at the University of Oregon, and second place again at Moot Corp (University of Texas) in Austin. Klymit has innovative new technology that uses inert (as in complete harmless, already in the atmosphere) gases as insulation in ski jackets. The insulation is adjustable, so as the day warms, you can set your jacket to cool. The company has an impressive management team, and agreements already in place with major clothing vendors. It's an exciting new venture. The team, by the way, comes from Brigham Young University. And the business plan started (can't resist adding this) with Business Plan Pro.
Nate's quote is part of the behind-the-scenes detail of A conversation with Klymit Technology, in which he's interviewed by 'Chelle Parmele over at Business in General.
And the plot (or the cliché) thickens too, with the fact that NeuroBank, from Carnegie Mellon, won the Moot Corp in Austin. NeuroBank took third at Rice University in early April with a combination of a new technique to harvest brain stem cells from the spine (instead of drilling a hole in the head) and a cell bank storage offering borrowed from techniques used to store human eggs, etc. Between the Rice contest in the first week in April, and the Moot Corp in the first week of May, NeuroBank went out and developed a waiting list of people ready to subscribe as soon as the service is available.
So there's that same theme: work, luck, reward, and all that.
It's hard to write about customer service. Most of the blog posts I see talk about what it isn't, not what it is. Most of my posts on the topic are bad examples. Negative examples are more fun. And easier to come by.
Paul Brown's Toolkit column, a regular in The New York Times' Small Business webpage, focuses on For Customer Service this week.
This one caught my attention this morning because it actually includes, of all outrageous things, a definition of what customer service is:
Writing on sbinfocanada.about.com, which offers resources for small-business owners, Doug Howardell of ACA Group, an alliance of consultants, says his group defines customer service as “the ability of an organization to constantly and consistently give the customer what they want and need.”
He also cites some additional positive suggestions from allbusiness.com about how to do it.
The best readily-available valuation of business consulting services is 1.12 times annual sales. For automotive repair shops, it's .41 times annual sales. Physical fitness facilities are going for .66 times gross annual profit. Grocery stores are going for .28 times annual sales, and sporting goods stores for .34 times annual sales.
There's a valuation report in Inc Magazine's April issue that turned me on to Business Valuation Resources, which sells information like the above, culled from data on actual transactions. I registered (free) to get a free download of a complex chart -- sophisticated, innovative, imaginative, but really hard to read. And I gather that the underlying data isn't cheap, because I can't find anywhere to send you for a link to the data table, industry by industry, that I used to do the snippets in my first paragraph.
Conclusion: if you're dealing with valuation, this could be a good resource. Valuation information is something like insurance account numbers: you don't need it very often, but when you need it, you really need it. Like when you want to sell your company, or sell part of your company, or predict valuation as part of an investment negotiation, or when there's a divorce, and ... well, you get it.
Gripe: once they've published the data and put it out into the world as hard copy, can I get it online somewhere? Oh yeah, I get it, there's value to the data. Tough call for BVR, how much do you give away to promote your data? 
I had a good time on the Jim Blasingame show last Thursday, a nice break from vacation ... here's the audio:
How un-zen is copying somebody else's zen? Today I got an email invite to download a white paper titled "Zen and the Art of Disaster Recovery." What? Oh, it's just a joke. I think. Here's more:
What's Zen got to do with Disaster Recovery? Actual Zen Masters probably don't have the answer to that, but there are eight steps to data enlightenment that will help you shrink the burdens and costs of disaster recovery, and increase the accessibility, integrity and security of your data. Now that's peace of mind.
Is it just me, or is enough just plain enough with this. Zen and the Art of Motorcycle Maintenance, by Robert Pirsig, is a milestone book, first published way back in 1974 (with several new editions since). I'm sorry, I think Zen in general, and this book in particular deserve more respect than cute titles. We've established now that you can name anything "Zen and the art of ..." I did the Amazon.com search and came up with the art of happiness, the art of archery, and, my personal favorite (which doesn't mean I've read it), Zen and the Art of Faking It.
And I have to admit, I'm influenced, in this complaining post, by having spent several years now trying to figure out how to integrate Zen and business planning. Zen seems like the opposite of planning. Lately, however, having put a lot of thought to it, I think I've come up with the integration. But that's for a different post.
And I have a rant coming on the art of copying. Also for a different post, but, jeez, copying isn't art. How do people who copy other people's stuff find a way to feel proud of themselves? Books, movies, television shows, and -- here's where I've spent a lot of time -- software products. There can be Zen to a lot of things, but there's no art to copying.
Here's an interesting surprise, from Education and Tech Entrepreneurship, a Kauffmann Center research paper published yesterday:
Twice as many U.S.-born tech entrepreneurs start ventures in their fifties as do those in their early twenties.
I think it's ironic that this should be a surprise; a generation ago it would have been a common assumption. Then came the successes of industry icons Bill Gates and Steve Jobs, both young college dropouts. And a lot of people like them. Or so it seemed. The young techies ruled the PC industry boom in the 1980s, and again, the dot-com boom in the 1990s, and the Web 2.0 boom right now.
And there is truth in that stereotype, of course. Where there's smoke, there's fire. But this latest research puts in a word for classic wisdom, experience, and education as well.
I picked this up from David Miller on Campus Entrepreneurship, who cites Ben Worthen's Tech Entrepreneurs Mostly Aren't Youngsters After All in the Wall Street Journal. He summarizes:
Instead, the average tech entrepreneur was 39-years old when the company was founded, says a survey released Thursday by the Kauffman Foundation. The survey asked questions of 652 U.S.-born execs at tech companies started between 1995 and 2005 and with revenues of at least $1 million. Not only was the average founder pushing middle age, but also nearly five times as many founders were over 45 (24%) as were younger than 25 (5%) when their companies got off the ground.
Only 8% of founders hadn’t completed a college degree, contrary to the image of the Bill-Gates-like college dropout. Forty percent had a masters degree or a PhD.
Some other interesting findings (quoting the study):
And this last point, included in the summary of the study, is actually citing a different Kauffman Center study. It looks like it was included because this study looked only at U.S.-born entrepreneurs.
Is any of this really surprising? That successful startups tended to correlate with experience and good education? I'm very happy to see research confirming some of the points that ought to be obvious but get disputed. I am surprised to see that fully 50% of successful Silicon Valley startups are established by immigrants, but, as I look around, maybe not so much. That one didn't come from this study, but it's a good reminder that our immigrant stereotypes are out of date as well.
I find this fascinating:
"Yes, I think it's a really good idea, and everybody around here really likes it, but what I'm worried about is that when I talk about it everybody I'm talking to sees what they think I'm saying, what they want to be the idea, rather than the real idea."
I'm not going to cite the author of that quote, because it could embarrass him with the others on his team, but it was in a phone call last week.
It reminded me that what he's talking about is a common phenomenon. Until I find a better description, I'm referring to the misunderstood images of the original idea as Idea Ghost Images, a reference to the shadow images you get on television when you have problems with the antenna. They are a reflection of the original images, but they're off. And the more of them you have, the greater the problem.
Have you seen this happen in your business world? Where there's an idea being discussed but each person imagines something slightly (or maybe more than slightly) different? And sometimes companies will move forward and commit to budgets and tasks and strategy without realizing that each person is agreeing to something different. That can cause a whole lot of problems.
It's closely related to what we call getting everybody on the same page. Maybe we should call it asynchronous idea management, but that's probably getting too techie with the language.
The solution, I think, is completely obvious. It's part of the normal planning process. Define the idea in a concrete way -- document, email, presentation, something that can be recorded and referred to later -- and manage it through that idea definition.
It's amazing, though, easy solution or not, how far we get sometimes without really dealing with those ghost images. I think it's a common problem.
The Plan-As-You-Go Business Plan is out! ...
Marketing Plan Pro 11.0 powered by Duct Tape Marketing is simple, practical marketing plan software that makes it easy to plan and carry out the marketing activities you need to grow your business.
