Planning, Startups, Stories

Passion and Persistance Can Be Overrated

I'm worried. I spoke yesterday at SpeakerLunch in Corvallis, an interested and interesting group of people, looking at starting and running businesses. New businesses, small businesses, and so on. They call it speed mentoring. Bring in a speaker once a month, over lunch, talk about it.

My problem this morning is the overuse of the three Ps of passion, persistence, and perseverance.

The question of the economy came up, towards the end of the session. I don't remember the exact wording, but it was about the wisdom of sticking with it during tough times, or starting a business during an extreme recession, or something like that.

Which reminded me that in the world of entrepreneurship a lot of old guys (like me) give people pep talks about passion, persistence, and perseverance. As if the key to business success were just sticking to it, no matter what. Good times or bad, the entrepreneur, we seem to think, is driven to success. My business above all.

What worries me about this is that it's too damn easy for the people on the podium to preach about sticking to it, and sometimes passion and those other Ps are misplaced.

I love the idea of starting business and entrepreneurship and all, but not at all costs. I am not advocating passion to the point of obsession; and particularly not getting so far down into the business, bad times or not, that you think of nothing else, and lose relationships.

Life is more important than business. Keep your balance. Keep your priorities straight.

These are tough times. Plan well. Be smart. Think it through. Don't bet the farm unnecessarily, and certainly not just because some old guy says you have to have passion and be persistent.

Stop. Think. Don't Send That Email!

I can't resist. I have to share this. It's about email. Don't push send. It is from Bob Sutton: A Cautionary Tale: Watch the Email:

"It is unclear if Dr. Kone lost his job just because of the email, there were a lot of other things going on (he did seem to have overly close personal connections to the student he admitted and there are some hints from the news stories that he was breeding a climate of fear at the school). But I confess that, for me, this story had special resonance as I think I am most prone toward becoming temporary as***le on email, and have learned -- the hard way -- to keep censoring myself. An IT guy I know showed me that he has his email set-up so that it takes a full five minutes for his email to go out after he hits 'send.' I think I will go in and set that up.  Also, another part of this story we should all remember -- many, or perhaps most, of our employers can go back and read the emails we send." (emphasis is mine.)

I very much second that motion. And I've learned this the hard way. There are several critical things to remember about email.

1. Email isn't private. Remember that, please. Never write in email something that you don't want your coworkers, your boss, your spouse, or significant other to see. Sure, most of your emails end up private, but any email you send can become legal evidence and show up in the worst possible places. 
2. The reader decides what you meant. The reader interprets. You don't get to hide in nuance, or inflection, or soften it with a smile. The words as written remain forever. No hiding in vague memory, and not recalling. Forever.
3. The reader owns it. Yes, I know, technically you can put disclaimers and legal notices all you like, but possession is possession, and the reader has your words in his or her email and can send it on as much as he or she likes.  It's out in the world.
4. You can't unsend it. An appropriate cliche here could be - the cat is out of the bag. It's out there. You can't get it back. No do-overs. No Mulligans.

Conclusion? Yeah, I have a conclusion. I used to prefer email communication because it didn't have to be in real time, and it's easy to type. Nowadays I try to sort and select. Some messages are fine in email, but we have to recognize when it's better to grab a phone and talk, or, even better yet, walk down the hall and talk.

Bob Sutton is the author of several really good books and teaches at Stanford University. His Bob Sutton - Work Matters blog is a good one.

Good Advice, Bad Advice

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?

Dealing with Idea Ghost Images

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.

Does This Kind of Sales Call Ever Work?

I'm occasionally amazed at what kind of sales tactics people use. Apparently this must work on occasion, but if so, I'm amazed.

I just listened to a voicemail message in which a would-be vendor of a fairly expensive online service implicitly complains to me about the inability of somebody else in the company to see how much and why we need what this person is selling.

What is he thinking? Does he imagine I'm going to walk down the hall and pass that complaint on?

One thing I've learned about delegation -- and it may have taken me a long time, but I do think I've learned it -- is that you can't ask anybody to do something for you, much less decide something for you, if you're going to second guess them on it later. And that means, by extension, if you're going to listen to a vendor about what's wrong with your teammate.

In this case it's about an area of the business that we do very well and that I've not been involved in for years. And its even more ironic because we changed management last year, the teammate in question doesn't even report to me, and is in fact way more involved in the daily operation and management than I am.

I wouldn't have taken the call, but of course that's why the person is in voicemail.

Which brings me to the question in the title of this post: does that ever work? Does anybody ever make a sale by going over the head of the person making the decision?

True Business Story: What a Difference a Nickel Made

One of my dumber ideas was the time I decided that $100 was a better price for direct mail marketing than $99.95. Smarter people than me thought that was crazy. I said that the nickel difference was obvious, an even hundred was a cleaner and more direct price offering. The $99.95 was mildly insulting. I insisted we try it.

Everything else was the same. We changed only the price.

Response went down to about 40% of what it was at $99.95.

This was back in the days before the Internet mattered, and small software publishers often used direct mail to generate sales, the late 1980s.

Direct mail was really hard. Hooray for the Internet.

5 Business Life-work Stress Factors

It takes a village to make sense. I posted Business, Pleasure, Death Sentence Wednesday on Small Business Trends, about the alleged stress of blogging. I quoted John Jantsch and Alan Johnston making fun of a poorly aimed (my opinion) New York Times story about bloggers dying from presumed stress. As of yesterday morning that post had collected several fun and interesting comments.

What is it that really causes stress while working? Granted, the NY Times story could have been written about any pursuit that anybody ever overstressed over. That's not very useful. But are some jobs more stressful than others? Or is it perhaps the match between the job and the person, the skills and the requirements, that causes stress? Or is it perhaps just the person, because some people will overstress about anything? This has been making me think. 

Last August I posted Passion or Ability? on this blog, about a question I got in email. The key quote was this one: 

So my question is even though I'm good at sales and advertising, should I stick with it or find something that I'm passionate about? What's more important--passion or ability?"

That post generated some interesting comments too. I think we're getting somewhere.

Hypothesis: could it be that work stress is related to mismatches? Not just the obvious working too hard, or mismanaging stress by mixing urgency with importance or failing to breathe deeply and settle it down on occasion? More specifically, these two key factors:

1. Mismatch work and values. Could it be that if you don't believe in what you're doing, that makes things harder, and causes more stress? I'd like to think most businesses believe in what they're doing. People who work in the restaurant have to like the food they serve. People who sell software have to believe it works, and that it's good for its users. People who fly planes have to believe in the planes.
2. Mismatch work and abilities. Some people love the phone, some hate it. Some can work all day alone with a computer, some go stir crazy. Some want to sit at desks, some want to climb ladders and pound nails. We had an employee at Palo Alto Software who was fluent in six languages and had a PhD degree, but wanted only to disassemble returned product. We tried to get him on the phone with customers and he hated it. 
3. Mismatch work and preferences. Some people love to travel. Some hate it. I've been in heavy travel jobs off and on for most of my life, and I've seen colleagues who hated leaving home and colleagues who couldn't wait to get back on the road. Family makes a big difference with that. Notice I distinguish between this one and the abilities one. What you like to do isn't necessarily what you're best at; I think both factors are important. Some people like to dress up, some don't. One person at Palo Alto Software asked for "dress-up Fridays" because we're so casual. Some people like the office, some like working alone at home. 
4. Working in a vacuum. No feedback. No metrics. Am I doing a good job? How would I know? 
5. Work competing with life. This is really just a restatement of point number 3, but I can't help it. I've seen companies that discouraged the rest of your life, wanted people in the office as much as possible, and I've seen companies that wanted people to have the rest of their lives. How driven are you? Are you disappointed when teammates leave at 5 pm?

I don't mean to suggest that this is an inclusive list. I bet we all know people who turn anything into stress, and people who glide through anything. So personality typing, and attitudes obviously make a big difference. And -- who are we kidding -- some jobs are more stressful, and some bosses are more stressful, and some companies are more stressful, and some cities (commuting and all that) are more stressful. 

One of the comments to the Small Business Trends was this one:

That whole “do what you love and the money comes later” thing sounds trite, but it is true.

I like that. Sometimes the truth of these things is trite, but still bears repeating.

And then there's the comment from Anita Campbell, founder and creator of Small Business Trends, which has more than 100,000 subscribers, about her life in blogging compared to the so-called real world:

My positions in the corporate world were 20 times more stressful than anything I do now. Not to mention all the time I used to waste in commuting (2 hours a day) plus writing reports (1 hour a day) plus meetings that were just people jockeying for position vis-a-vis one another (1 hour). That was the equivalent to half a work day right there — before I even got anything accomplished! THAT was stress, not what I do now.

So this is just my guess. Stress isn't by type of job alone. This is one of those difficult things that's hard to isolate. It's probably different for everybody.

Maybe we need a refresher on why zebras don't get ulcers.

4 Points on Working for Equity Instead of Cash

Sad but true: most of the time professional service providers take equity instead of cash, it's not a choice they make. It's the only option for businesses that seem to have good prospects, but not enough money. And, attractive as the equity deals are when they work, startup equity doesn't pay the mortgage, and it doesn't buy shoes for the kids.

I very much enjoyed Steve King's post Working for Equity Instead of Cash on Small Biz Labs yesterday. It is, first of all, a very practical and useful list. It's also, for me, a good reminder of one set of "good old days" I lived through. I left Creative Strategies and went on my own as a business planner in Palo Alto, CA in 1983. I almost always wanted my professional fees paid with money, not equity. And lots of potential clients wanted to pay with shares, not money.

The problem in that is that mortgages, shoe stores, supermarkets, and the like need checks that don't bounce. And then, as now, every entrepreneur in the Silicon Valley was sure that his or her deal was the best ever, that his or her company was the next Apple Computer. (That's an anachronism. Nowadays they're all the next Google or Facebook, but in 1983 they were all going to be the next Apple.)

It was really hard, sometimes, to walk the narrow plank between "that's fine and dandy, but pay me with dollars" and "we need to work with somebody who believes in what we're doing." I gather, from Steve's post, that it still is.

He has four points, all worth reading. This is just my quick summary:

1. Most tech start-ups fail. 
2. Not all start-up stock is created equally. 
3. Luck plays a role in high tech start-up success.  I've had the good fortune to both work for and invest in successful tech start-ups.  I've also invested in a number of start-up failures. 
4. I am very picky about the companies I am willing to take equity from. 

Steve says the best one he took equity from went under. I was lucky. The best one I took equity from went public. It paid for all the other failures, and then some. But, like I said, I was lucky.

It's a good post: Small Business Labs: Working for Equity Instead of Cash

The Mistake Bank

I was emailed a couple of days ago by John Caddell, of The Mistake Bank, which seems like an interesting idea, and one that everybody can use.

Apparently I'm soon to be a depositor in the mistake bank, because John's email was about getting permission to use one of my "dumb mistake" posts on this blog. Specifically, my post A Stupid Mistake. A True Story, about one of the dumb things I did once. 

I haven't asked John yet whether he noticed that "business mistakes" is one of my categories on this blog. That might be asking for trouble. I don't want to win any competition for most mistakes.

I did, however, decide to join the site. It's a Ning social network, so it was easy to join. And I think mistakes are second only to stories as valuable learning tools, and hey, come to think of it, most mistakes are told in stories.

The Mistake Bankis so brand new that it really lacks critical mass, but I joined and I hope you do. I already know way too much about my own mistakes. I'd like to read about yours.

How to Protect Your Business From Customers

What? You say, reading my title here. Why would I want to? Here's a question I received in the www.bplans.com Ask the Experts forum today:

My business sells window coverings and recently got taken by a client who decided to forgo paying for the balance due for product that was installed in his home. We often deal in large-value custom orders and need to protect ourselves in the future. What kind of agreement or contract can we use, and were can we find an example of something that will hold up in court? Should we use a lien agreement?

Ok wait. Let's talk about this. Have you considered the impact on your business of asking all your customers to sign something like that? You're selling window coverings. You have competition.

You just reminded me of my post last month The Heat, the Kitchen, and Credit Cards. I was mad at a customer who stole from us, and customer service for the credit card helped me out.

The active point in that was about the heat and the kitchen. You're in business. You're dealing with customers. You have to decide whether the occasional bad apple is worth baking all of the apples as they come in.

Here's a good exercise:

1. Estimate your average monthly sales.
2. Estimate your average monthly sales after you impose safeguards to protect your business from your customers.
3. Subtract the number in point 2 above from the number in point 1.
4. Is the result more or less than what your bad customers cost you in an average month?

Here it is in practice. An actual case, from something that happened in Palo Alto Software in 1999. Some of our non-US customers were making orders and then not accepting shipment, costing us money. Our accounting goddess wanted to make all non-US customers sign a form and fax it back so we could charge them anyhow. Without a signature, we were stuck.

1. The average non-US sales per month at the time were about $35,000.
2. We estimated that if we had every non-US customer sign a form and fax it back before shipping, our sales would go to about half of that, $17,500.
3. The problem we were solving was costing us about $350 per month.

Hmmm. That's a real case, with real numbers, from back then. Think about margin for error, too. Perhaps we estimated wrong, and our sales would have dropped only, say, 10 percent instead of 50 percent. Even in that case, the cost would have been $3,500 per month to correct a $350 per month problem.

So, getting back to the question, you asked: if you really want to protect yourself from your customers, that's a question for an attorney. And good luck. First, think it through.