Trizle

Starting a service business gets you a steady stream of cashflow, with minimal investment upfront. Starting a product business, on the other hand, takes tremendous capital -- and of course, there's that inherent risk that no one will buy your products. If that happens, how will you survive with no cash coming into your business? How will you operate with no operating capital?

Don't Repeat Our Mistakes

We started as a product business. It proved we sucked. We used too many resources, used too much time, and demoralized company morale. We spent months writing a product manual before anybody bought the product. We spent time capturing a product logo before anybody cared. Again, we overwhelmingly-unsurprisingly-super-stupidly sucked. With limited resources, we couldn't compete with the big boys of Dell, Apply, HP, and IBM. We had no cashflow, and with no cashflow, it'd kill our company if our products couldn't sell. After letting go half of the company, we took a different approach. Instead of trying to build and sell whitebox computers, we decided to service it.

Cashflow Enables Products

Now with a somewhat stable stream of cash, we're now able to build business products. If those products fail, we'll still have our main business to fall back on: our web computer service business. Think twice about building that new-great-big-billion-dollar invention. You'll probably be better off starting as a service business, then transitioning into a product business. Word.

According to a great Forbes slideshow, here are the 15 things you can do to live long a long life:

1. Don't oversleep.
2. Be optimistic .
3. Have more sex.
4. Get a pet.
5. Get a VAP.
6. Be rich.
7. Stop smoking.
8. Chill out.
9. Eat your antioxidants.
10. Marry well.
11. Exercise.
12. Laugh a little.
13. Lose weight.
14. Manage stress.
15. Meditate.

Be careful who you mess with. It might turn out that waiter is the nephew of your boss. Or, some widely-read blogger. Or, a godson of a venture capitalist. Or, the niece of Bill Gates. Someone once told me that in business (and in life), you can destroy your reputation you've built for 30 years within 10 seconds. In a classic case of "Don't Burn Any Bridges," a multi-billion dollar company dismisses one of its boss for rudeness.

About a year and a half ago, I received a copy of Bill Swanson's 34 Unwritten Rules of Management. To put it bluntly, it's a gem. As many of you may know though, most of the ideas weren't his. I was disappointed, as were the media, and Swanson's board. In light of that, let's not forget the Unwritten Rules:

1. Learn to say, "I don't know." If used when appropriate, it will be used often.
2. It is easier to get into something than to get out of it.
3. If you are not criticized, you may not be doing much
4. Look for what is missing. Many know how to improve what's there; few can see what isn't there.
5. Presentation rule: When something appears on a slide presentation, assume the world knows about it and deal with it accordingly.
6. Work for a boss to whom you can tell it like it is. Remember, you can't pick your family, but you can pick your boss.
7. Constantly review developments to make sure that the actual benefits are what they were supposed to be. Avoid Newton's Law.
8. However menial and trivial your early assignments may appear, give them your best effort.
9. Persistence or tenacity is the disposition to persevere in spite of difficulties, discouragement or indifference. Don't be known as a good starter but a poor finisher!
10. In doing your project, don't wait for others; go after them and make sure it gets done.
11. Confirm the instructions you give others, and their commitments, in writing. Don't assume it will get done.
12. Don't be timid: Speak up, express yourself and promote your ideas.
13. Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get the job done.
14. Strive for brevity and clarity in oral and written reports.
15. Be extremely careful in the accuracy of your statements.
16. Don't overlook the fact that you are working for a boss. Keep him or her informed. Whatever the boss wants, within the bounds of integrity, takes top priority.
17. Promises, schedules and estimates are important instruments in a well-run business. You must make promises — don't lean on the often-used phrase: "I can't estimate it because it depends on many uncertain factors."
18. Never direct a complaint to the top; a serious offense is to "cc" a person's boss on a copy of a complaint before the person has a chance to respond to the complaint.
19. When interacting with people outside the company, remember that you are always representing the company. Be especially careful of your commitments.
20. Cultivate the habit of boiling matters down to the simplest terms: the proverbial "elevator speech" is the best way.
21. Don't get excited in engineering emergencies: Keep your feet on the ground.
22. Cultivate the habit of making quick, clean-cut decisions.
23. When making decisions, the "pros" are much easier to deal with than the "cons." Your boss wants to see both.
24. Don't ever lose your sense of humor.
25. Have fun at what you do. It will be reflected in you work. No one likes a grump except another grump!
26. Treat the name of your company as if it were your own.
27. Beg for the bad news.
28. You remember 1/3 of what you read, 1/2 of what people tell you, but 100% of what you feel.
29. You can't polish a sneaker.
30. When facing issues or problems that are becoming drawn-out, "short them to the ground."
31. When faced with decisions, try to look at them as if you were one level up in the organization. Your perspective will change quickly.
32. A person who is nice to you but rude to the waiter, or to others, is not a nice person. (This rule never fails).
33. Never be afraid to try something new. Remember, an amateur built an ark that survived a flood while a large group of professionals built the Titanic!
34. Postscript: The qualities of leadership boil down to confidence, dedication, integrity and love.

I was reading through some of Robert Cialdini's studies on human psychology, and something hit: the world is our business testing playground. Any research study, by any accredited scientist or scholar, doesn't sit there and cite theory--and, fortunately, won't spread theories as gospel (unlike most business authors). Instead, they base their conclusions from real-world testing (e.g. comparing how scarcity affects 1000 people from different regions).

Most business information is based on theory, and "what sounds good", not on actual studies

It's a farce. It's dangerous. And, if we had it our way, we'd attach scarlet letters to those who preach unsubstantiated claims. Most business "experts" usually cite advice from what they hear, and what they believe as facts--but are really just myths. Unless your "expert" can back-up his/her points with data, you should probably take it with a grain of salt.

The point? Theory can never compensate for real-world testing.

That's why we urge our clients to forget about what they heard from Dr. Joe Schmo, and test, test, test. Want to know the best marketing technique? Test it between two methods. Once you get the best method, re-test that with another one. It takes an ongoing, Darwinian-style-survival-of-fittest mindset to test your stuff. Theory may sound good, but rarely works like you wish it had. Testing, on the other hand, gives you concrete strategic information. Use the world as your testing playground.

Remember those days when teachers would tell us that if we put our minds to it, we could achieve anything? They were wrong.

Now, not to be a pessimist, I'll explain why.

I grew up thinking I would be the best basketball star in the world. I thought I would rival Michael Jordan, pass like Magic Johnson, and rebound with the best. This was, of course, despite being one of the shortest guys in the classroom. Too bad I didn't know my chances were slim. When we progress through our youth, we pick up mentalities and talents along the way. Either we strengthen our analytical minds or grow our creative minds. Either we grow to empathize or we increase our aggressiveness. We pick up character traits. And of course, we're stuck with our genes. And from all that, we build our inherent abilities--also known as our talents. What to do with it?

Take it from Ben Wallace.

Detroit Pistons rebounding basketball star, reigning Defensive Player of the Year, and four-time NBA all-star Ben Wallace wasn't that good when he came out of college. Coming from a Division II School, he went undrafted by NBA teams. Teams saw that he was too small to play as a center or as a forward. He couldn't score. He couldn't make the game-winning shot. His free-throw percentage from college would be among the lowest one-percentile in the NBA.

But, there was one thing he could do: rebound.

So, Ben Wallace grew his rebounding talents. He constantly worked on his mechanics, his footwork, his art--if you will--on rebounding. He worked on his positioning skills. He learned secrets and techniques to block out other players from rebounds. He conditioned himself to grow his rebounding abilities. He lifted weights to strengthen his rebounding. And through all that, he's now one of the most integral players to the best basketball team in the world. If Wallace had, instead, worked on his weaknesses (e.g. scoring, free-throw shooting), he wouldn't be in the NBA. Instead, he knew his team was surrounded with great scorers and free-throw shooters--so he didn't worry about strengthening those techniques. He knew what he had to work on, and he focused on it.

An epiphany.

As for my less illustrious life, I knew I could never play in the NBA. But, in the event of doing playing it all my life, I developed a talent: competitiveness. And, I'm using it in my business, and seeking to strengthen it everyday. I'm far from perfect, but I now have a clearer roadmap. The same concept applies to your own business. If you're struggling at something, you'll probably find more success by switching perspectives (e.g. business models, industries, etc).

They say great people know one thing well.

And, they focus on it daily. If you're seeking greatness, see where your talents are. Even more important, know your weaknesses. You'll have a better sense of direction.

Yeah, we're a tech company. But, we're frustrated with how the industry usually works, and how it treats its clients. especially the small business sector. We hear too many horror stories from our customers, whose previous technology suppliers promised them something they couldn't live up to. One of the clients we're working with paid an astronomical amount of money that, though we're sure the supplier put some work on it, looks like a carbon copy of another project they did for a different client. There are two problems with this dilemma: (1) the client paid for original work, and way more importantly, (2) the technology didn't advance the client's goals. Instead, it was technology for technology's sake--not strategic sake. If you read our blog regularly, you're probably familiar with our take on technology: It sucks! It can't make you a great company. Yes, it can accelerate your small business toward that path (and that's where we come in), but it takes something else to build that foundation. It takes understanding your business's (or your) inner strengths, your passion, and your company values. It takes resilience to stick with your company's inherent character, and never jumping to the next fad. Only when you have your company's foundation, and understand with clear insight your small business's direction, will technology help advance your company.

A lot of times we get so stuck up on making things look pretty, instead of making things useful. I know I'm guilty of this. To design things, I've learned, is to first create a skeleton of it before putting the skin on it (or, to make it look pretty). That is, first make it useful; then beautify it afterward. Around the early 1920s, an alternative to the widespread QWERTY keyboard was produced--called the Dvorak Simplified Keyboard. The Keyboard focused on ease of use, as compared to the QWERTY keyboard's difficult structure. I ran across Wikipedia's entry about the theory behind the construction and usefulness of the Dvorak Simplified Keyboard:

It is easier to type letters alternating between hands. For maximum speed and efficiency, the most common letters and digraphs should be the easiest to type. This means that they should be on the home row, which is where the fingers rest. Likewise, the least common letters should be on the bottom row, which is the hardest row to reach. The right hand should do more of the typing, because most people are right-handed. It is more difficult to type digraphs with adjacent fingers than non-adjacent fingers. Stroking should generally move from the edges of the board to the middle. An observation of this principle is that when tapping fingers on a table, it is easier going from little finger to index than vice versa. This motion on a keyboard is called inboard stroke flow.

The usability-first mindset behind the Dvorak Simplified Keyboard should give you a jumping point to create and design your business products.

Most rules make no sense, folks. So I heard a 44-year old employee was dumped by his company, U.S. Card Partner Services for--of all things--listening to his iPod. Wait, then get this: he's being sued by the same company for about $300,000--the majority of that being from "lost profits." First, this lawsuit won't get you the Benjamins, and will (unfortunately) only destroy your public reputation. Second, U.S. Card Partner Services is seemingly being run by inept managers. Third, if you want to get rid of this problem, stop micro-managing! It's not your people who's at fault. It's your company's systems and policies. Instead of caring about their music-listening habits, work on your compensation structure. For example, if the employee doesn't make $40,000 in sales per quarter, then s/he's out. You're working with adults, who don't need or like to be hand-held (i.e. micro-managed). They need direction, yes (e.g. $40,000 sales/quarter). But, they crave freedom to use their own specific/unique/special/personal methods to achieve it. They'll surprise you.

I ran across Google's blog post on preferring testing over business theory. Just a quick note: if you're sitting there trying to come up with the best strategy to improve your business somehow, you might just be better off testing your different business approaches to get better results. And of course, at the end of the day, actual results beats theoretical results any day.