Make it useful

If there is one thing that defines successful software or web based businesses, it is being useful in day to day life and work.

By that, I mean that it is something we genuinely use in our day to day life and that it adds value.

For example, in the 90’s and the early 2000’s a lot of people bought digital personal organisers and put their contact details in it. As one friend summed up the experience, “I spent 3 weeks inputting the thousands of contacts I have made over the last two decades, then I went and lost the darned thing while on holidays. Never again.”

It is only now that we are starting to see a genuine automatically updated, cloud based, multi-device accessible contact list. I.e. it is so intuitive to use that you don’t think about it, you just use it.

If your business model relies on capturing data then the asking price is that you give them a tool or application that they will find useful and use often. Facebook and LinkedIn do offer functionality we appreciate and use and are good examples of customers giving up privacy in return for function.

We are all enticed by the all singing all dancing solution that answers everybody’s problems all the time. The only problem with that is that all your users will need training and a good administrator to keep you all in line.  This is the opposite of the recognised concept of usability (http://en.wikipedia.org/wiki/Usability).

If I put my investor hat on I am more likely to back someone who has a single pain to take care of, and packages it up  to be useful to the maximum number of users in their daily lives. That simpler business model is also more likely to generate new sales, as well as be bought out in the future.

And yes, I firmly lump a lot of attempts at Enterprise solutions (ERP) such as SAP and companies of that ilk in the class of trying to be all things to all people.

Knowledge management systems that add an extra 60 seconds to every email sent or document saved firmly sit in this category too – potentially invaluable but end up destroying productivity.

Your biggest nightmare as a developer is people who tell you that your product would be very useful to them then they only use it for a couple of days while still on the 30 day free trial.

Think of your own experience with Apps on your smartphone. First, there is the love affair “I have to get that”. Then you try using it, “wow, that’s amazing, I wish I had that before.”

Then you realise it doesn’t export to anywhere else, and that it’s going to add minutes to your day that you could use elsewhere, and then you never use it again.

Ways to make it useful:

• Do one or two things and do them well.
•  The layout is intuitive
•  The workflow processes are intuitive
•  Provide a couple of workflow processes – for the novice and the experienced user
•  Make it all about them, and easy access to what they need, including account details, invoices, etc.
•  Keep it as simple as practicable. This is the hard part.
•  Make it accessible as readily as possible – works on multiple browsers and different devices.
•  Make it easy to undo mistakes such as deletions or accidental purchases. We all press buttons out of frustration at the lag time of screen updates and can accidentally do the opposite of what we intended. (Amazon finally put this on book purchases so I stopped accidentally buying second copies of books I already had).
•  Consider providing an offline version – US developers should especially consider this as they often don’t realise how slow and patchy services can be elsewhere, and pretty much only the US has unlimited data plans.
•  Consider interaction with other systems and software, whether through export/import, API’s, XML, industry standards or whatever.

 My favourites for useful at the moment are Dropbox, and the Zoho suite.

Google Apps in my opinion would rank amongst the best for usability, but I don’t yet use much of their software (apps). I.e. I don’t find it very useful as a total package.

Likewise, Replicon, the online timesheet tool many of us now use, is great for entering hours worked, but provides an abysmal experience for administration and reports which have way too many options which are poorly documented and are a complete pain for even experienced users.

Ask lots of people what they want, and boil it down to what they really need and how it could replace or integrate with what they already do. Above all, make it useful.

Are you heading for bankruptcy?

I have seen too many businesses go under lately, and wanted to talk about it with you all as it is often not what you think it is.

I recently sailed close to the sun (so to speak) in the same way and given the economic situation at the moment things may be dicey for many of us for a while yet.

Technically speaking being insolvent means you don’t have enough cash at hand to pay your debtors.

Most of the time this is manageable. You whack a little on your credit card, you reduce unnecessary expenses, you juggle timing of payment, etc. Sometimes though, you have no options left and a large amount payable to debtors and suddenly you are out of the game. This is the reason many of your favourite shops or restaurants disappear overnight. 

Let’s list the main causes and the common solutions.

Tax payments  

These tend to come in large quarterly instalments covering wages (pay as you go) and value added taxes (e.g. GST).

You will no doubt be very familiar with these now and always save that and never touch it right? 

Good intentions are one thing, but sure as heck, you will tap into those savings sometimes and you will have a hard time paying.

The biggest trap for growing businesses is the taxes you pay on behalf of your staff (e.g. PAYG in Australia). When you start you business you and your co-founders will live off savings and a bit of income so this isn’t an issue. However, as soon as you start putting on staff this amount of tax payable can grow very rapidly and catch you out. Get your accountant to forecast this for you when you put new people on.

All I can say here is keep putting it aside and if you are really stuck your tax agency (ATO in Australia) may negotiate a schedule of payments. It makes sense for them to do this as it is better for them to receive tax late than not at all.

Growing too fast

Growing fast is a wonderful problem to have as it means you are on the path to success. It is also the point at which many businesses fail.

The number one question you have to ask is if it is sustainable. For example, you receive one very large order for whatever it is you do. Most people assume they have made it and that this is the benchmark for new business.

Consequently, they get new premises, fit it out, put in machinery if required, put on more people, etc. This is one heck of an increase in fixed costs for any business – especially if you were operating using cheap, written off second hand equipment – which is one of the major traps of buying an existing business.

Until you have a pipeline of repeat orders of that size you need to think about leasing or renting. That is, how can you make your organisation temporarily meet the needs of the order.

You can rent equipment, premises, short-order manufacturers and so on.

You can put on staff temporarily if required, or hire in contractors.

Be creative, there are ways to deal with it.

I should also mention that quality control issues leading to increased re-work, increased discards and increased refunds are also most common during phases of high growth. This is caused by putting on a lot of new people who haven’t fully come up to speed with work processes and quality requirements. They are trying to do their best, but not preventing quality issues is a very well trodden path to insolvency.

Sudden change in market conditions

If you are strongly exposed to one segment of the market and conditions change, you are screwed. You still have to pay all your debtors but you just lost most of your income. Something has to give.

As a fix, you need to decrease your costs immediately to stay solvent. We have seen this in major companies here in Australia over the last month with major layoffs, and expect a lot more to come in the next few months.

As a preventative measure you need to learn to diversify your customer base. Number one is to have more customers so you don’t rely on just one or two. Number two is to diversify the industry/market segments you serve, so if one takes a hit then hopefully the others are okay. This second point isn’t working quite so well at the moment.

You are unable to work

Whether it is illness, an accident, grief or divorce if you aren’t able to work in your business then everything loses momentum, decisions get left unmade and income is lost.

I know the standard answer from advisors is to work on your business and not in your business. Hey, it is great advice, but I would question how many businesses actually make that transition.

The reason I raise this is that for you to work on your business fulltime, rather than in it means that you have just become an overhead to the company.  Put it another way, your company will need to be earning a good million or more per year in revenues before you could even consider becoming an ‘overhead’.

In the meantime you may be providing the service/product, doing the marketing, doing bookkeeping, paying bills, dealing with HR issues, staying up to date on regulatory compliance, etc.

You can help yourself by hiring good people, training people, delegating responsibility and trusting their judgement. This often comes hard to many business owners as small details can often make a big difference to the business.

You can also hire contractors and consultants to fill in as needed.

Income protection insurance is available, but only goes so far when your organisation is a decent size.

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All of these issues will occur at one time or another, often when you don’t expect it. I’m not saying you have to sit down and actively plan all this every week, but keep it at the back of your mind when you face critical decisions.

Resilience and drive come from being beaten

In a good market you don’t have to try hard to win and keep business.

As soon as the market goes down, the tide goes out for all of us and suddenly work is cancelled with little notice and your competitors come in and undercut you on price taking your customers and your revenue. This is quite a painful experience.

It’s what you take from the experience of losing badly that counts. You will lick your wounds for a while, but when you have overheads to pay, staff to pay and a large mortgage you don’t have time for self-pity – it will only bankrupt you.

When you take a beating, you are forced to look at the market and your customer base with no illusions. It gives you a clear focus on what you need to do to win and retain work, and it gives you the drive to go for it.

There are no one-size-fits-all solutions to building more resilience, however, there are some generalisations – none of which are new – which can be applied.

Don’t put all your eggs in one basket  - If most of your revenues are coming from one or two clients, do everything you can to find other customers. Sure long term contracts are great steady sources of income, but that can all come to an end with only a day or two’s notice. If you aren’t making money elsewhere you are going to become a smaller company very quickly.

Pride cometh before the fall – it’s when you think everything is going well that you need to be most worried. I have experienced this many times, and see many others go through the same thing all the time. A contract isn’t won until it is signed. Payment isn’t received until it is received. Take nothing and no one for granted – you need to have a mild dose of paranoia at all times because, yes, your competitors are out to get you.

Life isn’t fair – and bad luck doesn’t just come in threes – it can come in non-stop waves. I know of a small business owner who was on the receiving end of an unfair dismissal lawsuit, a tax audit, death of his parents in a car crash, discovery of large scale employee theft, his partner leaving him taking the kids, and he had to find a new house – all in the space of 9 weeks. Do you think he had time to productively work or win new business in that time? One or two of those matters would reduce the average person to a gibbering mess, and he had all of them. That’s an extreme example, but you can have bad luck, personal tragedy and good outcomes all at the same time.

Keep on swinging – a good boxing analogy – keep throwing punches as you might just connect. It doesn’t matter what is happening, you need to stick to core business and keep doing it. Yeah, sure you are great at this aren’t you - resilience is your middle name after all. Your real test is getting knocked down a few times a year, every year for a decade. This tends to sort out those who can keep on going and those who can’t take it anymore.

There’s a silver lining to every cloud – there are always but always opportunities. You need to free your mind up to look for them, and encourage others around you to offer them too.

Lead by example – if you aren’t doing the right thing in terms of selling your business, how can you expect your people to. They will pick up on your cues and if you don’t show you care about the future, then they won’t either.

You discover a lot about yourself in times of adversity and hopefully it is good. Keep on swinging!

Stop being passionate – be successful instead

Regular readers will know that I have real problems with how much the term ‘passion’ is being misused right now. A number of you have been in touch with me and have asked for clarification on what I think are the right words to use.

If you want to know what I mean just watch the auditions episodes next time American Idol is on. Almost anyone who mentioned how passionate about singing they are couldn’t sing, and most of the talented were just nervous.

Saying you are passionate about something has come to mean you have a passing interest in something.  This is kind of like the difference between lust and love with the former being an ephemeral but real emotion and the second being lasting. The term passion as used in popular culture and the media is at the lust end of things.

When interviewing job candidates I have come to interpret the use of ‘passion’ as meaning ‘I wasn’t aware of this before, but I actually spent 5 minutes of my time on Google working out what it is.’

If I tried to unpack the traits that we think we are talking about when we say ‘passion’  when talking about starting a company I come up with the following.

Technical mastery

You need to actually be good at something. Some people learn slowly over time and others spend every spare minute of their time thinking about and learning about it. This second category is obsessive and this is fantastic for a startup, as long as it can be channelled. This level of obsession is often what is meant by the term ‘passion’.

When your company gets a little bigger you won’t be able to find as many obsessives so you’ll have to hire less obsessive people. Plus, let’s face it, if everyone in your company is obsessive you are in for a legendary level of conflict.

Ability to deal with uncertainty

The startup experience is stressful. We all read about and cheer on the success stories. However, the cold hard reality for 99% of startups is that they don’t get funded as much or as quickly as they like.

Product takes too long to develop and customers don’t like your first product release or are nervous to be the first buyers. Potential investors want to see you struggle with adversity and come out on top before they invest.

So, you will spend months if not years trying to work out how you are going to pay wages the next month.

This is a trait that can be learned. Ten years ago I was admitted to hospital with a full blown anxiety attack that had symptoms just like a heart attack. Today I think I could be on the receiving end of a Donald Trump style rant and just smirk.

If you have no problems dealing with uncertainty it probably means you are a sociopath – there is a reason there are more of them at senior management levels than in the general population. If you are sociopathic make sure you can find someone with empathy you can trust to translate your intent for normal humans with insecurities and anxieties.

  

Thinking outside the square

Very few people are good at this, and even for those who are good maybe only one in ten or one in 100 ideas are any good.

To serve an existing market you need a depth of experience to understand you and your client’s needs.

Also critical to innovation are constraints such as dropping prices, increased competition, lack of money, customer base or people are what drive innovation.

The Facebooks and Googles of this world are terrible examples of innovation for the majority of us. Statistically they are the extreme outliers. You need to look to your competitors and comparable industries to see what is really happening.

Follow through

Having a good idea isn’t enough – you need to follow through.

While you are doing your MBA this all sounds like white-board nirvana, come up with a plan, allocate resources, meet milestones and become billionaires. Unfortunately it isn’t like that for 99.999999999999999999% of us.

The main problem is you need to have the time to do it – which I can almost guarantee you don’ts.

So you are left with two options – chip away at it slowly over time or hire some people to progress it. The second option not only needs funding but you still need to give a lot of time to it to bring people up to speed.

And, don’t forget not every effort pays off. You need to have a portfolio manager mentality and put small bets on a number of initiatives at the same time.

Resilience

Resilience is an amalgam of all the above. It means that you don’t fall to pieces when you face uncertainty. It means you can keep going, and follow through until you have delivered product and given sufficient time to marketing for a sales cycle to work.

I met a company startup chairman last week who told me he literally wore out a pair of shoes early this year looking for investors in an IPO. He is very well known and respected in industry, however the market for raising equity right now is absolutely awful so he failed. However, he relentlessly followed up every lead, and the week before I met him he finally signed up a major international investor as a private investor. Not bad for someone past the mandatory retirement age of 65.

As a keen observer of startups I have come to realise it is very hard to guess who is most resilient. The stereotype would be the ideas man falling to pieces when the business doesn’t work as planned and the level headed technical type continuing on.  However, all that changes when you have to pay your mortgage as well as your staff who also have to pay mortgages and send their kids to school.

I have seen flakes who never give up and level headed people who run at the first sign of personal hardship.

Your startup may go through several phases or pinch points where your very survival is in doubt. You may survive a couple, but a third may do your head in. Can you keep the faith in your fellow company founders?  It is people problems that make it all go horribly wrong.

Flexibility

Here’s a fact for you – your business plan is complete bullshit.

Sure it made your investors and bankers happy, but ultimately it reflected your wish as to how the world works, not how it actually works.

When you try to invent a new market, unless it takes off quickly your company is dead.

When you try to innovate in an existing market you will find your first efforts miss the mark. People either don’t care or you aren’t big enough with a long enough trading history for them to trust you.

This is all neatly encapsulated in the current fail fast movement, the guiding principle of which is to empirically test your business model as soon as possible and then pivot or change your model for the better.

Another way to look at flexibility is the ability to think of your next move.  You are never cornered, there is always a next move, you just mightn’t have figured it out yet. 

When you have creditors screaming at you for payment, customers screaming at you for late product or defects, no money left in the bank and wages to pay it is very hard to do anything but melt down or panic. This is the time that flexibility is important.

Who can you pay later? What can you sell now? Who can pay you now? Can you pre-sell, giving a discount if they pay now? Can you offer options in lieu of cash to staff? Can you renegotiate payment terms?

Commercially minded

Primarily this means knowing what your company is worth and your own ability to deliver.

You need to make income/revenue as soon as you can. Without it you’ll never grow.

You can raise money from investors, but if you sell too soon you may be driven to providing a sub-optimal or cheap product.

You need to understand the fundamentals of contract law, the tax system, banking, employment law and other regulatory systems and how you can work within those frameworks.

You need to know how to sell and negotiate. It is only too easy to talk back a sale.

Very rarely will all of those skills be present in one person, so you need to recognise your deficits and seek help from within a group or advisors as soon as you can.

Anyway, those are some further thoughts on ‘passion’ from me. Please share your experiences.

The rational need not apply

The vast majority of wealthy people you meet acted on their gut instincts to get wealthy. They bought property or shares when the market was hot, they acted when everyone else hesitated even though the evidence was there for all to see.

You can’t plan to be hugely successful using any rational processes we are taught in business. In my experience, the more you have studied business, accounting or finance, the less likely you are to take risks. And by definition business is about taking risks.

I meet people who use their star signs to make a decision. I meet people who call in Feng Shui masters, or rely on spiritual signs like a bird landing on their fence when they are pondering a decision. The more I meet entrepreneurs the more I realise is that the one thing they have in common is that none of them have much in common apart from not being common.

In the end decisions get made, risks get taken and some of them pay off. Once you start off on the path of making decisions you find out some succeed and others don’t, but you are more willing to take risks if you have already taken risks and succeeded.

If you approach everything rationally it means that you will need to attribute some kind of probability to outcomes, and to do that you will need to actually have some means of measuring those probabilities. Guess what – not even the experts are good at that.

Ultimately every decision made in business is made on how much loss you are willing to take in case it goes wrong, and it is often the non-rational side of things that cause the decision to be made.

The more you are in this game the more you learn to fine tune what your gut is telling you – this is called experience, and you only get experience by actually doing things.

So, whether you are looking to get into business or you are looking to expand your business, the key is to try different things. Either it will work out or it won’t. Have a go, you might surprise yourself.

Raising capital is like dating

They are both brutal, demeaning and demoralising processes. Rejection is constant, having your hopes built up and then dashed again is part of your daily life. You are on a roller coaster you can’t afford to get off. It can also be a lot of fun if you go in with the right mind set.

Here  are some of the key similarities.

Up your game

You need to learn how to sell yourself in a way that attracts the kind of people you would like. Just like filling in a profile on an online dating website – you are going to have to put together marketing material and have a pitch ready at all times.

You need to show respect and put on your A-game. Appearance and packaging are important no matter how good the product or your team.

Expect Rejection

Just like when asking people out - a lot of people are going to look at you and your company and just say no. Rejection and pain will be your constant companion. You are constantly asking yourself, “why don’t they like me? Am I doing something wrong?”

You need to make the first move

After being rejected you may be shy about asking others out – which is a mistake. They may like you, but not be aware you are interested. This is the same with investors. If you don’t let them know you are out there looking and receptive to their interest then they aren’t going to offer. You need to make the first move.

Create openings for them to imagine being in a future with you

That initial attraction may fizzle at the first date. You need to have more than just an idea on PowerPoint, and you need to leave room for the other party to imagine how they can bring more than just money to the table. They need to be able to believe they can work with you.

Chemistry is important – but doubts may persist

Even after a few dates, consummation may not occur. You may be sending out signals, or not sending out signals about things that the investors are looking for. Who knows, there is chemistry at play here.

Pay attention to those who pay attention to you

One fundamental I’d like to leave with you is to never ignore someone who pays attention to you out of their own initiative. You can spend months chasing someone you like, but you need to pay attention to the ones who like you.

To put that even more simply, if somebody who has money to invest pays you attention you need to give them your full attention. There is a chance that they may be the only one to give you a chance for a while.

We all hear the stories about hi-tech companies where the CEO holds out for a better deal and then gets it. In dating terms they are like the supermodel who has no shortage of suitors and will look for the right partner. Are you really a supermodel? It’s one thing to have the attitude of one, but an empty bank account and maxxed out credit cards may help you change your mind.

The Ibis and the Seagulls

 A business parable  showing that experience and brains make a difference – trying hard is just not enough.

I was at the waterfront recently and saw something I though was a great parable for those of us in business.

A discarded McDonalds’ bag lay on the ground in the middle of the park. A flock of seagulls descended on this bag in the moments after it was discarded– they obviously knew that it was likely there would be leftover fries in there and they wanted them.

First one seagull pecked at the bag, then the second, and within half a minute there were 8 seagulls energetically pecking away at the bag.

A while later the seagulls were still pecking away at the bag, a little more slowly now, when a long legged ibis casually walked over (he’d come from the other side of the park). The ibis stood still for a moment, contemplated the scene, then casually walked over to the top end of the bag, stuck it’s long beak in the opening and pulled a few fries out.  He then got out of there fast before the seagulls could snatch the fries from him.

The moral of the story is – recognising an opportunity is not enough, and nor is enthusiasm and energy – you need to know what to do with it.

Why are cloud services so hard to understand?

Do you know what an hour of small instance compute time is? Neither do I – and I am no more enlightened after reading definitions for it. The IT world is losing billions of potential sales dollars by badly pitched services.

As one of the many millions of small and medium size businesses out there I am very happy to use cloud services and software as a service (SaaS) in order to make work and life simpler. To speak for small business owners everywhere – I spend a lot of my time setting up IT and sorting out IT problems. What I crave most in life is simplicity and reliability.

Some services are easy to understand. For example I have gotten rid of the need for an email server by using Google Apps – which also allows syncing across devices. I look forward to seeing Microsoft’s solutions as they finally roll out Windows 8.

For online storage Dropbox, Sharefile and others make life pretty easy – with some limitations.

And here is where we reach some of grey areas of the world of IT that haven’t figured out how to talk to non-IT types.

Like many business owners I really appreciate the per user pricing for SaaS. However, there comes a point where I want to look at a solution for the larger number of employees I have, and hit a brick wall in terms terminology.

I would love to have a scalable cloud based server – however, I realise now that even though I have been using the word ‘server’ for most of my working career, I actually don’t understand what a server is in a technical sense.

For me, like most people, there is the H: drive which is set up on my computer so that we can all save our files into a single location, open the files, edit them, save them, and even log on from a remote location. I believe this is what is called a file server.

Rackspace explains things in a relatively straightforward manner – but prices by the user rather than GB.

Windows Azure is powerful I know, but the marketing is written for IT geeks. E.g. “Load balance any number of Web Sites across private VM instances dedicated to your apps.”  Whisky Tango Foxtrot?

Amazon isn’t much better – “Amazon Elastic Compute Cloud provides the flexibility to choose from a number of different instance types to meet your computing needs. Each instance provides a predictable amount of dedicated compute capacity and is charged per instance-hour consumed.”

So, as far as I can tell, cloud services are marketed at large corporates with dedicated IT departments, startups with lots of IT savvy staff, or at personal use with massively dumbed down sales messages.

Dropbox may have a solution for Ted who’s about to travel around Africa, but it doesn’t tell me how to run my business more easily yet. I'm running a small business, not joining the Peace Corps.

Here’s my shopping list for the average small to medium size business (and remember, there are millions of us). Our defining characteristics are that we are time poor, intolerant of vapour ware, wary of non-mainstream platforms and need to be shown how something works before we trust it.

Let’s start with a shared drive (file server) based in the cloud. 

• I want a shared drive that I can use to open, edit and save documents easily. I want to set it up as an H:Drive or equivalent under Windows. If I need to sync I can just save a working copy to my C: Drive and then copy it back later. Full syncing can come later.
• I want to know that shared drive is backed up and recoverable.
• I may need to know where the data is stored in order to comply with privacy laws in my country (e.g. Google will host your data in Europe rather than the US in order to meet other countries more stringent privacy regulations).
• I need to be able to set access to those drives. For example, HR records and accounting should only be accessed by those who really need to know.
• I need to know what the up-time is and what security is for your service.
• I will get shirty if the typical maintenance time on servers at your end is convenient for US customers but affects me during working hours.
• Ability to access from mobile devices, etc. is great.
• Pricing – I am happy to pay by the user to a point. After that I would prefer to pay by the GB. Most of us aren’t multimedia intensive creative agencies who chew up massive amounts of drive space with videos and music. We mostly produce Excel, Word and Powerpoint files and after a certain level of monthly cost we start to get pissed off with your per user pricing.

Emails 

• Google Apps offers a fantastic service. Zoho and others also offer good hosted email plans.
• Outlook webaccess is good, but I hate using it compared to Gmail based solutions.
• Again, I am happy to pay based on users to a point- but then I would like pricing based on disc usage/bandwidth used.

  

Web hosting

• In case you hadn’t noticed, there is a rebellion against walled garden CMS’s. A lot of companies are moving to WordPress as their website and content management system – and there is a reason for this – it is cheaper, easier to modify and easier to update than most CMS.
• We are also sick of being told we need expensive graphic design packages, that we need to host it with the site developer at a premium, and we are particularly sick of being told we need to pay a lot of money to access our stats and put in SEO. You are using your technical skills to hold us to ransom, not enable us to be succeeding in a digital world.
• Google needs to get its act together on its own Google Sites and Blogspot services – they could, if they tried, take out a lot of website development and management. And hey, Microsoft – why aren’t you pushing the free version of your cut-down Sharepoint more aggressively and in language that I as a small business owner can understand.

And yes, there probably are some solutions out there that do some if not all of these things – but if it doesn’t come up in plain English on the home page of a large and reputable company then to me it doesn’t exist. Time to get your act together guys.

What if nobody can hear you tweet

Apparently if I don’t use social media for marketing to the maximum possible degree I am some kind of feckless Neanderthal idiot who doesn’t comprehend that the new generation is completely different to any generation who has been on this planet before.

Just in case you think I'm alone in my views – here’s an article by Arianna Huffington on the fetishization of social media – and she is one of it’s greatest users. This is the article that introduced her quote, "The road to social media hell is paved with well-intended hashtags"

There are also other technological solutions to help drive businesses that apparently I can’t live without.

Let’s dive into a few of the typical bits of advice and have a look at them rationally for a moment.

1) Build a relationship with existing and potential customers

Ummm…. Sounds great, but I now have regular updates on the businesses of my printer toner supplier, car dealer, furniture store, book store, software provider, business shirt makers, soft drink makers, websites, and so on.  The only thing I do now is delete their spam and resent their very existence.

Sure, send me info on great discounts every now and then, but please don’t kid yourself that I in any way shape or form am regularly reading your emails. I literally don’t care!!!

I don’t know how to break this to you. People don’t buy your product a second time out of anything more than habit. Loyalty has been found to be the same across almost all products and industries. It is somewhere between 65% and 75%.

And, NO, as your customer I do not want to have a conversation with you in any way shape or form. Life is too short and you are not a friend. Also, if you are any good you will already have a follow up process on sales.

Go stick your Facebook page and Twitter account where they belong – in the bin along with all the money you spent on those initiatives.

2) Build fan pages

This is great for big established brands where there may be occasional freebies. If you are a smaller company good luck getting fans who aren’t direct family or friends. By the way, have you read the incredible amount of utter drivel that constitutes fan discussions.

And don’t even get me started on ‘paid for reviews’ – the people doing them are so blatantly obvious. I now read book reviews on Amazon for entertainment value rather than on whether to buy the book or not.

3) Drive word of mouth sales

Yes, word of mouth sales are vital for growing businesses. The problem is that social media isn’t in any way shape or form a mouth. Word of mouth means that somebody you know will pass on your existence to people who might be interested. If you are a normal startup then nobody is coming to your facebook page, reading your tweets, or are even aware of your existence.

4) Get to the influencers

This theory goes along the lines that if only you can get to those super-connected social few who influence everyone else then some kind of marketing nirvana is reached. Unfortunately this is now considered by many to be sheer nonsense. Here’s why.

Let’s say a super-influencer gets to 3 or 4 people where a normal person only influences 1 person, that doesn’t mean that you can sit back and let your super-influencer can sell your product to everyone.  You still need to be selling to the broadest market possible.

Celebrity endorsement can work, but two things. First, you need to pay a lot, and second, just because someone checks your product out doesn’t mean they’ll buy it. Even worse, the effect is just temporary and you need to be running those ads for a long time to have a real effect – which I guarantee you can’t afford.

5) Viral video marketing

If you are stunningly original, or from a mega-brand, or have really great visuals, then maybe, just maybe if you are lucky something can happen.

For the other 99.9999% of us the viral video gets lost in the lower levels of YouTube hell. This isn’t predictable or worth spending the money on.

6) Crowdsource

Crowdsourcing is both fascinating and also a wonderful example of human behaviour.

At its most basic level crowdsourcing confuses participation with creativity. Yes, there are always some people out there who are willing to give their ideas away or at a low price in order to fulfil their own needs of participation or altruism.

Think about your own attitudes. When you first participate you are excited to be part of a bigger thing and give up time and energy to contribute. However, that initial “PASSION” quickly dies when you see other ideas taken over your own, plus the quality of contributions are, to be polite, variable, and even worse others blatantly copy your ideas.

On the buy side of crowdsourcing it is not straightforward – I have done this.

First, your brief has to be written in clear but simple English – you will have a lot of contributors for whom English is not a first language.

Second, you will get a lot of blatant copyright theft contributed as an original idea – so you need to have an idea about the field you are crowdsourcing about.  Do not underestimate this problem coming from the mashup generation – you could be on the receiving end of some nice lawsuits if your company actually starts to make good money.

Third, you need to spend a lot of time responding to the hundreds of requests, encouraging people, telling people ‘no’ in polite language so you don’t get flamed or a bad rating, etc. 

Finally, you are exhausted and over it.

Here’s a radical idea – find out what the basics are in business (they haven’t really changed in hundreds of years) and then go apply them. The internet hasn’t so much fundamentally changed business as just provided another channel to practice it.

Never Again Without Equity – the NAWE Principle

The insane hours and pressures associated with a startup or any new business initiative take their toll on your health. Stress levels are high and you are likely to just go home and zone out instead of spending time relaxing or exercising. This is sacrificing your long term health in the name of business objectives.

I am world class at doing this and have been hospitalised with ectopic heart beats and full blown anxiety attacks which have pretty much the same symptoms as a heart attack. Over time I have become better at dealing with stress, but recent events have driven home the need to talk about this to you all with the stories of a couple of good friends who have both had heart problems in their mid-thirties – stress induced.

I want to talk about this in case you recognize a bit of yourself in these stories and can act on it.

Also, if you are going to take yourself into heart attack territory by working on a startup, then you need to make sure you are compensated through a decent amount of equity. The reason for this is that most of us only have one or at most two startups in us before we realise the stress is too much. So, if you are going to go there have the self-awareness to know that this will likely be your one shot at the big money. It was my personal experiences almost killing myself for a ground breaking large scale government funded clean energy technology breakthrough project that made me come up with the NAWE principle.

On to the stories of my friends – names and details changed of course.

Case 1) David joined a small wholesale distribution company in his late twenties. The economy was starting to boom, and he quickly became an integral part of the growth of the company. In the course of eight years they went from being a three truck operation with a single warehouse to being one of the biggest distributors in the country with over 60 locations, a large fleet of trucks and 65% market share.

David was always reliable. At work from early till late. His wife and kids rarely saw him as he was always at work fighting fires.

When a company grows that fast nothing ever works as it should, and as one of the senior managers he was there to make sure things worked out. The owners always looked to him to solve problems because he would always step up to make sure things were done.

He wasn’t sleeping well, drinking way too much and wasn’t eating well.

At 36 – boom – he had a heart attack and had to quit his job. His only thanks after being an integral part of the team that grew the company was a pat on the back and a hand shake –(REMEMBER - GET EQUITY!!!).

David took a few years out to reprioritise his life, and now talks about how he tries to enjoy every day, and look for solace in religion. I really appreciate this new David, but unfortunately he is still taking responsibility for other people's problems and working really long hours for a new company – again without equity.

Case 2) Debby has been running a startup for a few years. Debby has been living hand to mouth for two years and it is getting to her – she is 35 and she is now having stress-induced heart problems.

Stress-induced heart problems are unusual in that you may not have clogged arteries or problems with the hear muscles. Doctors haven’t really figured out the exact cause, but they know that the underlying cause is extreme stress.

Debby is one of the smartest and most commercially and people savvy entrepreneurs I have ever met.  It doesn’t matter what life throws at her she sees the opportunity in it. She adapts, evolves, deals with it and moves on. She communicates her vision better than anyone I have ever met. I have seen her walk into a room of complete strangers and have them asking how they can be involved within minutes.

Customers do sign up for her service and she has enough money to trickle on from month to month. Every day the service is getting better, but somehow it is never quite good enough for the flood of customers or investors to come in. “Some day soon,” is her normal refrain.

Debby keeps the faith in her vision and I truly do believe that it will come good for her soon – if she can stay alive. You see, two years of getting up every day not knowing where the next sale is coming from and dealing with all the issues of the startup has gotten to her. Optimisim isn’t enough to counteract 18 hour days and extreme uncertainty. At least Debby has a lot of equity in her company.

So, if your relationships and your health are suffering from too much uncertainty and stress here are a few tips for you.

1.   Spend time with family and friends talking and listening to conversations about non-work related and preferably trivial matters.
2. Talk to your partner about what’s happening in your life. This can be hard as they mightn’t be able to help. For example, I found that if I shared even 5% of my average day my now ex-wife would have a full blown panic attack and wouldn’t be able to function herself. What I have found is that sharing important decision points or moral quandaries is good.
3. If you don’t have a partner, then get a dog – they are always happy to see you. They like routine and force you to do things. “Come on – let’s play fetch, you know you want to.”
4.  Get good sleep – this is an old saying but it really is true. At least sleep in on weekends, and if you can go to bed early and wake up when your body makes you.
5. Watch your caffeine intake. I don’t mean that caffeine will give you a heart problem. I mean this in the sense that caffeine is a stimulant and over the longer term it will affect your adrenal system. You know when your adrenal system is overloaded through stress and caffeine as you are absolutely exhausted the next day. Ever notice how movie stars are hospitalised for exhaustion – that’s just a nice way of saying they have been abusing cocaine to the point their adrenal system has gone on the fritz and they are truly exhausted.
6. Avoid excessive hours – I know this is hard to do. I do project work at short notice and work insane and intense hours. Now that I am in my forties I should know better. I can still do those kind of hours, but unlike in my thirties when I just bounced back and went on to the next job, I now collapse for a week or two afterwards and almost inevitably have a cold. I worked insane hours for most of the last month and I am barely functioning right now. You can’t keep those hours up. Learn how to delegate and hire people if you need to.
7. Get a hobby. Painting, team sport, music, gardening, or whatever floats your boat. The main thing is that when you have something pleasurable to focus on it completely distracts your mind from all the other thoughts that are running through it. It is like meditation – you go to another place. If you have trouble working out what to do as a hobby, think back to the things you liked to do as a teenager – odds are that you haven’t changed.
8. Leave your work at work. This is one of the hardest to put into practice, especially with the continuous urgency of working in a startup. Make time to deal with issues during work hours. If your work is bleeding into your home life, then try keeping a notepad or your smartphone next to your bed. When you think of something that needs to be done you can write it down so you can deal with it the next day rather than mulling over it all night.
9. Delegate upwards and downwards. Let’s be blunt – often senior managers in company get there because they can make decisions in stressful situations and not get overly stressed. This is a polite way of saying that senior management is populated by an unusually high number of people with sociapathic tendencies – i.e. very low empathy and aggressive. If you are known for getting things done and they just pile the work on you then you need to learn to bounce things back up – “ Sorry, but I don’t have time to deal with that this week, what would you like done by when. If it is truly urgent, you should check in with Francis.”  Also, you need to learn to delegate downwards better. Yes, things take longer and need a lot of correction and quality control, but you will get more done in the end.
10. Forgive yourself – most of all you need to realise that you are only human and despite your need to get everything done properly and never disappoint anyone – it’s not possible. I am not talking about giving up and accepting sloppy work. I am talking about truly forgiving yourself for not being able to do things as you expect they should be done.

Then there’s all the usual stuff about diet, reducing alcohol consumption, etc. That’s all true, but ironically that is as much a symptom as the problem. If you actively work on reducing your stress levels you will find that your diet and drinking get back in control.

And make sure you have a good equity stake in whatever it is you are doing, so even if you do have the heart attack you can make some money out of it – NAWE!

At least act like you’re in charge

After a couple of decades of study into what makes a leader the conclusion is that a leader is somebody who other people follow. Peter Drucker may have said something to that effect.

I have been travelling for business for a few weeks now and have a couple of vignettes for you to highlight this.

Scene 1

I am sitting in the dining room at a major hotel in Asia and the CEO of a mid-sized US company walks into the room. The manager of the dining room is a strutting rooster of a stereotypical alpha male. He is in charge and his body language shows it.

When I walked in I deliberately ignored this manager, which is the kind of reaction you learn when working as a consultant to senior managers at large companies. If you want to swim with sharks you learn not to act like food. Okay, I was probably acting like an asshole – it happens sometimes.

However, this CEO reacted like he had been cornered by the school bully. He immediately showed non-threatening deference and submission, backed up a few steps and then asked permission to sit at a table in an almost empty restaurant. Whisky Tango Foxtrot!? was the first thing I thought when watching this playing out in front of me.

For all I know this guy is extremely successful, but he reverted to some long held behaviours. In the space of 5 seconds he had revealed all anyone needed to know – he doesn’t believe in his own ability and may in fact feel like an imposter.

Mind you, within 5 minutes he had spoken to every good looking lady in the room…. hmmm…. maybe he is used to presenting himself as non-threatening.

Scene 2

I am at a restaurant in another Asian capital city with a man who is a rich and successful entrepreneur, and he was giving the staff a hard time.

“Can I have your pen? I need to write something.” – said to a passing waitress.

“Pass me the salt.” – it was only a couple of inches out of his reach, and he wasn’t going to stand up so he asked the staff.

He also took a phone call while the waiter was trying to take his order. He wouldn’t order, but he wouldn’t let the waiter go until he had finished either.

Naturally he ordered items off the menu.

Thanks to Neal Stephenson I now know that the act of giving people things to do is called ‘tasking’ them. When you task someone it immediately establishes a pecking order – you’re in charge. I’ve seen it in entrepreneurs and I’ve seen it in conmen – tasking is one of the basics of being in charge. However, it can be taken to an extreme where it becomes a bad case of self-entitlement.

This guy thought he was being fair – he was just busy. He gave the pen back to the waitress who was genuinely surprised to see it again. He apologised to the waiter, saying that if he couldn’t give his order in a hurry then he’d have to leave before eating, and he liked the food there.

Okay, maybe he did explain himself, but he was remarkably self-centred about it all. But you could see that he was a natural leader – he had complete strangers doing his bidding within seconds.

Needless to say, while I am happy to provide services to this guy, there is nothing on earth that could convince me to work with him… I’ve been there before and I am not going to do it again both for my health and my sanity.

The first guy displayed too much fear and deference. He might inspire people to protect him and I guess that is a form of leadership, but not a great one.

The second guy walked into the room knowing that everyone was there to help him when he needed it. This is leadership, but it is also a form of dictatorship. It really is at the bully end of the spectrum.

As a leader, you need people to follow you. Even if you don’t feel like you are a leader, at least act like it.

Actions speak louder than words

Recent events in my life have reinforced the meaning of this phrase.

As the psychologist Gordon Livingston says in his book ‘Too Soon Old, Too Late Wise’ while we are verbal creatures it is our actions that count.

• As a customer I value being called back as soon as possible after leaving a query.
• As a consultant I value hearing a robust opinion or disagreement so we can sort things out, rather than everything going quiet for a long time and then being told that things aren’t working out.
• If you say you are going to do something, do it, otherwise don’t commit to doing it.
• If you are running late on delivering something, tell me and we can work through what we really need and how we can achieve the outcomes over what timeframe.
• If you offer discounts through promotions, then make sure they are genuine and not just a bait and switch tactic.
• As a co-worker or employee – if you don’t understand, find a way to say that, even if you do lose some face.
• Show you care for people through your actions. Often it is the small gestures that make the biggest impact.
• To win work, sometimes you have to do work at a loss to get in the door. Often all a customer needs is a little information to help inform them of what decision to make. Give them that and they will remember and may return the favour with business or referrals in the future.
• Touch base with old customers – not in a CRM ‘I want to sell you more way’, but to genuinely check out that things are still working for them.
• Show respect to people who offer you constructive criticism, especially if they are your manager. Not listening, arguing and not following advice just shows that you don’t believe they have anything of value to offer.
• Turn up to meetings on time, or a few minutes early.
• Don’t talk badly, or act vindictive when people leave your employ. This just debases the loyalty your remaining people have.
• By acting ethically and following the law you are setting the tone for everyone else. If you take shortcuts on everything and always work in shades of gray, don’t be surprised if this comes back to bite you.
• Look for people to reciprocate actions. If you are doing all of the work, or all of the giving, then you are dealing with a one-sided relationship. Either fix that or end it.

Copy till you drop

I both love and hate reading about successful companies and what it takes to make it. Basically most of the popular press writes variations around a theme – it’s the old tale of geek made good. What they don’t tell you is that for every geek that makes it there are tens of thousands whose grand dreams go splat like bugs on the windshield of the real world.

If you are in business, these successful people are not role models – they are statistical anomalies. Face it, if you were one of those people you would know it. Here’s the good news, success in business is about identifying good ideas and most importantly acting on it. For every ten thousand people who talk a good game there’s maybe a single person who will go out and do something about it.

Zuckerberg didn’t invent social media. Bezos didn’t invent the book club. Apple didn’t invent the MP3 player. The guy came up with eBay didn’t invent auctions. But they did make them better and by doing so built a big customer base.

There’s an old saying – Pioneers end up with arrows in their backs, the second generation break even and the third generation make a profit.

If you read your local newspaper you will find a lot of articles about how a feisty and young company is redefining the way a business is done. It could be music recording, roasting coffee or selling real estate. It makes nice news copy and readers like it as they like to see that someone is having a go.

The old hands in business, however, let new startups go through the pain of pioneering a new way of doing business. If you actually succeed, then they are going to come in with more money, people and experience, and leverage their existing brand to take you on. Hey, you might well win, but I’d stake good money on them doing better on average.

Your competitors will be watching you at every turn and matching what you do and trying to one up you all the time. Over time I have really come to appreciate the old saying that you need good competition to improve yourself.

If you have a fantastic idea, unless you have millions to spend on protecting every aspect of IP in every nation on the planet, you cannot protect your idea from being copied.  Even then you will spend all your time in court defending your IP and not building your business. Plus it is almost guaranteed that in some way you are infringing someone else’s IP and they will patiently wait for you to be very successful before they sue.

From a startup point of view, I’d say to you to have a good look at what is working and what is not. For example, a lot of people think they can do online coupons in a better way than Groupon – some of them will succeed.

When you next have someone at a dinner party telling you that they want to come up with the next Facebook, just smile and tell them you are thinking of getting into Real Estate or selling cars.

Let somebody else prove that a market exists, establish pricing and legal precedent and then follow in their slipstream. Never be ashamed from taking inspiration from a good idea.

Creating a digital identity for life

Everything is rapidly becoming digital. E-books, music, tv shows, movies, newspapers, medical records, work records, Facebook, Linked In, etc.

What this is all pointing to is a day in the not too distant future where a lot of what of what we own is in fact digital

At the moment your digital assets are stored on devices with an 18-24 month lifecycle. With software as a service, plus services such as iTunes and Amazon we now have back ups of digital assets that we can recover when our devices die.  However, many companies die the natural death of an unsuccessful business and we have digital assets that we can no longer access, or even worse belong to others.

Combine all this with the amazing amount of log in names and passwords we have to remember, credit card details to keep up to date, and keeping track of the privacy issues that each app or service we sign up for entails. We are all going slowly nuts.

In answer to this, I dream of the day we have a single digital identity that we can use for all our dealings with the digital world. In legal terms this would be called a digital legal person.

I am not talking about an avatar here, I am talking about all the digital information about you and generated by you being kept and controlled by you.  The following are some examples of what I mean.

Personal details such as place and date of birth, birth certificate, car licence, spouse, contact details, emergency contact details, passport details etc. are stored and you can give access to them to appropriate parties such as banks, or government when you need to.

Medical records all attach to your digital identity. You can’t access themselves directly, but you can grant any doctor access as you wish. Basic information such as blood type, pre-existing conditions, etc. would be available immediately to health care and emergency workers.

School and university enrolment records and results could be stored and made available to employers, or to your parents for school results.

Digital assets you buy such as e-books, magazines, software, newspapers, images, music, movies, tv shows, pod-casts, etc. would have licence details recorded so you can access them for life. Like any asset, you can lend them to friends, give them away, or even pass them on in the case of death. Once you pay the licence, you have access to that digital item for life – regardless of device or how many devices.

Digital assets are going to get more complex in the future. To give one example, the manufacturing industry is rapidly moving towards 3-D printing. This means that in the future you will buy the licence to a design that you like for a piece of furniture, a sculpture, a toy or even plates, cups and cutlery. Some licences will be one-offs. There could be a warranty period where you can re-make something. Or there even could be a long term, if not perpetual licence.  Imagine handing down an antique design to your grandchildren.

When you want an item, you can take it to a 3D manufacturer and have it made. Imagine moving interstate or internationally and simply getting your favourite furniture and place settings remade.

This is only a glimpse of where things are going. There are even plans afoot to do complete digital house designs that can be 3-D printed. The implications for digital assets and the complexity of managing them are enormous.

You should have the creation rights for digital assets you make attached to your digital identity. Through this you can receive payment for usage, and you can even onsell your rights to royalty or usage, but you remain identified as the creator.

Online transactions are becoming the norm, and instead of the clumsy credit card system we have at the moment, how about your digital identity completes the transaction and ensures that payment is made for valid contracts.

Governments can attach all sorts of files to your digital identity. For example, your tax returns, benefit information, record of convictions, and much more. You wouldn’t have access except as allowed.

Tax returns could be made a lot simpler for the average person. All your income would be recorded. You could record your expenses from any source with your system prompting you to classify them appropriately after the transaction. You could also keep buying and selling of real estate, shares and other items in the records too. Your company would lodge how much tax they have paid for you, and how much has been paid into your retirement fund/superannuation. Your accountant could prepare your return almost instantly, after verifying a few things.

Think of the really annoying paperwork that goes with taking out a bank loan, buying a house or other big ticket items. What if all the forms to be filled in could be filled in by your digital identity. Think of all the time and effort it would save everybody. You don’t have to go hunting for all the bits of paper required as proof as it would be with you all the time.

Imagine being able to seal a complicated deal with a literal shake of a hand and saying yes to your digital identity.

Dealing with privacy would be an interesting issue.

At the moment what you put on line stays on line. Take social media by way of example. Imagine signing up to a future version of Facebook. Facebook would query your own privacy settings and agree to what can be shared publicly or not.

You would licence that future version of Facebook to post your comments, images, videos, etc. for the period of time you are with them. They could then use that information for their own commercial purposes for the period you have an account with them.

When you close your account, all your postings and prior information are deleted.

It could be the same with apps. When I see the amount of personal information an app is asking for to provide inane or one off services I often cancel a transaction on principal. How about your digital identity sorts out what matches your privacy and security settings and then allows the transaction or not. It could also monitor usage and ensure that it complies with the licence terms. If the licence terms change, your digital identity could monitor this and withdraw from the service.

The key of all this is that your digital identity is in your control, and you licence use of some of it at your control.

Now, take a deep breath and allow me to plunge into this even deeper.

We as individuals have multiple identities. We are one person to our parents and siblings, we are a different person to our spouses/partners, and we are yet again another person to our work places.

If we are looking at the digital world, this is going to get messy, and it will be complex. We fall in love, we divorce, we change jobs, we work as volunteers, we get sick, we change our minds…. In other words we are humans.

For most of us the natural grouping is the family and we share our physical assets, so how can we pool our digital assets in the family group instead of as individuals.

Many tech companies have made the transition to the idea that individuals are important and licence usage on a number of devices under the same licence. For example, you can have a kindle book on up to 5 devices at the same time.

If we assume a digital identity then it could be possible to do things on any device. Just like now when you can use a browser to log on to software as a service connections – but this could extend to almost any device.

How about a future where internet connection is ubiquitous and open to all devices. You would be charged for individual usage rather than infrastructure. For example, you could be visiting a friend and use their internet connection to make a call, download a video or whatever. You would be charged, not them. You could also use the internet connection at work for personal reasons and they don’t pay or see what you did. Maybe there could be a small contribution to the host for the cost of the physical connection to encourage some commerce in all of this. To deal with digital poverty there could be public connections that have some restraints on what can be done.

When you die, your digital identity remains active for official purposes plus inheritance of digital assets. You could sort through photos and videos, deciding what to keep or not. You could transfer ownership of e-books, or other digital assets. Accounts with software and other service providers would automatically close, or be transferred, and the public record of your life such as tweets which are often painful for the bereaved to see again are removed.

As to how this will happen, I have absolutely no idea.

Somehow, you would be given a digital identity at birth. Your parents would have the same rights and controls over it as they do now until you reach your age of majority.

Somehow it would provide some public access but also be secure from theft, alteration or damage.

Using your identity could be an instant thing like an RFID chip, or it could take longer. Speaking of something more instant, imagine taking a photo of a group of friends and everyone in it would be identified and sent a copy of the image automatically.

Yes, there will be huge privacy issues. It is clear that we are moving into a world where we are all more public, so the thoughts above are intended as thoughts on how we can cope with the privacy issues rather than trying to go back to a time when they didn’t occur.

Anonymity could still be possible through the use of aliases. You could use a fictitious identity to do things you don’t really want to share with anyone. Your real digital identity could then back up contracts by agreeing to terms and making payments. Contracts could be upheld, but with identity preserved, and if you break the law, officials could have access to your real identity.

I could keep writing for ages on this idea, but I think that’s enough for one day.

I can’t wait for this future to arrive.