Tag Archives: entrepreneurship

Entreprenurship, Behind the Scenes, Behavior/Magic and Economics

Entrepreneurship: Gina Trapani discusses all kinds of neat tools, applications and vendors that can help a new business get started.

Behind the Scenes: Robert Scoble takes us inside of Zappos.com and how they can create a corporate environment that keeps their employees excited and their customers enthralled by their service.

Behavior: An article on neuroscience probably would not have caught my eye, but bring Penn and Teller into the conversation and I am hooked.  This article talks about how magicians utilize flaws in our perception to amaze us.  I viewed the balls and cups clip 3 times and still I didn’t catch everything.

Business Economics: The US Postal Service is one of those organizations that we take for granted.  6 days a week, we will have a red, white and blue truck drive up and deliver our mail, most of it “junk mail” or what the USPS calls standard mail.  What we don’t think about often is how fiscally responsible they are, what are their unfunded pension liabilities and how they make money in the age of the Internet.  This article sheds some light on how the USPS operates and offers some suggestions to make the service more effective.

How we interact with email

I remember when I was young, my mom used to write all of her friends letters on real paper and put them into the mail.  She would get handwritten responses that she could keep and treasure.  We could identify the letters from this friend by the foreign stamps and from that one by the color of ink she habitually used.

Many people have written about the lost art of writing letters.  I don’t want to argue the merits of that topic right here, although a handwritten thank you card can work wonders.  It is always interested me to read the letters between historical figures.  You can get a better picture of the people behind the public persona by reading the conversation between two people. If you have those paper documents, you can keep an archive.  This archive can then become the basis for understanding and illumination.

Today, what I want to discuss is how we can manage our communications today, especially email.

For a while there, it seemed that email was totally fungible.  I don’t have my emails from 1999 or 2000 or even 2004.  Yes, I know that they are probably out there somewhere on some archive in at old ISP (remember this for when you write something that you shouldn’t have), but certainly not in a place that can be accessed easily by my biographer in 50 years.

Google Mail has changed this for me in a big way.  It can be the same with other on-line, cloud based email services. The search capabilities and large storage capacity of these services allow you to search for old correspondence in a way that is much more helpful than reading those old piles of handwritten letters.  Don’t remember the site that had that neat financial tool?  Just search your archived mail.  How did we resolve that board question?  Review all of the relevant documents from one screen. Google gives you over 7 gigabytes of storage (and counting) in each mailbox, so that you can keep all of your emails in one place.

The challenge with this is that besides search, the tools available to help you mine the information in your Gmail archive are limited.  Sure, there are labels and filters.  Labels are great in the abstract, but as you get significant amount of mail, it becomes difficult to tag each email before archiving.  Filters can help with the labeling, but you have to know the circumstances for which you need a filter before you need a filter.  I’m sure that there are a lot of you organized types who put both to good use.  But me, I’m not so much on the organized side of things. So, what can one do?

We tend to think that the young among us are most technologically centered.  They can quickly adjust to different tools and utilize social networking to the max to achieve their goals.  However, it is interesting to note that several of the young entrepreneurs that I am mentoring have mentioned in recent meetings about the difficulties that they have responding in a timely fashion to the deluge of emails that they receive every day.

The reason that this came up was in relation to an article I read on Gigaom about Why Email Clients Need to Change?.  My email box does not look like Alistair’s, but I have the same types of problems with an email deluge. His ideas on adding features to our email clients that help us make better use of both our incoming mail and our archived mail make a lot of sense to me.

How do you manage your email?  Do you keep everything or are you a deleter? Would the tools mentioned in Alistair’s article be helpful to you?  Do you have any others that you want to add?

Networks, Video and Entrepreneurship

Networks: Kevin Kelly wrote a book called New Rules for a New Economy in 1998. He has reprinted them as a series of blog posts and they are more relevant today than when they were first published.  A recent post talks about the mathematics of networks.  Don’t be scared.  The math is not difficult but the results are critical to our understanding of social networking.

Video: If you ever get the chance to see Seth Godin in person, do so.  If you can’t find the opportunity or want to see what I mean, check out this video from 3 years ago.

Entrepreneurship: Raman Chadha, from DePaul’s Coleman Center for Entrepreneurship writes a great article on venture funding.  I have long had the same kind of thoughts on entrepreneurship and whether angel or venture funding is right for even a small percentage of start-up ventures.

Tools, Behind the Scenes and Entrepreneurship

Tools: Zamzar.com is an online file conversion tool. It will take almost any kind of document, spreadsheet, presentation, text file, compressed file, audio file or video file and convert it to another format.  One of the neat new tricks is to convert a document into an audio file.  It is not a professional reading the file, but it is serviceable.

Behind the Scenes: Another in a series of posts that discuss the creation of something that you take for granted from a behind the scenes viewpoint.  Today’s topic: Magazine Subscriptions.

Entrepreneurship: Tim Ferriss, author of The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich is a polarizing guy.  Some people love him, others… not so much.  Today, he talks with leading venture capitalists about what they look for in new business pitches.  For all of you entrepreneurs looking for capital out there, this is required reading.

Economy, Entrepreneurship and the Government

Economy: Nassim Nicholas Taleb, author of  The Black Swan: The Impact of the Highly Improbable writes today on the Financial Times about 10 things that would help us to grow beyond our current economic crisis (and prevent another).

Entrepreneurship: Paul Graham writes about an interesting way to get entrepreneurship jump started in the US: change immigration law.

Government: Here are some factoids that I learned by looking at this chart:
The FBI costs half as much as the FAA.
We spent almost twice as much for Mine Resistant Vehicles as we did to fund the entire National Science Foundation.
The Office of the Secretary of Defense costs 11 times more than to run the Office of the President.

What did you find that was wacky?

Entrepreneurship, Netflix and Microbes

Entrepreneurship: As an entrepreneur one thing that we all need to do is to network.  Now, I have gone on record as saying that I hate the kind of networking that seems like speed dating.  But some helpful tips on how to introduce people well is always helpful.  Marci Alboher writes about the Seven Deadly Sins.

Behind the Scenes: Another behind the scenes article caught my eye.  If you have ever received the familiar red envelope from Netflix, here is a photo montage that shows you how they do it.

The Big Picture: The germophobes among us who continually use Purell and Lysol have helped to create Antibiotic Resistant Microbes.  These microbes have become much more prevalent in our world and will continue to be a significant infectious disease problem.  Bonnie Bassler presented a talk at the TED conference this year on how microorganisms communicate which might prove to be useful as we look for therapies for these diseases.

Magic Numbers

I get really jazzed up at this time of year.  Some of it is the magic of springtime, green grass, cycling again, robins chirping.  But mostly it is because baseball is back.  Baseball conjures up in me many things.  Partly it is the memory of “having a catch” with my dad (and continuing the custom with my kids).  Some is the love of the teams and the rivalries (Red Sox vs. Yankees and Cubs vs. Cardinals).

A lot of what we love is related to the ways that we can follow baseball.  Sure, a day at Fenway or Wrigley can be a memorable event. Following the box scores in the paper or watching SportsCenter can stoke the habit.  But in the end, baseball is a complicated game, full of arcane rules and strange rituals.  One way to make it easier to understand is to break it down into numbers.  Everyone knows about batting averages and ERA.  If you are really into baseball, you might know PECOTA, OPS and SLG. These stats help us to visualize, compare and project a team’s future.

In business, as well, we can use stats to help us understand where things are going.  I like to talk about these as Magic Numbers.  Everyone is familiar with the biggies — Net Profit Percent, Average Ticket for a restaurant, Return on Investment, Debt to Equity ratio, P/E Ratio.  But every business has (or should have) some specific measures that are important to its health.  These should be easy to calculate, presented on a regular basis (daily or weekly) and help the manager to forecast where the business is going.

For example, when I was running my consulting company, we had a few numbers that we tracked weekly.  They included Cash in Bank, Average A/R Days, Utilization %, Sales Pipeline and Backlog $.  Some of these were trailing stats; that is, they told us of what had already happened — Cash, Avg. A/R Days and Utilization fell into this category.  Pipeline and Backlog were leading indicators.  Pipeline told us how many deals we had in play for how much and when they were expected to close. We used an expected value (Expected % of Close * Dollar Value) as a tracking mechanism. Backlog told us how much work we had on our books that was signed by the client, but was not performed yet.  We needed to keep backlog increasing through sales at a reasonable rate.  The working off of the backlog would take care of itself; every week people were decreasing it.

Norm Brodsky, an entrepreneur and columnist at Inc. Magazine wrote about his use of Magic Numbers and how the practice allowed him to forecast a downturn in his business.

Sometimes Magic Numbers can be developed that will help you understand your market, while measuring things totally outside of your sphere of control. There are stories about people who count the number of cars in a mall parking lot to determine if their restaurant’s prognosis is up or down.

So, the question is do you employ magic numbers in your management process and if so, what types help you to forecast the health of your business?

Bad Economy

From time to time, I will give the floor to a guest blogger.  Today is one of those times.  Meet Howard Bender.  Howard is my friend and also the owner of the only Jewish delicatessen west of Chicago, Schmaltz Delicatessen.  Today, he talks about the need to look for positives in the current economy.

In a world filled with miserable attitude, bad economic times and lots of self-fulfilling prophecy of failure, an attitude as a small business owner and entrepreneur to be a survivor as opposed to a victim is everything. I just want to point out one trashy note today that can snowball and lead to a bottom line of success for me. I have never in my lifetime seen such a buyer’s market. Our vendors are scared of losing us, we are scared they are mistreating us, our customers are looking for more value with the same quality, our bankers are scared and our families are nervous.

In our business, we have driven down on our expenses to re-evaluate each and every line that sends cash out the door. We began about 45 days ago, re-bidding out everything from food and supplies to garbage and toner. Today, I sat down with our bookkeeper and looked at 3 competitive bids on garbage removal. Each and every one was 30% less than our current vendor. Shocked, dismayed and thrilled all at the same time! But wait, our current vendor’s service is superb. Let’s call them too! After reaching our current vendor, putting it on the table in a honest and real manner, I am pleased to say we now pay 30% less for superb, consistent service.

Now, there was a time when I would have felt I had been screwed for many years and no matter what,  I will switch garbage vendors just for that. But having spent the last couple of decades in this business working for hotels, restaurants, bakeries, and even on the other side as a foodservice distributor, I am convinced I have not been getting screwed. In fact, up until just months ago, I was paying a very competitive price. We bid this service out a few times over the last few years and all vendors were around the same price that I was paying up until today.

The rules have changed. They have changed for me, they have changed for my vendors, and they have certainly changed for my customers. The concept of competitive pricing is swinging on the pendulum. Always competitive but only the price changes. So in the inflated economic times of a few years ago, the price was competitive… and high. Now our competitive price is on the other end of the pendulum and is very low. The trick is to get a contracted price at the end of the pendulum… I’m working on it. I’m also opening my eyes a little wider to asking every vendor for a break… everyone knows they will charge more when they can. When I was a sales manager for a foodservice distributor, I used to tell my sales staff that if your customers are not complaining or questioning your price, you are not charging enough. Today is a really, really good day to question.

Entrepreneurship, Urban Studies and Grammar

Entrepreneurship: For anyone who needs to give a killer presentation or just to prepare a cool way to show mixed media, check out Simile Widgets Exhibit.  It is open source and free to use. For a helpful introduction, see what LifeHacker has to say.

Economy: Based upon the news media, it would seem that the whole country is in a deep recession.  However, Joel Kotkin writing on NewGeography.com talks about a swath of middle America that doesn’t seem to feel the pinch as much as the rest of us.  The article also takes an in-depth look at the center of this swath, Kansas City.

Grammar Police: Those of you who know me well, know that I have, occasionally taken my red pen to a document.  Most often, I use Microsoft Word’s track changes.  But if you want to know what is right to write, check out this comprehensive site by Paul Brians.

The Business Plan

Nothing sends shivers down the spine of the new entrepreneur more than the idea of writing that business plan.

Over the past several weeks, I have had the pleasure (?) of reviewing a number of business plans. Some were for a business plan competition, others were for companies that I have been advising and still others were presented as part of a class that I have been taking.

It is very instructive to me to see how people treat their business plans.

A very few build their plans so that they can be used as a real guide to build and grow their business, much as an architect uses a blueprint to guide the building of a house. However, often they forget that another reason to write a business plan is to sell your idea to an investor or a banker or a vendor.  You need to have that hook in there that explains the mystery of WIIFM (What’s in it for me?) for the reader.

Others use the business plan as a marketing piece. The more graphs, flowcharts and photographs the better. If you can find a way to throw a video in there, it must be golden. Market size, the entire population of the US? Develop a comprehensive  financial or operations plan? — they figure they’ll get those sorted out when they get the investor bucks.  Um, sorry, but investors want to understand how the business will make them money. That WIIFM concept comes back to haunt us.

In reality, the business plan is an exceedingly hard document to write.  It has to function in both modes, as a management tool and as a marketing piece.  If you look at writing the plan as something that you have to do to check the item off the entrepreneurial checklist, I can almost guarantee that the final product will not achieve what you want. If you do not have a few trusted people edit the document and provide feedback, it will not achieve what you want.  If you do not take the time to lay the document out clearly with a title page, table of contents, headers, footers, section headings, spell check, grammar check and possibly footnotes, it will not achieve what you want. If you don’t make sure that your financial statements tie together and are reasonable, it will not achieve what you want.

And the sad part is that an investor or banker probably sees hundreds of business plans a year.  They probably spend an average of 5-10 minutes scanning the document to see if they should invest the time necessary to evaluate the plan.  You may have the best widget or service on the planet, but if the plan doesn’t sell in the first 5 minutes, you may not get a chance to present to the target.

The business plan has to be able to clearly explain what the business is all about, why it is necessary, who will buy from it, how you will operate it, who will have what responsibilities, what the financials are projected to be and what kind of returns an investor can expect.

In the past several weeks, I haven’t read one plan that met all of these criteria.  But I remain hopeful that I will find the Holy Grail sometime soon.