Why Don’t People Think In Terms Of ROI?

2 December 2011 | talking about Leadership, Small Business

Something that bugs me is entrepreneurs who are starting a company or making an investment but do not think in terms of return on investment, or ROI. Simply put, ROI is an estimate: if you invest a dollar how much will that dollar grow to? Typically you calculate your ROI as a percentage. Lets say I invest a dollar today and 5 years from now that dollar is worth $1.20. That means you got a 20% return over 5 years (or 3.71% per year).

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Also, for the record this rant is not in relationship to the Mark Zuckerbergs, Bill Gates, or Steve Jobs of the world. These guys all started companies when they had no financial worries. The only risk was failing and going back to college. I am speaking the commoners, those who already have jobs. Those who already have a family. Those who already have a mortgage and a car payment. I am speaking to the people who buy rental properties, start web companies at night, or quit their job to go all in on a ice cream shop -not kids in dorm rooms (many of us missed that boat)
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Restaurants Telling Me To F-Off

30 June 2011 | talking about Customers, Management, Small Business

restaurant credit cardSure, strong title. Yeah, maybe I am over dramatic, but let me paint a picture for you. I walk into a mid-grade restaurant. You know the type. The type of restaurant you go for a quick snack, or maybe a few beers with your buddies. Not a night club were there is a high chance of people getting drunk and making poor decisions. You might sit around the bar or outside on a patio. Then after being all friendly with the server and placing your order for your first round of drinks the server says “could I get a card to hold”? The server wants to hold on to your credit card to make sure you do not run out without paying the bill. I am never mad at the server I am sure it is a restaurant policy. By doing that, the restaurant management is telling me: “We don’t trust you to pay your bill, we need insurance”.  I translate that to the restaurant telling me to “F-off”.

Imagine you walk into some sort of shopping store and someone greeted you and said “Let me see your wallet, I want to make sure you can really buy something here”. I would call that pretty insulting. Restaurants are doing the same thing. They are insulting you.

I know the restaurant takes the risk of serving you food before you pay. I am asking the restaurant to take all the risk here. Yes, I am sure people dine and dash every year at almost every restaurant. However, I am rather certain that the percentage of people that pay vs. those who try to steal is very inbalanced. I would think I would go as far as estimating that less then 1% of the customers try to steal from the restaurant. A restaurant is telling us ‘we would rather say “we don’t trust you”’ to 99% of their customers instead of just taking the loss on less than 1%. Sounds like greed and not caring about the customer.

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All Categories Of Business

21 March 2011 | talking about Small Business

Categories of BussinessI have spent my entire professional life at the decision making level with early stage companies. Some companies I founded and some companies I was invited to join. I have been part of a failing team nearly as many times as I have a winning team. These are not all just web start-ups, many traditional businesses as well. This past year I have been reflecting and seeking conclusions to what sets a company up for success and what sends a company to failure. I realize there are no right or wrong answers, but from time to time I am going to start logging my thoughts on my blog. I am hoping to start a conversation with others around these thoughts to help strengthen these ideas.

The Different Aspects Of Business

Particularly in the web start-ups, a company starts with a thesis; “The product we are going to build will change the world because we are going to solve XYZ problem”. Founders get so focused on building this product they do not define the other categories relevant to their business and they give these categories no attention. What do I mean by “categories”? I mean all the other relevant aspects of your business unrelated to building your product: sales, marketing, pr, business development, market research, hiring, branding, fund raising, paper work, and so on. So many founding teams just think they will deal with these things once “the product” is done.

Grow Your Categories Of Business

The successful companies I have been part of have defined the relevant categories and measured month-over-month growth of these categories. Thus, my suggestion to new businesses is: define these categories of business from day one. Determine who is in charge of each category, and measure progress every month. When a founding team is building their product they are often measuring month-over-month progress of the product development.

The rule of thumb that I have seen succeed more often than not is ensuring each category grows in some fashion every month. It does not matter how much. Each category has to make more progress in the coming months than in the past months. If on month one you have an introduction meeting with a possible business partner, on month two you should have one more meeting and maybe sign a letter of intent with the meeting from the previous month.
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The New Age Business Man / Woman

9 June 2010 | talking about Internet, Small Business

Something that has been on my mind for a while now is; What does the new age business person looks like? As more and more consumer dollars are being spend online and less and less spent in person on the streets, how does this affect the first time entrepreneur? Really great companies have been built by people with simple resumes. I see in many ways it is becoming harder and harder for a first time entrepreneur to break ground on their dream because they have to do business on the web.

It use to just take someone that was willing to work long hard hours and maybe some start up capital to build a truly profitable business. Whatever business the entrepreneur was going to go into they did not have to have 20 years of experience working in the industry, however in many cases that helped. I have a close friend who went to college and graduated with a business degree. Other than odd college jobs this friend did not have much of a resume. He knew one thing; he did not want to work for "the man", and he was willing to work his butt of to make it happen. After much research he raised a small amount of capital and went into the fast food business. Today he has grown the business rather successfully. All this friend had was a passion and a good head on his shoulders.

The New Skill Set Needed

The above example is getting harder and harder with the move to the web. To launch even a basic business you often have to surround yourself with domain experts in all sorts of different niches. If you want to compete on the web. You need to hire a designer, web programmer, mobile programmer, sysadmin, web marketer, experts on understanding your market, and more. You can not just sit on a busy street count the people going by to understand your market. You can not just lease a space and open your doors. You have to surround yourself with domain experts that often are not cheap. So a good head on your shoulders and some start up capital turns into a bunch of people with good heads on their shoulders and tons of capital.

How Do We Solve The Problem?

The problem I want to solve; Is how do we move the world to the web but keep the "all you need is a dollar and a dream" way of business alive? I know there is not a simple answer and as the Facebook generation morphs into business people they will already be hitting the streets with a leg up on my generation and older generations, but I would like to find better ways to bridge the gap.
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Take The Bull By Its Horn

17 January 2010 | talking about Small Business, Stock Market

take-the-bull-by-the-hornsSomething that has been frustrating me more than anything in the last year. With the slower economy I have been able to spend more time just talking to people; strangers, family, friends, and just about anyone else that has something to say. Being a business person the conversation often heads down the path of success and how to achieve it, but so many people I talk to don't want it bad enough. They would rather talk about it then do it. I am not just talking about building a business. I am talking about getting a job if they are unemployed, upgrading your current job, or starting a business.
When the economy tanked in 2008 I more or less lost my job. Every project I was working on dried up and went away. I like 10% of America right now I did not have the ability to collect unemployment, so I had to make a big shift in how I as going to support my self almost over night. Luckily, I was ready and the shift was something I was able to make quickly. I will get to what helped me in my shift in a second, but first a little rant. I have talked to so many people that are on unemployment and they are doing nothing with their lives. They talk about how they want to use this time to better themselves. They talk about the businesses they are going to build during this time. They talk about the personal brand building they are going to do to help them upgrade their employment when they go back to work, but they spend a great deal of time sitting on their ass playing video games or something.

Just Get Off Your Butt And Start Building

The key to bettering yourself in this context is to just get working on you goal and never quit, and more importantly never discount anything. Every little aspect about what you are doing maters. For example; I tell a lot of people looking for a job or looking to upgrade there job to start building their Internet personal brand. Start a blog, upgrade your Facebook page, start a Linkedin page, heck start tweeting. I hear over and over again; "That stuff does not matter in my industry", "The people looking at my resume don't know what a computer is", "Yeah that would be nice but there are better things for me to do". I am officially calling each one of you out on this. You got 90 year old grandmas on facebook, you are living in a cave if you have never Googled someone, and lastly how does it hurt? This is one little example of something you should be working on late at night to help in your building process. This a way better use of your time then trying to get to the next level on what ever your video game of the week is.
Most importantly, how does it hurt (I will say it again)? If you build an amazing web life and your future employer, investor, customer never reads it how does it hurt? You got a few less hours a week playing video games? Our lives are moving to the web. I promise you in a few years you will be giving urls to future employers instead of paper resumes or emailed pdf copies. Why would I review a one page bulleted list of how cool you are when I can go to your personal sites and find out who you really are; can you write, do you spend more time talking about how drunk you were last night or do you really reflect on the issues of your industry?
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I Think I Am Going To Buy Crush It By Gary Vaynerchuck

22 October 2009 | talking about Internet, Small Business

I just watched a great interview of Gary Vaynerchuk by Rick Turoczy (@turoczy) at his blog Silicon Florist. I watch Gary a bunch on the internet but unlike many things I see seek out I have never drank the Gary Vaynerchuk Kool Aid. Often when I find a blog or some great site I get all hyped up on it and visit the site everyday. I have always been a random passer by'er of http://tv.winelibrary.com so I never really understood why everyone was getting all jazzed on his new book CurshIt.
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Ideas Have No Value!!  Get Over It!!

3 October 2009 | talking about Small Business

So I have been around the block a few times. I have been involved with big well funded, well organized companies and I have been involved with just a few guys and an idea type companies. More often than I would like I run into people that have an idea, sometimes even a good idea. So many times all they have is an idea. No money or resources to execute the idea. I would like to make it very clear, IDEAS HAVE NO VALUE!!!
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