Forbes recently wrote an article about Why Google and Facebook Might Completely Disappear in the Next 5 Years, which had echoes what Malcolm Gladwell wrote about in Outliers, when it said, “Your long-term viability as a company is dependent on when you were born.”

The author (and Forbes) were getting ripped on this article on Hacker News – but no one can predict the future – we can only look at the past – and even though the timeline is short (15 years), history says Facebook and Google will fail unless they [can] pivot. The gist is that they can’t pivot. It’s not in their paradigm to accept what’s next. Can you?

But the statement, “X will fail unless they can pivot” is true for every company. The companies that make up the Fortune 500 don’t have a long life on the fortune 500. To say that the web will die out and vanish is reaching, and to say that it will in the next five years is really reaching.

Does the author (or any analysts) really expect mobile usage to dry up the well of search advert dollars or that mobile apps will eliminate the public/customer need for search?

The anti-trust lawsuit that is being dredged up against Google will do more to slow them than anything else in the next five years.

And, to say that Facebook can’t have staying power because MySpace didn’t is far from an analysis.

I do agree that the web is not dying – all apps need a website even if they think they don’t. Facebook will do (and has done) better than Myspace because they are a software company first, ran by programmers who have kept Facebook constrained, which has helped it grow.

The problem is that Google only got into social because they were chasing Facebook, just like Microsoft went to the cloud to chase Google. And Facebook only got into mobile because the people demanded it – but they were (and are) late to the game. They are buying Instagram because they are scared of it – not because it will help them grow.

I read something from Seth Godin today that said basically that not all companies can grow. Some do better when their small and can’t scale across that middle “dead zone” to be a big company. Some companies don’t work as a big company either (like web or graphic designers – at least not using the business models in place now).

“Perhaps getting a little bigger isn’t what you want, and it might not even be possible.” -Seth Godin

I’ve written on Amazon before and about CEOs I admire, but until I read Forbes’ April 2012 article on Jeff Bezos entitled Jeff Bezos Gets It, I didn’t realize how much I admired the man behind the company. Bezos seems to embody Steve Blank’s ideas of customer development by making the customer first in all business decisions.

Out of Jeff Bezo’s Top Ten Maxims, a third of them center around the customer. Number 2 is “Obsess over customers,” number 5 is “Determine what your customers need and work backwards,” and number 9 is “Everyone has to be able to work in a call center [for humility and empathy for the customer]“.

Credit: Forbes

It’s not just Bezo’s customer-centric approach to business that has my admiration, but his culture of innovation and his data-intensive decision making that make me so fond of his way of doing business. Forbes’ writes, “Data reigns supreme at Amazon, particularly head-to-head tests of customers’ reactions to different features or site designs. Bezos calls it ‘a culture of metrics’.”

Forbes’ continues, “For Bezos a data-driven customer focus lets him take risks to innovate, secure in the belief that he’s doing the right thing.” Bezos is quoted as saying, “We focus on what is going to be good for the customers. I think this aspect of our culture is rare.” Rare and profitable.

I’ve joked that Amazon has two departments, one that creates ideas on how to make money and another that says, “Yes.” From Amazon Web Services to Lab 126 Amazon has continued to create new revenue streams beyond the giant retailer that it has become. As an Amazon Associate, I get to piggyback on that success.

Forbes’ spends some time putting Bezos on a pedestal where Steve Jobs once stood, calling Bezos, “the corporate chief that others most want to meet, emulate and deify,” but in my mind I’d rather keep those two separate as Jobs tended to make products for customers, Bezos tends to make products because of them – and those are two completely different ways to run a business.

“In preparing for battle, I have always found that plans are useless but planning is indispensable.” -Dwight D. Eisenhower

It’s easy to get caught up in the notion that a sound business plan and a strong marketing strategy will ensure your success in business. We’re taught in business school and in the media that if you want to be successful, you have to plan, but how often do things go according to plan?

Business Continuity Plans

Its wise to plan for various environmental or social events that could seriously impact the ability of your business to continue on afterward. Is your data backed up? Have the backups been restored to test? Would you be able to function if 30% of your staff became ill? How long could you remain in business without electricity?

When I was a business analyst, I was responsible for helping department heads create business continuity plans that outlined what their department would do in the event of a disaster. Hundreds of pages were printed, placed in a plastic tub, and never touched again. In the event of an actual disaster, the plans were not what mattered, it was the act of planning.

As an Internet Marketer and Technology Consultant, I help business owners create a plan for how they are going to use the web to market their business, be more efficient, and lower costs. We create a roadmap for how we think things will go, but things don’t always go as planned. The key is to know how to pivot and planning helps with that.

Does your business have a disaster recovery plan for business continuity? Do you know what your company would do if a single workstation, a server, or the entire building went ‘down’? These are the plans that are above and beyond baseline data back-up, which you should be doing anyway. If you’re not doing that, stop reading this and back up your data! It should always be in at least two locations with one copy preferably stored off-site.

Disasters such as earthquakes, fires, and floods are all too common in today’s world, but sadly, business continuity plans are not. Be prepared for not only a loss of data, hardware, and facilities, but also the risk of a pandemic where a third to half of your work force either can’t come in or are sick. How would your business continue to function? Would you still be able to serve your customers? What sort of steps are you taking to prepare for a scenario like this, or worse?

It’s easy to create a plan, the hard part is executing it. One trap a lot of people fall into is creating the structure around innovation or a new project in the hopes that once the structure is in place the new product will almost make itself. “After [that] it’s just ‘plug and chug’,” they say. Executors know that you have to do the plug and chug part too even if that means hiring or outsourcing to do so. The ‘plug and chug’-level work should be a matter of following procedures in a well-defined structure. The creators, designers, and innovators at a company usually like to create the structure, but have trouble filling it in. Either learn to get around this psychological gap or find someone else to finish/maintain the job for you.

Business Plans

Business plans are important because they summarize both your vision for the company and your blueprint for the company’s operating success. The business plan is a written guide that details the start-up and the future direction of your company. Who should write the plan? You, the entrepreneur. No one else knows your business idea and goals better. Yes, there are services that can do the work for you. However, you must present this business idea to bankers or other investors. Therefore, it is best if you are very familiar and comfortable with the plan.

Although there’s no set format, a good business plan typically includes:

• Cover page—Identifies your business
• Table of contents—Organizes information for the reader
• Executive summary—Provides a “big picture” view of the plan, highlighting the factors that will lead to success
• Business background—If it is a brand-new business, include your background and skills
• Marketing plan—Relates the business’s marketing strategy
• Action plan—Summarizes how you will create and deliver your product or service
• Financial statements and projections—Illustrates how the business will perform financially based on the plan’s assumptions
• Appendix—Includes statistical analyses, marketing materials, résumés.

Business success requires the ability to adapt to changing situations. Nothing ever goes as planned (SEE Business Continuity Plans). The world of business is full of surprises and unforeseen events. Using the habit of adaptability allows business owners to respond to circumstances with the ability to change course and act without complete information. Being flexible allows us to respond to changes without being paralyzed with fear and uncertainty.

Problems are a regular part of business life. Staff issues, customer misunderstandings, cash crunches- the list is endless. To achieve business success, look at both sides of the coin. Every problem has an opportunity. Being opportunity focused makes the game of business fun and energizing.

Marketing Plans

When creating a marketing plan, keep in mind the four P’s of marketing:

• Product—What good or service will your business offer? How is that product better than those offered by competitors? Why will people buy/want it?
• Price—How much can you charge? How do you find the balance between sales volume and price to maximize income?
• Promotion—How will your product or service be positioned in the marketplace? Will your product carry a premium image with a price to match? Will it be an inexpensive, no-frills alternative to similar offerings from other businesses? What kinds of advertising and packaging will you use?
• Place—Which sales channels will you use? Will you sell by telephone, or will your product be carried in retail outlets? Which channel will economically reach your market?

Regarding “Price”, I recenly got an email from a customer who told me a story about a friend of his who confided in him, his friend said, “I was desperate. I had to sell out my women’s apparel store, so I did a lot of expensive advertising at 50% off. I was going broke so in total frustration one day I said ‘Oh, #@& it, doubled my prices and sold right out!” I liked the story enough, but it didn’t really sink in until I ran across a similar story the next day.

In the book Influence: The Psychology of Persuasion, author Cialdini tells the story about a turquoise jeweler out West who, in the peak of tourist season, couldn’t sell her jewelry. The owner had priced the jewelry reasonably. She had placed it in a central display location. She’d even asked her staff to point it out to browsers. Nothing worked. Finally, the owner gave up and decided to sell the jewelry at a loss. On her way out of town for a business trip, she dashed off a note to a member of her sales staff – “Everything in this display case 1/2”. When the owner arrived back at her shop she was surprised to find that all of the turquoise jewelry had been sold. Puzzled, the proprietor asked her staff what happened. She had misread her hastily-scrawled note (deciphering the “½” as a “2”), and doubled the price of each piece rather than cutting it in half, making the jewelry seem better and therefore worth paying for. The logic from both of these stories follows that, “If it’s expensive, it has got to be good.”

A marketing plan should summarize your findings about the key target buyer description, market segments the company will compete in, the unique positioning of the company and its products compared to the competition, the reasons why it is unique or compelling to buyers. Determine specific goals, set a deadline for these goals to be achieved, then write them down. The old saying, “Its not real until its written down,” is true here. Next, share these goals with your employees and any invested partners. Get everyone on the same page so that they can all help work towards the goal.

Determine which tools can best help you meet your goals and how they will be used. These can include, but are not limited to, the web, direct mailings, email newsletters, hosted events, relevant trade shows, outdoor or print advertising, or social media. Next, create a plan for use of each tool. Projects are best not left open-ended. In the same way you assigned a deadline for the goal as a time restraint, the goal should also have a financial restraint. Work with your team to create a budget that reflects your vision and achieves your goals. If you end up under-budget, that’s one more thing to celebrate when you achieve your goals.

The easiest and hardest thing to do sometimes it to delegate responsibility for implementing each part of the plan. More than likely you won’t be able to do all aspects of the plan and so you’re going to have to divvy up the responsibilities. Make sure there are built in accountability measures to check performance. Monitor the results of your team members progress and the goal in general. Beware of project creep. Weekly meetings to remind those involved about the plan and its deadlines may help. Lastly, don’t be afraid to make adjustments as necessary. Being an agile company may be what sets you apart from your bigger competitors.

Most people are familiar with the game of Pac-Man where the player guides Pac-Man through a maze, eating dots. And when all the dots are eaten, Pac-Man is taken to the next stage of the game. What most people are not familiar with is that this is exactly how they work throughout the day, which is what I call pac-management.

What is Pac-Management?

Like in Pac-Man, if an email, phone call, or a person stopping by contacts the Pac-Manager, everything stops. Because of this “life or death” situation, everything is an emergency. These “contactees” are known variously as “ghosts” or “monsters” and all of their moves are deterministic: a red contactee chases the Pac-Manager, the orange contactee is seemingly random, and the pink and blue contactees try to position themselves in front of the Pac-Mananager’s mouth. Near the corners of the Pac Manager’s office are four larger, flashing dots known as power pellets that provide the Pac-Manager with the temporary ability to eat the contactees. This pent up rage can happen at any time and will cause contactees to turn deep blue, reverse direction, and usually move more slowly. When all lives have been lost, the game ends. Read the rest of this entry »

I am going to write about a couple of my CEO heroes, Howard Schultz of Starbucks and Elon Musk of SpaceX and Tesla Motors.  Previously I wrote about my media heroes, which included two CEOs, Rupert Murdoch and Mark Zuckerberg, but when I classify ‘CEO’ heroes I value the entrepreneurial spirit and management style of Schultz and Musk in the same way I value the media empires of Murdoch and Zuckerberg.

Howard Schultz

Starbucks CEO and former owner of the Seattle SuperSonics, Schultz joined Starbucks in 1982 as director of Marketing after a sales trip to Seattle as a general manager for Hammarplast drip coffee makers, which Starbucks was buying at the time.  While working at Starbucks, Schultz travelled to Italy to buy coffee and noticed not only were they selling coffee, but espresso too.  He also noticed a new dynamic, one he would later embrace, “The third place,” after noticing Italians ‘hanging out’ at coffee shops all over the country.

The Third Place

The ‘third place’ is a phrase coined by contemporary sociologist Ray Oldenburg.  Oldenburg in 1990 that postulates that the third place is a term referring to a public place where people gather for the social satisfaction that they can’t get from the first two domains of the home and the workplace.  Oldenburg argued that the availability of such gathering places in America was lacking and so, inspired by Oldenburg’s observations, Schultz turned America’s ‘lack of place’ into a business opportunity encouraging loitering and turning Starbucks into a cozy home-away-from-home.

The Great Experiment

When Schultz got back from Italy he convinced the management team to add espresso to the menu.  They agreed to try it out in one store and although it went over well, the management refused to roll it out explaining that they didn’t want to get into the ‘restaurant business’.  Frustratated, Schultz started his own company to serve coffee, Il Giornale, in 1985.  Two years later the original Starbucks management team decided to focus on their Peet’s Coffee & Tea brand and sold the Starbucks name to Schultz and Il Giornale for 3.8 million.  Schultz renamed Il Giornale to Starbucks and aggressively expanded the brand across the United States.  In 2000 Schultz left the company, but rejoined as CEO in 2008, taking the company to new records in profitability.

Elon Musk

Co-founder of Paypal, SpaceX, and Tesla Motors, Musk is currently CEO of SpaceX and Tesla Motors in addition to being chairman of SolarCity.  Musk was inspired by Thomas Edison to solve three “important problems”: the Internet, space, and clean energy.

His first company was Zip2, which Musk cofounded with his brother, Kimbal Musk. Zip2 was acquired by Alta Vista in 1999.  That same year Elon Musk cofounded X.com, which later merged with Confinity, which owned the domain, paypal.com. This helped him solve his first problem, the Internet.

Paypal.com was originally used by Confinity for email payments by Palm users, but after 2001 became known for what it is today and X.com changed its name to PayPal.  Just one year later, in 2002, Ebay acquired PayPal and that same year Musk founded his third company, SpaceX. This helped him solve his second problem, space.

Musk was still building SpaceX when he cofounded Tesla Motors in 2004.  He later became CEO in 2008.  Tesla Motors make all-electric cars, which use much less energy than traditional gasoline-powered vehicles.  Lyndon Rive, Musk’s cousin, founded SolarCity in 2006 of which Musk is chairman of the board.  Together with Tesla Motors, Solar City helped him solve his third problem, clean energy.

In 2007 Musk won Inc.’s Entrepreneur of the Year award and his fortune is estimated at over 300 million dollars. This serial entrepreneur and father of five works 100-hour weeks and is passionate about what he does.  His passion is an encouragement to me and that is why is one of my CEO heroes.

Innovation comes from customers…or so Harvard thinks.

Aha moments rarely come without some sort of problem you are trying to solve and there is no greater ‘problem creators’ than your customers. Twitter is a perfect example of this. They will think of things you never thought of and use your products in ways you’ve never imagined. Learn to harness this phenomenon and you’re on your way to having a more innovative company.

For example, imagine you have a customer who wants software that allows appointments to be setup online. “No one has it” he says, but he wants it. So an innovator would make it, have it made, or find it, and then package it and sell it to other sites. That’s how innovation from the customer makes your company more innovative.

But you have to execute.

It’s easy to create a plan, the hard part is executing it. One trap a lot of companies (people) fall into is creating the structure around innovation or a new project in the hopes that once the structure is in place the new product will almost make itself. “After [that] it’s just ‘plug and chug’,” they say. Executors know that you have to do the plug and chug part too even if that means hiring out or outsourcing to do so. The plug and chug-level work should be a matter of following procedures in a well-defined structure. The creators, designers, and innovators at a company usually like to create the structure, but have trouble filling it in. Either learn to get around this psychological gap or find someone else to finish/maintain the job for you.

Going Off the Grid

Now that I have used my HTC Hero I realize that I am more plugged in than I have ever been. Not only is data being collected on me from phone, email, and Internet use, but I am freely giving up more information on Facebook, Twitter, and Tumblr. But I wasn’t satisfied with the amount of data being collected so started collecting more data using Endomondo and Facebook apps on my GPS-enabled phone, the HTC Hero for Sprint. Every since I got this phone with unlimited Internet access, I have been more plugged in than ever before. The New York Times has a great article on this called The Data-Driven Life. My friends have started to comment on the uptick in wall posts on Facebook and I’ve started to get caught back up on email, but I’ve also increased my risk.

Physical Risk

Now, more than ever I use my phone while driving. If texting makes you 8 times more likely to get on an accident, what is the odds for someone filming and posting videos to YouTube from the road? There is also the minor strain on the wrists from using the mobile device more and in more situations.

Financial Risk

Because my phone has always-on Internet access and unlimited text messaging there is nothing to stop me from using the phone at work. Checking Facebook is an issue that I have found that I have and texting with my wife can happen a lot depending on what she is doing that day. The bible says to be a slave to your master; serve your employer well while you are at your job. Being a good steward of your time is part of that.

Conclusion

So now that I’m in, am I wishing I was out? I do like the new features of the phone like weather information, Facebook access, and the qwerty touchscreen, but its just another thing in my life I have to maintain and manage. Like this site, I need to learn to better manage my actions while driving and while at work so I don’t get forced off the grid.

The purpose of How to Successfully Manage People by Jon Anshutz is to give you a better understanding of what it takes to effectively manage people. “How To Successfully Manage People” is a complete guide for managing. Anshutz goes out of his way to teach you the skills you will need to get the most out of your people. If you are serious about getting the most out of your people then you need to buy this book because it will show you how to create a “family” type atmosphere, how to set goals for yourself and your team, and so much more. No manager should be with out this book.

Managing Actions, February 2009

We have gone through several changes in the last year including a major facelift, a name change, an identity crisis, and now a new way forward.  It’s time we stop managing our thoughts and start to manage our actions.

From now on you can expect to find fresh content daily on subjects ranging from self-development to happiness, from management to marketing, and from pop-culture to programming.  Where else can you find out how to delete a Digg submission and how to live a purpose-filled life in the same blog?

Zac and I are passionate about life and we want to help you become more of a success than you already are.  If you’re reading this article right now you have already chosen the first step in learning more about yourself, your purpose, and your life.

We want to inspire you, motivate you, and lift you up so that you can go do whatever it is that makes you feel strong.  Be better tomorrow than you were today.  Move up in the world.  Get exited about life.  Find your spirit and develop it.

Thank you for reading Managing Actions.  We are glad that you are a part of our life and look forward to bringing you great content for a long time.  Cheers.

How to Identify Strengths and Revenue Streams

I need to make $8,000 to $10,000 (depending on what measurements, more on that later) in 2-4 weeks. This is how much I need in order to get back on my feet, financially. I have a day-job as a business analyst, but it doesn’t bring in enough to pay for my daily expenses, let alone the other events like car insurance, BMV taxes, speeding tickets, hospital visits, and car wrecks that happen along life’s path. This also leaves out any fun, gift giving, or getaways that a normal person might want to do. I decided to do something impactful on the bottom line. I needed to stop the cycle of overdrafts, late fees, and the risk of losing my cars, home, and other assets. I needed a plan.

Triage

The first thing I did was to get organized.  Personally, this is how I solve every problem.  I continue to organize it until there are no more problems within the problem.  In essence, I create a system.  The system then solves the problem.  This may not be the most effective way to solve a problem, but it is how my mind works and it is one of my strengths.  I feel strong whenever I am categorizing things, especially when I have to name or rename things in order to categorize them.  As a side note, I encourage you to ask yourself what makes you feel strong, then to write that down.  In the same way, notice what makes you feel weak (this is a weakness) and write that down too.  Then, start to do more of what makes you feel strong (your strengths) and less of what makes you feel weak.

Getting back to the problem at hand, I began by simply listing out all of my daily expenses in a Google Spreadsheet (by the way, if you ever need help setting up Google Apps or using Google Docs, I am your man, just leave a comment and I’ll be able to contact you from there).  Amazingly, I had not been doing this, but instead, paying bills as they came.  I had no idea how much money was coming in or how much money was going out.  If I wanted to know how much money I had, I logged into online banking and whatever the balance was, that was how much money I had.  I’m astounded about how many people manage their finances this way, or maybe it was just the people I was hanging around (more on that later).

Analysis

Once I had all of the bills, debts, and income listed out on a spreadsheet, I could start to do my analysis.  It wasn’t pretty.  I was getting snapped by late fees, overdue fees, and loads of interest charges.  I could save a boatload of money just by getting my bills caught up and paid on time.  And if I could get debt free, I could save even more on minimum payments, not to mention the interest.  In general, the faster you pay something off, the less interest you pay.  I had listened to enough Dave Ramsey to know that I needed to have a budget, start an emergency fund, and begin the debt snowball.  The question I had was how to do all of this when your budget is already negative?  One idea is to rotate the late payments so no one payment gets so late that you are either sued, leaned, garnished, or repossessed from.  I noted this as a possible solution, but saw it as more feeble than just trying to increase revenue, while keeping expenses low.  And that is exactly what I decided to do.

Start

I did not wait to do anything.  I knew that time was of the essence to as soon as I identified the next step, the next step was taken as soon as I was able to take it.  This sounds easy, but it is highly contingent on your motivation, your energy, and your measurements.  You might know what you need to do, but not want to do it.  This is a motivation issue.  Or you might want to do something you know you need to, but you don’t have the energy because there is only so much time in a day.  Then there is measurement, which shows what you value.  You can’t manage what you’re not measuring and whatever you are measuring will grow, so picking the right metrics and the right measurements is crucial to managing and growing your personal finances.

Motivation

I am using a variety of sources to help motivate me towards my goal of achieving $8,000 to $10,000 in 2 to 4 weeks.  One resource is TED Talks.  TED is a website of inspiring videos of entrepreneurs, teachers, futurists, and writers.  When I am feeling less motivated, I simply browse to ted.com and watch a video or two until I am sufficiently motivated to be more like that person, whom I view as successful.  In the same way, Karl Moore videos also inspire me to take action.  I discovered Karl Moore while doing the Thirty Day Challenge where he does “Mindset with Karl.”  The motivational videos mention the Thirty Day Challenge, but can stand alone on their own merit as truly helpful videos.  Karl Moore also writes books on happiness and self-development like The 18 Rules of Happiness and The Secret Art of Self-Development.

My children, or more specifically, my children’s desires are another source of motivation.  As I wrote in 4 Steps from Wanting to Receiving, having to decide what I can and can’t buy my children at the gas station is not a good feeling for me.  I would like to be able to choose what candy to buy them for health reasons rather than financial ones.  For some reason, this exercise motivates me more than any late fee ever will.

Energy

We all get the same amount of time each day, but because of our body’s limitations, energy is finite.  This means that energy must be spent in the most useful way as much as possible.  At my day job we would call this “utilization”.  While production is the sheer amount produced, utilization is production mapped against time, in other words it is how much was produced (how productive were you) in a given amount of time.  That is your utilization rate, which energy (and motivation) can play a large part in.  Managers wanting to more fully utilize their employees might want to invoke actions that either increase energy levels (by say rearranging a department based on strengths, not just needs) or increasing incentives (positive or negative). I have written a post on Ways to Stay Alert and Focused, but there is an entire site called Stay Alert, which has ways to stay alert and keep you energized.

After approximately 10 hours of working and drive times, I had approximately 3 hours of energy left to do work at home or somewhere else each day.  In order to be successful, I am going to use motivation in order to spend an additional hour each day in order to achieve this goal in 2 to 4 weeks.  To do this, after reading Stay Alert, I am going to be eating more fruits in the morning, more whole grains at night, and less or no meat for supper in order to stay energetic as I can throughout the day.

Measurement

The Law of Focus states that whatever you are focusing on (measuring) will grow.  In Management, Measurement, and Value I note that there is a clear link between value and measurement in that what you measure you also value.  You could say that a measurement of your values is in what you are measuring.  If you, as a manager, are only tracking stats on whether or not your staff shows up on time or not, then your staff will probably show up on time daily.  It shows that you only care (value) about whether or not they are there, but past that point, you are out of the loop.  Contrast that with the manager who tracks personal performance daily to get the utilization rate of each individual staff member, which he can do after implementing the staffing model I developed for his department.  Each staff member is now performing highly and if they come in late, it doesn’t matter, so long as they maintain their personal productivity numbers.

So what did I decide to measure? Remembering that what you measure will grow, I decided not to measure how much debt I owed.  Instead, I measured net worth, income (revenue), profit, and savings.  I also made another Google Spreadsheet which listed all of my assets, all revenue streams, the profit of each revenue stream, and savings from reducing a debt.  Every day, I would log into the various websites which contained information about my metrics and update the spreadsheet with new values.  Because my mind was focused on net worth, revenue, profit, and savings, I consciously and subconsciously began taking actions to increase those numbers.  In the same way that a manager sees improvement in whatever he or she measures in their  department, I would see improvement in my net worth, revenue, profit, and savings simply by measuring them.

Actions

Now that I have identified the problem ($8,000 to $10,000 in 2 to 4 weeks), identified the tools I have available (time, motivation, and energy),  and identified what metrics we are going to use to measure success, the first phase of this goal is complete.  You might call the first phase of research and discovery, “Analysis,” and this next phase, “Execution.”  In the same way that an idea is first created in the mind of man, then written down, and finally designed; it does not take shape until it is developed, manufactured, or implemented.  This second phase is what most people would consider the meat, the actions, the specifics.  It is where you actually do what you say you are going to do.  It’s the “fire” part of “ready, aim, fire.”

I began by doing a cost-benefit analysis of what activities would net the most gain in the metrics I had chosen.  I identified the resources I had available (the tools), which were my day job, a business that does business consulting in Indiana, an Indianapolis web design company, an Indianapolis coworking group, a DVD conversion blog and an Indiana VHS to DVD business, a blog about query string parameters, doing Indianapolis computer repair, helping my wife with her custom hand-knit wool clothes business or her blog about breastfeeding and Motivated Moms, helping Zac with his cognitive psychology training and discussion on what it means to be human, promoting the Erich Stauffer figurines web site, getting another side job, or having a garage sale.  My wife or children could also get a job or create more revenue for the family.  All options would be considered in order to achieve the goal.  This was a brainstorming exercise, which I’ll discuss with you later on to help you decide what activities you could do in order to achieve your goals, but first I’ll discuss how I did my cost-benefit analysis.

Costs and Benefits

It is easiest sometimes to decide what you are not going to do so I first struck the last choices having to do with my children and wife working.  My wife is a stay-at-home mom, but she also home-schools our three children, is a member of La Leche League, and the president of her local Alpha Chi Omega chapter – in addition to knitting for her Cloth Beginnings business.  I also decided not to help other people with their businesses because they don’t care about my goal as much as I do.  This strikes out my day job, computer repair, Zac’s business, and my wife’s business.  While one may want to support a business that is already doing well (defined as profitable – having more revenue than expenses) in the same way that you have the greatest chance at developing a strength you already have than by fixing a weakness, knowing the following information helped me with my decision.  While my day job is a profitable business, it just gave me a raise in July for the year and so is not likely to give me another one and it is not currently allowing any overtime.  Therefore, this opportunity is maxed out.  If I find an opportunity that reaps more revenue than this avenue in my cost-benefit analysis, I may scrap this job altogether.  The other businesses are either not profitable or are sole proprietor shops where the owner wields much influence.  The time it would take to both motivate the owner and get decisions made is longer than the time I have allotted for my goal (if ever).

After striking those choices, I could then analyze what was left over much easier.  This is the same technique used in the TLC show, Clean Sweep, where the first step in the organizational process is figuring out what you don’t need.  In Clean Sweep, the first step was dividing everything in their house into two piles: trash or keep.  This was the first sort.  The next sort moved everything from the keep pile onto a keep pile or a sell pile.  Only the things left in the keep pile went back into the house.  Even if items did not sell, if it went to the sell pile, it didn’t come back in the house.  Troubleshooting can work the same way.  Let’s say you are troubleshooting a broken computer.  One “pile” would be hardware problems, the other “pile” would be software problems.  Once you decide the problem is hardware and not software related, you then do a fine sort to find out whether the problem is with the hard drive or RAM (memory), for example.  In this case, the following choices remain, which must be analyzed using the fine sort method:

1. Watershawl, Inc. – business consulting, computer (technology) consulting, Internet marketing, graphic design, web development, web design, hosting, SEO, and online advertising.
2. Nook Share – a website about Nook covers.

I created two units of criteria in order to decide which pile the above revenue streams would be placed in.  Remembering the goal to make $8,000 to $10,000 in 2 to 4 weeks, I made the following rules: 1) it must be currently making revenue and 2) it must have the potential to make more revenue than it is currently making.  Again, we strike those activities which don’t meet the criteria.  Watershawl, Inc. and Nook Share both failed the first criteria and Erich Stauffer doesn’t have enough global search traffic in order to make more revenue than it is already making so that left Watershawl, DVD Conversion, Turn Film, and Query String Parameters.  The next criteria is time.  What is the sales cycle on revenue? Will the money be able to come within the next 2-4 weeks? Watershawl’s sale cycle is on average, 2 months, whereas DVD Conversion, Turn Film, and Query String Parameters are all Internet marketing businesses, which rely on affiliate marketing or pay-per-click advertising for revenue.  As soon as ad account levels reach certain levels ($100 on average) they pay out within 2 weeks.  I had just exited the business consulting, computer repair, and web design business for the Internet marketing business.

Identifying Strengths and Streams

I realize that since you are not in the same situation as me that the above-mentioned example may not be of good use so I wanted to explain to you how you can brainstorm to find your “strengths and streams.” “Strengths” are the opposite of weaknesses.  Weaknesses make you feel weak, whereas strengths make you feel strong.  “Streams” refers to revenue streams, which is any and all the ways in which you can or have made money in the past.  Brainstorming is the act of recording as many different ideas as possible in a short time without criticizing them as you go.  Save the criticizing (analysis) for after the brainstorming session.  Sometimes bad ideas can help you think of good ideas, so write down any idea that comes to you during this time.  Ready? Here we go. Answer the following questions in order to help you identify your “strengths and streams”:

What makes you feel strong? What makes you feel weak?

What activities are you not just good at, but also feel good doing?

What revenue streams do you have, no matter how large or small?

What are some ways you have made money in the past, which you no longer do?

What are some areas or ideas of things you have thought of doing, but for one reason or another never got around to doing?

Have you noticed any changes in technology lately that would make something easier for someone to do something?

Have you noticed a change in the demographics around where you live that might open a possibility for a new product or service?

Have you noticed any “cuckoos in the nest” where something that wasn’t supposed to happen did, or something was an unexpected success?

Have you noticed any examples of something that was supposed to succeed, but didn’t? What could you do to adapt to this new reality?

When I was young I used to collect aluminum cans to recycle for money.  As I got older I collected antiques to resell.  Later on I bought books to resell online or through local book dealers.  These were all retail activities which involved both labor and a product.  Eventually I started trading labor for revenue, which is called service.  I began doing computer repair and web design.  Eventually people began paying me for my advice and I became a business analyst.  Internet marketing is a mix of product and service because you are using your labor to help sell a product that you yourself do not deliver.  The service is in the promotion, marketing, and advertising of the product.  Anyone can do this using the free tools like the Thirty Day Challenge and other websites like Managing Actions which teach you how to be more effective by first changing how you think, in order to change how you act.

Limiting Factors

In order to be successful, you’ll need to overcome obstacles.  The first obstacle you’ll face is your own limiting thoughts so you’ll need to know how to deal with those right away.  An example of a negative thought is, “I can’t raise $8,000 to $10,000 in 2 to 4 weeks.  That’s impossible.” The first step is to realize that you are having a limiting thought, acknowledge it, then let it go.  Just because your brain creates a thought, doesn’t make it true.  Learn to manage your thoughts in order to manage your actions.

The second factor is the people you associate with.  In the same way that you have a greater chance of smoking if you live or hang around smokers or that you have a greater chance of gaining weight if the person or people you live with or work around are already overweight, if the people you hang around or not successful, are not following their dreams, or do not have multiple streams of income, then they are a limiting factor.  If you want to change, then you’ll need to spend less time with these people.

Next Steps

Every meeting should have two things: minutes and action items.  We have just had a meeting here.  This article is our minutes.  The action items are as follows:

Erich: use all available tools and resources to build and promote the identified websites in order to profit from Internet Marketing.

You: take some time to define the problems you are having, where you want to go, and what you want to accomplish, this will become your goal.

Erich: measure the success or failure of the Internet Marketing campaign, determined by the metric, revenue per man-hour.

You: brainstorm to identify your “strengths and streams” – find what makes you strong and what makes you weak, then write down all forms of income past and present.

Erich: update the personal finance measurements with increased net worth, revenue, profit, and savings from the Internet Marketing campaign.

You: manage your thoughts in order to better manage your actions. Notice when you are having a limiting thought, acknowledge it, then let it go.

Summary

This is not a get rich quick scheme.  This is about how to set a goal, make a plan, and execute (ready, aim, fire).  There is no “thing” that can make you rich, if that is your goal.  There is only you.  Mitch Hedberg said it best when he joked, “I bought a jump rope — but man, that thing’s just a rope. You have to do the jump part yourself.” [Thanks, Johnny] No blog, no self-help book, and no business can help you succeed more than a determination and drive within yourself.  If that is missing, everything else is just a rope.

Brainstorming

Occasionally, you should take time out to stop and evaluate why you are doing the things that you are doing.  Slow down to think if what you’re doing is the best idea or not. Brainstorm with pen and paper (yes, actually grab a pad of paper and a pencil).  The best ideas come by brainstorming, which provides an opportunity to evaluate your productivity, your methodology, and your overall goal. Brainstorming brings diversity of knowledge and perspectives effective for a more forward looking career. Brainstorming is a great activity, but it’s also good to talk to someone about what you are doing, in order to help establish the purpose.

Mentor Review

Take someone you admire out to lunch and pick their brain.  Tell them about what you are doing to get feedback from them.  Write down their responses, whether you believe them or not, and thank them for their time.  Make sure you pay for their meal.  Successful people like to share what they know (that’s why I have this blog) so don’t be afraid to ask them.

Technology Review

Also, keep yourself up on new technology and continue educating yourself to keep yourself alive and fresh.  It’s easy to become stale no matter what business you’re in.  Try to spend at least 2-3 hours a week just researching and finding new ideas.  It’s hard to break away from the normal routine but brainstorming with new ideas is refreshing and can renew enthusiasm.  This is part of innovation and entrepreneurship, which looks for innovations in changes in technology, among other things.  It could be that the way you have been doing things is no longer relevant at worst or at the very least, no longer efficient.  Ask yourself the following four questions:

1. Is there any new technology I could be using? — Technology may have become more efficient since you first developed your original time-saving method. Relying on an old template could be costing you time and money.
2. Have I learned any new ideas lately that I need to apply here? — You may have acquired some new skills or read about some new ideas that will handle your project even better than the time-saving technique that you are using now.
3. Are there new requirements that mean that I need to review this process? — The client may have updated his or her requirements for their projects. Using your old template or time-saving tools may not meet the client’s newest requirements.
4. Are there any other new tools I could be using? — There may be new tools or resources available to do the work that weren’t originally available when you developed your template.

Personal Brainstorming

At least once a month I block off an hour to go into a dark room and just wait for ideas to come.  I don’t anticipate thinking about any one thing, but there is something about the pitch black silence that allows great ideas to surface.  I’ve had many revelations, not just about business or problem solving, but figuring out why I thought certain ways about certain things.  It’s a chance to re-evaluate all aspects of your life and help you determine your purpose in life or in process.

Why did MySpace and Facebook succeed when CollegeClub failed?

CollegeClub.com was registered on April 4, 1996 and by 2000 had around 3 million registered users. I was one of those users who used it to find friends at other colleges online. On August 22, 2000, CollegeClub.com announced bankruptcy and said it would be acquired by Student Advantage, an Internet educational content and commerce specialist, for $7 million in cash and 1.5 million shares of its stock. Almost exactly three years later, in August of 2003, MySpace.com launched. Less than a year after that Facebook.com began as a social network for colleges on February 4, 2004, but eventually opened up to the general public on September 26, 2006. What happened to College Club? What made it different from Myspace or Facebook?

Why did CollegeClub.com fail and others succeed?

All of a sudden what seemed so hard for CollegeClub.com to do seemed easy for others. Was it the curse of the “first to market first to fail” concept that’s befell such greats as Palm, Netscape, and Tivo? Or was it something else? EDIT: since writing this initially in September of 2009, MySpace may not be the best comparison, but Facebook is still doing just fine. 11/4/2011.

CollegeClub.com’s Business Model

Lets take a look at the business model. CollegeClub.com allowed users to sign up for free, create profiles, communicate with each other, and post pictures online. Once it attracted a certain number of users, the site was then able to sells advertising to businesses looking to sell to this highly impressionable market with loads of free time and disposable income. Marketers know that if they can hook a customer in college, they may have them for life. Both MySpace.com and Facebook.com used this same model so why did CollegeClub.com fail?

CollegeClub.com was getting funding at the tune of $15 million from a group of investors that included Convergence Partners and France-based Viventures as well as $40 million from Seligman Technology Group via the group’s investment fund and additional money from previous investors Convergence and Sony. Later deals included partnerships with Ericsson and General Motors, with a planned IPO in the offing. The old addage of “it takes money to make money” wasn’t making CollegeClub.com any money. Why?

I have two reasons why I think this site tanked:

The first reason is bad management and the second reason is the high cost of technology at the time.

Infoworld said at the time, “While one source close to the company traces the financial difficulties to some unorthodox spending practices by management, [new owner, Student Advantage] said it believes that problems stemmed from the nature of the site’s business model.” I think Student Advantage was wrong. We now know there was nothing wrong with their business model (because it worked for both Myspace and Facebook) and this next statement from Infoworld backs this up:

In the recent past, Student Advantage has shown less than stellar financial performance itself. Since the beginning of the year, the company’s stock price has plummeted from a high mark of just over $20 to its current price, which is hovering just above $7. In addition, Student Advantage has continually met analysts’ predictions of red ink, and the company has suggested that losses will continue throughout next year.

The company went from bad management to worse management – and technology costs were adding up.

“The business model works.” said Monte Brem, senior vice president of corporate development at CollegeClub in said in 2000 – and he was right – but he noted that with nearly 3 million users, the back-end costs for the site ran high and needed multiple rounds of financing for success. “It requires a tremendous amount of scaling to be profitable,” Brem added. And back then, scaling cost much more than it did in 2003 and 2004 for MySpace and Facebook respectively. Moore’s Law has two effects. Not only does technology double in speed or capacity each year, but the price almost always shrinks by half every two years. For example, a Pentium III desktop PC with 128 MB RAM and a 40 GB hard drive cost $1800.00 in 2000. In 2003, the price of a desktop had dropped below $1000 for over twice the power. Multiply that over all the equipment needed to run a large social network. In April, 2008 Facebook expanded the number of servers it uses to 10,000. The more CollegeClub.com added users, the more technology they had to add on back-end to support the load. Their revenue simply could not overcome their expenses.

So why did CollegeClub.com fail?

Primarily, it was ahead of its time. It had a good idea, but no one had really succeeded with it before. Bad management decisions were made and the implementation of the idea did not match up with the cost of the infrastructure at the time. Had they waited until 2002 to launch, they could have superseded either MySpace or Facebook, but there is another reason why they may never have made it: their name. Names like MySpace and Facebook are not associated with a specific group like CollegeClub.com is. Eventually CollegeClub.com started HighSchool.com to address this problem but even it has the same problem of locking it into a specific group. There were also privacy and age related problems on the site, much like MySpace ran into in 2006 and Facebook has ran into almost every year of it’s existence.

What can we learn from CollegeClub.com?

There are three things they could have done differently:

1. They didn’t pick a scalable name that was generic enough to be applied to almost anyone, anywhere. Sometimes it is good to be niche, but you take on more risk if you’re running your own equipment. Sometimes is pays to have a name that can be used broadly, even if you start off small within a specific niche.
2. Take the time to develop a good business plan and don’t be afraid to change the business plan as you go. Create metrics for success, track them, and change course if necessary. The businesses that are most successful are the most agile.
3. Avoid debt if possible when starting a business. It always catches up with you. And the more debt you have the less your’e able to (as in #1) scale or (as in #2) change course. One of the most important things in any business is cash flow.

When You Say Yes but Mean No: How Silencing Conflict Wrecks Relationships and Companies…and What You Can Do About It

In 2003, Leslie Perlow wrote a book called, When You Say Yes but Mean No: How Silencing Conflict Wrecks Relationships and Companies…and What You Can Do About It. In that book, Leslie does a case study on the demise of CollegeClub.com in the chapter, Nine Bad Endings. Pages 141-156 cover the merger with Versity, the talks about the IPO, and the eventual bankruptcy. Overall it’s also a good book on management as one reviewer called it, “A Management Must-Read”.

“Saying yes when you really mean no” is a problem that haunts organizations from startups to big businesses. It exists across industries, levels, and functions and is inflamed by a sour economy, when the fear of losing your job is on everyone’s mind and the idea of allowing conflict to surface or disagreeing with others seems inherently risky. Too often, the conversation at work bespeaks harmony and togetherness, even though passionate disagreements exist beneath the surface. Is this what really happened to CollegeClub.com? Read the book to find out.

Converse to magnetism, in life, like objects tend to attract like objects. Good attracts good that the same way bad can attract bad. Trips to the doctor beget trips to the hospital and so on. Have you ever heard the expression that the more money you have, the more money you’ll make? That’s because money also attracts more money.

Pay attention to the thoughts you have right now. Are they good thoughts or bad thoughts? Are they thoughts of growth and improvement or limiting thoughts or thoughts of despair. How do we know what thoughts in our head are true and which ones we just placed there? Just because you have a thought in your head, doesn’t mean it’s true.

If you follow this thought out a little further you can see that if your thoughts are not true, then you can place thoughts there that are more fitting to your desired outcome. Some self-help books call this “self talk”. Some people view this as lying to yourself. I am proposing that your mind is always lying to yourself, so why not use the thoughts that it is telling you for good instead of detriment?

Let’s take a moment to go back to the thought about like attracting like and view some specific examples in science, nature, and in social settings.  If you grab a glass of water, then drop some oil in it, watch as the oil at first dissipates, then collects back together as the molecules are more attracted to each other than to the water.  Now, go outside, find a lake or pond and watch as the fish congregate together or how the “birds of a feather flock together”.  And lastly, visit a high school cafeteria and see how the children naturally segregate into various groups among the tables.

It’s the same way with adults and in life.  Rich people are more comfortable hanging around rich people. Poor people are more comfortable hanging around poor people.  It’s not that they can’t or don’t mix, but there is a level of uncomfortableness with this mixing.  I’ll be discussing comfortableness in a following post, but for right now I just want you to see how like objects are naturally attracted to like objects.

Now that you can see how it is naturally occurring, can you see how money naturally attracts more money?  Let me give you some practical examples by starting with nothing.  A man goes out and offers his services in return for pay.  This person is now considered experienced at what he does and can advertise this fact in either a resume or in an advertisement.  The man is now able to offer his service for a higher pay or in higher volume, thereby making more money.  This is active income, but if he manages his money well, the money will begin accruing passive income through savings and investments.  This man has now gone from having nothing to having something by doing one thing well and attracting more of it.

You may have heard of Dave Ramsey’s debt snowball.  Well the snowball is an example of like attracting like.  Paying down debt begets paying down more debt.  And once the debt is gone, the snowball can then turn into a snowball that instead of “beating debt” begins to “build wealth,” as Dave would say.  I highly encourage you to check out Dave Ramsey’s books.  They have helped many people create a plan for how to get control of your personal finances.  Dave likes to say that if you don’t manage your money, your money will leave you.  This is akin to the idea of what you don’t manage, you don’t value, which is what I recently blogged about in The Law of Focus.

The Law of Focus is much about like attracting like. Because you are focusing on something, measuring it, and valuing it, when you come across more of it, you will collect it or because you are so fond of it, others will bring it to you. This could be in the form of more work or just word of mouth (free advertising). For example, just like in the story of the man who had nothing and began offering up services, once you start down a path, people around you notice your path, and start to help make it straight for you. This is only natural. For those who don’t know which path to go down, that is the subject of a future blog post.

Cheers!

Management, Measurement, and Value

There are many variations of the Law of Focus, but they all stem around a singleness of thought.  In Jeremiah 32:39 The LORD says, “I will give them singleness of heart and action, so that they will always fear me for their own good and the good of their children after them.”  It seems that God supports the idea of focus in order to achieve a desired outcome.  Six Sigma mixes the Law of Focus in with Pareto’s Law stating that 20% of a process causes 80% of the waste.  Six Sigma is about increasing efficiency, but I would like to introduce a Law of Focus that is based on three things: management, measurement, and value.

Management

Every manager managing a department worth his salt collects data of some sort.  This data is usually associated with a pre-determined metric of some sort.  A metric is simply a measurement that can reliably compared to another measurement to allow for analysis.  Analysis is in of itself the act of comparing one metric to another.  The manager then uses these measurements to make decisions.  How many errors were there last month versus this month? Why? Production was higher this month than last month? Why? What happened? How can we do this again?

Measurement

The manager can only manage what he or she is measuring.  If you’ve ever had a boss that cracks down hard on dress code or attendance, he or she is probably not busy actually managing what Peter Drucker calls “social technology”.  They are not innovating, they are only keeping the status quot.  Innovating managers will look for differences in their analysis of the metrics, but they can only create an analysis if they have measurements to begin with.  What you are not measuring you are not managing. Period.

Value

The last leg of this three-legged stool is the glue that holds it all together.  For unless the manager cares about the measurement, he would not ask for it.  And by default, what he or she is not asking to be measured, they are saying that they do not value it.  Regardless or not if this is true, this is how your staff will perceive it.  Have you ever noticed that once a metric begins to be measured, that metric naturally begins to improve over time? This is because the manager is bestowing value on the measurement by asking for it.

Summary

Measurement changes things.  What you care about you will focus on. What you focus on, you will measure. And because you are measuring it, it will improve.  This is the Law of Focus.

The “con” in con-man is short for confidence.  Con-men are successful because they are confident.  They “fake it until they make it” one might say.  This same confidence can and is used by successful law-abiding citizens every day.  What I am suggesting is that there is such a strong connection between success and confidence that once one enters the loop through solid work, the loop begins to feed itself.

Lets talk for a moment about what I have identified as the entry point, “solid work”.  This is the preparation, the due diligence, the hard data gathering that backs up the confidence.  Yes, you can “fake it until you make it”, but those who make it eventually create solid work to back up their confidence.  Without it, the faking can only last so long.

Now, if you’ve heard or read Jim Collins talk about “the flywheel concept”, you can see how this kind of applies here.  In the beginning, it takes more solid work to get your confidence up, but once you have it, the past successes will make you more confident.  Confidence will then lead to more success, but if you don’t keep backing it up with solid work, the flywheel will eventually stop spinning.

Danielle Franklin of ForexExplore.com says that “Once you earn new experience, the confidence increases,” and I would have to agree. Whether you are in stocks, sales, teaching, politics, or management, managing your confidence-success loop is critical.

httpv://www.youtube.com/watch?v=N9ULWQ_tnM8

A tour of David Allen’s office (author of Getting Things Done), going through his systems and how he practices what he preaches.

Part of the You 2.0 Podcast series, a documentary on lifehacking.

UPS cuts left turns out of routes, saves 20% daily. Right turns take less time, gas, and mileage and so UPS now plans its routes to allow mostly right turns. Drivers report dropping from 50 to 40 miles per day for the same amount of stops. The next time you are planning a trip, see if you can plan it clock-wise, making more right turns than left.