On Growth

I have spent the last 20 years as a professional.  Instead of graduate school, I opted on going to the school of hard knocks to see if I could make a living.  In that time, I have swapped careers three times moving from radio to the casino business to finally winding up in the technology profession.   In that time, I picked up a little wisdom along the way.  I noticed that people who said one thing and did another were often rewarded for their deviousness.  The Peter Principle wasn’t just a fancy premise for an essay and that being a jerk was often forgiven if you made your monthly sales figures. 

I also learned a few things about the growth along the way.   Today, I want to talk about growth and how it will relate to my new firm.  The job of any business person is to grow their business.  A small business has to keep selling and growing in order to pay vendors and employees.  This simple formula of sales equaling growth quickly becomes complicated.  As customers increase, you have to hire more employees to service those customers.  The proper balance is how to keep customers happy while keeping employee costs down.  It is not easy.

Sorry, I am worried about growth not olives

I have witnessed a lot of funny things called growth which are fraudulent.  For instance, one company I worked for purchased regional competitors and other firms which provided the same service.  Sales increased but only because more market share was concentrated in the firm.  In many respects, it resembles building a house of beer coasters.  It looks impressive but it will fall apart the moment anyone pokes at the structure.  Which is what happened when bad weather affected the business, the share price of the company went from $33 a share to $12.50 and really hasn’t recovered in the eleven years since I left the firm. 

Another example, is fiddling with margins which boosts profits but really doesn’t solve a customer service problem.  I turn to the famous olive example, where an airline generated over $40,000 in profits by having fewer olives in its in-flight salad.  This is not growth.  It is accounting tricks and stiffing customers to create the illusion of growth. 

I plan to grow my business the old fashioned way with sales.  It will not be pretty but it will be honest and generate wealth and prosperity without all the smoke and mirrors. 

Making Sense of Agility

Just like dancing...only with business

In the next few blogs, I want to discuss the corporate values of my organization.  I have four guiding principles which shape how I want to run this business they are; agility, growth, development, and respect.  Today, I want to share with you my feeling about agility. 

In 2009 I was working for a dysfunctional family business, the technology staff was banished into the server room and was not allowed to do much interaction with the rest of the business.  When we were interacting it was usually to get reprimanded for not delivering what the rest of the business wanted.  It was like living in a Kafka story.  Introduced into this ugly environment was agile project management.  I was skeptical but decided to give it a try.  Much to my surprise, I liked it and I quickly became a convert. 

For those not familiar with Agile and Scrum, it is a better and faster way to deal with software projects created by developers and project managers at a ski trip in Utah.  They even have their own manifesto which is much easier to understand than the one Karl Marx cooked up.  It reads as follows:

·         Individuals and interactions over processes and tools
·         Working software over comprehensive documentation
·         Customer collaboration over contract negotiation
·         Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more.

Thanks to Agile, it was now possible to put in place processes which helped the business user rather than get in the way.  Documentation is still necessary in Agile but could be changed to meet customer needs.  Changes no longer caused controversy because they were handled in a judicious manner.  Finally, developers and business users had to work together to get things done because they both depended on one another. 

In the course of developing my web application, I have made several major revisions to the product.  Each correction or improvement, never say change, did make the software better.  It also created an understanding between the developers and business users.  The developers set the deadlines for a project while the business users set the priorities of what needed to get done.  Each side had equal power and they both developed a mutual respect for each other’s challenges.  Best of all, we had working software which met expectations. 

In this business environment, being agile is going to be a competitive advantage as we strive to meet customer demand and make things happen.  I would rather have something people can use that is improving than vapor ware which promises to be perfect, whatever that means. 

Its All About the Business Plan.

As I stumble into the world of entrepreneurship, I have learned a lot about myself and business.  I have also learned how much work goes into a business before a single sale is made.  I put together a board of directors to help me avoid dangerous mistakes and they also helped me put together a primitive business plan.  For those Type-A personalities, the purpose of writing a business plan seems foolish; you have a product and sell that product to others.  The rest is just details.   

What I am discovering is that the devil is in the details.  Without understanding the details of your business or hiring people who understand those details you are doomed to failure.  I realized this when I was being asked questions about my market, what my competition was doing and pricing comparisons between myself and others.  I knew everything I needed to know about my business but nothing about the environment where it would work.  It was humbling but necessary. 

So I am back to the drawing board with my business plan and spending a little more time doing research on where I fit in on the business food chain.  I suppose by sweating the details now I can enjoy better sales in the future. 

Crazy and Not in a Good Way

Consider me the Anti-Carly.

Being a business person exposes you to lots of people.  Most are hardworking attempting to a make a living and support their families.  Others seem muddle along in a lazy haze and others are so cutthroat you would be nervous if you left children in their presence.  It just comes with the territory.  Still, it amazes me to this day how many mentally ill, damaged and just plain mean people I meet in the course of my career.  Usually they wind up as my managers or as a client.  These individuals take all the joy out of doing business.  In fits of despair, I cry to heavens and ask why. 

Business week gave me a little insight into this existential problem.   According to author Jon Ronson, many people who are business leaders fit the operational definition of psychopathy.  In fact, many corporate leaders score “alarmingly high.”  I suppose this is because many business leaders crave power and strive to be in charge; just look at Ken Lay, Al Dunlap and Carly Fiorina.  All of those individuals tended to view others as mere tools to be used, were concerned about their personal brand over what best for their organization and when the stuff hit the fan, abdicated any personal responsibility for what happened.  I encountered similar behavior in the advertising and gift card business. 

Business schools for the last ten years have been railing against this kind of behavior.  Two of my favorite books on the subject are Primal Leadership by Daniel Goelman, Richard Boyatzis, and Annie McKee and The No Asshole Rule by Robert I. Sutton.  Both books illustrate the damage to the bottom line jerks cause.  Still when I go out in the business community, I see an abundance of people who exhibit this kind of deviant behavior and consider it an acceptable way to conduct business.  Again, I ask why. 

I turn again back to the business week and they say researcher David McClelland divided workers into three groups:  those who need power, those who need to achieve and those who want to be liked.  The ones who excel at achievement and being liked wind up as customer service representatives while those who crave power get the corner office.  In the Social Darwinism of the office, those who need power often get their fix at the expense of others.  More troubling, when these individuals are held accountable for their actions by employees they have the power to hire and fire.  This is creating a feedback loop of fear and repression at the office.  It stinks and it explains why innovation takes place at startup companies which are purchased by larger corporations. 

I know I will be forced to be a jerk from time to time starting up my own business.  I will have to fire people for poor performance.  I will also have to make some difficult decisions but that does not mean that I have to become like Lay, Dunlap or Fiorina.  Being an entrepreneur is a touch crazy but I hope that it is crazy in a good way rather than the psychopathic fashion that is all too common in business. 

The Times Are a Changing

Amateurs market software, pros sell software.

Back in the good old days of the internet, say between 1998 and 2002; if you had a dream and some venture capital you could found a company, hire a few friends, and play business.  That is until the money runs out and you have to file bankruptcy.  Many of those early start ups were huge vortexes of cash and bad management.  Many of them resembled fraternity houses populated with engineers and developers who attempted to have the fun they couldn’t have in college. 

There were a lot of great flame outs; Pets.com comes to mind right away.  Still in the aftermath, Amazon became the destination for one stop shopping on the internet and Google is one of the most valuable companies in the world.  This is the nature of business.  The strong survive and the weak are culled to make room for other attempts at innovation. 

I talk about this because another wave of internet companies are offering IPO’s on the stock market.  The professional marketing site LinkedIn is now said to be worth nine billion dollars.  All of that worth is investor enthusiasm; sales are but a fraction of that market capitalization.  It is easy for an amateur to look at this situation and think that they are ready for another gold rush.    

I am not an amateur. 

I have been in the trenches during the Dot.Com boom and bust.  I know what it takes to put together a good product that works on the web and mobile devices rather than in marketing presentations.  I am going to grow the business with sales and reasonable application of money.  Yes, a time will come where I will have to get some venture capital to grow the business but I want to be smart about it.  People are counting on me to manage their logistics and warehouse data.  That is trust that is earned through hard work and good engineering. 

My hope is the sales will take care of itself.  If not, I am going to be making a lot of cold calls and sending out a lot of mass e-mail. 

Tags are Going to Make the World go Round.

Found a great article on the Procurement Leader’s website.  The general theme is that most ERP and Supply Chain Management systems are too complicated.  The most shocking statistic was the following snip:

“…More than 65% of respondents age 35 and younger would be at least somewhat likely to change jobs due to negative experience user their company’s enterprise software.  “

In other words, bad software equals employee turnover.  We have something to correct that situation.  We have an easy to use web based interface which works over the cloud.  We have provided a way for you to look at information with your smart phone using the Microsoft Tag technology so that at any time you can view a Bill of Lading or piece of inventory. 

Go and click, you know you want to!

E3 systems wants to promote easy to use software that solves real world problems, we think that Microsoft Tags are going to make life around your loading dock easier.  Now you don’t have to type or lookup information.  Now you just scan the information and it shows up on your smart phone.  Tags can be incorporated in sales materials and are easy to use and reproduce.  The best part about tags is that they hold more information than a standard bar code so they can be hooked into web pages and other systems. 

Once you see tags in action you are going to be surprised how they will make the world of logistics go round. 

The Liberty of Being an Entrepreneur

The grand experiment gets another year older.

I hope that everyone has had a good Independence Day weekend.  I would think our founding fathers would be pretty impressed with the nation they created many years ago.  We are in the midst of political problems and economic challenges but I still think that we are the grand experiment of western civilization.  We are the example that other nations strive for and I look forward to the future as the 21^st century becomes another American Century.  

One of the reasons for American exceptionalism is we are able to take abstract ideas and convert them into concrete solutions to problems.  The cotton gin, telegraph, telephone, electricity, transistor, and internet were American inventions which we were able to adapt to the real world.  Seven years ago, Facebook was the product of a sexually frustrated young man.  Today, I have to promote my company on his service or face bankruptcy.  America is one of the few nations where this kind of story can take place.  You don’t see many entrepreneurs coming from France or Spain.  China seems very good at undermining human rights and violating patent regulations but they still do not have the track record of innovation we have in the United States. 

I am part of that tradition.  I created a company called E₃ systems.  What we provide is a means for small to medium sized trucking companies to use the internet to manage their inventory and bills of lading.  In the future, I will have features which use the Microsoft Tag Technology to track items and inventory with smart phones.  I also plan to make it possible to view truck driver log books and fuel charges in real time.  I plan to do this at a reasonable cost and over the web. 

No software to install and nothing to purchase.  You lease it over the web.  I think it is a reasonable means to address the challenges that the smaller provider faces. 

If America is going to recover from this recession, then it is going to take the efforts of Entrepreneurs to make a difference.    I think I am up to the challenge.