Why do startups fight city hall?

This past weekend, I had a brief discussion about Uber, France, tech startups and the need to “fight city hall”. It all started after I posted a story about an upcoming Paris taxi strike, which is designed to send a warning message to the French government and French people from a highly entrenched monopoly.

The message is “Don’t support something that threatens our monopoly or we will shut down the city.

The key thought in the article was that French government’s handling of the Uber situation is an illustration of what’s wrong with entrepreneurism in France and that the situation affects all French startups rather than solely impacting Uber.

It seems the laws in France are designed to frustrate entrepreneurs attempting to enter established markets, if not to suppress all new business entries. The article goes on to make note that all of this goes on while France’s leadership talks about how they want to encourage entrepreneurship.

Why care about what happens in Paris?

What in the world does this have to do with small business in the U.S.?

Similar things occur here in the States and in many cases, startups end up feeling forced into a situation where they are left with no choice but to fight city hall – often because the alternative is to be legislated out of business with the help of an entrenched competitor. Sadly, this “competitor” isn’t the least bit interested in competing. They’re happy to use the local and regional governments’ desire to protect the citizenry as a means of raising the bar into entering “their” market.

Most U.S. based entrepreneurs tend to avoid such battles because they are expensive, frustrating and quite often do nothing more than waste a business owner’s time and money.

Yet startups like Uber are often found doing that very thing – taking on governments to eliminate protections that were once created due to a public safety interest but have been perverted into something that seems perfectly designed to preserve and protect entrenched businesses not only from new entrants into the marketplace – but from their clientele as well.

Why startups?

Why are tech startups picking on established markets? And why do so many of them seem to want to fight city hall?

They often do this because that’s where the market is. We talk about the opportunity you create simply by improving service to clients here on a regular basis – and do so because it is one of the easiest ways to transform your business. Service – one of the essential things a business delivers – has gone from a foregone conclusion to a differentiating factor.

Uber is perhaps the most obvious and the easiest example to make note of, but they are far from alone on this one. Part of their attraction to consumers is how easy they make it to use their services when compared to most of their competition. Even now, their obstacle isn’t that cab companies all over the world have increased the quality of their cars, the ease of booking and paying for a ride, etc. No, their biggest obstacle is local / regional governments, many of whom have fought to keep Uber out.

The thing is, it isn’t really about Uber. They’re simply today’s easiest and most visible example to understand. What this is really about is creating more barriers to entry into a market.

Old rules that favor one company or one technology are what start ups deal with every single day. In fact they often focus on those areas because they make the market attractive. Markets with poor service often slowly become that way because of a lack of competition created by artificially created barriers to entry. Often companies in those markets treat their customers so poorly that people do business with them only because have no other choice.

These are markets that have repeatedly sent a message to their clientele that they need to be taught a serious lesson. Most local entrepreneurs can’t afford to fight City Hall. Only those who are highly capitalized have that luxury in most situations – the luxury of out-waiting and perhaps, out-spending city hall, something no small business owner can do.

As any small business owner knows, there are plenty of barriers to entry as it is. Be careful not to ask your representatives to help you create more of them, as the next time, it could be your business that’s targeted the next time. Each one of these barriers that is successfully installed makes it easier to create another one.

Starting a new business is hard enough as it is. Let’s not create more barriers.

Senate may drop the soap (maker)

About six years ago, there was a big fuss about the CPSIA, a law that was written to sharply reduce lead in clothing, toys and other items made for children under 12. Why lead? Lead poisoning causes developmental and neurological damage in young children, including by breathing dust from peeling lead paint.

I made some noise about the law as originally passed because it would force the makers of handmade childrens’ items out of business – and a lot of those businesses exist here in Montana. It wouldn’t have put them out of business because their products contained lead, but because of the costs of per-batch independent lab testing to prove they were lead-free.

The law passed unanimously. Imagine that happening today.

It passed in response to the recall of millions of lead-tainted toys in 2007-2008. However, there was an uproar from makers of small motorcycles and bikes. Lead appears in tire valve stems and other unlikely contact areas, which left them subject to the law.

The publicity resulted in a number of public forums with elected officials. In a response to my question during the Kalispell MT forum, my U.S. Representative lied to my face that he didn’t vote for the bill (the link shows otherwise). He then took the side of the youth motorcycle manufacturers (rightly so, I think) and said he’d fix the poorly-written law he’d voted for.

The law eventually got fixed, mostly, via an amendment exempting both small volume (often handmade) manufacturers – the ones who couldn’t possibly afford the testing requirements of the original law – and those reselling items they didn’t manufacture. While it didn’t save thousands of small handmade manufacturers from their losses prior to this amendment, it did stop the bleeding.

I say “fixed, mostly” because the law was amended to allow Mattel to perform their own lead testing rather than use independent labs other manufacturers must use by law. The irony? The slew of lead problems that provoked Congress to act involved millions of toys manufactured by Mattel and their subsidiaries.

What’s this got to do with soap?

I share all of that for a couple of reasons.

One, there are parallels in the CPSIA story to a new bill that could affect manufacturers of handmade soaps, lotions and the like, Senate Bill S.1014, the Personal Care Products Safety Act.

Two, there are a large number of handmade manufacturers of soap, lotions, creams, lip balms and scrubs in Montana, including my wife’s business.

Three, when the press microphones are on, there’s a high likelihood of horse biscuits along the lines of “I voted for it before I voted against it” or “My vote was a shot across the bow“, so have your biscuit filter ready.

S1014 is on the agenda of the Senate Committee on Health, Education, Labor, and Pensions, which is full of high-profile personalities, including two Presidential candidates. The needs of your small business or your employer may not mean squat in the context of Presidential candidate image makers advising these people.

Handmade manufacturers on alert

As in the CPSIA situation, an industry group has worked to provide exemptions for small handmade manufacturers. The Handmade Cosmetic Alliance (HCA) has for months tried to educate and reason with the bill’s authors and suggest that they include small manufacturer exemptions like those found in the 2011 Food Modernization Safety Act (FSMA). Despite that, these small handmade soap, lotion and cosmetic manufacturers will be held to the same standards that makers of prescription drugs and medical devices meet.

Most of these 300,000 (!) small manufacturers use food ingredients found in grocery stores, even though customers don’t eat them or use them to treat a medical condition. We’re talking about olive oil, oatmeal, sugar, coconut oil, etc. My wife buys olive oil for her creams off the shelf at Costco.

This law will force them to pay user fees that will result in higher consumer prices, plus it will add more paperwork burden by requiring them to file per-batch (10-50 units) reports. For the more successful homemade product makers, this could result in 100 or more FDA filings per month. Everyone has time to do that, right?

It’s almost tourist season. Many of the products tourists buy and take home are made and sold locally, and thus feed local families in your area. Speak now or …

Do you manage perception or reality?

Screen Shot 2013-04-07 at 10.55.46 AM

This “Sorry” image is what you see on YouTube when you’re prevented from viewing a video because the uploader decided not to make their content available in your country.

In this case, the video was a seven minute news clip from 1970.

NINETEEN SEVENTY.

I understand how allowing a viewer in another country to see 43 year old content of historical interest would seriously undermine that organization’s ability to sell advertising, much less how it would damage their credibility in the news market.

I wonder if the decision to limit this company’s news footage to their home country was considered long and hard in policy meetings and with legal. Was much discussion dedicated to finding reasons to limit access? How about efforts to find reasons to not to?

Was the cost of making that decision higher than the cost of letting anyone in any country view the video?

It reminds me of people who put more effort into controlling the public’s perception of their company than they do into taking actions that actually impact the company’s public image. The irony is that attempts at perception control tend to damage their employer’s image more than the truth would have.

We often ask the wrong questions.

Every day that you look the other way in your business when faced with perception vs. reality issues, your business becomes less personal, easier to hate and easier to replace.

Is that really what you want?

What does your community’s welcome mat say?


Creative Commons License photo credit: archerwl

A state association of businesses has pushed legislation into our state house that would limit the on-premise retail sales volume of a related group of businesses.

Yes, we talked about this recently, but today let’s go beyond this one business, this one time.

That situation is just a symptom of a far bigger concern.

For an established business with good wholesale distribution in place, retail sales limitations wouldn’t be a big deal – except that those same businesses already have legislated production and sales volumes that limit their growth.

These production/sales limitations brilliantly restrict both growth and new businesses in that market.

One of our town’s newest businesses, started by a young family, is placed in jeopardy by this legislation just weeks before their doors open.

That doesn’t mean the “other guys” don’t have grievances to settle (such as a level compliance playing field), but those grievances aren’t going to be cured by artificially limiting sales numbers.

Even so, it shouldn’t be about one business group over the other – both have the right to do business. I know business owners and employees on both sides. I believe these two groups have much more to gain by cooperating.

While the specifics of issues like this will change from year to year, what concerns me most is the message these situations send.

What’s the message to young families and entrepreneurs?

Last week, we talked last week about what communities do to encourage young families and businesses to put down roots or return to the area. Governments and community economic development groups put a lot of effort into these programs. Meanwhile, legislative proposals that limit the growth of new small businesses fly directly in the face of that work.

My question to those in the State House is this: Does legislation that chooses one market over another send the message you want to send from your state, much less your community?

Do laws like that encourage young families to stay and invest in your community? Does the legislature realize that when a small business person sees this done to one business niche, they can’t help but wonder if it will be done to another niche in the next session?

The message we heard then

When we moved our family and our business here in the late 1990s, one of the reasons we chose Columbia Falls was the warm response we received from folks around town. When we said we were considering moving here, the typical response was something like “That’s great. We’d be happy to have you here.”

While schools, the Park and recreation opportunities were important, the overwhelming “this is the right place” feeling came from the welcoming nature of the people we met.

The message I heard back in the 90s was not “Be a no-holds-barred success at all costs.” It was “Build it here. Be a good corporate citizen, a good employer, a profitable example for others who want to build / relocate a business here, and an asset to your community. Become a member of the family.”

If things didn’t work out or legislation targeted my business, I could always move it out of state because it isn’t tied to a brick and mortar retail location. It’s a by-design luxury and a property of the kind of work we do.

Thing is, brick and mortar retailers, restaurants, microbreweries and most services businesses really don’t have that choice.

What’s the message now?

No matter what the state house is working on, they must be careful about the message being sent by legislation that artificially manipulates markets and favors one group over another. It’s a message that other business owners and entrepreneurs look for when they choose a home. Business is hard enough as it is without having to fight off competition from the state house.

This session’s controversy in your state house, whatever it might be, will likely be old news next session.

The real concern to have is this: What our legislators do sets out your state’s welcome mat.

Do you want it to say “Welcome to our state” or “Build it somewhere else”?

How to keep cloud service failures from affecting your business

You look at those prices for Amazon cloud services and think you’re getting a deal.

Fact is, you are. You’re hiring a professional staff to run your systems in a very-high-quality environment and paying little for it.

But are you using these cloud services in a way that protects your business?

Forbes analysis of the Northern Virginia Amazon cloud outage from Friday’s storm doesn’t clarify who does / doesn’t use the NoVa cloud site vs. who had a better redundancy setup.

Netflix and Instagram are likely re-examining their use of cloud services. I doubt they’ll eliminate Amazon as what happened in Northern Virginia can happen anywhere. They’ll likely discuss cost-effective means of increasing redundancy that leave them less sensitive to single location failures.

Questions to consider

Redundancy with transparent switchover to backup systems with no data loss is ideal. Do you need that? Can you afford it?

Ask the right questions when designing your use of cloud services:

  • How much downtime are your customers (internal or external) willing to tolerate?
  • Do you know what an hour of downtime costs internally (lost productivity, inability to serve customers) and externally (refunds, lost customers).
  • Given those costs, how much downtime can we afford?
  • What notification mechanisms do you need to have in place to switch? (or is the switch automatic?)
  • What do I want to happen when a failure occurs?
  • What am I willing to pay for my desired level of redundancy?
  • What will a failure that doesn’t use this level of redundancy cost my business?
  • How do you switch to the redundant system? Is it manual? Transparent?
  • Does your vendor offer redundancy? How does it work?
  • Are your vendor’s redundancy sites geographically dispersed?
  • How does my data get replicated?

This really isn’t about Amazon. It’s necessary to protect your business whether you use Rackspace, Amazon, Microsoft Azure or other cloud services. The key is knowing what you want to happen when a failure occurs and designing it into your processes.

Why not keep it all in-house?

It’s tempting to keep your data in-house. It somehow seems cheaper and there’s the impression that it’s more secure. Evidence indicates locally-hosted data has its own risks.

Locally-hosted systems have a single point of failure. I’ve had clients whose businesses have burned or flooded and others whose servers were stolen. Without a remote location to transition to, you’re down. Can your business handle that? If so, for how long?

Security

Security of internal business data is a concern with cloud vendors. High-quality cloud vendors obtain security certifications like SAS70 (financial industry), HIPAA (health care) and PA-DSS (credit cards), which require regular audits to ensure continued compliance. Companies who keep their data internal are subject to them as well – yet they still suffer data loss.

Local data storage doesn’t allow you to escape expensive HIPAA or PA-DSS compliance if those requirements apply to you. In the financial industry, systems are sometimes subject to examination by the OCC (Office of the Comptroller of the Currency) and/or other agencies. But that doesn’t prevent data loss.

Regardless of system/data location, security should be designed into business processes rather than added as an afterthought.

Electrical power and internet

Cloud vendors use industrial-class electricity supplies with diesel backup generators. Their investment in these backup systems vary both in capacity and available time-on-generator, so ask for details. A site’s ability to run on diesel for two weeks isn’t nearly as important as your ability to switch to another facility in two hours…unless they don’t have two hours of generator time.

You can (and should) use an uninterruptible power source (UPS, aka battery backup) with automatic voltage regulation (AVR) to protect your local systems, but you’re still face internet-related downtime if remote staff/clients need to access locally-stored data.

Cloud vendors have multiple very-high-speed internet providers so that they are not subject to pressure from any single vendor and so that a single vendor’s downtime doesn’t bring the entire location down. You can do the same, but most small businesses don’t. If remote connectivity is critical to your business, it’s a smart strategy.

Whether your systems are local, cloud-based or both – plan for what happens when the lights go out. It just might save your business.

 

 

Out of Stock

Quais de Seine, Paris
Creative Commons License photo credit: Zigar

When your store is out of stock on an item…what does your staff do and say?

When I was out of state not long ago, I looked around for a pair of light hikers for everyday wear. I knew exactly what I wanted right down to the model name.

I visited a locally owned store, but they didn’t have my size in stock. A few days later, I visited a box store. They had the shoe on the wall (which is never my size), but they didn’t have any others. They didn’t even have the match to the one on the wall.

As I got into the car in the box store parking lot, I called the locally owned store again just in case they had some new arrivals. Nope.

They offered to order a pair for me, but I told them I was visiting from elsewhere and wouldn’t be around when they arrived.

At this point, they had choices:  Focus on the sale, focus on the customer or try harder.

What’s your focus?

If your sales people are trained to focus on the sale, they might say “Nope, we don’t have any” and be disappointed that they didn’t get a sale. If that’s the end of the conversation, your customer might go elsewhere – losing the sale and the customer.

If your sales people are trained to focus on the customer, they might say “Nope, we don’t have any. Have you looked at (competitor number one) or (competitor number two)? They both carry that brand.

If your sales people are trained to focus on keeping your customers happy, they might say “Nope, we don’t have any. If you come by and let us fit you in a similar shoe in that brand, I can order that model in your size and have it shipped to you. If it doesn’t fit like you want, we’ll take care of you until you’re happy or we’ll give your money back.

What they did was refer me to two of their competitors (one was the store whose parking lot I was in). The second one had my size in stock, so 20 minutes later, I had my shoes and was heading for the in-laws place.

The “try harder” choice might not have been what I wanted, but I wasn’t given a choice. Keep in mind that you can always fall back from the “try harder” position if the customer isn’t interested in or cannot use that kind of help.

The important thing

You might think that the locally owned retailer lost a sale, but that isn’t as important as keeping the customer over the long term.

While I wasn’t able to buy the shoes from the place I wanted, they were able to help me find them.

They could’ve run me off quickly by saying “We don’t have that size.”

They didn’t do that. I suspect their handling of the call was the result of training driven by a management decision.

I wasn’t a familiar voice calling them on the phone. While I’ve bought from their store on and off for 20 years, they don’t know that because they keep paper sales tickets. I’m not there often enough to be a familiar face / voice and had not been in their town for two years.

Yet they treated me like someone they want to come back.

Do you treat your customers that way? Do your online competitors?

Competition from tomorrow?

Sometimes business owners complain about online competition.

Yet online stores can rarely provide instant gratification. It’s difficult for them to help you buy something you need today for a meal, event, dinner, date, meeting or presentation happening later today.

They can rarely deliver the kind of service a local, customer-focused business can offer.

Online often gets a foothold when local service and/or selection are poor and focused on the wrong thing. Even with online pricing, a product isn’t delivered until tomorrow.

When you aren’t competing strongly against tomorrow, you really aren’t even competing against today.

Focus on helping them get what they want and need. Whether they are local or remote, customers just want to be well taken care of and get what they came for.

Where were you when the iPhone and Kindle were being designed?

Indian Sign
Creative Commons License photo credit: truedudi

As we discussed yesterday, anti-competitive businesses sometimes do “unfair” things.

Occasionally, they commit illegal acts to gain an edge. Commonly mentioned examples include bribing officials to get contracts or have them look the other way on enforcement or quality issues.

Sometimes the unethical things are illegal, such as refusing to sell spare parts to repair shops that compete with the manufacturer’s repair department.

The CPSIA/Mattel inspection situation is an example that surely makes you wonder. Legal (perhaps), but unethical handling by both Mattel and the CPSC.

Ultimately, competitive behavior has two sides. Let’s discuss a few examples…

Where were you when Pittsburgh, Tokyo and Guangzhou were investing in internet and manufacturing infrastructure?

  • Were you talking about how your infrastructure/facilities were “good enough”?
  • Do you (or did you) laugh at the quality of products that say”Made in China”? Do you find better alternatives locally?
  • When other companies moved call centers to India, did you follow suit in order to cut costs? Or did you follow suit because they provided better service to your customers?

Where were you (and what were you up to?) when Apple was designing the iPhone? When Amazon was designing the Kindle?

  • What – besides stare and/or cuss – have you done to respond to those “threats”?
  • If you aren’t the most strategically advanced vendor in your market – what have you done about that this year? Next year, will you be in a higher position strategically than you are now? How will you get there?

Where were you in the 90s when Amazon was investing in the long term, developing their e-commerce platform and despite their youth, doing e-commerce far better than anyone else? Note: “investing in the long term” often called “losing tons of money” on Wall Street.

  • Did you spend any time figuring out how your business could incorporate e-commerce – or if it even made sense to do so?
  • When the Kindle came out, did you buy one to better understand the competition that just popped you in the mouth with a right cross?
  • When Costco and WalMart started offering best sellers at or below your wholesale cost, did you complain about unfair competition or did you do something to make your business a better place for readers to buy books?

Where were you over the last 30-40 years as Wal-Mart laid the foundation for today’s domination? (and then continued to improve upon it – and did so right in front of your eyes)

  • Were you making it easier to buy?
  • Were you making it easier to park and enter your business?
  • Were you making is easier to pay your invoice, shop, ship, get a refund, repeatedly place an identical order, or talk to customer service?
  • Were you giving your customers more reasons than ever to come to your store instead of the local box store?
  • Did you start to build(or enhance) a high-value relationship with your customers that no minimum wage employee in a blue vest could *ever* break?

Where were you when Mumbai built business centers out of slums, trained tens of thousands of workers, and built a modern communications infrastructure?

  • Were you enjoying your existing legacy, built 40-50-60 years ago? (Ask Woolworth where that got them).
  • Were you letting your city or your manufacturing plant rot while holding out for another government bailout or sweetheart contract with a government entity?
  • Did you spend more on lobbyists in the last 5 years than you did on educating your employees?

Where were you when colleges and secondary schools in China and India were ramping up the quality and technological level of the training they deliver?

  • Were you complaining about your school taxes or local school boards?
  • Were you complaining about the parking problems caused by the local university?
  • Were you whining about the foolishness of having a local community college?
  • Did you sigh in disgust after interviewing yet another unqualified prospective employee?
  • Did you complain to your CPA or another business owner about the cost of training your staff?
  • Were you still running Windows 95 in your schools?
  • Were you ignoring the fact that most of the local school’s students are more technologically savvy than their teachers or administrators (much less their parents)?
  • Have you ever looked at the budget for your local school board? For that matter, do they make it readily available?
  • Have you thought to yourself “Yeah, but we can’t do that here, this is *your town’s name*?”

When things go south

When things go south, our culture (I’m speaking of the U.S., primarily) is to find someone to vilify…to blame. Generally speaking, we must point the finger at someone because it can’t possibly be our fault.

You’ll be glad to hear that I can save you some time there.

If you insist on laying blame, the person who can pull you out of it is the same person can blame: You.

Tomorrow, we talk about that and the ROI (return on investment) of blame.

After 3 days, we’re finally going somewhere positive and useful with all of this.

FACTA: Red Flags and Milk Bones

Restless Nights
Creative Commons License photo credit: il Quoquo

Despite the fact that Blondie (our golden retriever/ husky mix) gets credit card applications in the mail, identity theft is really not something that keeps her awake.

For that matter, little does.

When we go to Wells Fargo together, they never ask for her ID.

Maybe the sad Golden Retriever eyes are what the ladies at the drive-up can’t resist. All I know for sure is that on the way home, the old girl (Blondie, that is) filets out in the backseat in Milk Bone heaven.

For us bipeds, life is a bit more demanding. We’re asked for IDs frequently, yet sometimes we aren’t asked even though we’re supposed to be.

Why, whatever do you mean?

The last time I read an American Express merchant agreement, it said something about verifying the cardholder’s identity by checking their driver’s license or similar government-issued ID.

For whatever reason, I can count on one hand the number of times that happened since 1983.

I kind of understand the thought process here. Businesses likely see that as an opportunity to offend their clientele and customers might be annoyed. Still, that’s simple enough to defuse by saying something like “I apologize Ma’am, we just want to be sure that someone else isn’t using your card”. But it doesn’t happen.

Meanwhile, identify theft increases and as you would expect, lawmakers in Washington, in the state house and eventually, in the financial industry respond with ways to combat the problem.

For example, the credit card industry has PA-DSS (and a few things they worked up prior to that).

That’s a FACTA

For everything else, there’s Mastercard. Er, I mean FACTA – the Fair and Accurate Credit Transactions Act of 2003.

You may hear it referred to as “The FTC Red Flags Rule” or just “Red Flags”.

For banks, it’s old news. They’ve been dealing with it since 2003.

Just yesterday, one of my banks called and asked me to drop in sometime so they could scan my new driver’s license (it was new last October). The scan they have shows an expired date. Apparently regs require that the ID they have on file is current. At least they are paying attention (good news).

My presumption is that a scan of your ID allows the bank to compare the scan vs. the one that tall, good-looking guy gave to the teller before attempting to empty your savings account. I don’t know if they actually do that or not.

Are you a financial institution?

You’re probably wondering how all of this impacts the small business owner. For starters, it might just make you into a financial institution.

FACTA applies to any business that provides goods and services to consumers and bills them later (mostly).

Implementation for small businesses keeps getting delayed, for what are probably obvious reasons, but they say they’re serious that the November 1, 2009 deadline is the real deal.

Definitions are funny things. Like standards, they are subject to interpretation. I don’t look upon myself as a financial institution or a creditor, but someone else just might and the same goes for you.

Here’s a quote from the FTC.gov Red Flag Rule page:

The Rule applies to ‘financial institutions’ and ‘creditors.’ It’s important to look closely at how the Rule defines those terms because (emphasis mine) they apply to groups that might not typically use those words to describe themselves.

(snip)

Under the Rule, the definition of ‘creditor’ is broad, and includes businesses or organizations that regularly provide goods or services first and allow customers to pay later.

Examples of groups that may fall within this definition are utilities, health care providers, lawyers, accountants, and other professionals, and telecommunications companies.

The definition also covers businesses or organizations that regularly grant loans, arrange for loans or the extension of credit, or make credit decisions.

Examples include finance companies, mortgage brokers, and automobile dealers or retailers that offer financing or collect or process credit applications for third party lenders. In addition, the definition includes anyone who regularly participates in the decision to extend, renew, or continue credit, including setting the terms of credit.

Because of this, I cant suggest strongly enough that you read the FTC Red Flag Rule documents (link at end of post).

Here’s another one from the Red Flags FAQ – it’s the one that gets me:

The Red Flags Rule applies to businesses that regularly defer payment until after services have been performed.

I don’t defer all of it, and I don’t do it for all clients, but it doesn’t matter because I do it in some cases for some amounts.

I wonder how many businesses that accounts for?

No Quarter for Cities & Community Orgs

Community benefit organizations (also known by the misnomer of “non-profits”) are also subject the Red Flags Rule if their business processes and billing situations fit the profile.

Even the city where you live is considered a creditor by this Red Flags Rule if they (for example) bill you after the fact for the amount of water and sewer your house or business used last month.

If they charged a flat fee for water/sewer, even if it is after you’ve used it, the city wouldn’t be a FACTA creditor. Ahhhh, those little details.

Credit cards and retainers

Thankfully, it doesn’t appear to apply to businesses who take a credit card number and charge it monthly until your balance is paid off (PA-DSS deals with that – we need to talk about that little gem as well).

Likewise, FACTA doesn’t impact businesses who collect a retainer and then credit future services against that retainer. You knew they’d exempt attorneys *somehow*, right?

While this all of this isn’t the end of the world, it will require some process refinement and it might even change how you bill your clients.

You can learn more at http://www.ftc.gov/redflagsrule

#amazonfail, Niemoller and your business

choc bunny
Creative Commons License photo credit: Asti21

First they came for the chocolate bunnies, and I did nothing because I am not a chocolate bunny.

Quite a weekend we’re having: Passover, Good Friday, Easter, the Masters and a few thousand Easter Egg hunts, to name a few.

Oh, and I smoked a pork roast that turned out totally incredible. But I digress:)

In the midst of all the holiday celebrations, worship, family time and so on, Amazon gets into the act. So much so that they are trending #1 on Twitter (you must be logged into Twitter in another browser window/tab BEFORE clicking this link, sorry but that’s just how Twitter search works).

The hashtag (ie: search term) on Twitter that is receiving all the attention is #amazonfail.

First they came for those with an Amazon rank

It’s been a while since the online bookseller stepped in it and alienated a huge number of people, but they got into the act again this weekend.

Last time it was about Amazon shafting authors who use print on demand services that weren’t owned by Amazon.

This time, it’s some or all of the “adult” community.

At first, it wasn’t clear exactly what was going on (and still may not be), but an official customer service response from Amazon indicates that they are removing sales rank data for content with adult ratings. Amazon now denies this, calling it a glitch.

A growing number of folks in the GLBT (or LGBT) community (particularly on Twitter) are noting some inconsistency of the removed ranking data, noting that it seems to apply more to content of interest to them than to adult material across the board.

No matter what your feelings about the various forms of sexuality, I should remind you about two things:

  • First, the Rev. Martin Niemoller poem, “First they came“. If your business (through you) is willing to take on a group, be careful what you wish for. Be sure of your staying power with your stance on an issue.
  • Second, while there are political and other sensitive issues here, this isn’t why I bring this up. There are business issues intertwined throughout this.

In Amazon’s case on this issue, they risk a nationwide boycott from the LGBT community. If they change their mind, they risk a boycott by other groups. If they waffle and end up somewhere in the middle, they might get both.

Yeah but this stuff has nothing to do with my business!

Not really.

It’s 2009. For no cost, anyone can get detailed info about your political contribution numbers and plot them on a Google map and do any number of things with it, including to suggest that people pay you a visit.

Are you ready for that?

If you think your personal values don’t affect your business, think again.

Every business owner will inevitably find themselves taking a side on a political, theological or similar issue at some point (probably several dozen). You need to think through how you will handle situations like this.

  • Will you bring your stance on contentious issues into your business?
  • If you become active on an issue, will it impact your business and if so, are you strong enough to stand firm when the public attaches the issue to your business? It doesn’t matter what the issue is. What matters is how you will handle it and how your staff will handle it.
  • Are you willing to deal with the fact that your staff feels differently about the issue (whatever it is) than you do? Whether you are or not, you should talk to a HR specialist or an attorney who specializes in employment law before hiring people. HR problems are a great way to lose your shorts.
  • Is your stance on an issue going to affect the clients and employees you attract? As long as you are sure of yourself, that’s the primary concern. Well, that and are you acting within the law?
  • Will your ethics on the issue in question suggest that your business ethics should be called into question?

I’m not asking nor suggesting that you temper your views or how and where you share them with others. Only you can make that decision.

Nor am I suggesting that you be hypocritical. Congruent for sure, but not hypocritical.

What I am suggesting is that you need to decide in advance if you are willing to lose your business (or a part of your business) over your stance on an issue. It’s ok either way,  just be sure of yourself before you go down that road.

Some might suggest that you’ll get more business if you show your colors. In some cases, I think that’s absolutely right. One of the easiest examples I can think of where this likely helps a business is Ian’s stance on China, human rights and his Catholic goods store.

More than anything, I am suggesting that you consider the big picture before you step onto the soapbox.

No matter how you feel, it is difficult to get the genie back into the bottle.

PS: It’s all about the malted milk eggs for me.

UPDATE: An interesting theory on what might be happening to Amazon: http://tehdely.livejournal.com/88823.html

Whether this theory is true or not, it’s a valuable lesson for system designers of social media systems, interactive/community feedback systems and the like.

Meanwhile, a bunch of tweets reference people actively tagging conservative books with keywords that might get them de-listed from the sales rank numbers for the same reason that others are being de-listed.

UPDATE: Amazon says the change in sales rankings is a glitch. In social media circles, they arent getting a lot of traction on that. Time will tell.