Do towns benefit from building 2 pizza teams?

What’s the big deal about building an environment that creates the ideal conditions to form a two pizza team? Having startups to talk about at the Chamber lunch is exciting, but this isn’t about improving your cool factor. Improving the finances of your town’s families is important, but there are bigger benefits that affect everyone in town: economic diversification and risk reduction.

What risk?

When 100 families in a town depend on one employer, the current and future health of that town depends on that company, their management, the market they’re in, the market of raw materials they consume (if any), the owners, and so on. One mistake of the wrong kind can put the finances of 100 families at risk – all at once. When 100 (or 1000, or 10000) families in one town depend on one employer, the risk to the finances of that town is higher than the sum of the paychecks involved. All of us can probably cite an example where one of these companies failed, was forced out of business, or was bought out / divested, etc. The reasons don’t matter as we rarely have control over them. Diversifying your local economy is one defensive strategy against such events.

It isn’t that we shouldn’t seek big companies (no matter what “big” means to your town) or grow them locally. We should, but we have to do more than simply seek large employers to the exclusion of all other strategies. Expect that this won’t be what many are used to or expect. Be ready to defend those efforts with progress reports and outcomes, rather than “we know better than you” opinions. You should expect to be questioned about your efforts. The quality of your plans, your transparency, and the frequency and candor of your progress reports will all contribute to getting more people on board.

The economic diversification that comes from the creation of an annual two pizza team will surely be slow, but few lasting things of this nature happen quickly. The political (not necessarily election-related) pressure on economic development teams to bring 100 or 1000 jobs to town at one time is tempting, but in most cases, it isn’t realistic. Enabling and encouraging the entrepreneurs in your town to build new payrolls at a steady pace while other efforts continue is best. You aren’t creating a competition – you’re making your community’s interdependent economy more resilient for everyone.

Job security comes, in part, from economic diversification

Not everyone is going to be interested in taking the leap and creating one of these companies – and there’s nothing wrong with that. However, those who don’t take the leap still need work.

Finding a new job is not a fun experience. It’s sometimes easier not to change jobs and employees. Given the difficulty of hiring and being hired, it sometimes seems like neither employers nor candidates want to go through the hiring / interview process one more time. Despite the mix of sometimes unsightly job / employee seeking situations, there are companies out there who want to find good employees, pay them fairly and keep them. Likewise, there are employees who want to find a solid employer and stay with them for a long time.

The companies that start off as two pizza teams and stick around are likely to be able to do these things. That they’re working toward giving up whatever job security they have *and* creating something new leaves the impression that they want something better. You’d think that they will want something better for their staff as well.

Jobs at these kind of companies often go beyond “just a paycheck”. The motivation for these startups is frequently rooted in the founders’ previous financial / job hardship and/or insecurity, so creating that kind of security for employees is a high priority. The job insecure folks in your community have a job, or two, or maybe three. When those jobs are at risk, and/or seasonal, and/or part-time, the stress and related cognitive load on that family affects everyone.

The obvious benefits of adding new (hopefully stable) payrolls to your town’s families are positive, but the benefits go beyond a particular family’s new source of income. Spreading the creation and stability of family economies across different industries and companies creates a resilience more towns could use. Photo by checkyourhead90 Photo by Jonathan Kos-Read

Lessons from working at home

Geoffrey James put together a good list of 10 lessons learned from his 10 years of working from home. I’ve worked at home (and in my kayak, as shown above) since 1999 so I thought I’d chime in on the topics in his list.

1) Solitude: Solitude can be addicting, but like all good things, you can’t let it become a required condition for work (See #3). Pros perform well regardless of crowd noise.

2) Cut your hours: “you’ll be able to get twice as much done in half the time” – This can be true, but never assume it will happen simply because you’re working at home. Other interruptions that only happen at home can fill the gap left by interruptions you’d only encounter at the office. You have to manage your work environment and interruptions in both places.

3) Avoid Starbucks: Working at a neighborhood coffee shop has positives and negatives. If you’re likely to run into a bunch of people you know, go to a different shop. I used to do this a couple times a week simply to get out of the house back when I wasn’t traveling much. In a small town, it’s very likely that you’ll run into someone you know and that can easily consume an hour of time intended for real work, so don’t set yourself up for that. Going to a shop where you won’t likely run into friends / clients / etc will eliminate the interruptions. Some people filter the white noise of a coffee shop better than others, so use headphones if necessary. Avoid coffee shops that don’t use the sound-proofing systems for their 110 decibel smoothie machines / blenders. Learn to work productively in these environments because you will inevitably find yourself needing focus time in an airport or out of town.

4) Stay out of the kitchen: The draw of the fridge is a big one because it’s so convenient.

5) Limit gaming time: I’m not a gamer, but if you are, manage it as well as you do trips to the fridge or you’ll find yourself out of work and/or out of clients.

6) Don’t setup shop in the bedroom: James is right on point on here. Anywhere but the bedroom, for so many reasons.

7) Limit phone time: This depends on the work you do, of course. I strenuously avoid taking calls without an appointment – particularly conference calls. If you can’t do this, “train” co-workers (or clients) when to call you (if you can) or try to schedule planned calls immediately before or after another disruption to focus time (such as another meeting). Even if you can’t get anyone else to change their behavior, it’s on you and no one else if you pick up the phone during focus time. You’ll likely have to remind clients that you don’t allow interruptions from other clients when working on their stuff, and that this rule works for everyone equally. If you need to be available in an emergency, give people a way to let you know they need you ASAP. Text messaging works well, but only for people you aren’t regularly texting with.

8) De-clutter: This is a battle for me. The Fujitsu ScanSnap 1500 helps immensely but you have to stay on top of it.

9) Be comfortable: Absolutely. Comfort, proper posture and ergonomics are critical whether you’re at the office or at home.

10) Don’t assume telecommuting gig will last forever: I’m a bit contrary to Geoffrey on this one. I don’t care what Marissa demands of Yahoo employees. Each of them had to decide to accept the changes she demanded or find another job. Make your choice and make the best of it, or deal with the lack of choice until you can make life and/or career changes that allow you to resume working from home. If telecommuting is what you need or want, then you must use the ability to telecommute as a filter for clients and employers. I understand that some work must be done on premises. For the work that doesn’t, the best people for a project or a job don’t always live where the company is. Businesses who don’t recognize this sharply limit the talent they can leverage.

Working from home is a great thing most of the time. Preparation of your telecommuting environment and management or yourself & others are critical to doing it well.

Why small business should care about Meeker’s slides

Mary Meeker’s annual Internet Trends report came out today, so I thought I’d offer a few comments about it and how its findings are likely to (continue to) affect small businesses, including small software companies.

The Slideshare version is rather slow right now,  so I suggest you check out the PDF version of the Meeker report.

Psst, thank you Mary.

Tablet sales

52% annual year over year growth. For software companies, this matters just a bit. Web apps that work great on phones don’t always translate to the tablet form factor. Do the work to make your UX good on both.

Context: There are 789MM laptop users globally and 743MM desktop users globally – this is after decades of computer sales. Tablets – despite the modern tablet only having been around for a few years, there are already 439MM globally. Ignore them at your own risk.

KPCBMeeker2014Tabletuse

 

Advertising media

Meeker2014AdSpend

When reading the “Print is over-indexed” comment, keep in mind that most businesses who use print do so very poorly. They carpet bomb rather than snipe and they don’t track lead numbers or ad/media performance. I suspect they will do the same when advertising on mobile ad platforms and will complain that, just like print, advertising doesn’t work.

Don’t be that business.

Hey, nice network!

95%+ of networks are compromised in some way, and small business networks are likely worse than most of the ones Meeker is referring to.

Yes, yours is probably one of them *or could be*. It happened to Target (et al), it can definitely happen to you.

A quote from the slideshow: “Vulnerable systems placed on the internet (are) compromised in less than 15 minutes“. This doesn’t mean the internet is the big bad wolf, unless you have a pile of XP machines that aren’t properly taken care of and operated by staff (and management) who will click on any-old-thing.

Free shipping

47+% of orders include free shipping, vs. 35% five years ago.

Say this 3 times: “Lifetime customer value”. If this hasn’t reached your area – and in many cases, it may be a long time coming, consider beating the world to the punch. Leaders lead.

Cloud computing costs still dropping

A bit of Doctor Obvious, but the numbers are huge.

  • Compute (ie: CPU costs) – down 33% per year from 1990 to 2013.
  • Disk storage costs – down 38% per year from 1992 to 2013.
  • Bandwidth costs – down 27% per year from 1999 to 2013.

Where’s your competition?

Anywhere and everywhere, perhaps.

Meeker2014Competition

Vicarious video living

The highest volume video streaming site is Twitch – a site where people watch other people play video games. Presumably they do this to learn how to play better, I really don’t know why else you would do this. While this is of little specific relevance to me, Twitch’s numbers are certainly relevant.

Twitch has more user viewing minutes than WWE, Ustream, MLB.com and ESPN combined. Yes, COMBINED. 12 billion minutes per month.

How does video fit into your strategic plans?

As of January 2014, 43% of TV content viewing minutes were on non-live-TV. IE: DVR, DVD, streaming, mobile streaming, etc. They want it when they want it, not when someone says they must consume it.

How does *on-demand* video fit into your strategic plans?

The world is flat

As of January 2013: 9 of the top 10 producers of internet content are in the US, yet 79% of their monthly visitors are outside the U.S.

As of March 2014: 6 of the top 10 producers of internet content are in the US, and 86% of their monthly visitors are outside the U.S. 4 of that 10 have effectively zero US-based visitors. Yes, China.

Alipay’s “Yu’E Bao” asset management startup went from $0 to $89B in managed assets in 10 months. It is now one of the top 3 global money market funds based on assets under management. TEN MONTHS.

60% of the top 25 tech companies in the US were started by 1st or 2nd generation Americans. 1.2MM employees as of 2013.

How do you know which customers want to be an insider?

Coffee Cupping

This past weekend, I checked off two to-do- list items with one visit to @OnyxCoffeeLab.

First, I was looking for a good locally-owned place to sit, sip and write. A coffee shop.

Second, I was meeting with the founder of a @StartupWeekend-born startup to discuss how it would go forward.

It started off nicely enough with a chat with the baristas about the Northwest (one of them was from Pullman, WA), including some agreement that NWA’s current 18% gray winter sky is right out of a classic Northwest winter.

After some solo writing time, my meeting guy arrived. As we finished our discussion, a group of people entered together, filling the table’s remaining 10 seats. Soon after, the shop’s owner came over and started assembling a mass of small coffee cups, bottled water and other gear.

Turns out that a couple of hours earlier, I had settled into a seat at the Onyx Coffee Lab‘s cupping table.

Lean Customer Development

What I witnessed next was a nice session of customer development.

In addition to enjoying some new-to-me coffees, I watched as the owner exposed already-bought-in customers to new products that he’s considering for their product mix. None of the coffees we tasted are available for sale – the owner was still determining which ones he liked and presumably was using the reaction of this group to refine his opinion.

Later, I found out that the shop does cuppings (think “wine tasting” for coffee) almost every Saturday at 10 am. Sometimes they discuss different brew methods or other coffee geekery – always with a dual focus on education (building a better customer/spokesperson) and the coffee itself. This week, the education component included some help understanding how the coffee business grades coffees, ie: specialty vs run of the mill vs “not-so-specialty” coffee and how the various acids and sugars in the bean result in what we taste and feel when we have a cuppa Joe.

I didn’t discuss this with the owner after the cupping, but I suspect this was not only done in the interest of Lean Startup style customer development, but also to gather some feedback from those bought-in customers – presumably some of their biggest, best-engaged fans – as well as to build on their fanbase while pulling existing fans a bit closer.

I wish these sessions were on YouTube. They’d make a nice series for new fans to review as they choose their next “thirdplace“, much less for fans who missed a Saturday.

Oh yeah, the coffee

Coffee nerds, if you’re wondering what we tasted, we had:

  • Brazil Caturra
  • Burundi Bourbon (pronounced burr-bone, which has nothing to do with Jack Daniels)
  • Guatemala Geisha (no, nothing to do with Japanese bathhouses)
  • Ethiopian Heirloom (this one seemed to be the crowd favorite)

I preferred the last two, but I wonder if the order of their presentation provoked that result.

All in all, it was a great combination of StartupWeekend, coffee and the use of Lean Startup principles. Yet there’s one more lesson you can take from it.

In what position do they see you?

How can you can tweak and use this for your business? By understanding that a cuppings aren’t just about coffee, they’re about positioning.

  • The owner shares his coffee insight, education, expertise and knowledge with a group of customers who appear to be insiders. Almost everyone else in the shop is watching and listening intently since they don’t have a seat at the table (it’s first come, first serve). Some of them want a seat at the table.
  • The owner gets to meet with customers who have raised their hand to show they’re interested at a level beyond the customer norm. These folks will talk about the shop, its coffee, the cupping and anything else they felt was important. These people have other friends with common interests – including coffee. You know it’ll be discussed. In fact, you just read what I shared about it.
  • “Raising their hand” says “I care about, enjoy, have enthusiasm about coffee at a higher level than your average customer.” Just being a customer at a “coffee lab” shows a higher than typical interest in coffee. These guys go beyond that norm. Those are the customers for whom your positioning is most important. They are also the customers whose feedback you want.

How you can accomplish these things for your business?

Not on my watch!

Watches (32) 1.1

Most everyone I’ve talked to who really cares about their work has that one thing that brings meaning, context and (as my kids used to say) “give-a-care” to the work they do.

You might have heard it described as “Not on my watch”, a reference to pulling¬†watch duty on naval ships.

The best way I’ve heard it described is this:

What do you feel strongly enough about to say “That isn’t going to happen while I’m here.”

Whether you own the place or are working for the weekend, it’s that thing you just won’t rest about if it isn’t done right. It might be that thing you first notice when you visit someone’s home or business.

Are any of your employees working jobs that have little to do with their one thing? If so, they may be doing their assigned work while watching in frustration as the work involving their “one thing” is done at a level of quality or expertise that’s below their expectations.

Sometimes their response will be to take another job – one that leverages their one thing. Sometimes their response will be to take ownership.

Own it

You may see this when someone takes ownership of some part of your company – without being asked. It might be all or part of a process, a product’s quality or craftsmanship, a customer or a customer group. They take ownership by making the quality of that area their responsibility, perhaps going beyond your company’s standards. It’ll often happen without them being asked.

If you have employees, have you asked them (or put them in charge of) their “one thing”? If not, the signals will be there if they’re interested. They’ll make suggestions – often good ones – about how something is done. They may volunteer to help on projects that require expertise in their one thing.

If your company has people who seem less motivated than they should be, ask them if they’re doing their ideal work for you. If they could do any job in the company, is the one they’re doing the one they’d choose? If not, a pilot project can show you if they’re qualified to do that work.

If the pilot works out, you might find yourself with a newly motivated employee who really cares about the work they’re doing. New blood has a way of asking questions about things that’ve been forgotten, fallen in the cracks or weren’t considered previously – all because that new staffer (even if they’re simply new to that job) cares about that part of the business because it’s their “one thing”.

In the shadows

You may have departments within your company doing their own thing because they can’t get that work done any other way – at least not to their satisfaction and/or within the timeframe they need.

At a recent #StartupWeekend, I spoke on this topic with people from several different business sectors ranging from retail to light manufacturing. Each of them knew of a department within their company that had a “Shadow IT” group.

“Shadow IT” is a small departmental group (or a person) building technology solutions for themselves that they couldn’t get from their company’s IT (Information Technology) group.

One person from a large national retailer (not *that* one) is doing their own thing because they felt it was the only way to get the solutions they needed. Rather than wait or do without, they built it themselves.

This isn’t unusual – but it’s a sign of someone’s “one thing”.

That person doing the Shadow IT work might be the person who needs to take on that role (or join that team) in your company . Perhaps they become the official Shadow IT group for projects that don’t yet have an IT budget and haven’t appeared on management’ s radar.

As an employer, do I care?

You should. The under-served “one thing” staffers may not be disgruntled, but they may not be fully engaged. If you’re unaware of people (and their “one thing” assets) within your organization who could serve your business goals in ways you haven’t considered and at a level of quality that you might not have thought possible – what are you missing?

Ask them privately if there’s a project or job in the company that excites them. You never know what you might find. Having little startup-minded groups inside your business isn’t a bad thing.

The most expensive minute of your life

Starting over in business
Sometimes you just have to know when it’s time to move on.

To that end, a quote from James Altucher:

My first business I sold for $15 million. We built websites for entertainment companies. Bad Boy Records, Miramax, Time Warner, HBO, Sony, Disney, Loud Records, Interscope, on and on. Oh, and Con Edison. Mobb Deep would hang out in my office. Trent Reznor from Nine Inch Nails would stop by. RZA from the Wu-Tang Clan would want to play chess.

Then I saw that kids in junior high school were learning HTML. So I sold the business.

Are you ready (much less willing) to get out of the game you’re in?

More importantly, are you ready to start over?

Starting over is hard. It tends to take longer than you expect. It will probably cost more than you expect. But…if you see the handwriting on the wall, every minute you wait is even more expensive and painful than the last.

What to do if you aren’t ready

If you ask anyone who has kids how long you should wait before having kids, you’ll probably get an answer like: “You’re never really 100% ready, so if you want kids, just have one.”

The same goes for the things you’re not doing in your business.

We always think we need one more piece of knowledge. One more employee. One more location. One more revenue increase. One more class. One more tool.

So we wait.

The Fear Muscle

Thinking we need one more whatever is our subconscious “fear muscle” protecting us from some little piece of unknown, as if the one possible obstacle we can think of is enough to prevent us from starting, much less succeeding.

That one thing is usually not a start/stop choice, much less a project-ending obstacle. It’s usually just something we have to deal with – and it might not become an issue for weeks, months or even years. The scope of the project, the market and who knows what else could change by then. This hesitance tends to be an internal protection mechanism that we really don’t need. As a species, we’re far more adaptable than we realize, but our subconscious loves to protect us from what feels like an unknown.

In business, it’s protection we rarely need. In fact, if we need protection from anything, it might be protection from the inertia that keeps us from starting things.

Inertia is often the biggest obstacle we face. We tend to be afraid, or at least hesitant, to start as if we can only create the perfect child by having that child at the perfect instant in our lives. Anyone with kids knows better. Anyone who has started and built a business (or anything of substance) already knows this – but sometimes we still wait.

We’re not talking about the normal kind of afraid, just the “well, I need one more whatever to be certain this will work” kind of afraid.

Really, you don’t need that one more whatever. You just need to start. Start on the next project, the next service, the next journey or the next challenge and see where it takes you.

Do one thing

I know, it sounds simple. It sounds like common sense. Yet how many times have you waited and then later, wondered why you waited so long?

If you have to backtrack or stop to learn something, so what? It’s part of the process. You may zig or zag now and then, but that’s no different than what Marissa Mayer, Richard Branson or Warren Buffett deal with. Maybe the scale and probably the resources are different for them, but the PROCESS is the same.

Just get started…and keep moving.

Startup DNA

For those in the software / SaaS business, an interesting slide deck from a guy involved in some fairly high end startups.

The last third of the deck is not as impactful as the first 2/3rds, where in addition to his comments, the author offers some pretty helpful resources.

It’s worth a look.

What isn’t Amazon going to change?

During Amazon Web Services’ (AWS) November re:Invent conference, there were a number of interesting talks.

Psst…Don’t run away, not-interested-in-technology folks, this is barely about tech if you look closely.

I got the most out of the sessions centered around the strategic design decisions that Amazon.com (an AWS customer) and other AWS customers were making.

These discussions were all about making a system resilient, scalable and capable of reacting quickly and transparently to changes in the business – while keeping costs as low as possible and tied directly to the business’ actual resource usage.

Naturally, their point was that AWS helps provide this ability to people who build systems.

AWS streamlines server infrastructure the same way LTL trucking streamlines freight shipping.

LTL clients get to use a high quality transportation system without investing a fleet of trucks, warehouses, dispatchers, mechanics and drivers that they may not need two weeks from now. Yet all of those resources and jobs are necessary to get freight from point a to point b. Shippers pay for what they use, meaning less waste, more efficiency, better job security and better asset use.

As I said, this isn’t about tech.

No one ever says

During a discussion on why AWS is always changing, Bezos summed it up simply: “No one ever says ‘Jeff, I love AWS but I wish it was more expensive.’ or ‘Jeff, I love AWS but I wish it was a little less reliable.’ or ‘Jeff, I love AWS but I wish you would improve it at a slower rate.’ ”

Is it any different for you? For the LTL trucking firm?

In a business where inexpensive, high quality delivery whose cost tied to usage is the focus, these changes simply don’t happen without high quality systems managing things.

Systems reduce inertia, eliminate obstacles and streamline processes so people can get the right work done faster at the same (or better) level of quality.

They aren’t about tech.

What’s the next hot thing?

When Bezos was asked about the difference between being an entrepreneur when he started Amazon (1995) and now, he said “the rate of change has increased substantially”.

He noted that people always ask him what the “next big thing” is and lamented “I almost never get asked ‘What’s not going to change in the next 10 years?’ “.

He likened businesses that address those long-standing needs to flywheels. They take time to spin up, but run smoothly and efficiently once at operating speed.

These days, solutions to these needs can be built anywhere. In a rural Montana community of 4000 people, Zinc Air has developed energy storage technology that makes dependable, scalable, portable power storage a reality.

Power availability in the developing world is a need of substantial scope as it is in places that would otherwise require months or years of infrastructure construction. It’s one more example of a need that isn’t changing anytime soon.

Is there a business there?

Not all that long ago, a substantial reason for chasing venture capital was the cost of server infrastructure. Using cloud computing like AWS, you pay for what you use as your business grows, rather than for massive infrastructure you may never use. A long-standing obstacle that impacted business development has been addressed.

Obstacles like those that LTL trucking, AWS and Zinc Air eliminate are the kind of change that Bezos was talking about when he spoke of businesses addressing long-standing inefficiencies, problems and barriers in things that won’t change over the next 10 years, rather than trying to figure out what the next big thing is.

Consider hunger. The short term solution is usually feeding people who can’t feed themselves. The long term solution is somehow enabling them to alter their economic situation so they no longer need help feeding themselves. Solving it might include some combination of jobs, medical care, child care, irrigation, clean well water, transportation, seed stock and better farming methods.

“The next big thing” might be your streamlined solution to just one small inefficiency in one area that makes hunger so difficult to extinguish. And it might be bigger than Amazon.

If you’re willing to be misunderstood for a long period of time, then you’re ready to start something new.” – Jeff Bezos, commenting on starting Amazon.

What makes an entrepreneur tick?

Lots of nuggets here for small business owners in this panel video from Stanford Business.

There isn’t much need to watch this, but certainly worth a listen for you as well as perhaps family members, managers and yes, even your line employees.

I like the diversity of the panel, from a guy who quit high school and sold his business for $40MM before he was 18, to an engineer, to a woman twice denied partnership.