How to Get Smart Fast
Filed under: Intellectual Capital, My Hobbies, Utah Entrepreneurship
Too many entrepreneurs try to do it alone.
But it’s easy to work together with a group of entrepreneurs that helps everyone succeed. That is what YEO and other organizations like it are all about. There are many examples of this in history.
In 1727 Benjamin Franklin and 12 friends formed a group which he called Junto, where they discussed the topics of the day for their mutual improvement. For decades these individuals helped each other succeed and make contributions to society.
Napolean Hill, author of Think and Grow Rich, wrote about Mastermind groups which he learned from Andrew Carnegie.
Authors Mark Victor Hansen and Robert Allen advocate building a Dream Team, a group of people who can guide you and help you achieve your goals.
Yesterday I held my first Brainstorm Meeting for entrepreneurs in Utah County. We met at Magelby’s for lunch. There were about a dozen of us.
After introductions I asked everyone to tell us what the biggest problem facing their business is right now. Then everyone pitched in freely with ideas and suggestions about how to solve their problem.
One person volunteered to take notes and captured dozens of excellent comments and ideas, web sites and marketing tactics, that could be very helpful.
We pooled our knowledge and all came away richer.
I think there is power in groups discussing problems and possible solutions, especially when everyone shares their ideas and knowledge freely.
If you are an entrepreneur, you should join or form such a group in your area.
If you want to attend our next Utah County Brainstorm meeting, email kateygreat “at” gmail.com.
Great Article: Hiring is Obsolete
Thanks to Eliot Jacobsen for sending me the link to the Paul Graham article on why 20 year olds should seriously think about starting their own company.
Paul shares the most exciting thoughts I’ve ever read about
disintermediating employers–let the young technologists figure out
what the customers want and build it–and not go to work for a big
company that doesn’t listen to customers very well and doesn’t create
products very well anyway. Highly recommended! (And just in time for me
to share these ideas with dozens of young students at the UVSC
Enterpreneurship Camp next week.)
Treasures at Your Local Business Library
Filed under: History, Intellectual Capital, My Favorite Books, My Hobbies
I have often felt that librarians are among the most underrated and underappreciated professionals in the U.S. The reference librarians that I have known over the years are among the most intelligent people I’ve met. They don’t know everything, but they usually know where to find anything–and fast!
I started a masters program in Library Science at BYU about 15 years ago, but it was short lived because my first company started taking off and needed me full time. But over the years I have spent hundreds of hours in the business and government reference section of the BYU Library. I have found many hidden treasures there. I have been richly blessed by my time in libraries.
For example, it was a librarian who first told me about Ancestry, the publishing company in Salt Lake City, which she said published 2 of the top 5 genealogy books of all time. Discovering Ancestry led to our purchase of that company a year or so later and the rest is dot com history. Many of the early databases we added to Ancestry.com were scanned from or discovered in the BYU Family History Library.
All of the content in our original CD Sourcebook of American History (which sold tens of thousands of copies) came from the BYU Library. Much of our original LDS Collectors Library content was discovered in the library.
I have gotten more new business and marketing ideas by perusing Directories In Print than any other single source. I now own the 23rd edition so I can browse it any time that I want.
Today I spent a couple of hours with two excellent series, the International Directory of Company Histories, in 68 volumes, and the Business Plans Handbook, which has 8 volumes filled with actual business plans that have been used in fundraising.
I decided that I will require every entrepreneur who asks me for free help to look through the index of the International Directory of Company Histories to find other companies in their space, to see what they can learn from the history of other companies, particularly the keys to their success.
Today I read about the founding of Altiris, a local company. I didn’t know that it was a spin of from KeyLabs, and that the former director of Novell’s SuperLabs was one of KeyLabs’ founders. I’ve know about Altiris for years, but I gained a much better understanding of the company today by reading the brief history. I bet MyFamily.com will be written about within another year or two. New volumes come out every year.
Personally, I think I’ll read every one of the several thousand company histories in the next year or two, trying to identify the key reasons why these companies became large and successful.
Sometimes it was product uniqueness, sometimes it was timing, or sales or marketing strategy. Sometimes it was luck.
I read about one Australian wine exporter who floundered for 10 years and nearly died until they qualified for a government marketing subsidy and then came up with a very obnoxious brand name (which I won’t repeat here). Now they are doing tens of millions in revenue. I read about a Canadian insurance company that succeeded for 75 years in large part because they didn’t require up front payments for policies–they had generous billing practices and therefore wrote a lot of insurance.
My goal someday is to create a Taxonomy of Business Success Tactics and to create some kind of Decision Tree software that will help entrepreneurs. If you are facing a particular challenge, I’d like to be able to retrieve a dozen or more historical examples of decisions other business people made when facing similar challenges. My system will mostly pull up full-text narrative; I’m not going to attempt to create computer generated decision paths. I think decisions must be left to your intuition–but your intuition could be informed by history.
Whether or not I ever built something that could really be useful to other entrepreneurs, I don’t know. I may just end up with a full-text knowledge base similar to my Taxonomy of Internet Marketing Tactics knowledge base that has over 200 ways to increase site traffic and conversion rate. I’ve benefitted a great deal by having this knowledge base at my finger tips for years. I just wish I could polish it up and make it available to others.
Ecommerce success story
Six years ago my brother moved to Montana so that he could manufacture and sell log beds. His company is called Montana Log Outfitters.
He built a factory on 10 acres and started selling beds on Yahoo Store
and eBay. Today he sells hundreds of log beds per month. Not bad for a
high school dropout–albeit one who has always had a knack for making
and selling things.
The internet has enabled him to have a great life style. His customers number nearly 10,000.
Now he is expanding his business through overseas manufacturing
arrangements and he is going to be doing a lot more internet marketing
and email marketing. Check out his very affordable log bed selection and get free shipping.
Two Latest Connect Magazine Columns
My last two columns in Connect Magazine were my favorite ones to write so far. Let me know what you think of them.
- April 2004: Choose a Business Hero
- May 2004: A Grand Experiment in Team Building (or Speed Dating for Entrepreneurs)
Stretching Startup Dollars
One of the most impressive young entrepreneurs in the state of Utah shared with me this week some of the ways he has cut corners and cut costs to preserve his cash. I was super impressed. I don’t know how you teach this, but entrepreneurs who have instincts and smarts about cash preservation combined with creativity and operational skills will succeed big.
My friend had a bunch of old, mostly orange and green chairs. I jokingly asked him if they cost him $10 a piece. He said, “less. Actually we bought 20 desks for $500 and got all these chairs for free.” A marketing company was selling its fixed assets and they furnished their several thousand square feet of office space for almost nothing.
His office space is close to the railroad tracks–”the closer you are to the tracks, the lower your rent” he says–and he pays only $0.39 per sq ft per month — about 1/3 of what everyone else I know is paying. The space was actually quite decent.
He pays $1,000 per month for a billboard to recruit potential web developers. That seems like a lot of money, but compared to the $23,000 he spent employing one developer who wrote poor code — none of it could be used — the $1,000 per month to improve his talent pool is a great investment.
He sends out tons of direct mail. He calculated that it would be cheaper to use a one-window envelope with the mailing address printed on the letter inside than a two-window letter. But rather than pre-printing his envelopes with his logo, he found it far cheaper to buy an envelope printer and print his return address. He got a $4,500 envelope printer on eBay for $500. He saves hundreds or thousands of pennies everyday the way he does his direct mail. That adds up to hundreds or thousands of dollars a year.
He found a source for ink toner where he pays $10 for recycled instead of $200 for a new toner cartridge.
Once he wanted to use a photo of a well-known person for an advertising campaign. The person’s agent wanted about $2,000 per month. But my friend found a stock photo of the same person on rubberball.com for $59.00 — a one-time fee for unlimited use.
This is the kind of entrepreneur that investors love because none of their cash goes into luxurious office space, or high salaries, or a “we’ve got it made” attitude.
I wish I had the money saving instincts that my friend has. My primary money-saving virtue is that I hate taking money out of startup companies in the form of board fees or salaries. In my first startup 15 years ago my partner and I took $18,000 salaries for a very long time. And more recently I’m saving big on development costs by using open source wherever possible.
CEOs who can figure out how to get by with very low expenses will find their equity value will increase significantly faster and their harvest will be much, much greater.
What money-saving tactics have you found most helpful in your own startup company? What is the best cost-saving measure you’ve ever taken? Please share your comments.
The Biggest Damper on the Entrepreneurial Spirit
I am a cheerleader for entrepreneurs. Nearly every week I meet new young entrepreneurs who think their idea can make a big impact on an industry. I want them to succeed and I know many of them will–the ones who dream and take the risks will often end up with amazing success stories.
But it is interesting is to contrast the young do-it-or-die-trying entrepreneurs with talented, seasoned employees who have been in the workforce sometime but are unwilling to make the leap, even to pursue a great idea that they have. The older group have more experience, more knowledge, more connections, more savings, and more ability to be successful. But they are almost always more risk-averse. They may have a family, a lifestyle to protect, and above all, they feel sometimes an overpowering need to keep their existing health insurance policy in place.
So this is the thing I have noticed, which someone needs to address–a primary reason for many people not to leave their current job and take an entrepreneurial risk (with the potential to create hundreds of jobs) is not salary, but it is health insurance.
Whatever happend to "portable health insurance?" I search Google News and see no hits on this topic. Are there any states that are trying to make it possible for small business owners and new entrepreneurs to team up and get decent health care plans collectively? I suppose employee leasing companies may offer this kind of thing.
Can anyone tell me what I should say to a middle-aged employee who really wants to leave a job and start out on his own, but he’s afraid to do it because of losing his health insurance? What are the best options?
Alan Hall on the 5 Cs of Hiring
Alan Hall, founder of MarketStar (which employs 2500 people and helped clients sell $8 billion in products last year) gave a great speech at Weber State University in Ogden last Thursday. His presentation was outstanding, and I want to blog about all of it, but one of the take-aways for me was how he recruits and hires the right people.
I took copious notes on my Blackberry and for some reason I can’t find my notes today. I’ve tried to find them on my blackberry and can’t, and I’ve also searched in my Outlook Notes (which syncs with the Blackberry Memo feature) and can’t find them there either. I’ll be so disappointed if they are lost. I’ll just have to go hear him speak again. He’s fantastic.
Hiring is something I want to get better at. For Alan, there are 5Cs in hiring/recruiting. Each have equal weight in the equation.
Competence. Most companies hire with about 100% weight on competence. But for Alan, it’s important, but only part of the equation. If someone is just right for a company, but doesn’t have the competence for the particular job, they can be trained. But some of the other Cs can’t be as easily taught.
Capability. This represents how much potential an employee has to grow in their job and be promoted in the future.
Compatibility. For Alan, this has become one of the most important criteria lately. A person has to fit with the team.
Character. Values, ethics, etc.
Commitment. This means that a person will be loyal and dedicated.
Alan says they do a 360 degree interview process, which means that you get references and talk to the candidate’s former boss, peers, and subordinates. You need to know how the candidate works with others. Always have both men and women interview the candidate, since you get different insights from each.
Inspiration from the Founder of JetBlue
Today I had lunch with my cousin, an attorney from Salt Lake City. He told me about taking a JetBlue flight from New York last year and having the good fortune of being on the same plane with JetBlue Founder David Neeleman. Neeleman served the customers, as is his custom, and then sat next to my cousin and chatted for some time.
My cousin is not alone. Thousands of people have experienced David’s personal service and concern. Last year Norm Brodsky wrote an article for Inc Magazine about how he met David Neeleman on a similar JetBlue flight. He asks all entrepreneurs how often they take time to talk personally with customers.
Just last week, JetBlue was again recognized for offering the best airline service.
A couple months ago I wrote an article for Connect Magazine which hit the newstand this week about how David Neeleman has inspired me to more earnestly search for business heroes.
Keep your eyes on Neeleman if you want to learn outstanding lessons about succeeding in business by putting your customers first and truly caring about them.
Excellent Blog: Small Business Trends
I noticed on Alexa that people who visit my web site also visit Small Business Trends, which I found to be a very well written blog to help entrepreneurs.
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