Monday, May 16, 2005

Start ups - making middle class jobs

Telling everyone that start ups can turn them into Donald Trump is about as corrupt and dumb as telling all kids they can all get rich playing professional sports. A tiny percent of any of us get to play in the big leagues and a tiny percent of start ups lead to flat out wealth.

The reality is much more pedestrian, much more valuable, and in the end, much more sustainable for everyone involved.

If you can admit up front that control of your time and control of your life is much more valuable than money after some realistic financial goals are met, your start up can help your thrive beyond the dreams of Bill Gates.

I also don't know how the big commerce bureaucracies get away with celebrating the creation of businesses with hundreds or thousands of minimum wage jobs. There is a role for that kind of business creation in some circumstances to be sure. But simply counting heads for the sake of running up job creation numbers isn't a particularly helpful approach for the rest of the economy. It may make the short term look bright for the people announcing these kinds of businesses, but it damages the long run for the rest of us.

Most start ups, if planned right, can throw off a decent living. You'll work harder than you ever did in your life, I'd expect. You'll probably even have less overall free time available. But you'll be (sometimes!) controlling your time at work and have complete control of your time away from work. You get to impact your own future. Those are my kind of start ups.

I see start ups as a powerful tool for reclaiming middle class jobs and rebuilding middle class lives.

However, if you think a middle class lifestyle is not good enough for you, then please go chase your dreams elsewhere. Much of the rest of the planet would be deliriously happy to take your place. And they will.

Saturday, May 14, 2005

My little insider secret about innovation

Innovation is a pretty hot topic. I had to read about how I deal with it in two different newspaper articles... 25 years apart.

We designed a graphics production system 30 some years ago that we could have patented. But the market for selling the machine was untested so there was no way to set a reasonable cash value for the hardware that would have been sustainable for us. We elected to keep the system proprietary and prove out the market ourselves. The market was not only there, but we worked that mine in a nice, sustainable way for 25 years. Is that always right? No.

In my day job, my partner and I designed some cool new tools for fluid recycling. This time the opposite was true. There is no way we could ever satisfy the size of our target market by providing the service on our own. Not as a start up. Not even as a big contracting firm. We needed to move the tools themselves to the market. This meant a lot more exposure, so we developed the intellectual property and have received a number of patents. The tools are working beautifully in the field and this biz has some nice IP assets. Is that always right? No.

The secret to innovation is not the process of executing your ideas, but what preceeds it. The secret to innovation is finding problems and analyzing them correctly.

It seems like it should be complicated, but I don't think it is.

In setting this web site up I came across an old newspaper article about Banner Graphics from sometime in the 1980s. I also posted a good article about my day job. I thought it was interesting. The captions under the pictures were almost identical. 25 years apart. Two completely different enterprises. Two completely different industries.

25 years ago: "We're doing work nobody else wants."

Last year: "Takes on the task almost no one else wants."

It's is a Willie Sutton thing. Robbing banks because that's where the money is. Innovating where the problems are.

Find the problems. Often, they're pretty subtle. Find one you think you can fix. Take your time. Do your homework. Work to understand that problem better than anyone else. If you do that, the solutions will become obvious. Then you execute appropriately. That's my little insider secret to innovation.

Problems are the raw materials of innovation.

If you look around and you don't see enough problems, you need more help than I can offer.

Nashville recommendation

I love all kinds of music but the day job usually morphs into the night job and I don't get out to hear live music as often as I'd like.

I spent a great night recently listening to singer Melissa Paige in downtown Nashville. If you're anywhere nearby, Melissa will be playing at The Legend's Corner on Monday nights for the foreseeable future. Go hear Melissa. She's wonderful!

Tough stuff though, the music biz in Nashville. Great musicians playing for tips. On the other hand, it matches my biz model of "everyone on commission". Are musicians the teachers for the rest of us?

Melissa's web site doesn't do her justice. Good lesson for all of us. If you control your web content, you control your story. If you job out web content, you'll forever be catching up. Learn to control your web content. Not tomorrow. Yesterday.

Anyway, Melissa is fabulous. I highly recommend asking her to sing Patsy Cline and I highly recommend giving her a BIG tip when you're there!

Sales Tales 2: Pancakes in Paramaribo

Big Mo.

Momentum is the best friend a sustainable enterprise can have. Organizing your business model and your sales channels to encourage repeat orders is your goal. Work hard once. Reap repeated benefits.

This isn't always possible, and not all customers will behave, but the more you can build in repeaters, the more sustainable your operation becomes.

Case in point. For many years we sold banners to local service clubs through their parent organizations. Users out at the end of the food chain saw value in what we offered and built in repeat purchases of our stuff for their special events, come rain, shine, or revolutions.

One of our best examples of this was a rush order we were asked to produce for a pancake breakfast in Paramaribo, Suriname, located in the remote northeast corner of South America. The only problem was that it had to be delivered by air express that Saturday. Seems that a revolution was underway. Insurgents were expected to control the airport by Monday and no one knew what would happen by Tuesday.

What do you do if you're in a besieged capital with armed conflict and political chaos all around you? Momentum. Same thing as last year. Throw another pancake breakfast and order the banners.

Friends, wherever you go in your sustainable work life, try to invite Big Mo.

Remote partnering

There are many ways to solve problems. Physical proximity is not necessarily a requisite piece of the solution.

When we first started Banner Graphics our technology limited us to production of graphics that could only be used indoors. This was a big piece of the market, but adding the capability to offer work that could be used outdoors was also valuable. Often, one customer had both needs. The biz was growing nicely and we were always busy, but we were looking for sustainable ways to grow.

In between jobs, we tested changes to ink chemistries and fooled around with different substrates and overlays.

But we kept coming back to the fact that we WERE always busy and finding a fix was taking too much time away from our day job. So we set up our first remote partner. We visited with a local firm doing high volume laminating and learned from each other what kind of problems could be solved if we worked together. Ultimately we decided to make their capabilities part of our business model, and they made our services part of theirs.

Yes, outsourcing. Well, sorta. We weren't eliminating jobs, we were trying to grow our own jobs into something even cooler. Initially we took graphics there once every week or so. Within a couple of years, we'd moved next door. Within a year or two after that, a near continuous stream of graphics flowed out the back door of our shop, into theirs and back to us as finished product.

The core component of this little dance was data control. Knowing where everything was all the time and when it should be somewhere else. By starting early with this vendor, we both were able to work up data management strategies specific to the process. Even at high volumes (that neither firm expected at the start of the relationship) the process was easy and profitable for both because we'd thought it through at the beginning. Neither company's core business was hurt by intrusive production problems caused by their partners. That's because the data management just plain worked.

Over the years we were fortunate enough to expand that network considerably. Different enterprises, with different specialties joined the network. The next was down the block. The one after that was across town. The one after that was in the next county. After 25 years the network was many states wide. Everyone in the network contributied their core competencies to each other and everyone played nicely or they got yanked from the pool.

My current day job is based on the best remote partnering relationship I've ever been blessed to participate in. My friend and business partner Dave lives and supervises manufacturing of our equipment in the next state over, Illinois. We headquartered the biz in Wisconsin where I live and work. By planning our enterprise around this circumstance from the beginning, it feels as though we're just a cubicle away most of the time.

How does this work? Surprise. Good data management. Knowing where everything is all the time and when it should be somewhere else. Everything. All the time. Heard that before?

This remote partnering idea works with employees and co-workers as well. If you have an employee that you have to be standing near to supervise, I'd suggest that is an employee you don't necessarily want anyway. Why not let your coworkers live somewhere else too? They're grown ups. If they're good at what they do, their contributions are obvious.

This model requires moving physical goods and digital data effortlessly. I believe you'll need to have access to the commercial shipping grid (FedX, UPS, DHL, USPS, etc) and as fast a data connection to the internet as you can afford. It's doable without these, but a lot trickier and subject to problems. More on shipping in a future post.

For remote partnering data management, you can start with pen and paper, telephone and faxes, but I'd go digital ASAP. There are terrific database programs available to run on multiple platforms that we, the un-digerati, can readily make use of. Database programs allow you to present the same data a zillion different ways depending on how you want to look at it and what you want to do with it. Data files can easily be sent over the internet or live wired to a network.

At some point organizations will find the sweet spot where coalescing around a physical 3D location has merit. We've done that, but much of the organization is still remote, including me. Very little in life has to be all or nothing.

Remote partnering takes people of good will acting justly to keep the enterprise sustainable. As the complexity level goes up the need for written documentation for these relationships grows. But that's not new legal ground here in the 21st century. It's been done and any good biz attorney can match up an appropriate solution to your circumstances.

Remote partners can be your friends or relatives (careful!), new people you've carefully networked with to create the opportunity, outside businesses, or people directly employed by your organization. Most likely it'll be a mixture of these.

Downsides? This remote partnering stuff really confuses the bureaucracies set up to support small enterprises. Monies to support local businesses aren't available when your employees live in another state. State tax breaks for many business aren't available when the headquarters is someplace else. But who cares. Better not to rely on that stuff any way. You're better off spending your time selling than begging bureaucrats, but that's also for another posting.

I'm convinced remote partnering is an extremely valuable tool for sustainable enterprises, given the right individuals, the right talents, and good execution.

Friday, May 13, 2005

Young people, innovation and opportunity

I gave a talk at the University of Wisconsin Business School recently on starting and maintaining sustainable enterprises. One question from the follow up session has stuck in my mind ever since.

Before the talk I'd had dinner with some of the students who had organized the event. These young people were bright, savvy, challenging and inspiring. They had more good ideas for new enterprises over dinner than most of us have in a year. I focused on that hopeful enthusiasm in my talk. I knew that I was in a room full of talent.

After the talk we moved into the question and answer phase (my favorite). I expected a number of the cool ideas we talked about over dinner to get brought up for more discussion. However, the questions took a turn I hadn't expected. One of my dinner mates, a quick and knowledgeable student asked the following question: "We may have enthusiasm and great ideas, but won't the business world just see us as young punks? Aren't they're going to think, 'What does this kid know?' How can we break through these barriers?"

Hmmmm. Confidence. They had the skills. They didn't have confidence.

Business barriers are your own creation. They don't exist unless you put them there. If you've got a fix for a problem it doesn't matter if you're 16 or 86.

I'm not some retired guy who has sold a business and now gently blogs away on the veranda. I'm a guy still in the middle of a big damn start up fight. As I write this, I'm looking at a desk full of problems and potential. Fireworks are exploding, sirens are going off, data is flying and solutions are gold. I'm looking for help from ANY quarter I can find it. If a young person has a fix, I write a check. I am not reserving access to problem solving to a short list of old buddy vendors. That's just idiocy in this economy.

Young people have something many of us lose as we get older. A blank slate. Most young folks haven't learned to lug around the flawed perception that, "This is just the way things are." They don't accept that, thankfully.

It took a young person to shout, "The emperor has no clothes!"

There has never been more opportunity for solving problems. Young people often have the gift of seeing those problems more clearly than the rest of us. The process for creating innovative solutions has never been more accessible. Young people are the best connected to the grid. They are quicker to learn new skills and the new tools available. Young people have the most potential for finding innovative ways to promote and distribute their solutions.

A fix is a fix is a fix. If you've got one it doesn't matter how old you are. The world needs your help. Smart people and organizations everywhere are ready to encourage and celebrate young people if you're fixing a problem they have.

That's the idea remember? Fixing problems. No matter your age. Sustainable work.

Welcome, my young friends. Now get to work.

Wednesday, May 11, 2005

Starting part time

My contention is that most anyone can start their own enterprises, with a little planning and appropriate expectations. But the solutions don't come out of a can. It won't be a straight line, and you probably won't become a billionaire doing it.

Unless you're flush with cash to carry you through your start up, I don't recommend quitting your job and plunging in. I think you should take a breath and assess what's in front of you.

If you are able to put a self-enterprise project in place that can fit into your life sustainably, why wouldn't you at least think about it?

For many people new to business start ups, the best answer is often starting up part time. The internet is making this possible in ways that have never previously been possible. You can work out the logistics, see what breaks, and build your way into sustainable cash flow.

Getting cash flow underway sustainably, even in a small way, is one of the hardest early tests of your enterprise. The friction of inertia is damn powerful. Plan modestly and prove out your model. Part time start ups are a perfectly reasonable approach to learning the trade.

Is this easy? Heck no. You're probably all ready working hard and scrambling to find free time. If you add more into that mix there is nothing that feels at all like PART TIME to the person living through it. It's tough. However, remember that we're just exploiting the hell out of your most undervalued asset. Is this easy? No, and you don't want it to be. Remember, hard work keeps out the under motivated. The harder you have to work, the more wide open the playing field becomes.

If your enterprise doesn't reach full time launch velocity what have you lost? Nada. If you've planned right, you've created a small profitable enterprise you control and operate in the background. Best case it flowers into a freestanding enterprise supporting you and perhaps others. Worst case you've lost a little money (hopefully not much) and need to try something else.

You can make a small, smart investment of time and money and start your enterprise part time in the background. Think of your start up as an investment in yourself. No matter what happens you'll be smarter for the next one. It's a perk.

Monday, May 09, 2005

Keep restarting your start ups

I was talking to a biz friend who asked if I only worked on start ups. She runs a very cool enterprise that's all ready up and running. Potential growth everywhere. However, she was asking for help for a preexisting biz. She felt she was beyond thinking like a start up.

No such thing.

For those of us all ready in businesses, it's often harder to think of creating a start up out of our current gigs because we're tied to our existing ways of doing things. We're proud of what we've done. Why change when what you've got is working?

I follow Tom Peters writing on work within existing organizations. I'm wildly paraphrasing, but he likes to find ways to blow up existing models and continually reassemble the pieces to match market circumstances.

If you're not ready to do that, then you're not ready to succeed.

For smaller enterprises, there is often no real, definable end game. You need to hang your hat on the process not the products. Those of us within existing enterprises need to continually look at our organizations with the eye of a start up and see what pieces we can shift to better fix customer problems.

Innovation has to run through your veins. Innovate your processes. Innovate your products and services. Take your Best Practices and make them better.

If you don't take the chances needed for creating start ups within your existing enterprise, somebody else will make their own opportunities out of your lethargy.

Remember, your enterprise is not your job. It's your opportunity. Seize those internal start up possibilities every single day.

Sunday, May 08, 2005

You don't gotta do it...

Life is not something you've got to do. Life is something you get to do.

You have a privileged place in the history of the planet. Access to tools, knowledge, friends and partners worldwide, is laid at your feet. For tens of thousands of years, humanity has struggled incrementally to bring this explosion of possibilities to your party.

You have the ability to contribute. I'm not suggesting you should build skyscrapers or lay fiber optics in the Arctic, unless you really want to. I'm suggesting smaller fixes. Self enterprise level contributions.

At the meta level, seems likely that distributing the ability to provide solutions over an ever expanding range of contributors would make the whole affair more stable. Call me old fashioned, but there's just something about economic stability and sustainability that still appeals to me.

There are a lot of problems out there. You can make contributions to these problems in many ways that can also build enterprise into your life at the same time.

You don't gotta do it. You get to do it.

Your most undervalued asset

So you're thinking about self enterprise.

It is pretty alluring. Control your time, control your life stuff.

What you've got to do next is make something out of nothing.

Financially bigger startups will need different business plans. For self enterprise startups I'd recommend expending resources as though your enterprise depended on it. It does. You want to find cheap inputs and morph it into cash flow.

This is not bet the farm time. That stuff comes true sometimes, but mostly in the movies. You've got to find components to the solutions you propose that are undervalued big time. Something from nothing.

In other words, you need access to cheap inputs, that nobody else has access to, and you're smart enough to leverage into something that cash flows.

Hmmmm... Aint nothing left but you, friend. And you know you're capable of doing more. The only way to connect these two dots is with a terrific amount of hard work and absolute mastery over a problem that's numerically widespread.

What's you're most undervalued asset?


Stocks and bonds and most everything else being chased financially are NOT undervalued. You are. Everybody has access to those assets. Nobody else has access to your talents. Use that gift wisely. Invest in yourself and beat the crowd.

There's a lot of problems out there. Pick one and go fix it.

Saturday, May 07, 2005

Life decisions that build competence

Another young friend sends word from a remarkable road trip.

I've known my friend Nate K. for many years and have nothing but respect for he and his brother Pete. These guys are working out bulletproof sustainable paths for themselves.

Nate and his pal Aimee are now on a three month backpacking trip across Asia, including China, South East Asia, Himilayan North India and Japan.

This is a great blog with very cool images. 90 Days in Asia

This must've seemed like a hard decision early on, but one they'll never regret so long as they draw breath. The competence young people like my friend Nate show, and young people everywhere, should give us all hope. It sure does for me. Go Nate!

You get sustainable by getting smarter. Life is full of chances. Plan well and take yours.

Thursday, May 05, 2005

How to shrink your worldview

I'm blessed with smart young friends. Without them I'd never even pretend to keep up.

With them I can pretend.

Friend E just sent me the following list from a magazine she likes a lot, ReadyMade.

The Simple Life
How to Shrink Your Worldview in Six Easy Steps
by Johnathan Kiefer

1. Don't travel
2. Don't read
3. Don't look or listen very carefully
4. If you must socialize, stay within your group
5. Don't eat what you don't know
6. Ban spirituality

This was printed in longer format in ReadyMade Instructions for everyday life. Jan/Feb. 2005

Wednesday, May 04, 2005

Virtual companies. Real development.

I don't have any potential customers within a hundred miles of where I sit, here at company HQ.

Our employees all live in other states. Just about nobody in my town knows anything about our current business. Our last biz ran from here for more than 25 years and almost nobody local could tell you they ever heard of us.

This is damn near perfect.

Virtual companies are always assumed to be internet techie stuff. Think foosball at work and 14 year old millionaires. Virtual companies still carry that patina of irrational exuberance. All that splatter from the bubble burst makes everyone put away their checkbooks. Right?

We're a manufacturing company. A pretty cool virtual manufacturing company. Our company is ripping through 100%+ growth years. We're winning innovation and new product development awards. Exporting to Europe, Canada, Mexico and Africa for goodness sake. We've got some of the biggest firms in the world saying stuff about us that belongs in Valentines' Day cards. So how does being virtual help here? Easy. Nobody knows we're here. Same with the last biz. Nobody bothers us. We can work all that much harder and smarter solving customer problems in Cleveland and Johannesburg and Charlotte and Detroit and Mexico City. Surrounded by cool free stuff, in a really nice place.

Virtual companies? What can they do? Who ever heard of virtual companies these days?

Of course nobody hears about them. Little checks don't make noise.

The quiet little checks we write here in our virtual HQ home town don't get in the papers. They go to our city gardens. They go to CPAs. Checks go to lawyers. They go to school fundraisers and graphics companies. Our checks go to St. Vincent's and Goodwill. Our checks go to intellectual property law firms. Restaurants, office supply stores and internet service providers. Financial planners, web developers and our wonderful farmer's market. Quiet little checks. Nobody cares. We just contribute to the background noise that keeps the lights turned on. I propose that this is important. Keeping the lights turned on doesn't make headlines but it's a core value to most sustainable enterprises, including home towns.

And, yes, we outsource. OK, nothing so headlinish as China, et al. Ours is a little less inflammatory. It doesn't make the news. We manufacture mostly in Illinois. We outsource to other towns in my home state of Wisconsin. We outsource to exotic locales such as Ohio, California, the Carolinas, Indiana, Michigan, Arizona, even to the exotic forest fringes of Minnesota. My employee count here is low so we don't matter a bit to the big commerce types. They've never even heard of us. That's just fine.

My friend and neighbor Margaret Krome is a good writer and a wonderful generalist (the top end of my compliment scale). She writes about community development issues with so much common sense that I sometimes think she must not drink beer. Margaret wrote a column about our virtual company and the potential beneficial roles these kinds of companies can play for their communities.

What makes a good headquarters town? How did we make it work for our family? What attracted our interest and our checkbook? It wasn't the business climate. It wasn't access to venture capital. It wasn't the ability to network. It wasn't the culmination of a long search for the lowest cost of living numbers.

We set corporate and family roots because of the libraries. It was the parks, the schools, the safe streets and the culture. Basically, the free stuff. We felt we could start our businesses and live our lives here still keeping a decent quality of life without the need for a big income. It's worked.

Defending the commons could be made to look like some squishy do gooder program, but it's not. Defending the commons is pure hard ball. This is tough, free enterprise, self interest stuff. Making high value, family enhancing quality of life options accessible to as many people as possible builds a more secure economic base for all of us as well as nicer places to live (damn, not that same old benefit again).

Better quality of life benefits give people and families more security. Security gives people more capacity for taking reasoned economic risks like starting new enterprises. If nobody is taking risks, we're all going backwards.

We should be building our communities from the inside out, but we're usually not. We should be strengthening the commons, not ripping them up. I think we should do it, not just for posterity, but for our own current self interest. What's going to attract the new sustainable jobs? Parks, safe playgrounds, and did I say libraries?

Lots of community development people would love to land a car plant or some giant retail distribution center. I don't blame them. It makes their jobs easier. It's also appropriate for many economies that are set up to house them.

But there are other paths for other communities. Headquartering virtual companies doesn't make headlines like landing car plants, but for many communities, it's smarter to win the smaller battles. Virtual companies will headquarter in towns that deliver meaningful, free, easily accessible quality of life benefits. Many little economic miracles and many small enterprises can flourish with these in place. Everybody in the community wins.

When my neighbors think of virtual companies, I want them to think of pet food delivery services over the internet. I want them to think I'm nuts. Then, I want them to go away and leave me alone.

We've got a project to close in Detroit.

Sunday, May 01, 2005

The big, messy opportunity in the middle

I'd like to define the ground I know something about. It's a MIGHTY short list compared to the long list of things I don't know jack about.

I work in an area of startups between the business schools and the Grameen Bank (bless them 100 ways). I think this messy, unglamorous, middle ground needs attention. This is what I know about. This is where I work.

Many business schools are all over this entrepreneurship thing. I truly applaud them for doing this, and I think they're putting out a pretty good product for the most part. Many biz school graduates even come out as start ups. Good on ya. Go! However, most Biz School programs typically focus on case studies related to projects and businesses well above what most of us will deal with in our own start up enterprises. I certainly don't begrudge this. Somebody has to fix those big-business messes and I believe this new generation will do just that. I'm very glad they're there.

At the other end of the start up food chain, heroes live. The Grameen Bank (bless them) has changed the world with micro capital. It's a business model for which I have nothing but awe and admiration. I think it can work in even the most developed societies, and I think many of us can learn much from the fearless start up geniuses at Grameen. However, that's not my gig either.

I work in the messy middle, between the MBAs and the Grameen Bank.

For those of us in the middle ground, there are many good paths to successfully starting your own enterprise. Almost too many.

You can start it up part time. No sin there. Probably advisable in most cases. Work out the bugs, find out if you're really interested in doing this, and most importantly, get the cash flow moving. That's a hard stream to initiate.

You can set up your enterprise in the background without going live until you're ready (hopefully giving you time to locate all the things you forgot to think about in the first place).

You can take your enterprise live next week and shoot for the stars from day one. Good on you, also, friends. Clear sailing!

Whatever your timeline though, I'm pretty confident it will be wrong. You'll probably need more time than you anticipate until it throws off the numbers you want.

So, where are we? This middle ground between MBAs and the Grameen Bank looks hard and messy. It will probably take longer than you want. There are a million choices, which is worse than having just a few sometimes. Nobody quite knows what to do in this middle ground or how to proceed. Most people are dissuaded from even trying.

I call this about perfect. High ground, my friends, for anyone scouting their own enterprise. Welcome to the big, messy, wonderful opportunity in the middle.