Friday, December 21, 2007
Dancing with databases
"The primary asset of any business is its organization." -William Feather
I've enjoyed meeting many new small businesses this year. Watching the newest ones launch is just flat out exhilarating.
But I've learned something unexpected from existing small businesses. When you work in your own enterprise exclusively, you assume most of the rest of the world is facing the common types of issues you can read about in most business magazines.
Now that I can talk and work with any number of other small businesses, I'm finding many are coping with a very serious problem that doesn't get much press.
For many, their management lives, the bread-and-butter, back office management stuff, is in free fall.
At the very beginning of their enterprises, they could keep up with the flow of data. As that flow increased, they rigged a patch to keep up. They cobbled together different places to keep different kinds of data. Then another patch, then another, and so on.
As they became more successful, their ability to assimilate more details effectively decreased.
There is a true threshold here. Those that can find a way to organize themselves make it through. Those that can't, don't last long.
Coming from the silo that was our last startup, I assumed everyone was using databases to organize themselves. Now that I get to poke around in other silos, I find new and emerging businesses don't know enough about controlling their data with these powerful tools.
Small enterprise databases need an evangelist, and I'm volunteering.
Here's what I know about databases and how I've learned it.
Long ago, when we first started Banner Graphics, I thought we'd conquered the world of enterprise with our arrival. Customers loved us, orders were growing, yada, yada.
Then customers started loving us too much. Orders picked up in number, velocity and complexity. This was just Mary and I, with two very young kids.
We took a roll of our banner paper and cut a long length that we taped along the living room wall in our duplex.
On the far left side I drew a box for prospects who didn't know us and that we didn't know. On the far right, I drew a box for wildly enthusiastic repeat customers who recommended us to everyone (relevant to our banner biz) they knew.
I guess I've been filling in the empty space with new boxes ever since.
That exercise allowed us to identify the key individual steps required to process a sale, produce the products, deliver, and measure our results.
That sounds like a small, simple step. I'd agree, but I'd also suggest that those simple steps are most often the ones that get overlooked or poorly executed in the face of the increasing chaos that can be the daily life of a small, growing enterprise.
If you work for a large organization, the following will be relatively meaningless. If you have been in a small enterprise where you were required to fulfill most or all of every step of a process, the following example will have meaning.
By the time we hit our stride in the 80s and early 90s, Banner Graphics would be receiving 75 to 80 orders per day. These would come from many different customers. They would most always be shipped to multiple different locations. Every order would arrive in a different format. Many would require us to have specific purchase orders; others came in on the phone or fax; still others in the mail and eventually eMail. We would have to capture all that data.
Then we would have to organize the data so that we could quickly and efficiently print 75 or 80 different orders, all with specific colors, most with specific logos, every one with a custom message that had to be spelled exactly right.
Then we had to prepare 75 or 80 orders for shipment every day. If you haven't done this, it's harder than you think. It would mean producing our own custom shipping labels, or, very often, drop shipping under a customer's label. Tracking numbers had to be captured. Shipping confirmations, along with dates and tracking numbers had to be accurately sent to customers for every single order.
It was only then you could start the process of invoicing each order. 75 or 80 orders per day. Each invoice requiring perhaps 25 to 50 individual component pieces that had to be accurately inserted or the invoice would be rejected.
Then you watch - in aggregate - 75 or 80 orders per day fall into the paths of paid, overdue, long overdue and damn.
Do this with two people and a couple of small kids.
How did we do it and not drown in the details? A database.
I wrote our first database in a program called Hypercard. We were a mom-and-pop shop (literally), so I called that first program MacMom. Hypercard is no longer available, but I still have the screen shots and miss it dearly.
A database is simply a place to put all the boxes you draw on your banner paper.
My last startup, SmartSkim, faced similar data capture issues on a much larger and more complex scale.
What happened there? We were able to execute all those micro steps in such a way that we won multiple state and national new product awards, with giddy customers on 5 continents. When I mention this in the talks I give, I follow by injecting some fake 'Oooohs and Ahhhhhs'.
What's important is NOT that we won those awards. What's important is that we won those awards with 4 people. That's national and international sales to some of the largest and most complex business organizations on the planet, and all the indescribably obtuse paperwork that entailed. That meant designing and manufacturing custom, heavy equipment with zillions of parts. That meant inventory. That meant shipping using every method imaginable to every place you can think of, all with different requirements for documentation that had to be right every time. That meant custom installations in factories all over the world. That meant training and retraining, live and on the internet. That meant keeping a big, global population of stakeholders efficiently and transparently informed.
The information flow was like a fire hose on steroids.
What makes me the proudest? We did all that with 4 people. Mary, my wife, Dave, my biz partner, Dan, the best Inside Sales Manager I have ever had the privilege to know, and me. Four people, and a kick-ass database.
Some people would call the daily crush of variable data flow stressful and unpleasant. If you're not prepared, that doesn't begin to describe it. Dan called his experience enjoyable. He said it was like dancing with the database. I will never forget that line.
Which brings me back to the small businesses I've met this year through teaching or talks. In many cases, their back-office management stuff is in free fall because they are applying patches on patches to their initial methods for capturing and using their data.
I will here admit to the title of this post. I've been dancing with databases once again.
I know what a good structure for capturing data can do for these folks. I don't just know it. I know it in my marrow. I know it in my genes. I've learned it from the battles, won and lost, which have been my lifelong effort to efficiently identify and fill in all those boxes on the banner paper.
When I first started writing these posts, I wrote down the goal that was most important to me. I thought a big idea was appropriate so I said I'd like to help start a million new businesses. This year has been a lovely and encouraging beginning toward that goal.
But it has also showed some limits. A million is a big number, and I need to move faster. I've decided that creating a database for the rest of us is what's needed.
The small businesses I see that claim to be in free fall, are only falling down in information capture. Typically, the rest of their enterprise is flourishing. Customers love them. They are providing solutions to people who are happy to pay. They are creating jobs, better lives and more economic independence for our society. They just need to get a grip on the fire hose.
I'm writing the newest iteration of my enterprise control database. I think it can get me to my million number faster than anything else, based on what I'm learning.
To proof the solution, I've belly flopped my own new business into it and am sculpting the results accordingly. I didn't hold anything back from the test. All of it is there - marketing, sales, contact management, quoting, order generation, execution and shipping, purchasing and a killer dashboard. I really love this database. At this writing, I think I can share it with users over the web.
Clients and friends should get it by early next year. I'm giving my first public presentation about it in Madison in mid January.
I love naming things. It's so biblical. I'm riffing off the name of my day job and calling the new database Diligence. Version 1.0 is working like Banner Graphics in its heyday, and I'm just getting it tuned in.
When I say I'm dancing with databases, I really mean it. I see the solutions they can offer. I know the flat out joy that can come from the organization they can deliver. It's not that hard. You just have to capture the data and use it effectively.
I see a new class of databases that will become tools for a new class of independent entrepreneurs. These tools will turn their organizations from chaos to calm, allowing their good ideas and hard work to make the world a better place.
2008 is going to be a good year. I'm going to put these Diligence databases in service of my goal of 1 million new enterprises.
In my mind's eye, it's a lovely picture. Good people, good organizations, and, like Dan, changing the world while dancing with their databases.