Beginner Business

Earlier I talked about how too many cooks spoil the broth - that is, too many leaders on a team lead it nowhere. However, that’s not always true.

One team I was on was compared by one of the members to the early days of Saturday Night Live, and to prove his point the member passed around a short history of SNL for us to read. Interesting stuff. The article described how in SNL’s early days, it was a ragged yet intense group of people with great chemistry. (And yes, there was a lot of chemistry going on in every sense of the word.) It was a group of very talented people who managed to click and create something spectacular.

It was one of the rare examples of how a lot of “Makers” can sometimes create amazing things together if you somehow manage to glue them together with the right energy. I’d call it context in the sense that it’s used in The Tipping Point. With the right context, sometimes too many cooks make AMAZING soup.

Similarly in one of my favourite articles, Paul Graham talks about how his first company included Robert Morris, Jr. doing system administration. Having several “Makers” on the same team created great synergy there, too. Then there’s Google. And so on.

But often when you have a lot of Makers, eventually they leave the team. How many great SNL stars stayed on? Most left to start solo careers, just like so many rock stars.  It’s very rare that a team - or a company - is able to hold onto those players forever. Sometimes the Makers are artisans, and concerned only with their art, be it coding, comedy or choreography. It’s a little easier to hold onto talent like that, because like it or not, the talent needs the business as much as it needs them.

However, many Makers are machers in the making, to use an old Yiddish word. Primadonnas. Often Makers don’t do as well on their own as they did with their original group, but they find it hard to work well with others. They’d rather fail on their own than succeed with a group.

The question for a group leader or entrepreneur is two-fold:

1. “How can I hold onto these key people?”
2. “And, in the end, is it really worth it?”

The later years of SNL seem to answer #2 in the affirmative (and Drucker’s The Effective Executive agrees) but then the real question becomes:

“Is it more valuable to hold on to the Makers-turned-machers, or should we just get good at finding great new people?”

Notes

• Macher - Yiddish word for big-shot, usually someone well-connected who also has a swollen sense of self-importance.

You can become a better public speaker.

It’s amazing how many people could do their jobs better if they improved their public speaking skills. I recently gave a seminar called “Shy Guy to Guy Smiley” to introduce DJs and teachers to good MCing skills, but these public speaking skills are valuable for everyone - especially entrepreneurs. The key is to understand two things:

1. Step one is admitting the problem. If you’re not currently getting booked for a lot of speaking engagements, or if you get pulled off stages by angry mobs, you probably need to learn how to do it better. Even great speakers can improve.
2. Recognize that these are skills like any other, and they can be developed.

Now you’re ready to improve with some concrete advice.

Imitate

The first thing to do is to watch great public speakers and imitate them. From cheesy commercials to James Earl Jones, try them out. In particular you should pay attention to:

• Talk show hosts on radio and TV - they know how to keep a topic engaging, draw out questions and fill in when necessary, and especially make boring topics come alive.
• Radio announcers - Since they rely 100% on their voice abilities, they have to be good at it.
• MCs - at the Oscars, on MTV, or even at your local wedding.
• Comedians

Pay particular attention to tone and clichés.

Now record yourself. I used a mini voice recorder when I started. Don’t focus on long phrases or improvise. Choose short phrases and repeat them until you can finally bear to hear them played back. It’s not so much about what you say as how you say it.

The Tone is the Message

One of the best pieces of advice that was given to me when I started DJing, was that it didn’t matter so much what you said as how you said it. This will depend on the audience a lot, but we know that great comedy is all about the delivery; great public speaking is all about the tone.

Learn to smile while you speak. Not a fake, lips-only smile, but a smile with your whole body. It’s about learning to build up enthusiasm virtually on demand. Try smiling into a mirror until you actually believe the smile you see. When that happens, you’ll be able to achieve enthusiasm on demand, which is a worthwhile skill in itself.

In addition to smiling, speaking slowly can be very helpful in the beginning. When beginning public speakers thing it’s all about the words, they often rattle them off too quickly. Great public speakers know it’s all about the tone, so they focus on the richness of their intonation.

Of course, not all public speaking is about happiness. News anchors who report tragedies with too much giddy enthusiasm don’t keep their jobs. So setting the tone is also about appropriateness.

Know Your Audience

When I started DJing, the bar manager told me that when I got on the mic, I sounded too much like the host of a late-night jazz program. I had to learn to fit the over-the-top enthusiasm of a bar attracting mostly twenty-something students and professionals. It’s important to know in advance the tone that will work best for your audience and for your message, and to craft your tone accordingly.

Know Yourself

Once you’ve worked to imitate the styles of other great speakers, slowly experiment with developing your own style. Some people are more relaxed, others more intense. Some are witty, others even a little crass. Some work better with a lot of preparation, others are better off the cuff. The important thing is to start off by imitating styles that work, and then to develop a style that works better for you.

Trying to be funny

A quick few words on comedy: humour is extremely useful, but don’t try to be funny. There’s nothing more awkward than someone trying to force humour into a speech. The best humour occurs when you just allow yourself to be honest. Life is funny, and when you allow yourself to admit the truth about the things you talk about, humour will come naturally. And when you’re relaxed and good-natured about it, people will even laugh at some of your ill-fated attempts at jokes - especially if you’re laughing at yourself.

Prepare

So we already talked about how simply recording yourself will teach you a lot of what you need to know. That’s the first step in preparation. Next, use a script. Not a ten-pager. If you’re going to talk for a long time, the key is making an outline and identifying the key phrases.

Key phrases are a big one. If you’re a sales person or entrepreneur, having these soundbites prepared is essential - those quick phrases that nicely summarize what you have to say, and are hard to forget. “Widget 2.0 is more reliable, faster, and infinitely more blue-coloured than the competition.” As a teacher, your soundbites are short, easily-remembered phrases that summarize important concepts for your students. “Napoleon was short, French and bossy.” And as a DJ or MC, they can become useful cliches to tie things together and liven things up: “Live, from New York, it’s Saturday Night!”

The important thing is again the tone. Practice your soundbites so that you say them with the same attitude, rhythm and tone.

If you only have five minutes

Or even five seconds! The main tricks to spontaneous speaking are:

1. Know your topic. If you really know what you’re talking about, you can talk for hours about it.
2. Soundbites. If you have a lot of phrases you’re used to saying, it’s easy to say something interesting.
3. Organize. If you don’t have time to prepare an outline, start by establishing a goal. “If they leave here understanding only that AJAX is based on JavaScript, I’ll be happy.” That should take a second, because it’s the first idea that comes to mind. If you have 5 seconds, thing of two steps needed to achieve your goal. “1) JavaScript makes those annoying pop-ups, BUT 2) Gmail and Flickr use AJAX.”

If you have a chance, just before you speak, drink some water and hum low. It will prepare your voice and focusing on a low tone will bring more confidence to your voice.

Clichés

You don’t want to rely on them, but there are certain conventions used by public speakers across the world because they work. A common one is, “is there anyone here from New York? Boston?” “Are there any Lakers fans here tonight?” It’s an easy way to engage the audience. Steal these ideas from other speakers, and then make up your own.

Appreciate and excite

It’s all about creating energy and engaging your audience. It’s important to have something to share, but ultimately, more than anything else, if you show appreciation for your audience and create excitement, audiences will enjoy hearing you speak.

You can divide people into four categories: makers, breakers, stones and stoppers. It’s a vaguely construction-related metaphor:

1. Makers - They make things happen. These are people who instinctively create, assemble or lead. Where other people see Widgets, one maker has an idea for a new iWidget. When other people see two people talking about new iWidgets, another maker sees an iWidget web site in the making. And six months down the road, maybe an iWidget 2.0 Conference.
2. Breakers - They like to tear things apart. On a bad day, a breaker will just be heard talking about how iWidgets suck and the iWidget 2.0 Conference is full of geeks who will never get a date. On a better day, he’ll be proving that the iWidget 2.0 protocol has security flaws. Breakers tend to see things divided into “bad” and “worst.”
3. Stones - Stones don’t have much initiative, but they can be very useful. You can put a bunch of them together and create walls, even buildings. And once you start pushing a stone down a hill, it keeps rolling and gathering momentum. People who are stones can support the building efforts of makers.
4. Stoppers - Some people don’t create on their own, and don’t destroy things directly, either. They simply like to slow down the efforts of others. When you’re trying to roll that big stone down the hill, the stopper is the one on the other side of the stone, pushing back.

So far, makers sound like the good guys in the group, right?

Not necessarily.

Context

It’s all about context. First, because different people are needed for different things. And second, because people take on different roles in different situations.

Makers

Makers sound like very important, useful people, but they can also be problematic. If you’ve ever been in a team where everyone was a maker, you’ll have grown to understand the old saying about “too many cooks.” A team with a lot of creative people can lead to a lot of great ideas that go nowhere, and teams with too many “leaders” can end up neutralized by power struggles.

Also, makers tend to always want to move to bigger and newer things, often neglecting core business activities in the process.

What about as clients? Sometimes, makers are great clients. They’re the ones who contribute advice in online forums about your product; they may even have created the web site. If they like your product, everyone will hear about it. Then again, in six months they may be your next competitor. And in the meantime, they’re very insistent about where the product should go. They may want things out of your product that won’t benefit 99% of the other users.

Breakers

They sound like the bad boys, and they can be. As clients, they might be reverse engineering your new product to break your security features. In your organization, they’re probably vocal about how the rules or organizational structure is horrible. They can be a pain.

Then again, they’re an enormous benefit. If your organization or product needs changing, they’ll help you know what to change and how. They probably won’t shut up about it. They’ll also be out there organizing boycotts of companies that use child labour, or convincing customers not to buy software that installs spyware–and recommending other software. If you’re the one selling the spyware-free software or clothing made without child labour, these breakers are your friends–and customers.

Stones

Stones are the foundation, so to speak, of an organization. When you get them going, they can go far. But they don’t create momentum by themselves.

A lot of this depends on the situation. I might be more of a maker in my business, but if I joined a rock-climbing class I’d be more of a stone. Why? Part of being a stone is that you want other people to show you what to do. You rely on the expertise and resources of others. While some expert rock-climbers might join a rock-climbing club as makers, intending to get really involved, I know nothing about the sport. I’d just want to show up, spend an hour a week climbing stuff, and then leave. I don’t want to pick out my gear or research great new locations. (If my examples suck, well, it’s because I really don’t know rock-climbing.)

Similarly, great leaders know when to be stones. Sometimes it means trusting projects that aren’t being done your way; other times it’s about just getting out of the way and letting the experts you’ve hired do the job. At the same time, leaders can’t afford to abdicate completely. You also have to know when to step back in. How do you know when? When the project loses momentum, becomes scattered or loses focus on primary goals.

Stones are great customers–they tend not to complain much. Then again, that’s the problem: they don’t tend to warn you before they all roll away down the hill to a product they like better.

Stoppers

Stoppers seem completely negative until you realize where you need them. A stopper in a brainstorming session will just frustrate everyone. But when the brainstorming has ended and you’re about to bet the company on a new product line, the stoppers might be there to save you from investing in something that isn’t financially feasible, or has a fatal flaw. Where makers divide things into “has potential” versus “amazing,” stoppers see “acceptable” and “inacceptable.” Stoppers can make great accountants, lawyers or QA people, but of course anyone can take on this role when faced with a new idea that they don’t believe in.

Roles

After all, the categories are just roles.  We tend to take on different roles depending on the situation.  The trick is identifying the roles people take on, and learning to see how they fit together.

Over the last few years the enormous growth in Open Source software has brought a lot of high-quality applications with everyone’s favourite price tag: free.

There was a time when “free software” was the last thing smart executives wanted their companies using.  If it was free, could it be good?  What about support?  Would you be left with a lot of documents in an outdated format that is no longer supported?  Now with so many Fortune-500 companies betting the business on Linux and other free software, those questions are quaint relics of pre-Internet days.  Nowadays the question should be this: what free software can benefit my business?

The first waves of Open Source software were dominated by developer-oriented programs, but now there is a lot of mature business software available.  In many cases the free programs are most beneficial to the small-to-medium businesses who have a greater need to cut costs, and less expenses in re-training and re-organizing.  Still, many large businesses have embraced free software and found that the latest offerings not only compare to the expensive alternatives, but tend to have very similar interfaces that require very little re-training for users.

So What’s the  Good Stuff?

Here’s a list of some of the applications I’ve found to be of high quality, easy to use, and useful for business.  All of them are available for Windows as well as other operating systems.

•  OpenOffice ( Download OpenOffice here) - Like MS Office, it’s a suite of various business applications, including word processing, spreadsheets, a database, a design program, and presentation software.  OpenOffice is also the basis of an ISO standard for business documents, which helps ensure that documents can be shared.
  • OpenOffice Write - A very solid word processor offering the functionality of major word processors such as MS Word, but with the free price tag.  This is one of the most solid business applications out there.  One caveat: although OpenOffice Write can both read and save Word .doc files, there may be small discrepancies in the look.  If you’re sending documents to clients, the best option in any case is the PDF export function, which works beautifully.
  • OpenOffice Calc - Easily as good as Excel for spreadsheets, and for some tasks I prefer how OO Calc works.
• Gnumeric (download) - Another very powerful spreadsheet application, Gnumeric has a strange name but has been shown to be more accurate than Excel, with almost identical functionality.
• GIMP (download) - Yet another strange name for a very powerful program.  The GIMP, which stands for GNU Image Manipulation Program, is a mature graphics program competitive with PhotoShop and specializing in web graphics.
• Inkscape (download) - Not as powerful as Illustrator but still a great design tool for small businesses.
• Scribus (download) - A very advanced page layout application along the lines of PageMaker; very useful for the marketing and design purposes of a small business.

Using these free programs could save a business from $100 to $1500 per user.  For small businesses, it just makes sense.

After starting a few businesses I’ve become familiar with a lot of common mistakes that entrepreneurs make when starting a new business. Mistakes are inevitable (sometimes even desirable - more on that another time) but at the very least you can make new ones. Here’s a list of common mistakes you can avoid when you start your new business, whether you’re on a shoestring budget or funded by rich and optimistic investors.

The List

1. Trying to start too big.

   Keep growth organic by putting no more in place than you need to. Start with a direction and a plan, but realize that most of the planning you do today will seem wildly imaginative two years from now. Stick to what you know.

2. Wanting to seem too big.

   I’ve seen so many new businesses try desperately to seem and feel like they’re bigger than they are. It’s the “perception is reality” deception. Do you really need that downtown office today? Chances are, it won’t draw clients as much as great work and word of mouth will.

3. Letting anything come before revenue.

   By this I mean two things.

   1. Time. The very first thing you should do is to make sure you have a product and customers.
      Get out the simplest excellent product you can provide, and find customers for it, before you do anything else. Until you are selling a product to customers, you don’t have a company, just an unpleasant, expensive hobby. This is especially dangerous when you have a lot of investment money.
   2. Priority. At the end of the day, revenue is simply the way you tell how well you’re satisfying your customers, so nothing’s more important than this.

4. Trying to be everything to everyone or trying to do too many things.

   Ok, you’re in business and you have no money. So any work that comes along is good, right? Not quite.

   • Beware of accepting work too far from your core business. Every category of work you do carries a certain overhead, whereas when you’re doing a lot of similar work you can streamline processes and get economies of scale.
   • Also, recognize that when you do work outside your core business, you don’t increase the value of your business nearly as much. A design shop that is known for amazing, innovative web development will get much better business and word of mouth than a company that is known to have done merely average work in logo design, web design, and programming.

5. Caring too much about the business plan.

   It’s important to have some sense of direction, but the only reason you need a full, formal business plan is when you’re trying to beg for money from someone. Otherwise, your business plan only needs:

   • A brief market analysis
   • Cost analysis

   Most business plan revenue projections fall between “sardonically witty” and “slapstick humour.”

6. Starting a business with friends.

   Some people say this is because friendship and business don’t mix. I say it’s for two other reaons:

   1. Most people don’t know how to do business with their friends. Business with friends requires even more work. There’s a tendency to say, “we don’t need to worry about that, we’re friends.” Running a business with friends is the best way to discover how different your values, goals, skills and work habits are! On top of that, you have your friendship to manage at the same time.
   2. Usually, people don’t go into business with their friends for the right reasons. Typically they choose their friends as business partners because they already get along and have things in common, rather than because they can make a business partnership. Beware of starting a business with friends who are too similar to you–you’ll both want to do the same jobs. Instead, find someone who complements your strengths and weaknesses.

7. Equal partnerships.

   The only way an equal partnership can work is if there are only two partners, and they complement each other very well–such as an outgoing sales and marketing guy with a software whiz who spends all her time behind a computer screen. Usually equal partnership is a euphemism for “constant arguing.”

8. Any bizarre revenue-sharing scheme.

   I’ve seen a number of new companies try to work ways of handling inequality in the amount of work done by partners, by creating some kind of bizarre revenue-sharing scheme. This problem has already been solved. If you have a registered partnership, then you are equal partners, period. If you are incorporated, then it’s mostly a question of who has how many shares. To reward hours spent working in the company, pay wages or salaries, even very modest ones. If you feel that this isn’t enough to reduce the inequality of different partners’ time and effort contributions, then you’re
   in business with the wrong people and that is your real problem. Hint: in a healthy start-up, nobody pays much attention to how much work the others are doing, or how much they’re being paid, because they’re all too busy working.

9. Some of the founders work full-time and some part-time in the company.

   This is a recipe for disaster! Not only does it create instant inequality, but it also goes against a fundamental entrepreneurship value: if you’re not willing to invest yourself completely in a business, you shouldn’t be trying to run one. Get a day job and let the real entrepreneurs do their thing! If someone is willing to invest financially as a “silent partner” without participating in the day-to-day, that’s great–as long as they stay silent! The only people who should be working part-time in your company are your part-time employees, which is often a great way to transition from a company where the owners do all the work, to a company operated mostly by employees.