Monday, January 31, 2011

Which Kind of Entrepreneur are You? - A Visual Exercise

Do you consider yourself an entrepreneur? If you do, are you an analyzer or a doer? Probably both, yes? There are two extremes in the entrepreneur world. There are the people who have great ideas, but research and plan until the idea is rationalized into the “this won’t work” trash bin. These are the “aim, aim, aim,” people. Then there are the extreme doers, who dive into initiatives without proper due diligence. This second group is the “ fire, fire, fire,” group.

Confirmation bias allows an aggressive entrepreneur to rationalize greater expected returns and lower costs of failure. Therefore, they are more likely to pull the trigger sooner in the research process. At the same time, an over-analyzing entrepreneur will rationalize themselves into lower expected returns and greater costs of failure. They will spend much more money on research before going to market.  Let’s look at three graphs showing the decision process of three market actors; the “fire, fire, fire,” the “fire, aim, fire,” and the “aim, aim, aim.” The purple square is the point of indifference.

In large fixed and variable costs industries, the car business for example, somewhere between “Fire! Aim! Fire!” and “Aim. Aim. Aim.” is clearly the way to go. Mistakes are extremely costly. But with the low fixed and variable costs of much of the social technology industry, “fire, aim, fire,” is the way to go. Here are two reasons;
  • Low barriers to entry allow anyone and their dog to put business models to the test. Thus speed to market is critical.
  • The costs of failure are low enough to allow an entrepreneur to quickly recover and try something else.  This means that you have tons of competing initiatives any any given point.

At the end of the day, the power lies in knowing yourself.

Which type of entrepreneur are you? And is that the winning strategy?

Monday, January 24, 2011

Never Lose an Idea, Google App Tackles Bad Memory

Ideas come at inconvenient times. You’ll get ideas in the shower, at the doctor, or while running. What’s worse is that sometimes you’ll get two or three ideas in a row. So then just remembering them is a challenge. On days when you have a lot on your mind, you can forget an idea seconds after its conception. That’s bad.

Record your ideas immediately! You don’t need to be at your desk, ready to write an article. Do you have your phone nearby? Chances are you do.

Use your phone to get your ideas down. It seems obvious. On most phones there are notepad apps. But notepads are just notepads. Your ideas deserve more than that. Try Google Docs. It’s a great way to record your ideas.

  • Google’s documents do not default to a page view. An empty page can be intimidating.
  • Google saves your document automatically every few seconds, so just write, then turn your phone off.
  • You’ll see the progress you’re making when you can scroll up and look at the other entries you’ve made. Recording your ideas will feel productive. You may even gain momentum.

Try fleshing out the promising ideas on the same document. Eliminate the bad ones. The result will be a mass of ideas at different levels of maturity. It’s pretty neat to see. When ideas are fully developed and ready to go, you may want to take them off your idea doc. Make room for the youngsters.

          Make room for the idea.

Monday, January 17, 2011

Say Goodbye to Standalone Contact Databases

Almost. Here’s the thing. 
  • The current worker in the US stays with their employer for on an average of 4.4 years. 1 
  • As of January 7, 2011, the unemployment rate was 9.4%. 2
    • Add to this all of the people who are working under contract, and what you have is a lot of people doing a lot of moving around. And this means your contact information quickly becomes outdated.
    So, if you want to stay with a standalone database, you’re going to have to find a balance between the costs of keeping it up to date, and the number of times you hear, “He no longer works here.”

    But it’s much worse than that. Outdated information can be very damaging.
    • Mass communication problems - you won’t know who is not receiving information you feel important enough to broadcast.
    • Missed opportunities - for instance, you have a client that you speak with on average four times a year. Let’s say that contact moves to a new company. You won’t know that until the next time you call him. By then your contact may be using the company’s default supplier. And you’ve lost a growth opportunity.
    • You become reactionary - This is a world of information. If you’re constantly the last one to find things out, you won’t be around long. It is unacceptable to discover that a key contact has moved to another company from an industry periodical.
    Here’s the answer to this conundrum. Outsource your contact management to the contacts themselves! Who knows the most about your distribution partner, Edward Knickerbocker? Edward Knickerbocker, that’s who. He’s the one that is going to update his profile on Linkedin when he moves to a new company, because it’s in his best interest.

    Admittedly, I haven’t seen the right software for this yet. Linkedin is the best self-updating database for professionals there is at the moment. But there’s a snag. People are hesitant, and rightly so, to put their phone numbers on their profile. Other than that, you can download your contacts’ information and plug it into any program you want. Go to the “Contacts” tab, then click on the export connections link at the bottom right-hand side of the page. This will allow you to turn your contact information into a .csv file. You can import your contacts into a cloud program, say Salesforce or Google Contacts. From there, everyone in your organization can see the same contacts, and it’s constantly updating. Sensitive information, like phone numbers and notes will not be effected by incoming, non-conflicting fields.  It’s not a perfect solution, but one will come soon. Perhaps a permission level system built into Linkedin. We’ll see.

    In the meantime, keep cutting costs where you can. And win the information race.

    Monday, January 10, 2011

    Moral Hazard vs. Business 2.0

    Moral hazard can be very hard to isolate. It’s usually hidden in the moments of an employee’s day; one more email to a friend, one more news article, ten minutes to make coffee in the morning.....I hear some people do that.

    So how can a manager decrease moral hazard costs?

    •Hire more managers to look over employees’ shoulders? This merely shifts the costs of moral hazard to new personnel.

    •Implement draconian rules in the workplace? This shifts moral hazard costs to diminished employee engagement, which may be more costly than the original problem.

    •Use appropriate Business 2.0 technologies. I’ve been working with a lot over the past week. The software provides employees with all the information and tools they need to take ownership of their tasks.

    Salesforce is just one example of collaborative software that gives employees more ownership over their work. Find the one that suits your organization and give it a shot. Pay attention to employee feedback. To date I haven’t seen a fit-all program for every company and situation, so you’re going to have to tweak it as you go. Good luck!

    Monday, January 3, 2011

    Early Adopters in a Late Adopter Workplace

    Every Business 2.0 fan wants to be part of the action. They want their company to be fully integrated into the web via social networking and use ESSPs (Emergent Social Software Platforms) to collaborate and innovate.

    But for the majority of companies this is simply never going to happen. And the Social Business fans that are stuck in them need to either shift their perspectives, or start jogging to cope with their frustration.

    Just last week I was helping a mid-sized firm with their basic social networking efforts. I asked through email how many people had a LinkedIn account. 45% responded that they had one set up. About half of those said they never used it.

    I set up a LinkedIn company page and through some effort I got 32% of the company properly affiliated with the firm. I had to walk around to each person’s station to help them with their accounts.

    One key manager told me that he just wasn’t going to start an account. No explanation followed. And I didn’t ask for one.

    Things weren’t going well. Would an executive mandate get things going? It’s always tempting to use authority to push change. However, I recommended that the CEO lead by example and continually express interest in everyone using LinkedIn.

    This company was full of late adopters. Even if the CEO mandated more social networking, most of the employees would modify their behaviors just enough to avoid trouble. And as soon as they weren’t being watched, they would return to the status quo.

    Manage your expectations or you are bound to find yourself in moments of frustration. This is easier said than done. If you are a new Business 2.0 fan, buy some jogging shoes.