Tuesday, March 30, 2010

Why use Facebook?

Many of you know I have a new business called Karmaback.  We build tools and technology to make Facebook and Twitter more engaging.  The question is, why use Facebook at all?  What does it do for your business?

The answer is nothing.  It does nothing for your business.

You CAN however, USE Facebook to help your business.

Here are a few tips:
1.) Post at least 2-3 times per week, but not more than 1/day.
2.) Make your posts informative about Your products or Your industry.
3.) Encourage your Fans to discuss the topic.
4.) Encourage your Fans to "spread" the topic when it is relevant.
5.) Reward your Fans for following you.

3-5 are what Karmaback can do for you.

1-2, you have to do for yourself.

Sunday, March 28, 2010

The search for the perfect solution.

Got a problem?  Got something you really want?  Have you ever gone on a hunt for the "perfect" solution to your problem?  Why can't you find it?  Why can't anyone just make the PERFECT solution?

The reason it is hard to find perfection is that companies are working with 2 conflicting variables... supply and demand.  Usually, there is limited supply of something (for example, it costs money to get a supply of Titanium to make Titanium watches)... versus demand... (for example, the price of the Titanium watch HAS to be higher because of the cost of the supply of Titanium).  So, the never-ending challenge: Price vs. Features ensues, and most companies FLOCK to the place where the MOST people are willing to pay the given price.

FEW companies have the guts to make a product at either extreme: price so low, everyone could afford it... but who would want it... it's just crap?   Price so high, no-one can afford it, but WOW it has all the features and is darn near perfect.

The perfect solution is very rare.  Price low enough that there is high demand AND features high enough that it solves the problem nearly perfectly.

Software can change that.  It is possible to have the perfect software solution.

This company: Line2, is VERY VERY Close:

Live extreme.  Search for perfection.

Thursday, March 25, 2010

How to Manage Outside Offsite Contractors

The contractors have finally dialed in, 15-minutes late, for the status meeting.  They act as if nothing is wrong, "Hello everyone, how is it going?"  Your team looks frustrated, back in college they only waited 10-min for full PhD's!  "Fine, fine," you say calmly, "how are things there?"  "Fine, going good," they reply.  "Uhh, can you be more specific, this is the update meeting after all...".  Twenty minutes later they hang up, and you have NO IDEA the status, quality, or needs of the contractor.  What went wrong?  This is not going well!

As CEO, I spend a lot of my energy making sure that my management team is WELL ARMED to manage effectively.  By manage, I mean: ensure that tasks and objectives are met on schedule and that all tools and materials are available when needed.  

The problem is, when a contractor is NOT in the same office, you rarely know when they are lacking tools or needed materials.  It is equally difficult to get exposure to the progress vs. schedule, and damn near impossible to make sure the objectives are met.  MANY MANAGERS struggle with this with employees, let alone offiste contractors.

Here are some of the tips I train my managers (and employees who often do manager jobs) in dealing with contractors:
1. MOST IMPORTANTLY: don't pay hourly.
* Hourly is the wrong incentive for your contractors!  Pay based on objectives and milestones.
* If you must pay hourly, be sure to specify how many hours per week/etc. that the contractor may work on the project.
* If you must pay hourly, be sure to get an estimate first.. and provide a penalty if they go over the estimate (makes it almost not hourly).

2. Have a GOOD CONTRACT that includes both a carrot and a stick.  
*  Include in the contract a "Bonus" for early delivery, but also include a "Penalty" if quality problems exist post-delivery.
*  My penalty is usually they have to fix the problem in 2 days or we will deduct 5% from the total.
*  A good bonus would be 10%.  (contractors aren't use to this, so it can be quite motivating!)

3. Whenever possible only contract out something that is a "complete job".
* The Job MUST have a finite end-point and delivery metric.
* It must be FULLY specified IN THE CONTRACT.
* It cannot rely on multiple inputs or outside team members.

4. Build in "DELIVERED" milestones to the Contract.
* At least 1 per month or so... a nice stopping point with delivery of the 'unfinished' product. (ideally in a testable state).
* Along the way, you will see progress when a delivered milestone is given to you.

5. Make certain all tools and needed materials are given at the start.

* If there is a change you HAVE to make... don't.  Just let the contractor finish, then do a change as a separate contract.

If you can follow the above, you don't need the weekly meeting, just a quick call or email if they miss a milestone!
Best of all, they are MOTIVATED to do it on-time and high quality.
AND you can track their progress via the milestones.

Monday, March 22, 2010

Delegate or become your company's bottleneck.

"Okay everyone", he says in that snide nasal tone you know SO well. "just a reminder, your revised proposals are due by Monday morning."  You look on bemused that you have to do this.  You're not nervous, just annoyed.  You would have been done by now if you didn't have to make a proposal first.  "James, your idea needs some refinement, you need to include more widgets and less dongles like this," the nasal tone interrupts your reverie.  Its a good thing you didn't start yet, your idea just got mangled beyond recognition... its now 100% more safe, and 1000% less interesting.

We've all known the manager that refuses to delegate.  They want to be involved in EVERY decision.  They want to be "presented to" and (if your lucky) given a recommendation.  It's usually either a VERY capable person (who is super-duper smart and works super hard), or a VERY nervous/worried person who is constantly thinking about CYA (Cover Your Ass).  In the first case, they are doing it because they probably DO have great ideas and maybe could do it better/make it better.  In the latter, they are doing it because they are worried that if it gets screwed up, they will lose their job.  In either case, they are doing it wrong.  Refusal to delegate means you ARE the bottleneck in your system.

There are two principles that are being ignored here.  First, the principle of trust.  In both cases, they are not trusting their co-workers (or subordinates) to do the work right (well).  The second is efficiency.  In both cases, the manager has sacrificed "efficiency" by putting themselves in the work-flow.

I can't change your manager over night...but here is how you can change him (and/or yourself)!

1. introduce the concept of "guidelines".. pre-approved guides within which one can operate without approval.  Budgets, schedules, milestones, and boundaries.  (e.g. $500 per month spending maximum for needed stuff)

2. introduce the concept of "good enough".. a standard that is admittedly below your BEST's best, but that is good enough to get the job done without taking your Best's time away.  (note: works well when the BEST is the manager in question, or he thinks he is).  [not that I know from personal experience] :)

3. introduce the concept of "front man".. a front man not only has ownership of the project, but gets exposure as the leader to higher-ups.  This concept is a win-win-win... the CYA guys, get to CYA.  The subordinates get higher-up exposure, and the higher-ups, get to see new faces!

Now, start delegating, and work on the stuff that really matters.

Friday, March 19, 2010

Formalizing an online persona.

If you are an entrepreneur or a high-tech professional, and you do not have a Blog, I ask you, why?

If you don't have a Linked-In persona, I ask you, why?

If you don't know your place in this online world, I ask you, why?

If the answer is you don't believe in it, I can't help you.

If the answer is, not enough time, I can't help you.

If the answer is, why...I have this to say.

No matter who you are or what you are trying to do, people are going to Google you.  When they do, they will either find what YOU have written about you, what someone else wrote, or worse, nothing.

I'd never to hire a VP or Director who has "nothing" about them online.  Linkedin is a must.  References on Linkedin a big plus.  And a Blog even better (as long as its related to what you do).

So, that's my advice.  Do it.  Update it.  Participate, don't just watch.

My blog title and name was updated just today after hearing from colleagues it was a bit out of date.

Yep, they Googled me!

At least they didn't find... nothing.

Wednesday, March 10, 2010

An engineer's take on the Business of Sex.

Got your attention didn't I?  Why?  Because sex sells.  Pornography once pushed the envelopes of internet technology, leading to the creation of streaming video, live streaming video, CDN, and other internet technologies.  Pornography once dominated the bandwidth of the internet.  Here is your wake-up call... TIMES HAVE CHANGED!  The internet is now dominated by "user generated content".  Facebook, myspace, and the like now dominates web traffic.  What does this mean for the business of sex?  It has peaked (no pun intended).

Photo courtesy of this interesting study that Online Sex makes you depressed.  I would argue this is especially true if your business depends on this declining trend.

Monday, March 8, 2010

How to recognize a BAD/Small Business Idea & MVP

Knowing a bad idea is sometimes easy... check out this hellarious site: stupidbusinessideas.com.  What do these have in common? Simple: it is obvious that people are not willing to pay for it (or the market is VERY small).  But how can an engineer-type thinker discover if his idea (which isn't so obvious) is a Bad (small) business idea?

I will outline 2 methods, which would ideally both be used.

The First Method P.O.D.C.
PODC is a qualitative tool that helps a person analyze if the 4 key components of a Business Idea make sense
P = People
O = Opportunity
D = Deal
C = Context
If you see green lights all down the PODC list, you are good to go to the next method (or take your chances if you wish).   Here is what Green Lights should look like.
P.  The people running the business and inventing the product(s) are experts in the relevant fields and have experience having done it before.
O. The opportunity (the problem you are solving/need you are satisfying) is large enough that a small market share is all that is needed for a viable business.  E.g. a 1% market penetration would lead to a $5MM+ business.
D. The deal proposed is not too small or too big and has milestones and success markers along the way before further investment is needed.  E.G> a small amount of $ investment $ is all that is needed to get to the first milestone.
C. The context (the world view) is fresh and new, not old and boring.. and the business does NOT rely on some obscure law or quick trend.  Competition may or may not be there, but this solution seems unique and could be a long-lasting business.

Did your PODC come out green?  Now the real test: will people pay?
To test this, Engineer-thinkers need to deploy a Minimum Viable Product (MVP).  This is VERY hard for Engineer-type thinkers, who want to solve the whole thing & get it working first.  WRONG.  You need to TEST to see if people will pay first.  
Some guidance may be found here: http://venturehacks.com/articles/minimum-viable-product  and http://venturehacks.com/articles/minimum-viable-product-examples and of course http://www.startuplessonslearned.com/

Here is my quick instruction manual to make an MVP.
1.) Find someone creative who will build you a 3-page website for cheap.  ($1000)
2.) Build page 1 that gives the pitch for the new product/service.  1-button: Order Now.
3.) Build page 2 that shows the price & looks like a shopping cart.  1-button: Proceed with Order
4.) One page 3, say: "Sorry, we are currently back-ordered.  You will be emailed when new inventory is available.  Thanks for your business."
5.) Build some ads for your business idea on Google Adwords: http://adwords.google.com/
6.) MEASURE how much it costs to bring ppl to your site... how many are interested in Order Now... and how many "Proceed with Order" after seeing the price.
7.) Adjust parts 3-6... and see if you can make MONEY with the business.

If you can sell for more than 4x the cost (where cost is product cost + shipping + marketing cost)  you are in good shape.

If not, start over with PODC and see what was wrong.

Best of luck!

Now, get some good ideas!

Friday, March 5, 2010

How to know you have a BIG IDEA!

Many of my engineering friends have ideas... most are small... some CAN be big....  How do you know when an idea could be BIG?  Having judged Moot Corp 3 years in a row, won it 5 years ago, and after reading hundreds of business plans, I believe I have a formula that can help any engineer-type thinker answer that question:

1.) Is there a burning need?  (e.g. are people hungry to solve the problem, or spending a lot of money trying to solve it or avoid it)????
2.) Is there a big Market? (e.g. are there a lot of people who WOULD be hungry if hey knew they could eat (buy) something to solve it?)
3.) Are people WILLING to pay to solve it?  (this one requires a test... see MVP)

If your idea is big, I encourage you to go for it... nothing is worth losing than opportunity!

Wednesday, March 3, 2010

A balance of "reward" and "honesty"

Please reply and help me find the balance points...

If someone gets paid to say good things (spokesman), do you question their honesty?

If they ask you to become a fan, and you realize they got entered into a contest as a result, does it lessen them?

If someone shares something with you in their feed, and they got entered into a contest as a result, does it lessen them?

Think about Facebook games:
When people share "achievements" and get "silver" for it, do you care?

When people write a review for a product, that was given to them, is it less of a review?

When people write a review for a product, and they get a free t-shirt, do you trust the review less?

If someone shares a link on Facebook with a comment, and they get a free hat for doing it, do you care?

THERE IS a line somewhere... where is it?

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