July 2012 - CTG Company, LLC

Recently I have set a few productivity goals for myself. I know these work because I have gone long stints being totally dedicated to them with huge results. I’m jumping back on the wagon and figured I’d share them with my Type A brethren.

1. Check and respond to email twice a day. The first time being after 11AM.

This is the most important productivity step for any obsessive compulsive because we constantly check email and respond within minutes. When I’m not strictly following this guideline, my average response time to emails is less than 10 minutes. This probably impresses the people I work for and people who work for me, but the productivity losses are huge. Leaving your email open or constantly checking email is an excuse to distract your mind from your current task. It is scientifically proven that we need long periods of focused time to get things done.

The 11AM restriction helps you actually get the things done you set up in #3. If you open your email first thing in the morning, some “must do” task will jump out and get you off your priorities.

2. Remove yourself from all “chat” services like G-Chat. (Also, Twitter if you sit and stare at it all day like it’s a world chat box).

Anything that stays open on your computer that allows others to interrupt you without your permissions is a bad thing for productivity. For the same reason voluntary email checking causes harm when it breaks up your productivity blocks, chat services allow others to harm your productivity.

This one is one I have stuck to with great results, but it has not been easy. Particularly when I was a financial trader. Using chat services to communicate with prime brokers and other service providers was the norm. You just have to let people know that the phone is your preferred communication method if something is time sensitive. I find that people redefine the definition of “time-sensitive” when a phone call is mandatory. Videos of pandas sneezing are time-sensitive when it is just a chat away.

3. Use a robust task list like Evernote to set 3-5 must-do items per day.

I have found huge productivity gains to setting 3-5 main tasks I must complete per day. I usually set these up the night before an hour or so before I go to bed. The first couple hours of the day I dedicate to killing at least two of these tasks before I open any sort of communication (Twitter, Email, etc…). If by 11AM I can nail down two tasks, even if I run into several interruptions during the afternoon, I do find the time to finish up the remaining tasks.

The worst thing you can do is have an on going, 90 item task list. I see this all the time. People don’t know where to start and mentally it becomes a lost cause.

The typical MBA doesn’t know how to identify the right markets to attack. I’ve been surrounded by Harvard, Stanford, Chicago (even I’m one), and Northwestern MBAs my entire life who continually return to the corporate grind. They identify crap market after shitty market (whoa… that was like a Rickyism). Luckily, I’ve spent some time around savvy college drop outs that can smell a cream puff market a mile away. The business building I’ve done myself has also given me a lot of insight. This isn’t rocket appliance so let’s get on with it. It’s a peach and cake.

1. Understand that business is not like poker. If you take him head-on, the madman with deep pockets will whip your ass in the long-run.

There are a lot of aspects of business that are like poker. However, the key difference is that in business we only get to play a few hands.

The standard approach a youthful, energized MBA will use to identify a market: 1) Find a $20mil+ market where margins are high enough to sustain an additional competitor. 2) Confirm that all the market leading companies are under-managed by decaying executive teams. 3) It all culminates in the raising of a bunch of capital or the purchase of a second tier company in the industry.

In many situations, the MBA doesn’t realize they just sat down at a poker table with a wealthy madman.

It plays out the same every time. The MBA may genuinely out manage his competitor, maybe even has a technological advantage to lower cost of production, or even produces a better product. He plays his cards exactly how they should be played. However, the competitor grinds down the MBA via an irrational price war, huge marketing spend or a vertical integration rampage. The madman bets big on even his shittiest hand. Eventually, the MBA eats crow and gives up.

When you are identifying markets you have to perform due diligence on who the industry considers the biggest competitive threat. It may not be the largest competitor or the one growing the fastest. If the identified market player is a public company, a company with a lot of debt or a private partnership with complicated equity ownership structure you are probably OK. Bankers, public boards, and dispersed equity owners are too risk adverse to allow for madman-like behavior. If the company is substantially owned and run by one individual or very tight nit group (e.g. brothers) and debt free, watch out! These companies are a death sentence to take on as a market outsider. In this case you should either try to purchase that company or move on to another market.

2. Realize creampuff markets are never huge, nor are they perceived as having high margins.

Booku millionaires are made in the cardboard box, paperclip, and other boring-as-shit industries all the time. MBA professors would never tell you that because the only millions they’ve made were sucked right out of a university endowment or public funding via a socialist-esque tenure system… I digress

It’s supply and demand. MBAs are good at raising capital and they are also good at executing on what they have been taught. Hence, there are a ton of people (and MBA soaked PE funds) looking for companies in large, growing, and perceived high margin industries. It’s tough to find a deal and that is really what it’s all about. You only live once, so don’t waste your time unless you make money the moment you sign the purchase contract.

I keep using the phrase “perceived high margin” because tons of commodity products have much higher, sustainable margins than you would guess. People say Saas software is high margin while ball point pens are low margin. Well maybe. But what if someone comes to compete with your exact Saas offering? Net margins get driven to zero due to the low barriers of entry and low marginal cost of production. It might take years of supplier negotiations, learning production methods, and capital investment to chip away at the ball point pen maker’s margin.

I will grant it’s totally different if you are creating a market. In that case you have to have high margins, here is a good article on how to do it.

Alright take these two tidbits and go buy a Chinese takeout box company… your road to millions!

Monthly Archives: July 2012

3 Huge Productivity Boosters For The Type A

2 Ways to Find Markets Like A Non-MBA