Lunch Break Snapshot

PROS:
1. You will be more productive. This ain’t bullshit. With an inkling of self-motivation, you will get more done by avoiding meetings, interruptions, and commuting (this is huge!).

There is a behavioral benefit. You are no longer stuck somewhere for 8-18 hours putting in your face time. If you waste time while working, you’re now wasting YOUR time. There is good research suggesting we can’t focus more than 40-50 hours per week. I theorize that our American culture can’t distinguish between hardworking, effective people versus hardworking people who can’t prioritize or get things done. The former can utilize their 8-10 hour allotment of productivity to the company’s benefit, but they still can’t go home. They would risk being marked as a lazy ass. American culture penalizes them. Alternatively, the latter group benefits by American corporate culture because they are always busy and work long hours. They are “hard workers”. Yet, they don’t get jack shit done.

When you’re remote, the only thing people see is the end product. If you aren’t pulling your weight, your customers and clients are going to cut you out. Pure, refined capitalism.

2. You will discover new currencies. Before I went on this adventure, there was one currency in my life. Cold, hard, green, crisp, Ben-Bernanke-printed dollar bills! Any other explanation was hippie talk. Well, today I understand the value of optionality, free time, and reduced frictional costs.

• Optionality – When you are working 80-120 hours a week for a person/company who doesn’t care about your upward mobility, you are owned and paid for. You’re never going to be booku rich, change the world, or do the things you want to do in life. You will be comfortable, but mediocre. You cannot pursue what you need to pursue when someone else’s tasks are 100% priority, not aligned with your career growth, and you need permission to do anything outside that relationship. (note: I actually had great employers in the past that cared greatly about my future, but I don’t see the same among most my peers.)

  Since going rogue, I still “work” 50-70 hours a week. However, most the time above 50 is used towards streamlining my life and looking for additional streams of happiness. I have taken advantage of great opportunities, because I have had time to research and study a variety of deals. I have also been able to strengthen my relationship with my main client and prove my value proposition to them.

• Free time and frictional costs – OK, so you’re wondering how can I work 50-70 hours a week but still have free time? Let’s do the math. I wake up around 8:30AM and go to bed around midnight. 15.5 hours to burn. I work for 10 hours, 5.5 hours left. Eating dinner, showering, etc… runs about 2.5 hours a day. With the remaining three hours, I can go down 4-5 ski runs, go on an alpine hike for 2-2.5 hours, or do a ton of other things. The key is FRICTIONAL COSTS. In my math, you don’t see commuting for two hours, walking to lunch, coordinating business dinner, etc… Additionally, you don’t see frictional costs on the fun part of my day. I live where I play.

  Working in San Francisco because you are 1.5 hours from a functional beach and fours hours to Tahoe’s ski resorts is not living where you play. I never had fun while living there because the frictional costs killed it.

  Last winter I was able to ski 34 days and still put in 70 hour weeks. Went from scared shitless, pizza skier to going all over the mountain in less than two months.

Not me, but getting there!

CONS:

2. Network, community and scaling. This is the hardest part, by a huge margin. I am the first to admit that relationships will propel your monetary success and affect you personal happiness. When you are remote, you have to work at this. For me, this means more travel. I travel to keep connections with friends and good clients. Sometimes I consider splitting my family’s time between a remote location and one that puts me more in the mix. Getting the idea juices boiling and working with people who are on your team, face-to-face, can’t be replaced.

The other challenge this brings is scaling your businesses. Without qualified talent where you live, it is challenging to grow your business. Hopefully next year I’ll have more to say on this one, maybe even include some creative solutions.

2. No safety net. No two weeks paid if you get fired, no $200 when you pass go. This goes for any entrepreneur, but is more strong and fast when you go remote. There is no “buddy’s startup” or alumni career center up at 10,000ft, in the middle of the Rocky Mountains. You’ve shunned normalcy, standard career paths, and society’s norms. In a way, you can never go back. You have gone full retard.

I’m putting this as a CON but sometimes think of it as the best part about going remote. It’s the biggest leap to freedom you can make. Just remember, going back would be bumpy.

The post Reflecting on a Year of Remote Awesomeness. 2 Pros, 2 Cons appeared first on CTG Company, LLC.

With just a little innovation you can snatch the remaining tail of an industry in decline. Tails can last longer and be monetarily bigger than you think. They aren’t going to get you a $100 million exit, but I know a lot of people who generate high, six-figure cash flows from industry tails. The current Kickstarter.com project “The mPrinter” may end up being a good example.

This idea is belligerently sexy, because it embraces the two important elements that affect your ability to capture the tail of an industry.

1. You actually have to be better (or cheaper). This is a hard task in growing, competitive, headline industries. However, the firms with market share in the mobile thermal printer space have yet to embrace wireless technology. Their printers are used by armies of electricians, IT people on server farms, engineers on oil rigs, and supply chain management employees in huge warehouses. What percentage of these customers already have iPhones, iPads or Android-based smart phones? I would guess… most. If this industry wasn’t mature and boring, there would be a hundred different teams of eggheads building wireless thermal printers that leverage mobile devices. mPrinter has this figured out. By building a standalone printer (vs. an integrated product containing software, hardware to run software, and a printer all-in-one), mPrinter will ultimately be able to create cheaper printers that have superior, mobile-devise-based software interfaces.

2. Your competition has to be about as nimble as this cat. Covered in cash, growing like crazy, and not thinking about their cash cow.

This is a “no-duh” statement, but it is important to recognize that a lot of firms don’t protect their declining cash cows. I love this matrix they teach all MBAs. The BCG growth matrix:

They really need to put a bull’s eye on the cow, so bastards like me know where to shoot

They train you in business school to use the cash flow from your cash cow to fund new products. This is backed by solid logic. Tons of companies blow up because they rested on their laurels and failed to innovate new products and markets. My beloved Smith Corona, is a great example. Just recognize that this logic also forces large, growing companies to leave their heard of cash cows without a shepherd. Time to be a wolf.

In mPrinter’s case, the large industry players aren’t focused on protecting their mobile thermal printer/supplies market. Brady, Brother, and Dymo have product teams on this market, but all I see is the same machines being revamped with newly designed casing and a few proprietary supplies adjustments. These firms focus on entirely new products and industries because that is what growing public companies are mandated to do. Well they could return cash to investors… oh sorry I was dreaming for a second.

Some cash cows are there to be poached. There is nothing wrong with it. You are incrementally innovating to help an abandoned group of customers, and in life you have to have cash flow to make meaningful things happen. These are great markets to start on.

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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.

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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!

The post 2 Ways to Find Markets Like A Non-MBA appeared first on CTG Company, LLC.

Eric Reis wrote a great book, The Lean Startup, that I recommend everyone read. Before I proceed to talk shit about some of the methodology, I want everyone to know I utilize the lessons of this book everyday to improve the businesses I work with. I am just explaining two points of caution.

One of the main themes in the book is using the scientific method (controlled testing and data analysis) to improve your business. The idea is that every action a company takes should be measurable by non-vanity metrics, i.e. metrics that drive your business model like customer aquisition cost, churn rate, or number of users using your service daily. The action can then take place and be tested. If the action or strategy performs well in non-vanity metric terms, the company integrates the strategy. The firm then moves on to an additional test. Its about fine tuning the business engine. As an Ex-Quantitative Hedge Fund Trader, I love the idea of letting the data drive the business strategy. However, that experience also taught me two important issues. They apply well to the Lean Startup methodology. The first is the data mining issue. The second is solving for a local maximum when you think you have solved for a global maximum.

Reis does not emphasis that every business experiment should have a rational theory behind it. This is a mistake. Take the example of A/B testing of single words on a content website. If you perform thousands of single word tests, you will eventually find amazing results. Results like if you use the word “midnight” instead of “12:00AM” that your conversion rate will go up by 1%. This is a major issue in statistics called data mining. When you start to perform lots of experiments not based on rational theories, you will find statistically significant yet meaningless results for a small set of experiments. If you perform those experiments again, you probably won’t get significant results on round two. Well thought out experiments that are based on rational theories return results that are more durable. The other reality is dumb experiments waste a huge amount of time. Seems obvious, but you see people testing things that make no sense by even large stretches of the imagination.

The local maximum issue is more problematic. I’ll explain by example.

The basic test here is how we are going to spend our advertising budget, Paid Search vs. SEO. The non-vanity metric is customer acquisition (CA) because we are an eCommerce site. CA and retention rate drive everything. We are currently focusing almost all our efforts and cash on paid search at Point A. We decide to perform a test of increasing our focus on SEO. We move to Point B during the test and measure a significant decrease is CA. Awesome! So our next test we decide to increase our focus even more on SEO. We move from Point B to Point C during the testing period. We measure a statistically significant uptick in CA. We scramble back to Point B. When it comes to this strategy we assume we are on an optimal point at Point B. However, we have just found a local maximum. A matter of fact, any incremental testing will drive us back to Point B. It is clear that this is sub-optimal when we look at the reality (which we don’t know as testers) shown in the graph. We want to be at the global maximum of Point D! (Note: I use global/local maximum when technically I’m talking about minimums. I do this because this issue as usually described as the “Local Maximum Problem”.)

It is important to realize that many elements of business have a graph like the one above. Local maximums are all over the place. Using SEO probably won’t start to payoff with low customer acquisition costs until you jump to putting most your focus on it. Vertical integration in manufacturing is the same. When you first start to integrate, profitability will go down. As you make massive integration moves profitability may drastically rise.

What is the solution? Use The Lean Startup methodology to constantly improve your business but make sure to take some long shots when tests don’t work. If focusing on SEO starts to hurt your business, try to test a larger change in focus towards SEO for a brief period. A way to solve this issue is described in Exploiting Chaos, a great book by Jeremy Gutsche, with a suggestion that every company should have a “gambling fund”. With a gambling fund, large and sometimes costly projects can be pushed out with no remorse and no intermittent testing. This is an effective way to find a global maximum out there that you are missing! The book is a great read for a bunch of other reasons too, and Jeremy is a great guy with some special insight over at TrendHunter.com. Not to mention he knows the best steak houses in Toronto.

The gambling fund topic is covered towards the end of this keynote:

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For anyone who is trying to use a remote or outsourced support team, Desk.com provides some great features. The Saas platform provides an online portal where agents can login to keep track of support cases, assign cases to each other, and track progress. Our agent in Cleveland, OH can work cases in the morning hours and then pass time sensitive issues on in the afternoon. Our representative in Rocky Mountains can followup later in the day. On the other hand, our Colorado agents can pass technical cases back to our manufacturing facility in OH for resolution. This could easily extend across international borders (I’ll try it soon, I’m sure). The case platform is straightforward and takes a computer savvy new hire just a few hours to become a power user. These features are shared by Zen Desk and other competitors, so they aren’t a Desk.com competitive advantage. On to that…

What distinguishes Desk.com for me is its integration with SnapEngage chat software and the community support center it provides. When a customer chats with an agent, the chat transcript is logged as a new case inside Desk. If during the transcript the user gave the agent contact information, that information is also automatically logged into Desk. Integrations are key when it comes to case software because the software is only as good as the information put into it. The more that can be done automatically, the more powerful the tool. We also have a phone switch that sends our support email a audio file of all voice mails. Each voice mail automatically opens a new case in Desk.

For SmithCorona.com I felt it was key to have a robust engine for the external customer support pages. Desk.com allows you to tie your case agents directly into a platform where they can answer public questions and write articles on common issues. This is all available via a robust search engine. After only a couple weeks, our two agents have built the foundation of a knowledge base where customers can self service. Desk.com does allow you to customize the look and feel to some extent, with an additional upgrade you can have full control of the look.

Desk.com runs $49 per agent, per month. It seems pricey but Desk.com does give you one free agent and the option of paying $1 per hour for “flex agents”. I use this flex option for myself and one other manager. When it comes down to it our four person team can all use the service for less than $100 per month.

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OK so this video isn’t Shark Tank’s best but it cracks me up and does show why I like the show so much. Shark Tank embraces what is so great about America (I know it is a knock off of a Canadian show, but stay with me here). The show isn’t just about “entrepreneurship”, it’s about people who understand the power of making it on their own.

There is nothing more empowering than knowing you can create ideas for society and execute on them to make yourself wealthy, powerful or whatever floats your boat. There is also nothing more moral. The engine of creation and creative destruction does more for society than all philanthropy combined. This isn’t an opinion, it is a mathematical fact.

Our culture in the good ol’ US of A, over the past three hundred years has gone from a culture of self sufficient adventurers to a culture of dependence. The industrial revolution was a great thing for sake of increasing living standards, but it started a trend away from entrepreneurship. It turned large populations of would-be agriculture entrepreneurs into factory works. Then over the years, government intervention into every facet of the American’s life, including a massive safety net (should I say “safety trap”) called welfare, stripped the last remaining need to embrace self sufficiency.

Shark Tank and its predecessor Dragon’s Den up in Canada are a breath of fresh air!

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This new world of marketing with its whiz-bang SEM, SEO, and social media gives new product innovators a huge advantage over their historical equivalents. Today, you take your new product (or just the idea) and with a $500 investment you can accomplish a ton; identify if a market exists, get product feedback and gain significant sales. Great books like The Lean Startup by Eric Ries promote these techniques. It does work and is a great win for the innovative entrepreneur. However, many not-so-innovative souls have been fooled into thinking this formula can be applied in the realm of mature markets.

I have a unique situation where I am the co-manager of two different eCommerce sites that exist in the same product category. The market is competitive, mature, and price driven (think commodity-like). Site A is two years old, has established first page SEO, and a long-term Adwords account. Site B is a new website with little SEO traction and a fresh Adwords account. Both have similar keyword density and unique original content. We have a cost advantage over our competitors. Both sites share this advantage. The difference between the two sites shows us an example of how much it costs to break into a traditional market when equipped with a true customer benefit. It’s not $500.

For the same set of keywords, Site A has Adwords quality scores of 5-8 while Site B uniformly has quality scores of 3. Both sites have the same type of landing pages, almost identical ad copy, and click-through-rates. Hence, the QS difference is attributable to the age of the Adwords account and established SEO.

Why would the age of your Adwords account matter? In mature markets, click-through-rates for ads are notoriously low because providers can’t differentiate. Until you statistically prove to Adwords algorithms that you have a superior offering (higher CTRs), your keywords have low quality scores. With low quality scores you pay more per click. Also, not to be a cynic but Google has an incentive to favor their long-term paying customers while extracting as much as they can from new entrants. Site A is paying $2.50 for the same customer click that Site B is paying $6.50 for.

Why would SEO matter? Without it, you directly pay for all customers. With it, you aquire some organically. The second part of the answer is that improved SEO improves you Adwords quality scores and therefore reduces your cost per click on Adwords. SEO is a double whammy!

Based on Site A’s historical spend on Adwords and SEO, roughly $50K split between ad spend and SEO will make Site B competitive with Site A. This $50K will be spent during 4-6 months with little, if any profitability due to high customer acquisition costs. $50K is pennies compared to what it would have cost to open a new sales channel in the industry ten years ago, but it is still real money. It is enough money and enough time that you need to know you have it before you start the process.

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KeePass is a secure and free way to store passwords. I use it constantly.

For all the posts on lifestyle design, outsourcing, and generally just depending on others/software to help you live the life you want to live, there is little written about security. It may just be naivety. It is absolutely dangerous. I do try to practice The Art of Letting Bad Things Happen, popularized by Tim Ferris, for the sake of not letting the little things drive me nuts. However, one strict exception is security. Think about how you use your passwords. If someone figures out your Gmail password, what else can they control? I bet a lot of you use the same password for multiple logins (a huge no-no!). When that piece of shit hacker gets into your email, you are going to lose a couple days of life/productivity at a minimum. What is that worth, $2k, $3k, $20k?

This is a more salient issue for those of us who utilize lots of software and/or people to do our work. Anytime you sign-up for software and use an email/password, that data goes into a standard type of database. Today, it is certainly a SQL database where your email is stored in plain text and your password is encrypted (or sometimes also in plain text). Given the fast-paced nature of Saas start-ups, security is not a top priority and frequently these databases get ripped off without the start-up (and not-so-start-up) ever knowing. With a little magic, your password is decrypted and is being sold with its email counterpart on the black market. It’s pretty much unavoidable if you are using a lot of cutting-edge Saas software to automate your life. So, the best line of defense is to reduce the value each email/password combination offers a hacker. The best way to do this is to always use strong and unique passwords for all your logins.

When it comes to giving outsourced contractors WordPress logins, server credentials, Amazon credentials, etc… always make sure to use unique user/passwords that are easy to change later. So the obvious issue is how you are going to keep track of 100′s of passwords. KeePass!

First, KeePass has an internal password generator. This is cool because you don’t need to think up a strong password. With one click, you have a 30 character, hacker-ass-whipping password.

Second, KeePass lets you organize all your passwords, keep notes, and pull up login URLs with one click. It is a password lock-box and bookmark index in one.

You can throw KeePass on a thumb drive or cloud backup (SugarSync, DropBox…) so you always have it with you. If you are going to do this, I recommend looking into using key files to use with a password to encrypt your KeePass database. It is a basic procedure and KeePass will walk you through it.

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I recently implemented SnapEngage on the thermal label site I run, SmithCorona.com. After a brief free trial, I went ahead with a year long business subscription that runs around $49 a month. The service provides the technology, analytics, and logging for proactive customer chatting on the site. My package allows for four separate chat agents with cool individual head shots. See an example here (I’m in the bottom corner annoying you about ribbons and labels!):

I find proactive chat annoying on websites. Well, it turns out I’m in the minority. Our customers have embraced it on this site. Roughly 15% of all customers engage with our agents and this looks to be improving conversion rates. The high usage is probably due to the site’s B2B nature. Our buyers are accustomed to ordering directly with inside sales reps over the phone. I think the chat bridges the gap to eCommerce.

I am a programmer myself but still found SnapEngage’s implementation process a huge selling point. To get SnapEngage up and running on your site all you have to do is paste four lines of code into your templates. There are cheaper solutions I could program myself, but I would never be able to get the logging and analytics. To boot, maintenance would be a nightmare.

We have had a couple small design issues with the chat window sliding behind different parts of our layout (even with proper z-index in the CSS), but overall we have been very happy with the software. I highly recommend it for businesses that have the resources to have an agent available most the day via chat and businesses that have customers who are used to talking to someone before making a purchase.

EDIT:
Chris over at SnapEngage followed up with some help on my display issues. Here are a couple links that solve the issue:

http://help.snapengage.com/faq/the-snapengage-button-or-chat-window-is-hidden-behind-a-youtube-video/

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