That's right. Nobody has started something from nothing.
Without the Napster, Zuckerberg is a nobody.
Without Bill Hewlett answering the phone Steve Jobs and Apple computer are nothing.
Without money from IBM Bill Gates and Paul Allen go bust.
A lucky break is required for success and too many entrepreneurs (with egos the size of Texas) take too much credit for their own lucky circumstances.
I once worked with a guy who claimed he was self-made. Turns out his dad lent him $200,000 to start his business.
There's a billionaire family who lives 20 miles from my house. From all the accolades they receive you'd think they started their $200 million dollar countertop business from nothing. Turns out they invested $34 million before they ever made a dime.
I'm pretty sure that most people could start a business from scratch given a $34 million dollar budget.
Take Steve Jobs. What a fake. Yes he made Apple from "nothing (reread above qualification)" but look at Next. Not even Steve Jobs could turn his money, connections and experience into a successful company. Even Steve needed something more...something unquantifiable.
The truth is you need resources to be successful. Money, experience, and connections are necessary but they are not enough. There has to be an opportunity that can sweep you up in it and that is something that you can't manufacture. It is a meeting of a need, a skill set and a passion all coming together at the same time. For entrepreneurs, they can only supply 2 of those 3 things. The need is illusive. I can only be found by accident. You can set out to discover it but you will fail multiple times before you find it.
Just ask AJ Khubani the infomercial king. He built a multimillion dollar business only to go bankrupt because he hit a dry spell. The need, or demand if you will, is lucky. Not even the experts can spot it. But if you find it it will take you away.
Luck is required. Nothing else matters. Luck supersedes money, experience and connections. It is necessary for success.
10.26.2015
Moron Gurus and The Ultimate Dare
Warning, this is a rant/vent.
I'm sick of gurus.
They talk and talk and the reality is they're all a bunch of idiots. Not a one of them can actually start something from nothing. They all had unusually favorable head starts and advantages that allowed them to make their millions and grow their businesses. Either that or they are narcissistic liars who have absolutely no empathy or feeling towards those that they fleece.
"We're awesome" they say.
"We can get you a 10 gazillion percent ROI!"
You just need a minimum $10,000 per month advertising budget. Oh, and we won't guarantee anything because the reality is we don't know if what we're going to do is actually going to work and so you can have 100% of the risk. Then when it fails we'll just blame your puny budget and ask for more money and promise the same old BS all over again.
F!
I once ran a business that sold to a half billion dollar per year TV shopping network. When I asked them how they get new customers they didn't know. They were struggling to find new customers too and they had an 87 million person audience on cable and satellite built in to their business model. When you ask small business owners which of their advertising works they don't know. What's the difference? Nobody seems to know.
When you ask an advertising agency what to expect for ROI they don't know either. I once did some consulting work for a company that grew from 0 to $3 million in revenue in 5 years. They got lucky and some reporter wrote a story about them that went national. Since then their business has declined substantially because they also don't know how advertising works.
Yet, the gurus continue to write and film useless articles and videos that are full of crappy, watered down, advertising advice.
Here's the question I have: Why not put your money where your mouth is? You spend $2000 per month for 6 months advertising my small business and I'll give you 100% of the ROI attributed directly to that marketing. If you're advice is worth what you say it is then that's a heck of an ROI. Any takers?
No.
There are no takers.
You see, nobody actually has the guts/brains to take that. If the promises were true a truthful guru would take that dare and print money like nobody's business. The returns would be too good to pass up--much better than the stock market. And, there would be customers lined up around the corner.
But the reality is that the returns on advertising suck and are unmeasurable. So no guru could ever take that bet and get an ROI. Therefore, neither can I...the small business owner.
So, what is a small business owner to do? Other than luck and happenstance, how can you grow your business?
I'm sick of gurus.
They talk and talk and the reality is they're all a bunch of idiots. Not a one of them can actually start something from nothing. They all had unusually favorable head starts and advantages that allowed them to make their millions and grow their businesses. Either that or they are narcissistic liars who have absolutely no empathy or feeling towards those that they fleece.
"We're awesome" they say.
"We can get you a 10 gazillion percent ROI!"
You just need a minimum $10,000 per month advertising budget. Oh, and we won't guarantee anything because the reality is we don't know if what we're going to do is actually going to work and so you can have 100% of the risk. Then when it fails we'll just blame your puny budget and ask for more money and promise the same old BS all over again.
F!
I once ran a business that sold to a half billion dollar per year TV shopping network. When I asked them how they get new customers they didn't know. They were struggling to find new customers too and they had an 87 million person audience on cable and satellite built in to their business model. When you ask small business owners which of their advertising works they don't know. What's the difference? Nobody seems to know.
When you ask an advertising agency what to expect for ROI they don't know either. I once did some consulting work for a company that grew from 0 to $3 million in revenue in 5 years. They got lucky and some reporter wrote a story about them that went national. Since then their business has declined substantially because they also don't know how advertising works.
Yet, the gurus continue to write and film useless articles and videos that are full of crappy, watered down, advertising advice.
Here's the question I have: Why not put your money where your mouth is? You spend $2000 per month for 6 months advertising my small business and I'll give you 100% of the ROI attributed directly to that marketing. If you're advice is worth what you say it is then that's a heck of an ROI. Any takers?
No.
There are no takers.
You see, nobody actually has the guts/brains to take that. If the promises were true a truthful guru would take that dare and print money like nobody's business. The returns would be too good to pass up--much better than the stock market. And, there would be customers lined up around the corner.
But the reality is that the returns on advertising suck and are unmeasurable. So no guru could ever take that bet and get an ROI. Therefore, neither can I...the small business owner.
So, what is a small business owner to do? Other than luck and happenstance, how can you grow your business?
7.21.2015
Invest in Bonds When Interest Rates Rise
Most people are fearful of investing in bonds when interest rates rise because that means the price of bonds will be dropping...significantly.
Most people can't take that heat. However, I think it's actually a great time to invest because the interest payments will allow you to buy the next batch of bonds for cheaper at a higher yield.
That means that every year your yield goes up with certainty instead of like the stock market where...hang on I have a phone call...no, for the second time I am not interested in a business opportunity with Amway!
Okay, back to stocks. Stocks are hard to predict so you never know what you are going to get and you are always looking for better returns. With bonds you can just sit back and watch the 7% roll it. Yes, that is correct, 7% yield is easy to find in investment grade bonds. You just have to look for it. And, as I mentioned before, with a little help from the Fed that yield will only increase.
So while bonds are boring and misunderstood. I think it's a great time to get in, so that's what I'm going to do.
Most people can't take that heat. However, I think it's actually a great time to invest because the interest payments will allow you to buy the next batch of bonds for cheaper at a higher yield.
That means that every year your yield goes up with certainty instead of like the stock market where...hang on I have a phone call...no, for the second time I am not interested in a business opportunity with Amway!
Okay, back to stocks. Stocks are hard to predict so you never know what you are going to get and you are always looking for better returns. With bonds you can just sit back and watch the 7% roll it. Yes, that is correct, 7% yield is easy to find in investment grade bonds. You just have to look for it. And, as I mentioned before, with a little help from the Fed that yield will only increase.
So while bonds are boring and misunderstood. I think it's a great time to get in, so that's what I'm going to do.
7.10.2015
How to Spot a Lazy Incompetent Business Person Using E-mail
Using cc in e-mail drives me crazy. It has caused quite a bit of mistrust of me and my communication. However, upon closer examination I noticed something. CC'ing people on e-mails is not and should not be my problem.
Requesting that someone cc people on e-mails is the equivalent to saying, "I'm too lazy to communicate with my people...so you should do it for me."
CC's cause all kinds of confusion especially when the e-mail is to someone outside of your organization:
1) Sometimes you cc someone and you shouldn't. How are you supposed to know that?
2) Sometimes you don't cc someone and you should. How are you supposed to know that?
3) Sometimes the conversation morphs and cc'd people should be dropped or added. How are you supposed to know that?
4) CC'ing people give's the impression that the e-mail is not as important for the cc'd people or they would have been in the To field. Then they don't make a mental note of the communication.
5) CC is used as a weapon by toxic (i.e. lazy) people, "What do you mean you didn't get it, I cc'd you? Now I can't trust you."
6) Important information gets stuffed at the bottom of important e-mails and cc'd parties are expected to root it out and remember it.
7) CC fills up people's inboxes. Enough said.
8) Everybody has different, sometimes competing views of e-mail etiquette. CC etiquette for one person violates etiquette for someone else.
9) Remembering who to CC for all the organizations your business deals with is simply impossible. There are too many scenarios and nuances and preferences to keep straight. This guarantees miscommunications, accidental communications, and overtly political situations.
10) It allows supervisors to spy on and micromanage subordinates, which creates distrust. This spills through to customers. "Why am I cc'd the boss on everything? Is my contact incompetent?"
11) If I cc 3 people plus the "To" person, that team has now spent 4x the time reading that e-mail even if it was erroneously send to 2 of the people. If time is money, then cc is a massive waste. What if your entire company cut the time reading e-mails by 50% like in my example above?
The more I write and think about it the more I believe that CC is bad for business and relationships. If I e-mail a business contact with a question or important information, I expect them to deal with it internally and get back to me. If cc'ing is so important to their team, then they can set up a filter to forward e-mails from me automatically, or have daily meetings to enhance communication. That eliminates a lot of friction, tension, erroneous e-mails, politics (why didn't you cc me?) etc...
The best solution, let each person manage their communication to their team instead of requesting outsiders do it for them. Under this scenario only the most important information makes it to the right people and time is not wasted over communicating to the wrong people.
I'm done with cc.
Requesting that someone cc people on e-mails is the equivalent to saying, "I'm too lazy to communicate with my people...so you should do it for me."
CC's cause all kinds of confusion especially when the e-mail is to someone outside of your organization:
1) Sometimes you cc someone and you shouldn't. How are you supposed to know that?
2) Sometimes you don't cc someone and you should. How are you supposed to know that?
3) Sometimes the conversation morphs and cc'd people should be dropped or added. How are you supposed to know that?
4) CC'ing people give's the impression that the e-mail is not as important for the cc'd people or they would have been in the To field. Then they don't make a mental note of the communication.
5) CC is used as a weapon by toxic (i.e. lazy) people, "What do you mean you didn't get it, I cc'd you? Now I can't trust you."
6) Important information gets stuffed at the bottom of important e-mails and cc'd parties are expected to root it out and remember it.
7) CC fills up people's inboxes. Enough said.
8) Everybody has different, sometimes competing views of e-mail etiquette. CC etiquette for one person violates etiquette for someone else.
9) Remembering who to CC for all the organizations your business deals with is simply impossible. There are too many scenarios and nuances and preferences to keep straight. This guarantees miscommunications, accidental communications, and overtly political situations.
10) It allows supervisors to spy on and micromanage subordinates, which creates distrust. This spills through to customers. "Why am I cc'd the boss on everything? Is my contact incompetent?"
11) If I cc 3 people plus the "To" person, that team has now spent 4x the time reading that e-mail even if it was erroneously send to 2 of the people. If time is money, then cc is a massive waste. What if your entire company cut the time reading e-mails by 50% like in my example above?
The more I write and think about it the more I believe that CC is bad for business and relationships. If I e-mail a business contact with a question or important information, I expect them to deal with it internally and get back to me. If cc'ing is so important to their team, then they can set up a filter to forward e-mails from me automatically, or have daily meetings to enhance communication. That eliminates a lot of friction, tension, erroneous e-mails, politics (why didn't you cc me?) etc...
The best solution, let each person manage their communication to their team instead of requesting outsiders do it for them. Under this scenario only the most important information makes it to the right people and time is not wasted over communicating to the wrong people.
I'm done with cc.
3.25.2015
Inside the Ant Farm: Recruiting in the Wild West
Warning, this is a bit of a rant, but there are some lessons in there at the end.
So, I just had my first adventure in recruiting my first employee. I am looking at hiring someone for a canvassing position to help me drum up business. I posted an ad on Craigslist and received a resume at 4:30pm. Being close to dinner time I decided to call the person in the morning.
The next morning before I could call back the prospective candidate called me. After a short time on the phone I found out the following:
1) The address on his resume was 3 years old
2) He lived in a different state than me and wanted me to pay for commuting
3) He did not want to do canvassing, but instead suggested working a cart in a mall
4) He wanted $100 per lead which is the equivalent to $2500 per week just for leads! (I was offering $10 per lead and $160 per job sold. That works out to $1250 per week for 15-20 hours of work.)
Can you say red flags?
Anyway, being somewhat new to this I decided to meet him anyway and told him to e-mail me so I could send him the address for a coffee shop where we could meet. He sent me an e-mail at midnight that night.
The next morning at 10am I get a text saying "I never received an e-mail. I can't do business like this sir."
I thought, that's a little forward considering I only had 10 hours to respond, during which 7 were definitely while most of America was sleeping.
Based on that text I replied that I thought it would not work out and wished him luck in his search.
Then he went ballistic on me calling my ad a garbage ad and saying I was crazy and that he wouldn't work for free. All I can say is wow! Not the type of person I want on my team. Now that I've written this it all seems too obvious.
So, lessons from recruiting:
1) Some people are crazy
2) If a candidate calls immediately after submitting a resume then be on guard. Why are they being so incredibly impatient. If they are worth their salt then waiting 1 business day for a phone call shouldn't be a big deal. (I return all phone calls the same or next business day)
3) If a candidate won't take the time to update their resume (their first impression) then they probably won't give a good second, third, fourth impression either.
4) If someone says $5000 per month for a 20 hour per week job is "working for free" then that person is probably a whiny loser. Stay away!
I think it's interesting that there are people out there who demand so much of others. How do these people hold a job and make ends meet? I suspect that this fellow may be hurting big time and that by rejecting me he can avoid being rejected himself. He obviously didn't take to kindly to me not hiring him.
Okay, it's time to let this one go.
So, I just had my first adventure in recruiting my first employee. I am looking at hiring someone for a canvassing position to help me drum up business. I posted an ad on Craigslist and received a resume at 4:30pm. Being close to dinner time I decided to call the person in the morning.
The next morning before I could call back the prospective candidate called me. After a short time on the phone I found out the following:
1) The address on his resume was 3 years old
2) He lived in a different state than me and wanted me to pay for commuting
3) He did not want to do canvassing, but instead suggested working a cart in a mall
4) He wanted $100 per lead which is the equivalent to $2500 per week just for leads! (I was offering $10 per lead and $160 per job sold. That works out to $1250 per week for 15-20 hours of work.)
Can you say red flags?
Anyway, being somewhat new to this I decided to meet him anyway and told him to e-mail me so I could send him the address for a coffee shop where we could meet. He sent me an e-mail at midnight that night.
The next morning at 10am I get a text saying "I never received an e-mail. I can't do business like this sir."
I thought, that's a little forward considering I only had 10 hours to respond, during which 7 were definitely while most of America was sleeping.
Based on that text I replied that I thought it would not work out and wished him luck in his search.
Then he went ballistic on me calling my ad a garbage ad and saying I was crazy and that he wouldn't work for free. All I can say is wow! Not the type of person I want on my team. Now that I've written this it all seems too obvious.
So, lessons from recruiting:
1) Some people are crazy
2) If a candidate calls immediately after submitting a resume then be on guard. Why are they being so incredibly impatient. If they are worth their salt then waiting 1 business day for a phone call shouldn't be a big deal. (I return all phone calls the same or next business day)
3) If a candidate won't take the time to update their resume (their first impression) then they probably won't give a good second, third, fourth impression either.
4) If someone says $5000 per month for a 20 hour per week job is "working for free" then that person is probably a whiny loser. Stay away!
I think it's interesting that there are people out there who demand so much of others. How do these people hold a job and make ends meet? I suspect that this fellow may be hurting big time and that by rejecting me he can avoid being rejected himself. He obviously didn't take to kindly to me not hiring him.
Okay, it's time to let this one go.
3.13.2015
Inside the Ant Farm: Postcards Failed
So the first 2000 postcards landed on Monday. I got one call and that guy didn't leave a voicemail. I called him back with no results.
That's a 0.05% response rate. :(
I'm trying to decide if it is worth paying to send out the remaining 4000 postcards. Is it better to put the money into something else or should I stick to the plan of 3 waves of 2000 postcards to the same audience?
I'm going to sleep on it.
That's a 0.05% response rate. :(
I'm trying to decide if it is worth paying to send out the remaining 4000 postcards. Is it better to put the money into something else or should I stick to the plan of 3 waves of 2000 postcards to the same audience?
I'm going to sleep on it.
3.05.2015
Inside the Ant Farm: Waiting for Postcards
Yesterday my first wave of postcards went out. I am now in limbo until they land.
I continue to test my phone system to make sure it works and am constantly reading internet case studies on response rates. There is basically no good data out there about response rates. Probably because they can vary so much. I'm hoping for a 0.25% response rate or better over the whole campaign. That means I am looking forward to getting 5 phone calls next week.
Fingers crossed!
I continue to test my phone system to make sure it works and am constantly reading internet case studies on response rates. There is basically no good data out there about response rates. Probably because they can vary so much. I'm hoping for a 0.25% response rate or better over the whole campaign. That means I am looking forward to getting 5 phone calls next week.
Fingers crossed!
2.27.2015
Inside the Ant Farm: Courage to Start
Today I bought 6000 postcards.
It took me 5 weeks to summon up the courage to spend $3000 on postcards and a mailing list.
The cards will go out in 3 waves to 2000 very targeted people in my area. Hopefully I will get 2 people to buy flooring from me so I can break even. If nobody responds then it's back to the drawing board.
I am not a risk taker by nature. When I look back at some of the "risky" things I've done, most of them were somewhat hedged. I tend to take risks that have a plan B, C, D and E so that I can get my money back, preferably with friends attached.
In this case I have taken care to target potential customers with large houses, in expensive neighborhoods so that I will need fewer jobs to recover my postcard expense. Big houses means more flooring and expensive neighborhoods means more expensive flooring. By doing this I expect each job to be 2.5x more profitable than the smaller homes in my neighborhood. That means I only need a 0.2% response rate if I close half of my leads. It's much safer to advertise to big houses.
Advertising is the kind of activity that most people avoid because on the surface it looks like a waste of money. Plus, it's a lot of money for most new business owners to spend on something that isn't tangible. Buying a truck or tools or business cards is easy. You have something to show for it and you could get your money back and sell most of those items if you had to.
Buying advertising is not easy.
It is nerve-racking.
Now that it's done I'm excited to see the results. If I get a 0.5% response rate and I close half of the leads I'll get 5 jobs and then I'll send out more post cards. As long as it is profitable I will continue to send post cards to build my business. My goal is to have 1 job for every weekday. That means 250 jobs per year.
It takes courage to start a business...to let go of something so precious and sought after as money.
Plus it might fail.
But, if it works (and it has a better than 50% chance in my estimation) then I can't afford not to do it. 250 jobs per year, all derived from postcards, it too much money to pass up just because I'm afraid.
The postcards land in 2 weeks. I'll keep you posted.
It took me 5 weeks to summon up the courage to spend $3000 on postcards and a mailing list.
The cards will go out in 3 waves to 2000 very targeted people in my area. Hopefully I will get 2 people to buy flooring from me so I can break even. If nobody responds then it's back to the drawing board.
I am not a risk taker by nature. When I look back at some of the "risky" things I've done, most of them were somewhat hedged. I tend to take risks that have a plan B, C, D and E so that I can get my money back, preferably with friends attached.
In this case I have taken care to target potential customers with large houses, in expensive neighborhoods so that I will need fewer jobs to recover my postcard expense. Big houses means more flooring and expensive neighborhoods means more expensive flooring. By doing this I expect each job to be 2.5x more profitable than the smaller homes in my neighborhood. That means I only need a 0.2% response rate if I close half of my leads. It's much safer to advertise to big houses.
Advertising is the kind of activity that most people avoid because on the surface it looks like a waste of money. Plus, it's a lot of money for most new business owners to spend on something that isn't tangible. Buying a truck or tools or business cards is easy. You have something to show for it and you could get your money back and sell most of those items if you had to.
Buying advertising is not easy.
It is nerve-racking.
Now that it's done I'm excited to see the results. If I get a 0.5% response rate and I close half of the leads I'll get 5 jobs and then I'll send out more post cards. As long as it is profitable I will continue to send post cards to build my business. My goal is to have 1 job for every weekday. That means 250 jobs per year.
It takes courage to start a business...to let go of something so precious and sought after as money.
Plus it might fail.
But, if it works (and it has a better than 50% chance in my estimation) then I can't afford not to do it. 250 jobs per year, all derived from postcards, it too much money to pass up just because I'm afraid.
The postcards land in 2 weeks. I'll keep you posted.
Inside The Ant Farm: A Real Time Look at Starting a Business
It's easy to watch Shark Tank. It's fun. But it is discouraging.
Here are these people who have invested many thousands of dollars, or hundreds of the thousands of dollars, or millions of dollars...and the sharks are chewing them up. How's the average Joe supposed to start a business? While I love the show, I think it makes business seem way to complicated.
Is step 1 to raise capital?
Do I need a fancy app or to invent the next Snap Chat?
Do I need thousands of dollars for a prototype and a patent?
What about licensing deals?
There are literally hundreds of questions that lead to discouraging answers, but the reality is that business is helping someone by trading something you have for something they have. If it's a good trade for your customers then customers will not be a problem.
I've started this "Inside the Ant Farm" series to chronicle my new start up as it starts up.
The term start up may give the wrong impression. This is not a tech start up. It is not a crazy new invention. It is not something that will be suitable for Kickstarter. No, this is way too simple for that.
It's flooring.
You know, carpet, and hardwood and tile...the stuff you walk on everyday. The only thing you are physically touching 99% of your waking hours. And, it's boring.
But, being simple, I think it will make for a great experiment that just about anyone can learn from.
So let's rock and see where it goes.
Here are these people who have invested many thousands of dollars, or hundreds of the thousands of dollars, or millions of dollars...and the sharks are chewing them up. How's the average Joe supposed to start a business? While I love the show, I think it makes business seem way to complicated.
Is step 1 to raise capital?
Do I need a fancy app or to invent the next Snap Chat?
Do I need thousands of dollars for a prototype and a patent?
What about licensing deals?
There are literally hundreds of questions that lead to discouraging answers, but the reality is that business is helping someone by trading something you have for something they have. If it's a good trade for your customers then customers will not be a problem.
I've started this "Inside the Ant Farm" series to chronicle my new start up as it starts up.
The term start up may give the wrong impression. This is not a tech start up. It is not a crazy new invention. It is not something that will be suitable for Kickstarter. No, this is way too simple for that.
It's flooring.
You know, carpet, and hardwood and tile...the stuff you walk on everyday. The only thing you are physically touching 99% of your waking hours. And, it's boring.
But, being simple, I think it will make for a great experiment that just about anyone can learn from.
So let's rock and see where it goes.
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