Saturday, February 20, 2010

Good Lessons: The Art of the Start

I love this post here: Its a link to the manifesto for Guy Kawasaki's book "The Art of the Start". It puts it in plain English, basically get an idea, find a meaning in you work, and start. Don't go putting down a business plan, just start. I believe this and have heard it before. The idea of kicking things off is something I'm working on now but I've realized I have two big road blocks. The first is that sometimes I try and start things without even knowing if it will work. To this end I just ordered this book: The New Business Road Test: What Entrepreneurs and Executives Should do Before Writing a Business Plan. Of course, I inherently disagree with the subtitle because I'm not writing business plans, but the purpose of the book is to find a way to test ideas before you do them to see if they'll work. To me, this is the real gem and the thing I need to figure out.
The second thing I realize I'm missing is the fact that I run out of ideas sometimes or cant come up with any that I think are really good. To remedy this I read a lot, travel and pay attention as I'm going around. I'm supposed to be carrying a moleskin to write stuff down but I don't. Anyway, my thought is that while going through life I'll see something that I can work off of and implement it. For instance, I was trying to find a candle for my apartment and couldn't and realized that lots of men probably couldn't either. So for about a week I went on a rant to make candles for men. However, after calling manufactures there seemed to be a lot of capital needed to do a run of candles and I realized I might be in over my head in a market I didn't know or understand. So I pulled off, but I'm going to read my new book and see if I should revisit it and a bunch of other plans I've had.

Good Lessons: 10,000 Hours

In his book, "Outliers", Malcom Gladwell introduces the idea that it takes 10,000 hours for someone to become proficient at something. He goes on to say that these 10,000 hours must be comprised of really focused, perfectly practice hours with constant improvement in weak areas and good coaching. This helps explain why pro athletes are so good. They spend countless hours practicing from child hood with coaching that gets better and better all focused on improving their game.

For a lot of people (and me for a while) the 10,000 hour idea seemed like a far reaching thing that I would never be able to manage. However, if you break it down you can see something a little brighter.
A normal work week is 40 hours in a normal work year of 50 weeks, so 2000 hours a year meaning it would take 5 years for your to be good at that job or aspiration. If you think about it this way it explains why your boss or mid level managers (if they're smart) are so good at what they do.
But who really works 40 hours a week, no one I know. So lets use 60 hours a week which gets you to 3000 hours a year meaning it only takes 3 years and 4 months to become proficient.

To me, 3.3 years does not seem like that long of a time and shows that you can become proficient at many things over your career / lifetime. The scary thing I think about is what exactly is it that I need to become proficient at to be successful. I mean, there is no way to "practice" business, your either doing it or your not. Also, for someone like me who doesn't know what they want to do exactly, does it mean that I've already made missteps in picking up skills I'll need? To that question, I'll have to say negative since I think that my first job has definitely been a valuable training ground. Also, the side projects I'm working on will surely help me fill out my more entrepreneurial skill set as well as my next job, hopefully.

So, I say all of that to say to people two things: 1. Don't be put off by 10,000 hours. It's a long time, but its not impossible and you didn't have to start when you were 5 like the pros. 2. However, don't underestimate the fact that to get to the 10,000 you have to constantly be working and improving. Yet, once you start honing in on what your passion is that shouldn't be too hard and you'll be an expert in no time.

Monday, February 15, 2010

How To Make It In America - Episode 1

So I dont know if you've heard but HBO is pushing a new series called "How To Make It In America". The show seems like it might be a good fit for us to talk about here on QLA because, as descibed by the shows producers (who also produced "Entourage" btw), the show is about "what it's like being at the bottome of the heap and looking for a way up"

Anyway, I here's a link to the first episode but I wouldn't get too attached because I'm betting HBO takes it down. Regardless, I'll do my best cause if you know me you know im too cheap to have HBO so I'll be finding links and what not to keep up.

Friday, February 12, 2010


So, I've been reading a lot the past few days about what's called "hyperlocal" news. The idea is that instead of showing news that happens all across the world, media companies, particularly web start ups, are creating news outlets that show whats going on in a neighborhood; literally. The idea is that people will be more inclined to search the news if its ultra relevant to them (about their kids' schools, the YMCA club, new businesses etc). The main source of revenue (for now) is through advertising. The big catch there being that small business, who normally wouldn't advertise on the internet, can now be players. Estimates are that this is a $100 billion market opportunity.

My thoughts on this? I think its a great idea. Right now the industry seems to be having some trouble (several major newspapers have tried this and failed) due to the fact people cant seem to get the business model right. For instance, some use computer algorithms to pull information from police reports etc., others use volunteer and freelance journalist, while still some, employ editors (my favorite). The trick comes in when it gets down to figuring out the revenues needed to support such an operation since, by nature, the audience being reached is small.

For now, I wont go into my ideas about the industry (definitely will later), but I want to put the business model out there and I want to build on it.

Ok, so lets go to my offices a few days ago. (its about to get vague cause its a deal, but go with me). We're looking at investing in a franchise. Our franchise plays in big cities and takes a high number of customers to break even. A competitor plays in small towns and requires very, very few customers to breakeven. So what does this tell me. First the example reminds me of hyperlocal and got me thinking that there is definitely something to this idea of getting really intimate with a small group of customers (remember 1000 true fans...). At first I always thought of trying to create some sort of lifestyle, more premium thing that would attract customers, but lets explore the hyperlocal, small town/rural concept some.

The small town is a real factor in America and many people live in small towns still. I would argue that these are "hick towns" like you might be thinking because its 2010 and people have iPhone and stuff so they have the internet etc. Also, I don't think these towns are broke because in some cases they're locations where people who work in big cities live. I do think the rent for these places is probably pretty cheap for a commercial business.

Now all that being said the real question is "What business would do well in a small rural town". In my opinion, it has to meet a few requirements:

1. Can't take up a large space (rent would get too high)
2. Has to rely on a small number of transactions (so cant be dirt cheap stuff i.e, beat wal-mart)
3. Has to be franchise-able (to make real money anyway)

I use point 3 because if you / I create a franchise concept then we can make tons of money off franchise fees / agreements, overhead etc. plus it creates a business that is quickly scalable. The other issue this deals with is getting to all of those small towns which would have been a problem.

As an aside, one I think there is real money / value to be made in the white space of 1. small towns and 2. sub segments of large cities by ethnicity so applying the concept to urban, black neighborhoods could also be an idea. For now this is just something to ponder on and think about, but it might be the way to go...

Tuesday, February 2, 2010

Good Lessons: 1000 True Fans

A lot of times when we think about sales and really making it big we tend to focus on serious commercial success. For example, trying to create the next "bottled water" that everyone on earth will use or trying to create a platinum selling CD or best selling book. While, these are certainly good business models, they're hard to crack in the sense that the chance that you can get something to be that big is small and would require quite deep pockets.

Of course there is another route which is to go super ultra premium. Think private jets (or commercial jets like those made by Boeing). Of course Gulfstream may only sell a few jets a year, but they sell for such high numbers that a few sales can sustain the company.

Along that same vein a blogger Kevin Kelly introduced the idea of "1000 True Fans". This idea is based on the concept of having 1000 true fans that will pay for your product every single time. The post uses the example of an artist that cultivates fans that will spend $100 per year on work produced. This would generate a healthy income of $100,000 per year.

The post focuses on maintaining good contact with those fans and making sure that they are always able to access you. This will create a bond that continues to get them to buy and, more importantly, spread you good works, enabling you to get more fans.

So how do I think about this. First, it serves as a reminder that it is easier to create a smaller number of real fans than a larger one. This means that I need to focus on creating niche products that appeal to small number of consumers who will really appreciate and continue to use the product. Similarly, I need to focus marketing efforts to those people that matter and not try and shoot blanks.

Finally, I think the biggest take away is a two pronged idea. First customer service has to be the number one priority. Additionally, it reminds me that companies and brands need to engage consumers on different levels. You cant just be a shop and sell to customers, you have to create and add real value to their lives. For example, Ben and Jerry's (ice cream) doesn't just sell ice cream. They do nonprofit work, advertise their use of natural products and ultimately, connect with their customers values. Polo Ralph Lauren actually sponsors real polo matches. There's tons of examples of brands and products that are really trying to connect with the consumer and that, in my opinion, is the only way create lasting "fans".

One last point. I spent a week at HBS for a program (SVMP) and we studied Starbucks. You know why Starbucks works? Because some people hate it. That's right, some people hate Starbucks, hate the people that go there, think its weird etc. You know what that means? Some people LOVE Starbucks. Big take away, if your creating brands that are going to cause some people to fall in love, then you have to be prepared for some people to hate it, its a simple by product. Everyone cant love something or it looses its edge.