Category Archives: 1

Business Lessons from the Land of Hard Knocks

I wrote this three years ago  after burning through my family’s life savings in a failed startup, but never posted or published it – as frankly it hurt too much.

After all, no one ever dreams at the end of the ride, they’ll be wondering whether they should put a bullet in their head so their family can collect the life insurance to pay the bills – or that they’ll be forced to rip their family from Sunny San Diego and relocate to the mid-south.

So I have to thank my little brother Matt, who inspired me with hisrecent postings on http://www.metamorphblog.com/ about the lessons he’s learned in the last year of working on his startup speakertext.

Enjoy.

Be kind – but ruthless

Acts of kindness go a long way and often cost next to nothing – but at the same time success requires being ruthless. If your best friend isn’t carrying his weight – and his incompetence puts the company at risk, then firing him may not be nice but may be required to succeed. Or if you can’t cut the mustard, be honest with yourself and get help. So whether it’s people, strategy or products, there’s no room for rose-colored glasses in a start up if you want to succeed.

Fail as fast as you can

As Thomas Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.”  As my brother pointed out in his post, where you end up is typically way different from where you start and the only way you get there is to find out what doesn’t work.

Know when 80% is good enough

Achieving perfection is almost impossible – since no matter how much time you spend on a project, as soon as you test the concept on a real life user or prospect, they’ll surprise you with completely unanticipated feedback. So unless it’s something that has to be perfect the first time, it’s more important to complete the initial phase quickly and get feedback faster – so you can deliver a successful product sooner.

Create a culture of execution

Establish a culture of execution and accountability. The best ideas will get nowhere if you don’t execute – so agreeing on specific deliverables and tracking them to make sure they are done – is critical. Otherwise, everything gets lost in the swirl of day-to-day events.

Projects cost twice as much and take three times as long

Since most projects either cost twice as much or take three times longer than predicted, the fact that you don’t complete everything in the desired time frame isn’t as important as making sure you are making consistent progress toward your goals. So reset your expectations, tighten your belts, keep a close eye on your bank account and assess and reassess your progress on a weekly and monthly basis to make sure your still on track – and that the track actually leads somewhere profitable.

Great management trumps great products

Entrepreneurs are often in love with their ideas and inventions. Occasionally,  a great product will float to the top regardless of the company management, but more often than not it will drown because the people responsible for shepherding it to the top can’t swim. Good managers quickly learn what’s required to make it to the top even if the product isn’t the greatest.

Cash Flow is King

No cash means you are out of business. Revenue is irrelevant if you don’t have cash to pay the bills – so it’s critical to focus on ways to increase your cash flow and focus on those things that will generate cash sooner than later. So while you may look at your product as your golden goose, professional services is often your fastest way to increase your cashflow, and in the process learn what the market really wants and enhance your customer experience.

No pain, no gain

What you enjoy and what’s required to be successful are often two different things, so sometimes it requires some pain in order to grow.

I have a friend, who keeps telling me she wants to take her business to the next level – but in order for her to do that she needs to spend more time on the things she doesn’t like, such as operations, and less time on the fun stuff, like networking, or give up control to someone who will do what’s necessary – but then it won’t be her company any more. So whether you’re an engineer who loves engineering and hates selling or a salesman who doesn’t want to be bothered with operations, you have to grow in order to grow your company.

The issues that bother you at the beginning will be what kills you later

I had concerns from the very beginning about my two partners but I thought as long as the product worked as advertised the people issues wouldn’t be real problems. In the end, while we had product problems it was the people issues that prevented the organization from adapting and quickly overcoming the inevitable roadblocks – so even if the financial-opportunity look fantastic, run away if your gut tells you.

If it looks like a goose, walks like a goose, it’s a goose.

You can try to define your product however you want, but if your customers think of it as X, it’s X and will be very difficult to get them to see it as Y. We proved our product could add 10% to a customer’s top line – but most customers couldn’t get over the cost – since they viewed our product as an add on to their existing product – and couldn’t see paying nearly as much for our add on as the primary product. No matter how much we tried to convince them that we were selling apples, they insisted on comparing us to the oranges they were already buying.

Share your Success

We all stand on the shoulders of giants, so when we are successful, it’s not because we did it all by ourselves but that we were able to take advantage of the infrastructure others created. And if you’re lucky enough to succeed, it’s critical to share your success with others so that we can make the world a better place.

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Local News: Everything Fits, So Publish It All

White snow and clear ice coated the ground and trees in Memphis – so I grabbed the family, loaded up the sleds and headed over to the city’s biggest park, Shelby Farms, to take in the fantastic scenery and ice-covered slopes.

To top it off, there was a photographer from the Commercial Appeal snapping photos of us and other families sledding, running, building snowmen, etc… My 12-year-old was certain fame and her picture in the paper were inevitable. Of course, neither happened –but in the process I realized just how badly the Commercial Appeal and other media organizations are missing opportunities to drive engagement, grow their audience and increase revenue.

As anyone who has ever worked in community journalism knows, people want to see themselves, their family and friends.

We’re no different. The next day, we scanned the paper and went to the Web site to see our pictures – and found none. Instead of giving our family (and the hundreds of others people photographed at the park that day) a reason to stay on the site, share links with family and friends, we went away disappointed.

Of the dozens, if not hundreds, of photos taken only a couple were published in print or online. Newspapers were founded on the tradition of scarcity and selectivity, “All the news that fits,” but in the age where space is limitless does that still make sense?

I would have loved to have seen a halfway decent photo of myself and my family sledding. While it may not have been the “best” photo of the day, from my perspective it would have been way better than none – as I have no photo of myself and my kids sledding. And even if I had photos, I can guarantee that the quality of the photos would far surpass the blurry out-of-focus action images from my point-and-shoot camera.

The drive to share pictures and videos of ourselves with friends and family has driven the explosive growth of Youtube, Flickr and other social networking sites, so why not leverage the photographic talent, already deployed resource and the newspaper’s brand to provide people with “published” photos of themselves to share with family and friends.

The cost of publication is minimal. The majority of the cost is already built into the publication of a single picture – so each additional picture should require virtually no incremental expense.

And the upside?

Audience Engagement & differentiation: Local content with local people to drive the engagement and differentiation local news organizations require to retain subscribers. In other words, we would have shared the pictures with family and friends –giving us another reason why we should read and subscribe to the Commercial Appeal.

More Revenue per assignment: Instead of having to support the cost of deployment with the ad dollars driven by just a photo or two, multiple photos should drive more revenue and lower the cost of the assignment.

My family’s fame & fortune: Best of all, my daughters’ would have achieved their desired celebrity and we would forever be etched in the history of Memphis, sledding down the slushy slope. While Flickr & Facebook are great ways to share photos – nothing beats the validation and excitement of appearing in the official media or local “paper of record”.

Missing the boat: Reporting on cool sites and companies instead of partnering with them to deliver new and exciting services

News organizations continue to miss the boat by not partnering with the ever-growing array of information technology providers to deliver new capabilities and the information people are looking for.

The great irony is that the news media wind up writing articles about how great these services are but fail to partner with them to provide their service as part of their brand’s offerings.

The partnerships would enable the local news organizations to better deliver on their core missions and increase revenue, while providing a great sales channel for these services.

Connecting Residents & Police

The June 3rd Wall Street Journal article “New Programs Put Crime Stats on the Map” highlighted how new services are not just delivering crime stats to audiences but truly connecting the police and residents. Residents are able to sign up for alerts and search for incidents, services that have already been offered by a number of local news sites.

The new services take it one step further and are providing an instant two-way communication platform between police and residents. The police are able to push out information and even request assistance from local residents about crimes. And residents can submit information and ask questions online.

What these services often lack is a big audience as building software is much easier than gaining adoption. In fact, CrimeReports.com stated they only had 70,000 users, a fraction of what they could get if they partnered with local media sites that already have a large audience. An audience who is looking for this type of information and not finding it.

Making Stimulus Spending Transparent

The May 28 NPR story about Onvia’s site Recovery.org  and what a great way it is to track how the stimulus money is being spent. The story identifies yet another great opportunity for the news media to join forces with an information/ technology company to provide a great service to a much broader audience.

Instead, NPR and the rest of the media just report on the site, instead of partnering with it to deliver the information as part of their mission of informing the public.

This could be a great partnership as the local media could write stories, develop charts, create videos, etc. based on the information on the site in their paper and TV editions that publicize the online tools thereby helping drive traffic to their sites. Onvia could generate new revenue and grow its audience by becoming part of the local and national media sites.

I could go on with a whole host of other examples, but instead just read a few articles about cool new services and you’ll find a host of potential partners.

If traditional media is ever going to successfully transition to an online model, they will need to aggressively move from developing in house solutions and purchasing software from traditional service providers to aggressively courting and integrating new technology and information services.

As someone who has seen his family’s life savings go down like the Titanic in a failed startup, I can attest that it’s generally easier to build a product than it is to build an audience – so most companies will jump at the chance to partner.

Contact me at kevinjmireles@yahoo.com if you’re interested in learning more.

Kevin Mireles has an MBA from the school of hard knocks and over 15 years of publishing and technology experience. He currently works full time in an unrelated industry but has never gotten over his first love.