Why we Ignore Looming Change.

October 27th, 2011 | by | entrepreneurial life

Oct
27

Seth Godin wrote this week about how new technology affects our businesses. He suggests that instead of asking ourselves how we can adapt this new way of doing things to our own efforts, we rather ask “how will this technology undermine our efforts”. Undermine, in this context, is in the sense of a sinkhole appearing in the middle of the M1.

It struck a chord. A while ago I wrote about webinars hurting conference venues. Owners of venues and event organisers assured me that I was wrong. Yet, over the past five years, I have done more than 1000 hours of profitable live online training, but less than 50 hours of live seminars. It turns out that lot of other trainers are going down this path. And the more people who attend online, the more who start to use it for themselves.

I have a South African friend who trains techies. He used to fly around the world doing his training in situ. (Highly techie field.) After joining one of our webinars, he began to ask how many of his clients would prefer the online process, rather than paying for him to be there. That was 18 months ago. Last month he invoiced more than R1,000,000, training people around the world through webinars, without leaving home. (That means that none of that money was paid to venues, hotels, car hire companies, airlines, or printers – all of whom normally take a large chunk of that income.)

I contrast his results with the response I get each time I talk to a teacher about webinars. “Yes, but, what about the personal relationship.” And in that single statement they discard the future of teaching.

Frankly, I think that relationship means a lot more to the teacher than it does to the person sitting behind the desk. Who can recall an hour of Latin with Wesley Francis without a shudder? Classrooms are great for people who need to be forced to learn. But for those folk who have their own drive, they are hell.

Each of us who is inside an industry looks at it from inside our own box. Webinars won’t work for a group of four-year-old kids. But, they are an godsend for people under time pressure, or for deep training of smaller groups, or for impromptu groups. (Venues and impromptu are mutually exclusive concepts.) And these are the folk who make up a lot of the seminar market.

Let’s forget training for a moment. Let’s look at Google Translate. I use it because I am grappling with Norwegian. As do most of the others in my class. (Polish, Russian, Polish, French, Filipino, Polish, Iraqi, Thai, and Polish.). Google Translate does a fine job of quickly turning Norsk into English, or Russian or Polish. It is a fine tool.

When I am lost, which is very often, I type in the entire text of the letter that’s arrived with a large official stamp, or the website I am looking at, or the newspaper I am reading. Google Translate gives me fine rendition in English. Not perfect, but close enough.

When I speak to a Norwegian about the subject (and more recently a German Ph.D.) she bursts out laughing about how bad Google Translate is. And then she regales me with a tale about how some or other local idiom gets translated literally rather than rendering its true meaning.. (“He laughed his lungs out” being the German example, which means “he stubbed his toe”, I think)

In getting lost in that one tiny error, she discards a tool that the rest of us idiots use daily. And the world has no shortage of us idiots creatively playing with our tools as we dream of world conquest.

Which gets me to thinking. Maybe we shouldn’t be looking at what our competitors are doing. They aren’t doing anything that we are not, other than maybe doing it better.

Maybe we should be looking at what complete strangers are doing because they are not locked in by our history. They are taking a complete new look at what we do, and seeing it for what it is: Quaint in an olde worlde way, and ripe for change.

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Word-of-Mouth

October 12th, 2011 | by | marketing

Oct
12

Whenever I talk to some intrepid entrepreneur about finding clients, often a few months before I talk to them about closing their business, they assure me that they don’t need to do any marketing because all of their clients arrive by word-of-mouth.

This is a prime example of a problem known as confirmation bias.  Of course all of their clients arrive by word-of-mouth.  That’s because they’re not doing any other marketing, so there is no other way for clients to arrive.

Just in case this isn’t obvious, it is very unlikely that a person will call in response to the wireless ad that my intrepid friend did not arrange, or the magazine advert that he didn’t place, or the flyer at the traffic light that he did not hand out,  or the website that he doesn’t have.

That’s not the way he sees it.  Rather, he interprets the results to mean that he is so darn good that his past clients are referring him.  It is easy to make this mistake.  After all, 100% of his new clients are indeed the result of word-of-mouth, even if there are not enough of them to cover the watery soup and gruel he has come to enjoy.

Now, I don’t know about you, but I’m not the kind of guy who, at the dinner table, waxes lyrical about the service I have received from a plumber, ISP, car salesmen, or   bespoke PHP coder, unlike, it seems, women using OMO. That’s often because their service is nothing to write home about.

Facebook has added a new high-speed layer to the concept of word-of-mouth, not that any of my interviewees is using it.  But, frankly, I must admit to having a few problems with Facebook at the moment.   It was once a superb place to stay in touch with my family.  Now I am bombarded by word-of-mouth messages that have been engineered by Filipino copywriters for every man and his poodle, including Coca-Cola and Weetabix.

I am not sure that I want my clients and partners to know that my granddaughter is expecting triplets sired by a passing swagman, especially if they hear about it before I do. Facebook is very good at that.

No matter where I look I am prompted to “like” something, which apparently gives the “likee” the right to assail me with yet more Filipino writing.  And, Lord forbid that my finger innocently slips onto an advert for a dating site which Facebook has put on my front page. Within seconds, all of my friends see that same advert with a picture of a good-looking young man, and a note at the bottom assuring them that Peter Carruthers likes it.  I might do.  But not him. I just do not want quite that level of word-of-mouth sharing.

Relying on word-of-mouth is, I think, a dreadful way to sell your services and products.  Especially at a time when the world economy is tightening, and the competitors are getting a lot hungrier.  I think this is the universe telling us to bring our First Team to the market.

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Employers and Employees.

October 10th, 2011 | by | entrepreneurial life

Oct
10

“My fondest hope is for world peace.” This is what all beauty queens say. Including Sandra Bullock. And “my people are my biggest asset” is what all businesses are fond of saying, often just before firing 15 percent of said biggest asset.

But any person running a small business needs to work from another rule book. Our role ensures that we will only ever hire staff who don’t fit well, and then look after them in a way that ensures that we will get the worst from them that they can offer.

I might be generalising, but after working with more than 30,000 SMMEs over the past 20 years, I can count on the fingers of my left foot the number of ventures with great staff, doing great work, and having real fun.

I was thinking about this after reading Mike Schüssler’s economic report about the sad lot of entrepreneurs in South Africa. Who would have thought that you and I, on average, earn less than the 22-year-old sweeping the floors of a govt toilet block. And that’s not allowing time off to toyi-toyi about greedy rich capitalists like you and me.

As I see it, the reason we battle with staff issues is simple. A big company knows the risk when it employs a new person. So it does it with extreme care. It defines the role, detailing the exact skills needed. It then takes as much time as is needed to find the right person, with an expert team to meet each hopeful new staff member. This means that they cull from the list the axe murderers, light-fingered accounting staff, and those people whose Ph.D. is not really from Oxford in the UK, but rather from the Oxford Online University in Ulan Bator.

Before the new staff member joins, he/she then signs an employment contract that gives the company all legal rights possible, and the staff member none. (This is the reward for being a “our biggest asset” staff member.)

One must contrast this with Mike Microbusiness. He knows that he needs help only when he starts working 25/8 instead his usual 24/7. He doesn’t employ a person with some expert skills that he doesn’t have, a person who can add more value than Mike is paying. He employs a person to share the pain. Instead of focusing on the right things to do, he adds an overhead to try and finish all the things he should not be doing.

It’s simple to qualify for employment at Mike’s. You need to be breathing, with at least one leg. The leg, of course, is optional as long as you can start next week.

Mike doesn’t have the knowledge, reserves, or cash to do any real evaluation, and often employs the first person to arrive that doesn’t look like his grandmother.

Then Mike throws as much of his load at her as he can. This is, I’m afraid to say, not a well thought out process. The employment contract, if it exists at all, is verbal. (“Gosh darn, I know I should have got that signed when she joined,” is one of the refrains I see on business Forums everyday.)

According to Mike Schussler, most Mikes earn less than most of their employees, for taking all of the risk. And when things go wrong – and 96 percent of the time they go wrong in the first 10 years – Mike’s staff will still hate him for letting them down.

I am a little embarrassed to say that that is why I now live the life that I do. When my business closed, I lost everything. My staff each had to find new work, and hated me for that. I had to find R2million to cover the debts incurred in not firing them much, much sooner.

Now, I don’t employ staff. I didn’t used to have an office, but my children drove me to drink too early in the day, so I now rent office space month by month. No surety. I have a partner, but he lives two countries away, which is far enough away for both of us to be happy. I automate as much as I can. And each thing that I can’t automate I humanate. (This is handing the work to online freelancers in India or some other warm place where people don’t earn a lot of money.)

I don’t drive a smart car because I don’t have to impress clients. I don’t wear a suit because I don’t even have to see clients.

All of which means I don’t need nearly as much money to survive as I used to. And I don’t run nearly as many risks as I used to. And maybe, just maybe, I will finally get to retire in the next five years, which has been my dream for the past 30 years, a little like a carrot in front of this donkey.

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Business And Climate Change

October 4th, 2011 | by | life

Oct
04

May I share with you why I think the Earth is screwed?

If you watch the news for just one day you will see that money and related issues take up 90% of every broadcast. It’s the Greek crisis, it’s the fact that economies worldwide are not growing, and it’s the stock markets. These are the urgent issues of the day.

And these issues resonate with us. After all, if the stock market in Ho Chi Minh City is down 43% how on earth are we going to pay our bills at the end of this month? And there is nothing quite so urgent as this months bills.

So, economic growth is important. If you listen to the words that our leaders use, they keep talking about helping us consume more. And if we have no money, they will find a way to lend money to us to help us consume more, whether we need to or not. (They do not yet have that money, but hope it will come from the taxes our consumption will generate.)

Climate change doesn’t make nearly as much news. Nor is the news nearly as focused, because nobody really knows what the problem is, or even if there is one.

The fact that you and I have, in the past 50 years, eaten our way through the Earth’s resources in much the same way as a swarm of locusts goes through an acre of wheat, is not urgent. I think it is the most biggest issue that mankind has ever faced, but it sure is not urgent. We have to pay the bills first.

That’s the first problem. We humans deal with urgent issues first, which doesn’t leave much time for the important things.

There is a second issue. Those bills that you face at the end of this month are obviously yours. Either you have signed bits of paper that make them yours, or you have spent far too much money on shiraz, woman, song and a new flatscreen this month. It is your job to make things right.

But who must fix climate change? (I am assuming that there is such a thing, and for the purposes of this email that’s good enough.) Any problem which we all own – the “commons” such as polluted air or polluted sea – is also owned by none of us. As long as we can blame “them”, or expect “them” to fix it, we can hide away from it.

Why are these two issues so crucial to us?

Well, economic growth demands more intensive use of the earths resources. Any attempt to reduce climate change demands less intensive use of the earths resources.

Economic growth is urgent. Climate change is merely important. (And if climate change isn’t important, the fact that we are using all of the helium, oil, iron, fish, etc might bother our grandchildren when they go cold and hungry 50 years hence.)

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