Up in the Air and On the Way to V-WISE

Air travel in and out of Syracuse isn’t the easiest thing in the world, but traveling to speak at the V-WISE conference in San Antonio gave me the chance to read through the current issues of Fast Company and Inc Magazine. As usual, both issues carried lots of interesting articles for entrepreneurs. My favorites were in Fast Company, The Cure (by Russ Mitchell) the story of a journey of a new CEO for a hospital in Oakland. The leadership and team issues were particularly interesting.

From the article:

He quickly began building a new management team, including COO Bill Manns, who was hired from Providence Hospital in Southfield, Michigan, near Detroit. At Manns's suggestion, they immediately commenced a grassroots money hunt, which Lassiter now calls "the foundation of our success." The pair gathered the top 85 managers, formed them into a dozen teams, and gave them 16 weeks to find $21 million in cost cuts and new revenue. Lassiter says he told them: "It's up to you. We barely know where the restrooms are, so we're not going to solve this problem. You're going to solve it."

To encourage fresh thinking, Lassiter and Manns devised "odd-couple arrangements," putting together doctors, nurses, techs, and other managers. The teams drilled into vendor contracts and challenged their own habits. Take the kit used to test newborns' umbilical-cord blood, a $96.50 item. A simpler tool does the same job for 29¢. Is the more-expensive device better? How much better does it have to be to be worth the extra $96.21? ACMC had been choosing the premium option, at a cost of $322,000 a year. Now, the teams decided, ACMC could not afford it.

While I’m always a bit leery of articles providing corporate lessons from the playing field, Lessons of LeBron (by Chuck Salter) was nonetheless interesting and a fun read as well. Knowing that I always read articles on the food industry, I enjoyed Inc Magazine’s piece, Toughen Up Cupcake (by Burt Helm) on the Washington DC cupcake wars. I also thought Jason Fried’s piece How to Hire an Assistant, about how he and his partner hired an assistant particularly intriguing. I mention that because in it he mentions that when they were hiring the assistant, rather than drafting the typical boring job description, they instead the things that the assistant would have done over the last day had then been on the job. He said based on the ad, they were flooded with applicants. It still took time to find the right person, but in part that was because they neglected to include a key piece of info in the ad. But despite that misstep, it seems their approach has merit and should be considered. Here is how they described the position:

Instead of a boring list of skills—this software, that many years of experience, "team player," etc.—we wrote a list of 26 things that this person would have done in a week had he or she been working here.

The list included things such as "Booked two hotel rooms and two flights for out-of-towners"; "Packed up and shipped out about five copies of Rework to various people"; "Coordinated with Abt Electronics to schedule installation of four flat-panel TVs"; and "Researched and recommended local floral arrangers for weekly flowers for the office." This way, whoever was applying would know exactly the kind of work he or she would be expected to do. (You can read the job posting here).

What drew me to the piece was that right now in the Entrepreneurship Department we’re in the process of hiring three professors, two of which will spend a considerable amount of time mentoring student businesses. I find myself wondering if rather than drafting the usual ad, we should have said that if they were on campus, in the last day they would have taught a class, mentored a student, talked with an alum, attended a couple of meetings with student startups, and met with the E-Club on a new business idea.

Oh well, maybe next time.

Ozzie, Baseball and the World of Social Media

Major League Baseball now has to deal with wonderful world of social media. One of their managers, the White Sox’s Ozzie Guillen was tossed out of a recent baseball game for arguing with an umpire, and then went into the clubhouse and tweeted about it. Ozzie, who is no novice when it comes to getting thrown out of games, is cutting new social media ground for the business of baseball.

Baseball is a wonderful lesson for all of us…it was once America’s game, but thanks to incredibly long games, World Series games that start and end way too late at night, and a season that keeps starting earlier and ending later in the year(can you say baseball games in November?)…they’ve lost key fans to football. Of course if I was in charge of any of the four big-time sports in the US (baseball, football, basketball and hockey) I’d be terrified of the future. If you want to have some fun, ask someone who is in the age range of 16-25 how many complete games of any of those four sports have they watched recently. The answer will be very low (maybe zero) and very different from what the response would have been twenty years ago. These sports need to find a way to engage the younger audience, because without it, 20 years from now there will be half filled stadiums ...and the only games being broadcast on TV will be video games.

Party Like It's Well...You Know

With apologies to Mr. Prince, apparently on the left coast they are getting ready to party like it’s 1999. Again. Or as it was once put, “it’s déjà vu all over again.” Take a look at the article in today’s Wall Street Journal by Monica Langley, In Silicon Valley, Investors Are Jockeying Like It’s 1999.

While the article was right on target, I’m wondering why as a country we seem to be so inclined to go overboard on things. Think the last tech bubble when an investor honestly told me that “the old rules of investment didn’t apply anymore.” Or think of the recent housing bubble when everyone had to own two or three homes and TV shows were all over the “flippers.” Or the derivatives mess a few years previous. Hopefully this incarnation of growth in tech will be something different than the disaster it was the last couple times around and if not, there will be a couple of sock puppets around for people to buy and for those of us in colleges to talk about.

Scott Adams on Getting an Education in Entrepreneurship

When I saw in the Friday Wall Street Journal that Scott Adams of Dilbert fame was writing about entrepreneurship, I didn’t know whether to cheer or run and hide. Given the treatment he’s given to corporate America, I was wondering if he would turn his talents next on us. But my fears were unfounded, so when you get the chance, take a look at the article, How to Get a Real Education. In the article, he gives some lessons that he’s learned along the way. From the article:

Combine Skills. The first thing you should learn in a course on entrepreneurship is how to make yourself valuable. It's unlikely that any average student can develop a world-class skill in one particular area. But it's easy to learn how to do several different things fairly well. I succeeded as a cartoonist with negligible art talent, some basic writing skills, an ordinary sense of humor and a bit of experience in the business world. The "Dilbert" comic is a combination of all four skills. The world has plenty of better artists, smarter writers, funnier humorists and more experienced business people. The rare part is that each of those modest skills is collected in one person. That's how value is created.

Fail Forward. If you're taking risks, and you probably should, you can find yourself failing 90% of the time. The trick is to get paid while you're doing the failing and to use the experience to gain skills that will be useful later. I failed at my first career in banking. I failed at my second career with the phone company. But you'd be surprised at how many of the skills I learned in those careers can be applied to almost any field, including cartooning. Students should be taught that failure is a process, not an obstacle.

Find the Action. In my senior year of college I asked my adviser how I should pursue my goal of being a banker. He told me to figure out where the most innovation in banking was happening and to move there. And so I did. Banking didn't work out for me, but the advice still holds: Move to where the action is. Distance is your enemy.

Attract Luck. You can't manage luck directly, but you can manage your career in a way that makes it easier for luck to find you. To succeed, first you must do something. And if that doesn't work, which can be 90% of the time, do something else. Luck finds the doers. Readers of the Journal will find this point obvious. It's not obvious to a teenager.

Conquer Fear. I took classes in public speaking in college and a few more during my corporate days. That training was marginally useful for learning how to mask nervousness in public. Then I took the Dale Carnegie course. It was life-changing. The Dale Carnegie method ignores speaking technique entirely and trains you instead to enjoy the experience of speaking to a crowd. Once you become relaxed in front of people, technique comes automatically. Over the years, I've given speeches to hundreds of audiences and enjoyed every minute on stage. But this isn't a plug for Dale Carnegie. The point is that people can be trained to replace fear and shyness with enthusiasm. Every entrepreneur can use that skill.

Write Simply. I took a two-day class in business writing that taught me how to write direct sentences and to avoid extra words. Simplicity makes ideas powerful. Want examples? Read anything by Steve Jobs or Warren Buffett.

Learn Persuasion. Students of entrepreneurship should learn the art of persuasion in all its forms, including psychology, sales, marketing, negotiating, statistics and even design. Usually those skills are sprinkled across several disciplines. For entrepreneurs, it makes sense to teach them as a package.

Delighting Your Customer

Alec Stern, one of the founders of Constant Contact, the email marketing company for small businesses, is on campus today and speaking in three different entrepreneurship classes. Having just had lunch with Alec and after sitting in on his first class of the day, I know that our students are having a wonderful experience. Some of the lessons learned that he pointed out: 1. Think of the “why” of your business, rather than just the “what.” He specifically mentioned the Simon Sinek TED talks lecture on that topic. 2. Keep your business within the guardrails. When you’re growing your business, you’ll find people and money sources who are interested in moving your business…think of what’s important to your business and stay focused on it. 3. Delight the customer…Constant Contact’s attrition rate is amazingly small, even though many of their competitors are giving away something that CC charges for. They keep these customers because they are so good on customer service and by helping the entrepreneur learn how to really use their product. Plus, you can actually…and this is just amazing…talk to a real customer service person when you need help. New customers get a phone call from CC within the first 48 hours after signing up to make sure they really know how to take advantage of the full suite of product. 4. Give back. I was particularly pleased to hear Alec talk to our students about the importance of giving back to your school, your community and your country.

A Decline in Startups and Jobs

Here is an interesting post that has been getting some traffic today based on a paper that was written by the Federal Reserve Bank of Cleveland. The paper discusses a real decline in start-ups which began right before the economic troubles started, making an argument that the high US unemployment rate is related to this lack of new ventures. The post from the NY Times is called A Decline in American Entrepreneurship by Catherine Rampell. From the post: American workers weren’t the only ones sacrificed by the Great Recession. Start-ups suffered, too. A new paper from the Federal Reserve Bank of Cleveland tracks various measures of entrepreneurship over the last few years. It found that the number of businesses with employees — one indicator of entrepreneurial activity, like self-employment — took a nosedive. The population-adjusted number of businesses began falling even before the recession officially began in December 2007. But once the downturn hit, the number of businesses began falling precipitously. Some of that decline was because of business failures. But it was primarily tied to the lack of new business formation. The report’s author, Scott Shane, writes: 68,490 more businesses closed in 2009 than in 2007, an 11.6 percent increase in the business closure rate. But in 2009, 115,795 fewer employer businesses were founded than in 2007, a 17.3 percent decline in firm formation. The financial crisis held back new business formation in many other countries, too, as documented by this paper presented last fall at the Federal Reserve Bank of Atlanta. Given these findings, it is perhaps no wonder that the job market is still so poor. Young businesses (not small businesses, despite what politicians may tell you) are the biggest engines of job growth. With so few businesses forming, hiring is staying very depressed. And the main problem in the job market is not layoffs — which are at a record low — but new hiring.

How Many Pro's You Have?

Driving in to school today, as I do most mornings, I was listening to Mike and Mike in the Morning on ESPN radio. Today they were talking about March Madness and how you pick which teams are going to win, especially in the early round games. And Jimmy Dykes, one of the ESPN game analysts said that to figure out which team has the best chance of winning, you have to answer the question, “How many pro’s you have?” What Dykes meant was when you look at both rosters, you look at which team has the most players who are going to go on to the NBA and play, and especially in tournament crunch time, that’s the team you want to pick.

As I think back to being a part of an angel group in Florida, that’s exactly how I, and the rest of the group decided which companies we wanted to invest in…and it was based on which team had the real “pros.” Our group was getting on an average, around 25 to 30 business plans a month to read. We would narrow this down to just two presentations a month, and since we shut down for the summer, we were looking at around 20 opportunities a year out of the more than 350 business plans that were sent our way. Many people have said this, and when our own money was on the line, most of us deferred back to the notion of “I’d rather in invest in an A team with a B idea, than an A idea with just a B Team.” So even in entrepreneurship, we were using the notion of “How many pro’s you have” to decide which deals to invest in. As you are building your start-up team, remember that and find the best players you can to fill each slot. Friends are good, family is OK, but the best of the best is the best way to get your shot at angel and other institutional funding.

Now, back to the NCAA tourney and Go ‘Cuse!