Category Archives: Business Stories

Planning Is Telling Stories and Making Them Come True

You could call this synchronicity. A few years ago I was reading Seth Godin’s All Marketers Are Liars at about the same time that I caught Harvey Cox talking about the power of stories as truth telling in all major religions. I paused to think about the importance of stories in so many different modes of thinking and communicating; and of course, me being obsessed with business planning, I started thinking of stories as building blocks of planning.

Around that same time, people liked my post Let Your ‘Story’ Frame Your Business Plan, one of my columns at entrepreneur.com. This is moving forward with my sense of planning and stories as closely related:

Suspend your image of a business plan as a document, for a while, and think of it as a collection of stories combined with concrete specifics or goals that aim to make those stories come true.

That led to more recent posts including Stories as Business Strategy earlier this year.

As time goes by I see increasing attention to the wisdom of framing ideas in stories. Just to give you the idea, think of your marketing strategy as a story about how a specific kind of buyer solves a problem or gets something he or she wants by encountering your business. What did she want? How did he find you? What made you different? These are all stories.

A sales forecast tells a story. An expense budget tells a story. So does a set of starting costs, and a balance sheet, and a cash flow projection. I don’t know about you, but I can’t think through these numbers without imagining the purchase decision, the channel, the process, and the scale of units, prices, and costs, assets we need, debts we accumulate, and so on. I can’t be the only one who sees stories in numbers. I hope. Maybe this is what happens when former lit majors fall in love with business analysis, but I’m hoping you agree.

The best way to talk about goals is a story:

Think about your long-term objectives story. Are you looking for wealth and fame, or to do what you like? What does success look like to you? Is it getting financed and making millions, or taking off at 4 p.m. to coach your kids’ soccer team?

And the planning specifics take those stories and break them into specifics required to make them come true:

As you imagine what those stories are, break them down into meaningful, trackable parts. Set tasks associated with those stories, assign tasks to people and give them dates.

The Seth Godin book carries the subtitle: the power of telling authentic stories. I say we go it one step further: we tell authentic stories and make them come true. And that’s a really good path to better business planning.

This is Your Brain on Stories

“The people we are coupled to [meaning talking to, sharing a story with] define who we are.  And our desire to be coupled to another brain is something very basic that starts at a very young age. “

Fascinating research here summarized by neuroscientist Uri Hasson, on how our brains become aligned when we hear the same story. He researches the basis of human communication, and experiments from his lab reveal that even across different languages, our brains show similar activity, or become “aligned,” when we hear the same idea or story.

This amazing neural mechanism allows us to transmit brain patterns, sharing memories and knowledge. “We can communicate because we have a common code that presents meaning,” Hasson says.

This is a 2016 TED talk. I chose it for my Friday video because I’m fascinated by the power of stories, as more true sometimes than truth, because of the way we think.

The source for this one, on the TED site, is http://www.ted.com/talks/uri_hasson_this_is_your_brain_on_communication

Headlines: Naked, Vicious, Brutal, and So Forth

1972 Tim Berry Mexico City
That’s me there in the UPI office in Mexico City in 1972

I was 26 years old. Married, already a father, but still, so young, and so full of illusions. I still thought – although I was starting to wonder – journalism could be about changing the world for the better. And not at all ready to accept the truth as Matt Kenny presented it to me that night, beer in hand, in a bar in Mexico City.

“Tim,” Matt said, “you have to learn about 50 words that will almost guarantee you play in the papers.” He swallowed. He looked at me and frowned. “But first I have to warn you,” he said, shaking his head, “you’re probably not going to like it.”

He swallowed again, then started listing the words:

“naked, violent, brutal, cruel, vicious, rape, clash, showdown, face-off, fists, bare, nude, stripped, fight … “

I can’t remember them all. Using these words, and combinations of them, Matt told me, would guarantee much better readership. Headlines with these words beat all other news stories.

This was in 1974.  Matt Kenny, 50-something, gray hair, glasses, and quick to smile, was day editor for United Press International in Mexico City. I was night editor. Matt had been with UPI longer than I’d been alive.  We were at that bar together that night because I Matt was a nice guy, a teacher at heart, and I was annoyed at him. So he took me out for a beer, to explain. To teach. And what he taught me 44 years ago is still true today. It’s true about headlines, readership, traffic, and people. Matt’s 50 words still work.

I was annoyed at Matt because a few days before he had rewritten my lead about a Kon-Tiki-like raft trip arriving on Mexico’s Caribbean coast. I covered the story live, from Cozumel, and Matt handled it on the desk. It was a scientific expedition, a social science experiment, or so said the adventurous organizer. I wrote a lead focusing on the science, the experiment. Matt rewrote my lead to emphasize “suntanned bikini-clad” women and the co-ed journey across the Atlantic Ocean on a raft. He took the science out of it, and replaced it with the sex.

United Press International, alias UPI, was a wire service with generations of history as the “other wire service,” the competition to Associated Press, AP, which still lives today. Mexico City was an outpost. We filed stories from Mexico City to the New York editors. The system gave the editors in New York our first sentence only, as they scanned new stories coming in. From that one line they decided whether or not they wanted to see the first paragraph.

Matt was right, of course; I didn’t like it. And he was right about headlines. Matt Kenny was not unhappy or bitter or cynical or even hard-boiled. He was a pro. He did his job well. Matt’s 50 words don’t tell us anything about him — I liked him a lot, was proud to work with him — but they tell us a lot about us. I’ve seen it over and over in the years since. I see it in the coverage of politics, news, and life in general, not just in news media, but throughout social media. And in email subject lines too. That’s who we are. It’s not the media; it’s us. Now, about violence and the primary elections … do you think this is related?

(Image: that’s me in the picture, in 1972, in the UPI Mexico City Bureau, photo by David Navarro)

State Supreme Court Decides in Favor of Nasty Reviews

The Oregon Supreme Court just reaffirmed the legal protection of nasty Court Protects Nasty Reviewsreviews as free speech.

Which reminds me of the ongoing opportunity and problem of reviews. Amazon.com reviews, Yelp reviews, Google, TripAdvisor, and all of them are a combination of powerful, important, and yet also full of problems. Users care and we generally love the idea of picking and choosing based on what all those nice other people decided to share with us. And business owners care too, we live and die with reviews. But there is that temptation to write your own reviews, game the system, get your business five starts by hook or by crook. And there’s that related temptation to use reviews to hurt competition.

In the Oregon case from just last week, the Eugene Register Guard reported the court sides with online review writer in dispute with wedding venue owner. The issue was between wedding venue owner Carol Neumann and customer/reviewer Christopher Liles.

Two days after attending a wedding on Neumann’s property in June 2010, Liles posted to Google Reviews a highly unfavorable rundown of his experience at Dancing Deer Mountain. Titled “Disaster!!!! Find a different wedding venue,” the review called Neumann “two-faced,” “crooked” and “rude.”

Oops. Neumann sued for $7,500 in damages for defamation, and that suit was thrown out. Neumann appealed and won. The state supreme court just reversed the appeal. The Register Guard reported:

The state Supreme Court ruled Thursday that an online reviewer’s highly critical remarks about the wedding venue owner are protected free speech.

So reviews are protected by the first amendment. Liles’ Lawyer summarized:

Strongly stated opinions about goods and services — no matter how derogatory — are protected speech so long as such expression does not include or imply provably false statements of fact.

Interesting. And it makes sense. But I have some questions for you:

  1. How to you react to the blistering reviews that seem full of venom? I tend to discount them. I take the excess emotion as a sign that there is more there than just the words. I’m very wary of what seems like revenge reviews. I’m reminded of a seething-with-rage review of a restaurant in which the reviewer wrote “they refused to seat us because they said we were drunk.” So I don’t take that as such a negative.
  2. What do you do to deal with reviews that are written by the business owners, friends, families, and employees? Can you tell? I look for real detail and granularity to validate a review. And I also prefer places that have hundreds of reviews, rather than just a few, because it’s harder to game reviews in high volume.
  3. What do you do with reviews written in bad faith by competitors. For example, I’m pretty sure some restaurant owners write bad reviews for the restaurant across the street. How can we tell?

My Dumb MBA Mistake

I’ve made a lot of mistakes. You can’t build a business from scratch without making mistakes. It’s an entire category on this blog, more than 150 posts. This dumb MBA mistake wasn’t my worst, but it’s one of the easiest to explain afterwards, and I hope one that might help others avoid making it too. There is a moral to this story.

Mexico-City-Kainet-Flickr-ccIt was August of 1981, early morning, in the office of John Lutz, managing partner of McKinsey Management Consulting in Mexico City. I was three months out of Stanford with an MBA degree, working for McKinsey Management Consulting in Mexico City.

The McKinsey offices sat in a very stylish high-profile office building overlooking a critical freeway junction over Chapultepec Park, linking the fancy Las Lomas residential area with Polanco and the Paseo de Reforma main business district. The streets were wet from rain overnight, and the freeway was, as almost always, jammed. The sky was dense, a mixture of rainclouds and smog.

I needed to quit. It was so embarrassing. I didn’t like to see myself as the archetypical fancy MBA blowing off the first job. I was 33 years old, married, and my wife was expecting our fourth child. I was way too mature for this stuff. But still …

I had arranged a job waiting for me with Creative Strategies International in San Jose. From where I was, returning back to the San Francisco peninsula, Silicon Valley, seemed like returning from exile back to paradise. I liked Creative Strategies, and liked living back in the states. I wanted out of McKinsey.

I really didn’t like the job with McKinsey. It was stupid to have taken it. It was a job meant for a 26-year-old single person blinded by ambition and unencoumbered by relationships. Like most professional firms, success involved putting up with a corporate culture that spent 12 to 14 hours a day in the office, whether or not there was work to be done. The firm actively discouraged families by encouraging long-term business travel but without families, and by running 5-day strategy meetings at beach resorts and forbidding families coming along, even at the family’s own expense. I was not supposed to disagree with partners on … well, you get the idea.

I certainly didn’t belong. I’d been entrepreneurial for 10 straight years, making my own way with freelance journalism and, later, my own consulting, and I wasn’t up to faking awe for the partners. And as a family, we didn’t belong in Mexico City. I had loved that place for nine years in the 70s, it had been good to me, but I was done. My wife is Mexican, she grew up in Mexico City, and had family there, but she was tired of it too. The city was too big, too hard to deal with. We had left in 1979 and shouldn’t have gone back in 1981. I fell for the money and prestige, stupidly, because it wasn’t enough to keep me.

So, back in the office with John Lutz, did I tell him why I was leaving? That I didn’t like the job, had made a bad decision, didn’t like Mexico, I’m sorry, it won’t work.

No. I didn’t. I told him I needed a lot more money.

This is one of the best arguments ever for telling the damn truth, even when it’s embarrassing. I’m still embarrassed, but I’m older now, and, well, I think this is a good lesson to share.

So they gave me more money, and then how dumb did I look?

I still left, and I left looking really stupid. Why didn’t I just tell the truth in the first place?

So there’s the moral to the story. You’ll be in a situation where you’re tempted to slant away from the truth to make it easier, but remember before you do how bad you’ll look if the other side answers the wrong issue, forcing you to admit it was never the real problem. So here there is. It bothered me for a long time but that was 25 years ago or so, and hey, I’ve made a lot of other mistakes since, the sting has worn off on this one. I hope you find the story useful.

(Image: Mexico City via Kainet Flickr CC)

How did Tim Berry grow Palo Alto software?

I was amused to check in with Quora this morning and find somebody had asked me to answer “How Did Tim Berry Grow Palo Alto Software?” Obviously that’s a question dear to my heart. So here’s what I answered, which seems fitting for this blog today.

Business Plan Toolkit
The first Business Plan Toolkit in 1988

Slowly, carefully, bolstered by good product and reviews that validated, doing a lot of coding and documentation myself, and not spending money we didn’t have.

It started as spreadsheet templates. The first of those was published in 1984 to accompany a book “How to Develop Your Business Plan,” published by Oasis Press. In 1988 I separated from that book, and redid the templates to accompany my own book when I published “Business Plan Toolkit,” released in MacWorld January 1988. All of these early products were 100% my work, my spreadsheet macros and my documentation. It helped to have a diverse background, including 10 years as a professional journalist, foreign correspondent in Mexico City, plus a Stanford MBA. I could write about business so (people told me) others could understand.

Throughout the early years I kept up a healthy consulting practice doing business plans for some startups and some larger high tech companies, plus workshops on business planning for dealers of high tech companies. Apple was by far my best client, with repeat business in consulting on business planning from the beginning until 1994 (Hector Saldana was a steady client for years, and a supporter of the business idea, and informal advisor). The consulting supported marketing expenses. There was no Internet to speak of until 1995, so the early marketing was a combination of small ads in the back of magazines and product reviews in major computer magazines.

It was a major struggle for years.  I was sacrificing consulting revenues to prop up products. The motivator, for years, was “I want to sell boxes, not hours.”

My wife’s role was especially important during those long hard years. She didn’t give up on me. We have five kids and we depended financially on my consulting, but she stick with my idea of “boxes not hours” as I continued to use scarce funds to keep the product dream alive. We had some money to deal with because my role in Borland International paid off in 1986, but we were still struggling, with small houses and used cars. And by the way we’re still married as I write this in 2016.

When we moved it from Palo Alto to Eugene OR in 1992, I had three early equity shareholders (1% each) who agreed to surrender their shares because there was no value in them. My wife and I moved to Oregon because we wanted to. She said to me: “we put up with all the downside of you having your own business; let’s get the upside and move to where we want to live.”

By 1994 I was in deep trouble, with a quarter of a million dollars of unsold product stuck in retail, coming back from channels. The template products never made it. And in the words of Kathy Colder, a key purchasing executive from Fry’s, “Tim, your boxes suck.” At the worst point, we had three mortgages and 65K$ credit card debt.

Business Plan Pro
Business Plan Pro circa 2000

What I did then was decide not to just repackage, but to build stand-alone product instead, dumping templates entirely.  I found a local three-person programming company (Cascade Technologies, which no longer exists; its founder was Ken Barley) to take my templates and my vision and create stand-alone product for Windows using Visual Basic and an Excel-compatible spreadsheet we were able to buy as a tool, and include in the software. It added a complete interface to include the words as well as the numbers, and keep it all, even formatting and printing, inside the one application. I wrote about a third of the code myself, in Visual Basic. My vendor got a low monthly fee for 12 months, plus a percent of future revenue. We were still not able to spend money we didn’t have.

That effort was launched in 1995 and became successful as Business Plan Pro so I was able to stop consulting and dedicate myself to the business. My son Paul Berry joined me in 1998 and developed the web business with downloadable software. We grew quickly to more than $5 million annual revenues by 2000. (Paul left in 2001 and became CTO of Huffington Post in 2007 and founded RebelMouse in 2012).

In 1999 we took on a minority investment from Palo Alto venture capital, RB Webber and Associates. That was our first outside investment. In 2002 we negotiated a buyback with them because after the dot-com crash valuations had plummeted and the company was worth more to me and my family members than what an acquirer would pay for it.

I stepped aside in 2007 and asked Sabrina Parsons to become CEO while I focused on blogging, writing books, speaking, and teaching. She and the team released LivePlan in 2012 and that – a web app, SaaS, browser based has become very successful, having had several hundred thousand paid accounts already. I’m still chairman, and founder, but Sabrina and her team get a pretty free rein to run the company. Market share and awareness keeps growing and we’ve had several years of double-digit growth in revenues again, after the great recession. And it is entirely family owned.

Here is the source on Quora: How did Tim Berry grow Palo Alto software?

Do Big Tech Companies Become Too Big Not to Fail?

culture-eats-strategyI caught this one yesterday on Medium: Culture Eats Strategy for Breakfast. It’s by Dare Obasanjo on Hacker Daily (great title, by the way). It’s a well-thought-out discussion of how Google and Facebook culture achieved a substantial shift of strategy in a way that others (Blockbuster facing Netflix, and Blackberry facing iPhone) couldn’t. Here’s the summary.

“when your strategy changes then your entire organizational culture will have to change as well. Your organizational culture is defined by what positive behaviors you encourage and what negative behaviors you tolerate. Blackberry couldn’t compete with Apple when teams were still motivated & rewarded for keeping corporate CIOs happy and there was no way Blockbuster could compete with Netflix when they fundamentally saw themselves as a classic retail video rental store and ignored the power of online experiences.”

That’s a good read. Dare collected details and presents them very well. There are some stories of interest there.

And it challenges an assumption that I’ve made for decades now, which is that large businesses are doomed to fail eventually because they become like big ships, unable to turn quickly, unable to react. I’ve seen IBM fall from the “Big Blue” industry giant of the 1970s, 1980s, and 1990s to another also-ran today (no offense, IBM). I’ve seen Microsoft fall from the king of the world in the middle-to-late 1990s to struggling to keep up today.

It seems so hard for big tech companies to sustain growth rates when sales run into the billions. Although this post argues against it, I would have thought that Google, Apple, and Facebook will eventually slow down because they are so big. But maybe not.

I’ve never been an employee of a big (thousands of employees, maybe tens of thousands) company but I’ve deal with them as consulting clients. What I thought I saw was that as they grew, middle managers and office politics took over, regardless of what top management wanted. Decision making slowed to a crawl, and the friction through the chains of management became impossible. The culture changed in ways top management couldn’t prevent. Go to an exciting startup and people are working at all hours. Go to a big company and they left at five. Or so it seemed to me.

Can Google, Apple, or Facebook buck that history? Are big tech companies doomed to decline. Live by tech, die by tech? Do they become too big not to fail?

The Broken Spreadsheet That Birthed a Business Startup

I thoroughly enjoyed doing this Mixergy Interview, published this week, about how I bootstrapped Palo Alto Software from zero to about $10 million annual revenues:

Tim Berry on Mixergy
Tim Berry on Mixergy

It started one morning at 2 a.m., when I had to deliver a finished set of financials the next morning. It was 2 a.m. and I was tired and done with the financials but I had done something in either Lotus 1, 2, 3 or Excel because I use both. I don’t remember which one it was but I had done something to break the damn spreadsheet! If the financials are going to work, when you change the assumptions the balance still balances and the cash flow, and so on.

So it was 2 a.m. and I had broken the spreadsheet. I thought to myself, there is so much productizability in this. I have to be [building this out,] assumptions, inputs, outputs [and so on], so that this doesn’t happen again.

Mixergy is a collection of interviews with entrepreneurs. Andrew Warner, founder, does a great job interviewing, and collecting interviews. The goal is a collection of thoughts and stories about entrepreneurship. I’m proud to be included.

Andrew posts the complete transcript along with the interview, so it’s easier to browse. Here’s another snippet, about raising venture capital and buying them back:

But then, and this is what’s important for the story, you need compatibility with your investors. When the whole thing crashed in 2001, then we had completely different business models. Our investors needed us to have an exit, a liquidity event. Valuations were back down onto what they really were, you know, two and a half times revenues, for example, for a healthy software company.

But two and a half times revenues wasn’t enough money to make me and my wife and our family feel like we wanted to just sell the business. I had to be 10 or 20 times revenues. But, our VCs were trapped as minority investors. And they were trapped forever. I now have eight angel investments. I understand how bad it is to be trapped as a minority investor with no hope of a liquidity event. I don’t want investors, even as a minority, who aren’t happy with me or my company, so we negotiated. Their lead partner there told me later that not until the negotiations were done, “Tim, actually I can tell you now, you are our best investment for 1999.”

Andrew led me through a lot of stories: How I failed as a hippy, how we got started on the web, how we realized we needed downloadable software, how I changed my role seven years ago to open the field for a new management team, and others.  This led to a Business Startup.

Required Reading on Business Owners Making Critical Mistakes

For a good time take a look at the answers to this question on Quora: What are some classic examples of a founder letting his or her ego get in the way of making the right decision for a company? 

owner mistakes business mistakes

Now yes, that’s one stellar example of a loaded question. But — loaded or not — it’s attracted some very interesting answers. It makes for good business reading, for sure.  

One particularly-well-written answer (this one) narrates a painful story of a successful pivot turned to failure by a stubborn founder insisting on doing things the old way 

We tried this before … We failed. Miserably. … our sales staff, followed by myself, along with the other partner all advised against the move … Then, all of the sudden, two months later, he made some executive vote to change everything overnight.  … Our revenue streams dropped immediately. 
I stressed for months on end, … but he didn’t listen. 
He just made the move, and everyone eventually lost their jobs. 

That’s a small piece of a long answer, and I’ve clipped it significantly. It makes a good story and good reading. That answer goes on with some other examples too, which makes me wonder. Maybe its biased and just sour grapes. 

Another interesting quote from another answer:

The thing with egos is they cause a distortion of reality which means they’re either too fragile to accept the truth (self-esteem) or they’re so starved for attention that their bullying gets in the way of real progress (narcissism). … Jobs was so broken inside and so desperate for recognition that he worked his staff mercilessly hard and caused rifts between the Macintosh and Apple II (I think) teams. His narcissism caused him to bully and press on others. He damaged morale in the company and hurt sales.  

Maybe these are twisted answers from people bitter about things having gone wrong. Maybe they are exaggerated. But regardless of historical accuracy, every business owner should read through these. And I write that as a business owner.  

The Fitness App That’s Working for Me

Combine ease of use, and real science, by a real expert: It’s a fitness app I’ve been using on my iPhone, MiFitLife, which is the first one of these I’ve used that actually works for me. It’s based on science, developed by a real expert, and it lets me input workout data in 10 seconds instead of — like every other I’ve used — 10 minutes.

MiFitLife Richard Brown fitness app

The developer, Richard Brown, is a friend, a long-time Eugene OR resident, and beloved professor at the University of Oregon. He also has a PhD degree in Exercise and Movement Science, has trained more than a dozen olympic athletes, and is a member of the athletic hall of fame of the U.S. Naval Academy. Disclosure: I do have a financial interest, because he’s also a client of Eugene Social, in which I’m a partner.

I really like, actually, believe in, the science behind the app. It’s based on VO2 Max:

You should care about VO2 Max because the best measure of your ability to convert energy is your ability to deliver oxygen to your cells.

For more on that you could check it out in Wikipedia, or Richard’s explanation on MiFitLife.com.

What it means, for me, in daily use, is easy to use, because of easy data entry. I’m a regular at the gym. I lift weights, do cardio, etc. So with any of the half dozen or so leading iPhone fitness apps I’ve tried, entering workout data had me entering the exercise like every set of weights defined by what it was, what weight, and how many reps; or how many miles in how many minutes. With MiFitLife I enter the time and the VO2 Max level, with a simple sliding scale. That’s 10 seconds instead of 10 minutes. And that means I actually use it. I input my workouts and follow its recommendations. It works for me.

Another advantage is that it starts by getting my details, like age, weight, exercise habits, etc., so it can add value with recommendations. How much to do, and how often, is not a random anonymous algorithm. At my age that’s reassuring.

And it accommodates any exercise, easily. One of my daughters records the stairs and vacuum cleaner exertion of cleaning her apartment. It does swimming, cardio, rowing, sports, walking, whatever … it’s all a matter of VO2 Max. Time and effort. Simple.

Unfortunately, this recently-released iPhone fitness app is up against hundreds, maybe thousands, of competing fitness apps. And when you get into tag lines and marketing, they all say the same thing. Every one of them claims science, and tailoring, and easy to use. But this one actually is.