All posts by Tim Berry

Adam Osborne on Product Release Brinkmanship

Ah yes, software product release. When do you let that product go? When is it good enough? What if there are more problems? This is publishing at its best.

The joy of easy updates

I will say that what we do with software today is sheer joy compared to the stress of releasing a product in the middle 1990s. Back then we had to finish the software, test it, test it again, and then duplicate physical disks and assemble packages and send them out in pallets to the stores. Some undiscovered mistake could be a disaster. It could literally kill companies. The disks were out there, thousands of them.

Today, in contrast, we can change the masters of downloadable software whenever we want. We can post updates on the web. New versions happen as soon as we add features. We update LivePlan caref when we packaged them up and duplicated disks and sent them out to the world with the assumption that we wouldn’t discover problems soon after. Those disks had a life of their own. Nowadays we can update a web app constantly, let people download the software, change the latest version overnight.

Adequate is good enough? Maybe.

What I do want to write about is the late Adam Osborne, founder of Osborne Computers, writer, columnist, and inspiration to a generation of computer writers turned entrepreneurs.

I had the privilege of dealing with Adam Osborne a few times during the early Silicon Valley days. Two of his sayings come to mind:

  1. “Adequate is good enough,” he said, more than once. He was talking about product development and technology business. “Ship it.”
  2. He also espoused what he liked to call the Adam Osborne Trade Show Theory of Productivity, which was, in detail: “80% of the GDP is finished the night before the trade show opens.”

I have to admit, looking back, that I’m glad now that we have a different system.

Infographic: Women in Business

Thanks to Balboa Capital for this infographic today with a summary of statistics on women-owned businesses.  This all looks like good information to me. With limits. For example, I chronically question the research on factors considered important because I think these surveys are politically motivated and set up to serve political agendas. So in this one, I don’t believe business owners are really concerned about macro economics or tax rates. They are concerned about increasing sales, hiring people or now, and cash flow. But that’s just my opinion.

I also note that according to this, women-owned businesses are financed the old fashioned way, not by high profile angel investors or venture capital. And that the playing field is not level by any means, even after 50 years of attention to gender equality. Women still have a tougher time, in general, building their businesses.

By the way, I recommend Women on Business, the website and blog, as my favorite source for women in business and writing about business. That site has no relation to this infographic.

infographic women in business

Finding Dumb Investors is a Dumb Idea

Are you looking for dumb investors?

investor money
investor money

“How can I find investors who don’t take much equity?”

“How can I find investors who don’t interfere with my running the business?

I first posted my objections to this kind of thinking nine years ago in Dumb Investors Dumb Idea, one of the earliest posts on this blog. That was before I joined an angel investment group and became one of those investors. My objections then are a lot stronger now. And I still see a stream of this kind of thinking in blogs and at my favorite question and answer site, Quora.com.

Valuation determines equity

The equity share from investment is simple math. If your investors put in $100,000, that’s 10% of a startup valued at $1 million, and 50% of a startup valued at $200,000. So what’s the underlying valuation? Read up on that with 5 things entrepreneurs need to know about valuation and understand startup valuation. So with normal angel investment, the startup founders want a higher valuation and the angel investors want lower. It’s a lot like negotiating to buy a house or a used car. Ultimately, both sides have to agree, or there is no deal.

Angel investors normally care and add value

Angel investors are overwhelmingly amateur investors, investing their own money, investing in industries they know or local startups. They are successful entrepreneurs giving back. They believe in their ability to select startups well, study them well (it’s called due diligence) before deciding on a deal, and to offer valuable advice and experience. I’ve seen dozens of pitches that ended with investors not interested in startups whose founders knew everything and wanted no advice. People who don’t want interference with their business are not going to do well with angel investors.

Normal angels choose angel investment instead of leaving their money with an investment advisor, bank, or some other institution. They know that investing in startups is risky, but they trust themselves and expect to be able to help.

 

 

 

Infographic: 46 Facts on Entrepreneurship

I want to share this infographic today because it has a lot of good information. I like some of the surprises in some of the numbers. The credit is down at the bottom. I don’t think every detail here is true (I don’t believe startup failure statistics demystify business failure statistics) I do think the research is sound and the numbers a good reminder, in several points, of the realities of worldwide entrepreneurship.

 

46 Facts on Entrepreneurship

(Infographic courtesy of dealsunny.com)

Data, Politics, Poets and Truth

Sheep on grassIn the good old days – I turned teenager in 1961, and 18 in 1966 – we had a generally accepted process for establishing truth. First, we generally distinguished opinion from fact. Second, when fact was in doubt, we turned to evidence.  And evidence, once presented, was accepted. Evidence ended arguments. But data killed that, politics killed data, and now poets predict politics.

Data undermined simple truth

The decline of truth started with data. Huge masses of overwhelming and conflicting data forced us to choose truth from streams of incoherent evidence. For example: Is margarine is good for you? Eggs? Coffee? Those are just three simple cases, regarding food. We have ample streams of evidence on either side. We can find data to support any answer. And those are just easy food and health arguments, not nearly as controversial as, say when ISIS started, who supported what war and when. Evidence doesn’t end the argument because we’re overwhelmed with conflicting evidence.

Talking points undermined evidence

And then came talking points. First, the overabundance of conflicting data undermined the weight of evidence. After that, political strategists discovered that repetition of well-packaged spin, half truth, and lies could be taken as truth. And now we accept political talking points as truth, even in the face of evidence to the contrary. Millions of people firmly believe absurdities in the face of clear and unambiguous evidence to the contrary.

We’re left with truth in poetry

Truth and LiesSomewhere around 1790 William Blake wrote The Marriage of Heaven and Hell. That lengthy and sometimes bewildering work includes a section called the proverbs of hell, which includes the following:

Everything possible to be believed is an image of truth

No I’m not suggesting Blake foresaw or forewarned us. But what he says there does fit today’s reality. Right? We’ve got wide ranges of diverse and discordant images of truth. Of course, Blake included that in the section framed as proverbs of hell, not heaven, so maybe he mistrusted its direct meaning. But in the poem, he likes hell, so who knows. I suggest it here as food for thought, nothing more.

And then there is this, written 100 years ago by William Butler Yeats in a short poem called The Second Coming.  It seems disturbingly like what we see around the world today:

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

That’s towards the opening of the poem. It gets even darker as it closes. Sadly, that too sounds a lot like mainstream politics today. Did you watch that debate on Monday?

 

 

How to Make Money on Your Brilliant Business Idea

A Pile of CashSo you have a brilliant business idea that will be very successful. My congratulations to you. Now read all ideas are brilliant and nobody is going to pay you for your ideas. Are you still sure? All right then, let’s continue.  And – this is important – do not even think about getting investors yet. Do a lean business plan.

1. Gather a team

Can you execute on the brilliant business idea yourself? That does happen. For example, take your browser to KiddoLogic.com. That’s a venture built by one very smart woman, on her own. She used her own money and paid the providers she needed, to get going. If you can do that yourself, without help, then I applaud you. Go for it. Forget investors; just do it. You don’t need them.

For the rest of us, your next step is to gather a team of people who have the skills and experience you need to get going. Look for people different from you who can do what you can’t and who know what you don’t.  If you don’t know anybody, or don’t know the right people, that’s a damn shame; but it’s your problem to solve. If you can’t solve it, then keep your day job. Other people have solved that problem millions of time.

If you can afford to pay them…

If you can find suitable people, then  you have to convince them to join you. If you can afford to pay for their services with your own money, then maybe you don’t have to convince them of the idea. Just pay them. This puts you in the category of the smart person on your own. Just do it. You’re special, the sole entrepreneur with a great idea and the means to execute. Skip to the next section.

However, if you can’t afford to pay people, then you need to convince them to join you as co-founders and work on this idea for free. Don’t feel bad about that; that’s what most successful entrepreneurs had to do. And if you can’t convince the right people to join you, then get a clue. Your idea was one of the many ideas that seem brilliant but won’t work. Keep your day job. Revise your plan. Focus on a subset you can do yourself. Or give up.

Get your people together and revise that early plan. Bring it up to date with what you’ve learned while gathering the team, and what your team members were able to contribute to the plan. Remember that plans are made to be reviewed and revised and kept live and up to date.

2. Execute. Get traction. Prove it.

You have a team and you have a plan. Execute on it. Follow your plan. Go as far as your team can take you towards early website, product prototype, discussions with potential buyers or distributors, so-called minimum viable product. Maybe you go on Kickstarter or one of the other sites for pre-launch selling. Get traction. Prove to yourself and future investors that you idea will work. You’ll have to know what that means in your specific case. It’s different for every business.

3. Seek investment if and only if…

Don’t go for investment unless you really need it.  Never bring in investors unless you need them to address an huge opportunity that makes sharing your business ownership with outside investors good for you and them. Read the startup sweet spot.

Furthermore, don’t go for investment if you’re not going to get it. Only a few businesses are good investments. Read this self assessment will you get angel investment, 10 things angel investors ask about your plan. And be aware that the advice in those two posts applies to the U.S. market only. The realities of angel investment are vastly different in other markets.

(Note: I have no association with Kiddologic. I saw her pitch for local angel investors and was very impressed.)

Startup Culture is as Leaders Do

The question over on Quora was How should a new startup develop and sustain a strong company culture? I decided not to answer the essential how-to, but rather to share my experience in this area, which is more like a reality check on startup culture than anything else.  The following is straight from my Quora answer.

Culture is not what you say

Culture isn’t what anybody says, it’s what the leaders do. You can write mottos and pin poster on the wall, send memos around, write mission statements and mantras, develop tag lines, and repeat seemingly meaningful phrases at meetings … but what determines the culture is what leadership values – not what it says it values, either, but what it actually values with actions, policies, decisions, priorities, rewards, praise and everything else that happens all day every day.

Leaders, as people, rarely change who they really are. They will nurture new ideas or not, listen or not, treat their people fairly or not, depending on their values, their past, and who they are. Sometimes people can change over time, but that’s rare.

Leaders frequently believe their words and ignore or fail to realize that their actions contradict their words. This is why businesses are so full of hype and spin and meaningless drivel in mission statements and the like. Have you ever seen a company that doesn’t say they believe customer service (for example) is extremely important? But how many flow that thought into actual policies and performance. Similarly, is there any business that doesn’t say it values innovation? But how many businesses actually reward people for questioning authority or trying to do things differently? These are big-company examples everybody knows, but I use them to make a point about startups.

What’s a strong culture?

And your question itself offers an implicit example in itself. You say “strong culture.” What’s that? One leader could say a strong culture is when people compete with each other constantly, spend infinite hours in the office, and value stress. The next could say strong culture is one that develops a mission to make the world a better place, treats everybody fairly, and cares about its customers. Which is strong?

What matters is who you are and what you do, not who you want to be, or what you say you believe.

 

Do You Suffer from Distraction Sickness

Does this seem familiar to you: Distraction Sickness

I had sensed a personal crash coming. For a decade and a half, I’d been a web obsessive, publishing blog posts multiple times a day, seven days a week, and ultimately corralling a team that curated the web every 20 minutes during peak hours.

Andrew Sullivan

That’s from Andrew Sullivan: My Distraction Sickness — and Yours, in New York Magazine this week. I recognized the author’s name immediately because I’ve seen Sullivan on talk shows often. On TV he comes off as thoughtful and articulate, and he’s frequently introduced as a gay republican and prolific blogger. Here’s the first paragraph of his Wikipedia biography:

Andrew Michael Sullivan (born 10 August 1963) is an English author, editor, and blogger. Sullivan is a conservative political commentator, a former editor of The New Republic, and the author or editor of six books. He was a pioneer of the political blog, starting his in 2000. He eventually moved his blog to various publishing platforms, including Time, The Atlantic, The Daily Beast, and finally an independent subscription-based format. He announced his retirement from blogging in 2015.

The independent blog mentioned is The Dish, where the last post is dated June of 2015.

But that’s just background information. What’s notable about his background, in this context, is the sudden change, the lack of Andrew Sullivan writing and talking on TV in the last year. I read this piece and discovered why. And decided that what he’s calling distraction sickness might be an epidemic.

Distraction sickness

Sullivan describes a process that seemed alarmingly familiar to me – and, I bet, to you too:

Facebook soon gave everyone the equivalent of their own blog and their own audience. More and more people got a smartphone — connecting them instantly to a deluge of febrile content, forcing them to cull and absorb and assimilate the online torrent as relentlessly as I had once. Twitter emerged as a form of instant blogging of microthoughts. Users were as addicted to the feedback as I had long been — and even more prolific. Then the apps descended, like the rain, to inundate what was left of our free time. It was ubiquitous now, this virtual living, this never-stopping, this always-updating.

Is that not you? Ok. Nobody you know? C’mon, tell the truth.

He continued:

I tried reading books, but that skill now began to elude me. After a couple of pages, my fingers twitched for a keyboard. I tried meditation, but my mind bucked and bridled as I tried to still it. I got a steady workout routine, and it gave me the only relief I could measure for an hour or so a day. But over time in this pervasive virtual world, the online clamor grew louder and louder. Although I spent hours each day, alone and silent, attached to a laptop, it felt as if I were in a constant cacophonous crowd of words and images, sounds and ideas, emotions and tirades — a wind tunnel of deafening, deadening noise. So much of it was irresistible, as I fully understood. So much of the technology was irreversible, as I also knew. But I’d begun to fear that this new way of living was actually becoming a way of not-living.

Is this you?

I’m not attempting to duplicate Sullivan’s whole article here. I highly recommend you read it yourself and think about it. But here’s one more piece of it I want to add:

Our oldest human skills atrophy. GPS, for example, is a godsend for finding our way around places we don’t know. But, as Nicholas Carr has noted, it has led to our not even seeing, let alone remembering, the details of our environment, to our not developing the accumulated memories that give us a sense of place and control over what we once called ordinary life. The writer Matthew Crawford has examined how automation and online living have sharply eroded the number of people physically making things, using their own hands and eyes and bodies to craft, say, a wooden chair or a piece of clothing or, in one of Crawford’s more engrossing case studies, a pipe organ.

It certainly made me think about my level of the disease. For a split second. Before diving back into blogging.

 

 

What? Me do a Business Plan? But I’m Not a Start-up!

Are you a business owner? Do you have a business plan? Is your answer to that question: “Business plan? but I’m not a start-up. Why would I want a business plan?” business management

My answer is that you do want business planning. You want business planning as a way to set strategic focus, priorities, effective tactics, measurement, and task assignments. Make those clear and record them so you can revisit monthly. Then track progress and performance as you do a monthly review. Add in plan vs. actual accounting to compare projected sales and spending and use that process to kep a close eye on cash flow. Anticipate problems. Accommodate rapid change. Give yourself a process to optimize your management.

Maybe you don’t want a traditional business plan

The disconnect is the problem of what is a business plan. I agree that you don’t want a business plan if you think of that as a formal traditional business plan document. The traditional static document, that you do once and then forget, is not useful to real businesses.

The shame, though, is what gets lost in the shuffle. The real business planning process is such a great tool for growing a business, but so many people dismiss it as a one-time plan used only to start a company or raise financing. That myth of the business plan for start-ups only gets in the way far too often. If you own or run a company, you probably want to grow it.  And if you want to grow a company, then you want to plan that growth. And the planning is only the beginning; you want to use the full planning process to manage growth.

The real benefits of business planning

Think for just a minute about how many different reasons there are for an existing company to plan (and manage) it’s growth. There’s the need first of all to control your company’s destiny, to set long-term vision and objectives and calculate steps to take to achieve vision. Without planning the company is reacting to events, following reality as it emerges. With planning, there’s the chance to pro actively lead the company towards its future.

For an existing company that wants to grow, planning process is essential. Everybody wants to control their own destiny.  The planning process is the best way to review and refresh the market and marketing, to prioritize and channel growth into the optimal areas, to allocate resources, to set priorities and manage tasks. Bring a team of managers together and develop strategy that the team can implement. Work on dealing with reality, the possible instead of just the desirable, and make strategic choices. Then follow up with regular plan review that becomes, in the end, management.

This normally starts with a plan.  The plan, however, is just the beginning.  It takes the full cycle to make a plan into a planning process.

TED talk: A Growing Threat to Democracy

About a third of the way into this talk from last year’s TED global the speaker says:

Have you wondered why politicians are not what they used to be? It’s not because their DNA has degenerated. It is rather because one can be in government today and not in power, because power has migrated from the political to the economic sphere.

The audience laughs at the DNA joke, but then falls silent. The speaker, Yanis Varoufakis, who was Greece’s finance minister during last year’s Greek financial crisis, has a very serious point.

Over the last three months, in the United States, in Britain and in the Eurozone, we have invested, collectively, 3.4 trillion dollars on all the wealth-producing goods — things like industrial plants, machinery, office blocks, schools, roads, railways, machinery, and so on and so forth. $3.4 trillion sounds like a lot of money until you compare it to the $5.1 trillion that has been slushing around in the same countries, in our financial institutions, doing absolutely nothing during the same period except inflating stock exchanges and bidding up house prices.

So a mountain of debt and a mountain of idle cash form twin peaks, failing to cancel each other out through the normal operation of the markets. The result is stagnant wages, more than a quarter of 25- to 54-year-olds in America, in Japan and in Europe out of work. And consequently, low aggregate demand, which in a never-ending cycle, reinforces the pessimism of the investors, who, fearing low demand, reproduce it by not investing.

the economic sphere has been colonizing and cannibalizing the political sphere to such an extent that it is undermining itself, causing economic crisis. Corporate power is increasing, political goods are devaluing, inequality is rising, aggregate demand is falling and CEOs of corporations are too scared to invest the cash of their corporations.

So the more capitalism succeeds in taking the demos out of democracy, the taller the twin peaks and the greater the waste of human resources and humanity’s wealth.

I’ve been a fan of TED for years now because it tends to highlight a combination of truth, concern, science, arts, and of course it’s namesake acronym, Technology, Education, and Design (TED).  I like talks that shake me up a big and make me think. This one does that.

The source of this is at the following link: Yanis Varoufakis: Capitalism will eat democracy — unless we speak up.