The art of not getting it

“I believe that banking institutions are more dangerous to our liberties than standing armies.” Thomas Jefferson

Last year before my mojo was stolen, when the economy was merely bad and hadn’t yet become truly stupid, I wrote that this was either the best time to jump in and invest or wait it out. Dark Days Indeed. I also mentioned that my decision was to jump in and start a new business.

Now, it’s not a big business and certainly not something I’d give up my day job for, although there are probably those that would claim they wouldn’t be able to tell the difference. But I am blessed (and cursed) with owning a beautiful retail space in a great little downtown that happens to be empty since it’s where my late wife Bonnie had her business. By virtue of the fact that it was originally a gas station it has a large street side patio area that now has landscaping where the pumps used to be.

Bonnie, the true visionary, always looked at the space and thought it would make a perfect wine bar, especially with the patio included. So why not? I love wine, I have the space, and it’s not like people are knocking each other over to lease the space in these times. So I’ve been systematically moving through the steps.

Here’s where it starts getting stupid. I learned of a state program to assist small business owners improve the appearance of their facility. Cool. Although my patio area is beautifully landscaped it’s not conducive being a good area for commerce. In other words, it needs to be totally redone. Perfect situation for the state funds, right? Uh, not so much.

Here was the exchange between the State of Michigan and my city representative: SoM: “Is this the place?” City: “Yes”. SoM: “It’s already been improved.” City: “But it doesn’t work for the business he wants to put in”. SOM: “But it’s already been improved”. City: “It’s been landscaped, but it needs to be fenced in and be restructured for commercial use”. SoM: “But it’s already been improved”. And so on.

Needless to say, I’m getting no state money.

Then there’s my bank – my commercial bank. I won’t bore you with the exact dialog but the essence of the conversation comes down to that I have plenty of equity and great credit, but, uh, well, the best I can make out banks don’t make loans any more. Actually to be more accurate, the quote was “we’re making no loans to anyone at this time”. So, I’m not sure exactly what they do, but providing capital doesn’t appear to be one of them. I asked my handler from the bank what their Mission Statement is. When he fumbled for an answer I suggested they use the Hotel California missive. “You can check your money in but it can never leave”.

So essentially the only way you can get money these days is if you take your big company, manage it badly, break all the rules (and a bunch of laws) and then beg the government to bail you out; which they will do and as a bonus not put any oversight on what you do with the money.

Therefore I’m thinking too small. There’s no reward for being sensible, I need to greatly overreach my bounds and when it doesn’t work out I’ll just beg for one of those $250,000+ jobs being created by the stimulus package. I mean, if the package costs $787 billion…I’m sorry…BILLION…and it’s going to created 3 million jobs then each job is worth $262K. Not bad, I could make that work.

So, where’s the XOD advice in this post? Well, for one read the Pragmatic Marketing blog Tuned In where they talk about the 10 steps for winning in a down economy. The other, I guess, is don’t look for help from anyone closer than yourself these days. And you know, that’s probably as it should be anyway.

Thank you, doctor. I feel better.

All things to all people

“There is no safety in numbers….or in anything else” James Thurber

I’ve said before that I try to keep this blog neutral as far as religion, politics, race, gender, etc. So, I only bring this up as a springboard into what I really want to discuss.

Every election year I’m amused, amazed, astounded, stupefied and horrified by how the person trying to become the elected official of “the free world” pulls out all the stops to portray themselves as ALL THINGS TO ALL PEOPLE. It happened again and now we’re going to put out a lot of money in order that campaign promise gets kept.

I could bore you with how I feel we should all pay much more attention to who we elect locally than nationally but you either already get that…or don’t… so why try to put lipstick on the pig.

The United States of America is arguably the most diverse country on the planet. For as silly as we can sometime be, we are more tolerant than most. Few other places would allow some of the goofballs we have to be prominent figures. So how, I mean HOW, can any one person be elected just to help me or the people like me while at the same time equally helping those that are very opposite of me? I mean, really!

I only bring it up at all to make my business point. Name me the company who successfully pulled off being “All things….”?

Some have tried. Chesebrough-Pond’s grew to have sales in excess of $1 billion dollars in the 70’s (that’d be real money today) until it decided that it could be “All things….”. Here’s the story: http://www.answers.com/topic/chesebrough-pond-s-usa-inc?cat=biz-fin. Likewise the 1990 book “Barbarians at the Gate: The Fall of RJR Nabisco” tells a great, and true, tale of a free-for-all leveraged buyout of a conglomerate that peddled cigarettes and food among other things. In the world of technology no one floats to the top faster than Computer Associates. My buddies and I have always fantasized about being allowed into the CA warehouse where they keep all the cast-off products they got from acquisitions that they never looked at again. I envision it being like the warehouse at the end of the movie Raiders of the Lost Ark.

There is no doubt that companies can lock themselves in too finely. Railroads never seemed to get the fact that they’re in the transportation business, not just the rail business, for instance. The old adage “focus or falter” is still worth paying attention to.

One of the dangers today is there are a lot of struggling companies who can be acquired for what will seem to be a pittance. You’ll be able to work the spreadsheets and convince yourself the risk will be minimal. What won’t show up in the spreadsheet will be the hidden costs of distraction, new baby syndrome, and the inevitable “gotcha” issues that never came out in the due diligence. All of a sudden this piece of cake has become a pile of dung.

Ask yourself a critical question: “Does this company/technology strengthen, enhance or move forward our existing strategy, or are we changing our strategy to accommodate it?”

That’s not to say it’s not a buyers market, but as the signs warning of low ceilings say in England “Mind Your Head”.

Don't fall in love

“One's first love is always perfect until one meets one's second love.” Elizabeth Aston

Given Valentine’s Day is upon us the theme seemed appropriate.

I was honored to participate in a podcast the other day. Michael Hopkin of Ryma Technology Group (http://www.rymatech.com/) has a blog site dedicated to Product Management (http://www.leadonpurposeblog.com/). Michael also runs a podcast called The Product Management Pulse.

It was great fun and Michael is a great host. Mostly it got me to think, talk and reminisce about my first love – Product Management. Over the 30 minutes or so I was able to cover several of my favorite PM topics but in replaying it I realized I never got around to one of my most stringent rules for being a good Product Manager (although God knows I tried, I even attempted to talk through the break).

DON’T FALL IN LOVE. Not with your product, not with technology, not with any one client, not with any one salesperson, not with any one analyst. The real power of a Product Manager is to always remain “passionately unattached”. Product Management must prove everything, with research, with data, with facts, with backup. And they must also be very passionate about the fact that they have no emotional attachment to anything but the truth. “You want the truth? You can’t handle the truth!”

Michael asked me if there was any one path that leads to being a Product Manager than another, tech vs. sales, etc. My answer was that , no, Product Managers come from all backgrounds. I should have answered, “All Product Managers should come from Vulcan”. Mr. Spock would have been a killer Product Manager, totally factual, totally logical, always with a researched answer at hand. Killer.

My yardstick has always been that the Product Manager should always be the first person in the company to recognize when their product has jumped the shark and is looking at a logical, graceful sunset. That’s the easy part, any PM worth their frequent flyer miles can do that. The hard part is they’re also the first person who should stand up in front of the C’s and say so. “Excuse me, Mr. or Ms. CEO, but coming up in the next release my product is scheduled to jump a shark and I think it’s time for Fonzie to hang up his leather jacket”.

That, my friends, is a REAL Product Manager.

Dancin' with the Devil

“You might as well fall flat on your face as lean over too far backward.” James Thurber

One of the challenges of being in a key position of a start up that is funded by outside investors is establishing a working relationship with those whose money with which you’re playing. Investors take many forms, from benevolent angels to ruthless venture professionals.

The old joke goes that everyone wants an investor who "gets it” until they have one. I once said to an angel investor when launching a Series “A” round, “let’s try to find some smart money”. He said, “Son, all money is dumb”. Thus the never-ending search to find investors who are smart, knowledgeable, friendly, supportive, patient, involved but not too involved. Most of all, you want your investor’s pockets to be deeper than his intellect.

The fact is, any time you’re using other people’s money they are going to have more than just a casual passing interest in what you’re doing, why you’re doing it, when you’re doing it, and how you’re doing it.

I’ve had two interesting conversations over the past couple of weeks. One was with a friend who took investor money last year and one with a friend who’s debating taking some. Fortunately they happened in that order so I was able to quote to the one debating taking investment things I had just heard from the one who just took investment. Highlights included:

“I field ‘how’s it going?’ phone calls for three solid weeks then go to the board meeting where I answer the same questions again”

“Most of the questions revolve around ‘is there a market for the product?’. It’s like the due diligence they did 6 months ago has been totally forgotten”

“Their solution for all revenue shortfalls is ‘we need to drastically cut expenses’.

“They constantly bring up other companies they deem to be successful, most of which are in different markets, have been operating years longer and have ten times the capital to work with.”

The net of all of this is the management team gets little chance to run the business. The distraction of constant inquisition means a business flow is never achieved. It now appears that my second friend is going to continue to run his self-funded company at a slower pace without outside investment. I think he’ll end up healthy, wealthy and wise.

However, if you choose to take the money, or if you’re in a company that already has, here are some universal truths:

• The only thing faster than the speed of light is bad news


• Good news will be treated with skepticism


• No, they don’t have to understand


• Yes, it is their money


• Anything you say can and will be used against you in board meetings


• Anything your people say can and will be used against you in board meetings


• No, someone didn’t switch those nice people you met before you got the check


• No, they probably don’t remember all those conversations about how the money would be used
  

If you’re considering taking outside money then please understand these universal truths and plan accordingly. That is, plan on not having time to execute your roadmap, develop your product, develop your sales force, plan a marketing campaign or talk to your customers. You can, however, go ahead and get started raising the next round of funding that you’ll all too quickly find out you need.