Striving for excellence in your business is absolutely critical in this environment. There are too many average companies out there. They are struggling. Excellence is hard to execute, but if you do execute - it becomes a huge competitive advantage. Here are some of my thoughts for creating and sustaining an excellent company:
1) Operational Excellence. Transparency is key. Do you have a dashboard? Do you know what’s going on in your business day-to-day, each hour? Do you know your key performance indicators? What constitutes success this year, this quarter, this month, today? You can’t improve what you can’t measure. Get that dashboard built and automate it so you know what’s going on and act on the data. For our business we track uniques, pageviews, repeat visits, registered users, popular pages, revenue, and other key metrics everyday. Whatever your business is, don’t fly blind.
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If there was a near-perfect analogy for all businesses, it would be the lemonade stand. Did you ever play the computer game growing up or did you ever operate a lemonade stand? It was pretty easy to get, right? Buy cups, buy lemonade, build a stand, advertise, and sell for more than it cost - make money. Shouldn’t all businesses be intuitive and easy to understand? What is your business like? A lemonade stand or Enron? I still don’t get Enron. Get back to the basics.
Let’s start with an almost-true Lemonade Stand story. Sara, a budding entrepreneur at the age of 9, started a lemonade stand just over a year ago. Each month, she runs the stand on the weekends asking everyone who was nearby to buy. It happens to be a very profitable business, making almost $40 month and going up every month.
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You and I have set some challenging goals for 2009. We’ve got a focus plan and we’re ready to hit the ground running. Only problem is, we haven’t set up the racetrack to win. There are some hurdles ahead that we’re aware of and it will slow us down or knock us out of the race. I’ve realized that I need to take those hurdles out before I start the race.
Financial Hurdle
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As I’m reflecting about how to run my business in 2009, I need to be creative on how to grow my business. I don’t believe “flat is the new up.” I’ve got to grow. It does, however, require creativity and a shift in strategy to grow in this environment. I need to find ways to reduce expenses to increase runway (trying to maintain significant cash reserves), but at the same time grow the business. Basically, I’ve got to get more from less. It can be done. Here are some of my thoughts on how to go about doing this:
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I’ve been a customer of Sprint’s now for over 11 years since 1997. It’s been a love/hate relationship, the actual service itself has been fine, but the customer service piece has been a struggle (and, that’s to put it lightly). The good news is that I’ve learned a good deal from the experience and I’m here sharing with you about how we can learn from the big guy and build better businesses. Thanks Sprint!
I’m in a two-year contract and it’s about to expire (March, 2009) to be exact. Every two years, I do a “dance” with their “retention” department to make sure I’m getting the best deal and to make sure they realize that I’m also considering alternatives. This year, I’m considering making the change to the iPhone or maybe the Android G1. I probably would have kept my Palm Treo and just stayed with Sprint as usual, but I will be leaving as soon as the contract is up. As you know I generally find negotiating fun. Not Sprint, the conversations are generally long and surprisingly, unpleasant.
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Today I met someone who really got my attention and blood pumping as he talked about his work with the Gates Foundation. I’ve got tremendous respect for Bill to leave a legacy for the world through his philanthropic efforts, but I had no idea about specifics about how he would go about solving the deep inequities in the world specifically in health. Today, I learned a bit…
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You’ve heard the mantra - “it’s lonely at the top!” It’s very true and if you don’t have a good support system locally, you will struggle. I can’t tell you how many times I’ve needed to rely on outside counsel such as my entrepreneurs group, advisory board, and board to be a sounding board especially during trying times. Your venture should never be an island. Even if you don’t have a board, being in a community of entrepreneurs is critical as you often need an outlet to share war stories and to talk things through outside of your internal team.
Personally, I have a local group of entrepreneurs I meet with each month that include CEO’s from a moving company, a real estate development firm, a financial services firm, a recruiting firm, and a catering company. They have been true friends and I’m always surprised at how similar the issues we share while running very different companies. Without them, I wouldn’t know where I’d be.
For those of you who don’t have an advisory board or a community of entrepreneurs you can tap into, here are some creative and not-so-creative ways to get help:
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One of my biggest pet peeves is signing that check each month for our office lease. I might be ticking off my landlord and my commercial real estate agent, but talk about something that I perceive is a high fixed expense that doesn’t generate revenue each month. As an investor, nothing drives me more nuts than hearing about an early stage startup signing a long-term lease in a Class A building. After payroll and benefits, often times leases are the next most expensive line-item. In this market, you are the buyer and you should expect significant concessions before signing any leases.
Here are some tips that I have to keep that lease as inexpensive as possible:
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If you’re like most people, the thought of taking on a used car salesman is not your idea of fun. I hope I can help change that.
Risk
As a kid, I always enjoyed playing RISK, you know the game that has you trying to take over the world. One of the key strategies of the game is negotiating treaties and picking your fights. It turns out as I learned the hard way, it can also sour friendships when you treat negotiating into a win-lose proposition. One of the successful strategies to winning is to play the “Switzerland” in the game and constantly looking for win-win strategies with your opponents so they are not incentivized to come after you rather they choose to go after your other opponents. My first tip in negotiations is to view the negotiations as a Game and that it is Fun.
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Stock Market Fail
Are you sick and tired of losing money in the market and figuring out if you are going to keep your job?
Excuses
I met an executive of a mid-sized company today that is awfully miserable in his position and has been dreaming about starting a company that he is passionate about. Get this - he’s been working on his business plan for 5 years. I asked him why he hasn’t started yet, this is what he said in bulletpoint form:
- I don’t even know how to get started
- I have no funding
- I don’t know if I can give up my salary
- It’s too risky, what if I fail
- If I had a nice retirement nest egg I’d start it now
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