Knowing Your Sales Funnel...Maybe

Mischief Night, or Cabbage Night, or Goosy Night, or Beggars' Night, and then Halloween are coming. They'll be the first two weeknights *off* this month, in terms of start-up stuff.  But not other stuff.  Before I put my head on the pillow, here are a couple random thoughts to bounce around:

** What Serge said.  Before I started b-school, I called a friend from undergrad (yes, Serge is his real name) to ping him for his thoughts.  He said not to join too many clubs, and that possibly the most risk-free time you'll ever have to start a business is during business school.  Here's why that was great -- I bit off way more than I could chew this semester.  There are one or two things I would've done differently had I known, but hey, I didn't.  Some assignments have been sub-par.  Some grades will suffer.  It won't matter.  School isn't *really* the real world, in that sense.  If I wasn't schlepping around from Bellingham to Boston to Beverly (that's the last 24 hours, and the alliteration was unplanned, I swear), I might've been able to study for my Airline Industry midterm tomorrow.  It's a shade past midnight, and I won't study, and won't beat the mean.  But I will pass, because I absorbed enough from class and from the problem sets to make that happen.  That's all that matters.  Post-June, it's the real world again...but now, it's really just not.  The difference between a B and a A, or even a C and a B, on a piece of paper that no one may ever see, just isn't all that real.

** Sales latency.  This is something that continues to surprise/amaze me.  If you asked me to explain my sales funnel to you, I wouldn't be able to.  I wouldn't look at you funny, though -- I would just say, "I don't know that because I don't have enough information."  Sometimes an e-mail that got sent in June gets responded to in late-October, because the right person saw the right person who ran into the person who was the decision-maker.  That took time.  It's really hard to know the ROI of something you do on day [X]. As the old marketing joke goes, "I make all my sales from half my ad budget...I just don't know which half." The idealist in me wants to think if you're doing something, and you're doing it well, you start to make your own luck with increasing frequency.  

** It's Not What You Know, It's What You Can Learn.  I loved the section of Chris Matthews' book "Hardball" where he talks about "It's Not Who You Know...It's Who You Get to Know."  He was purposely twisting the old saying about who you know and what you know by saying that YES, it is "who" you know, but that you have the power to change that to work in your favor by meeting more people. Knowledge works the same way -- to put it into a formula, you could say that curious person + time = a knowledgeable person.  Anyway, when I saw Steve Kaufer speak to our Sandbox Accelerator class, he flat-out told us that when he started TripAdvisor, he didn't know the first thing about the travel industry.  But he wasn't too worried about that, because he knew he could learn...and he did.  Today, the guy probably knows more than just about anyone on the planet about that subject.  I didn't start off with any particular background or credential in my field, but when enough minutes turn into enough hours and then enough days, following enough books, enough YouTube videos, and enough journal articles...the types of conversations I can sustain start to change...which is a nice reward to see.

** "Free" is a cruel, cruel mistress.  Anyone who thinks they know precisely whether ANY business should EVER do anything free is about as wrong as anyone who thinks they have a good solution for US policy towards Iran.  There is no easy answer to this.  For every app that failed to monetize its freemium concept, there's a counterexample.  Shoot, PayPal actually PAID its early adopters tidy sums of money just to use the service.  Free is complicated.  Free can serve a purpose.  A business just has to know when to tap the brakes, and then when to slam them.  Too much free is a hobby, and not a business.  Free, if done right, has the power to launch.  

I may be head-bobbing tomorrow morning during the case about the Basel III capital requirements for banks, and then during the Health Care discussion about linear optimization models for patient throughput, and then the midterm, and then BAUFS (Business Analysis Using Financial Statements...great acronym, eh?)...and it may not matter.  I can sleep on the train.  Tomorrow night can be time for some family, some baseball, and some rest (and if you think I sound like a fairweather baseball fan, you're damn right I am! There's no way I could sit through any game not being played in October unless I was physically there at the park watching).  

And on that note, good night, and thanks as always for reading.  

The Elephant's Tail

The XO of my first command in the Navy (peace be upon him) used to use a bunch of funny colloquialisms, which amused me to the point that I began keeping a running list in my standard-issue green notebook.  At times, this list created needed amusement for the wardroom.

One of the things he used to say was this: "When you eat the elephant in bite-sized pieces, you eventually get to the tail."

It's good advice.  Between now and mid-December, it's serving me well.

I'm not sure if I've ever been this busy for such a sustained period, at least in a civilian context.  As Cliff recently reminded me in a comment, too busy is better than not busy enough, so I realize it's not all bad. And I also realize that it's a situation completely of my own making, so this isn't so much a complaint as it is a statement about reality.

There are stacks of papers to grade (yes, the picture here is an au naturale candid of my kitchen table). There are assignments and cases to complete.  There are inboxes to (try to) clear.  And there are 5 MAG seminars every week.

One of the best time management tactics I've heard of is the pomodoro technique.  It's named for the Italian word for tomato, apparently because an Italian guy came up with this using a timer that looked like a tomato. What it basically boils down to is this:  You set a timer for exactly 25 minutes.  During those 25 minutes, you just focus on one single thing.  When the timer goes off, you take a 5-minute break to clear your mind, walk around the house, or write a blog entry...or whatever else.  Then, back to the timer.

Eventually, what happens is that as a few of these time blocks start to whiz by, your plate looks a little bit less full.  Slowly but surely, you slog through until you realize, "Wow...that case I had to write up is done, and I understand why the MinuteClinic is a disruptive innovation" and "Wow, that thing I'm doing in Beverly next week is almost ready now...and I actually understand what Len Kleinrock was saying about packet switching."

The beauty of the pomodoro system is that it prevents you from falling prey to analysis paralysis.  Basically, the stress of being overwhelmed with a monumental task list leads to a temptation to want to buckle.  It's the absolute worst thing you could do, when you think about it rationally, but it's something everyone who has ever faced sustained periods of stress (and c'mon, that's all of us) understands:  Unless you have a way to really get yourself rolling, you could wind up actually doing nothing.

And on that note, it's time for 25 straight minutes of grading.  And after that, it's off to Lynnfield and then Templeton for work.

December come she will.

In the meantime, it's pomodoro time for this Captain. 

When is a $20 bill worth more than a $50 bill? All Depends How You Stack It...

I wrote a blog entry over the summer about how pricing is one of the most difficult decision that any new enterprise has to make.

Just about EVERY start-up founder is tempted to "grow, grow, grow."  That makes sense -- people that self-select an entrepreneurial route in life tend to be go-getters.  Go-getters tend to want to, well, go and get. People with more wisdom and experience will say, "Why not tap the brakes a bit by playing with your pricing model, even if it means sloughing off a few customers?"

The early-stage founder hearing that is listening to, but still not following, that advice.  There's an important distinction, and the process is necessary (some things need to be personally experienced to be understood, and then they become obvious in retrospect).

Anyway, here's another unsolvable zen koan riddle:  What is an hour of your time worth?  In the context of someone bootstrapping in order to smooth out their personal cash flow, it depends.  Again, it's not simple.

I have a job that pays $50/hr.  Not bad, eh?  Well, it's not so great, actually.  It's a tutoring gig that works on a taxi dispatch model, so there are a few problems.  First, the hours don't stack up, so the transition time/travel time really eats into the dollar total. Second, and equally problematic, it doesn't work like a *money faucet.*  In other words, I can't simply decide I want to work more, and then work more -- someone else controls the throughput.

That considered, a $20/hr job might be worth far, far more.  If it's something where the hours stack up in 4- or 8-hour shifts, and if it's something where the hours are predictable (and therefore the personal cash flows predictable), it's an infinitely better option than the seemingly more lucrative one.

Trying to work multiple "taxi dispatch" type of jobs to make it all somehow add up the right way isn't advisable, either -- way too complicated, and way too much risk.  $20 x 20 hours/wk tells me the pre-tax math works out to $1600/mo.  If THAT is enough to clear the bar (to where start-up income PLUS that exceeds monthly expenses) then that sounds like the no-brainer option for being able to effectively bootstrap.  

Excuse Me, Are You a AAA member?

I was just walking up Market St., back towards home, when a clean-cut, late-teens/early-20s white male said to me, "Excuse me...are you a AAA member?"

Right then and there, I said this: "Let me guess:  You're from Andover.  You're out of gas.  You can't get a hold of anyone right now, and you just need a few bucks to get gas and head back home."

I'll give him credit for the way he responded: "Yes...but hey, I'm just trying to eat."  At least he was honest.  I only knew to expect it because a neighbor had just explained to me two days ago how she had given someone money after hearing that story.

I then told him why I thought the "Stranger in Distress" story was pretty effective, and I actually asked him about his yield.  At that point, he looked at me kinda funny, and just said, "I hate to lie. Sometimes I'll ask for money straight up...but hey, I'm just trying to eat."

We parted ways after I explained that I actually didn't have any cash, and that even the coffee I was holding had been purchased with a credit card.

As CC Lorrey has explained in the Chamber, this is becoming a bigger and bigger issue downtown.  The other day, I was accosted three separate times getting back from 336 Bridge to 200 Market.  This is mainly a hunch, but I don't think Lowell produced these people...I think it drew them.

Empowering the Idiots

One of the truest things you can say about the impact of online-all-the-time social media on our culture and society is that "we haven't figured it out yet."

We haven't figured out the legal boundaries of what employees can say about employers without risking termination.

We haven't figured out the legal intersection of social media postings and custody of children.

We haven't figured out where the line is that separates teenagers' 1st Amendment rights from things that might be construed as serious threats.

And we certainly haven't figured out that a couple idiot Tweeters do not speak for the mood of a country.  Certain news organizations, however, can use those idiots to push their narrative, and they do.

Let me get this straight:

1. A beautiful woman of Indian descent was crowned Miss America.
2. 99.99+% of Americans simply went on with their lives, genuinely not caring one way or the other, or maybe giving her passive support (i.e. 'good for her...wonderful...now back to my errands.')
3. A handful of people used the #MissAmerica hashtag to attract attention to themselves for making vile comments about her heritage.

I could find a handful of people on Twitter who are saying the moon is made of cheese.  Does that mean that such a statement captures the national mood?  No one would take that seriously.

This cycle could literally never end.  ANY TIME that someone wins something, is elected to an office, or is otherwise recognized, there will be SOMEONE ready to write some flip, vile comment on Twitter.  Whether it's a teenage boy out for jollies, whether it's a deranged loner who really means it, or whether it's completely staged in order to set up a 'teachable moment' (remember the staged racial stuff at Oberlin a little while back? Google it) it does not merit the front of page of CNN and the Globe.

Well, at least I say so.  But then again, I'm not the editor of either one.  

The Words of the Prophets Were Written on the Subway Walls...

I was thinking this morning about something Gerry Nutter said about bicycles for city employees in Lowell, and the way that he then used Cambridge/Somerville/Lexington as pejoratives when implying something about the motives of city decision-makers.

It didn't take long for Corey Erickson and Tobes from Sons of Franky Cabot to jump in...or for me to follow up with another point last night.

Here's what I said:  Some people in Lowell are quick to throw down their "Cambridge" card when they want to criticize any new, interesting outside idea.  The feeling, however, is not mutual.

For the past 40 years or so, Cambridge has been run by a Lowellian (and not just ANY Lowellian, mind you, but a former Aide to Mayor Howe).  The people of Cambridge love him...so much that they've paid him a salary comparable to that of the PRESIDENT for much of this time (yes, I'm being serious...and yes, you can look that up), and put his name on important buildings, like the police station kinda sorta near the Galleria.

Boston isn't afraid of Lowell or Lowellians, either...just look at their nationally-renowned Police Chief.

Anyway, on my way into work today (I TA on Thursdays now...easy work for good pay), the sign you see here in the pic caught my eye.

Here's why:  What it's implying is that when you take/borrow/steal the BEST ideas from the BEST minds, you then become the BEST.  

Lowell is already the best Gateway City in Massachusetts.  If I didn't believe that, I wouldn't live there.  And while I may be plotting my escape from downtown, I plan to stay in Lowell for quite a long time -- that's as strong of a statement as I can make for my personal *investment* in the place.

What's going to keep Lowell great is the presence of civic leaders like Patrick Murphy, Dick Howe, Bernie Lynch, Cliff Krieger, etc....people with a WORLD view who aren't afraid to open their eyes, ears, and minds to the big world outside and see where it can fit inside our little slice of America.

What could truly make Lowell a backwater in a way that would hurt ALL stakeholders (yes, it's a huge middle-class/working-class city with lots of families) is a reactionary, not-invented-here mindset that's terrified of things that are "from away."

...And if the complete, knee-jerk, reactionary rejection of all things "from away" is what you seek, you might be able to find it in some remote parts of Maine.  Shake down enough downtown yuppies, and maybe you'll be able to scratch together the fare for a one-way.  

No Martyrs, Please

We just wrapped up our Accelerator experience at the Sandbox.  Overall, it was awesome.  Overall, I will write more later.

I missed the second night of final pitches b/c of a longstanding engagement in Shrewsbury, but one thing that came up on the first night is critical for any entrepreneur getting ready to pitch anywhere: Stop talking about your martyrdom.

When someone gets up in front of judges or investors and declares, "I'm not paying myself a salary," they may think that sounds impressive.  They may think that translates into an image of self-sacrifice, or self-abnegation.

If  I were on the other side of the table, though, that's not what I would hear.  I would just wonder, "Okay, so how exactly is that sustainable?  Is that your long-term plan?  Are you running a business here, or a personal charity?"

• Maybe someone has passive investment income.
• Maybe someone inherited a million bucks.
• Maybe someone's spouse brings home enough bacon for the whole household.
• Maybe there's a long-term plan that involves short-term use of bridge loans or credit cards.
• Maybe the person is living off of some sort of government benefit.
• Maybe someone is working other jobs on the side to make ends meet.

Until you know that, though, those are all just maybes.  Whether by hook or by crook (maybe, for instance, you're diverting some student loan money into your business...) just have some kind of a plan.

Whether you pay yourself a salary is YOUR choice...but just be ready to explain it, and to stand by it.  If you boldly state that you're martyring yourself for no salary, and then go deer-in-headlights when pressed as to how, exactly, that keeps you from living under a bridge, you've lost the confidence of whoever was asking the question, as well as everyone else around you.