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.  

He's Going the Distance!

"Hey yo, that's amazing..." -- Raekwon, Triumph

Tomorrow, Lowell's own James Ostis will complete a successful streak -- 365 straight days of attendance at Brew'd Awakening at 61 Market St.

Many attend Brew'd frequently, myself included.  Merely going to Brew'd a lot in one year does not an accomplishment make.

However, James has NEVER missed a day in the past year. Through blizzards, holidays, weddings, trips to Maine, job interviews, festivals, and all the many other things that could possibly pull less-dedicated folks away from a streak like this, James has persevered.

This is awesome.  I may be the biggest champion of "The Streak," as it's now being referred to on the streets of downtown Lowell, but a growing band of others is also planning to take a brief pause from their busy lives tomorrow to reflect and pay homage to this man and his accomplishment.  

10,000 Hours? That's a Good Start. Try This, Too

Since Malcolm Gladwell came out with Outliers, the whole "10,000 hours-to-be-successful" meme has been a strong one.  While I don't doubt the concept or the formidable intellect of Mr. Gladwell, I would say that the hours-in/success-out function might not apply very neatly to things that happen on a more day-to-day level.*

One's mentality is pretty important, too.  And I know I already wrote about this concept at length several weeks ago, but I saw a quote today that I fell in love with, and feel compelled to share here:

"The greater the artist, the greater the doubt. Perfect confidence is granted to the less talented as a consolation prize." -Robert Hughes

I have no idea who Robert Hughes is, but I'd like to shake his hand if that'd be at all possible.  If you look at people who are truly at the top of their game -- whether in sports, performance art, medicine, business, etc. they are very tough on themselves.

Yes, yes, they're "confident" in the sense that they believe that they can ultimately make it happen.  But that is NOT the same sort of vapid, airy confidence that comes from pithy platitudes and affirmations like, "I can achieve what I can believe," or whatever else gets peddled in airport bookstores.

I worked with a student today who is preparing for an upcoming test.  He will do very well.  How do I know?  Because I can see it.  He's hungry.  When he gets something wrong, he gets mad.  He says bad words.  He throws the dry-erase markers sometimes.  THEN he wants to go back through from scratch to see WHY he got it wrong, so that it won't happen again.

Other students don't do that.  Other students fall into the "but I didn't mean that, so I'm not really wrong" trap.  Guess what?  They tend NOT to do well on GameDay.  Any shocker?

I've spent tons of time over the past year around business start-ups, and around students preparing for the GMAT.  Admittedly, my observations are still really just anecdotes, but hey, they're my anecdotes.  The biggest problem I see around me is NOT lack of confidence.  It's lack of introspection, lack of hunger, and lack of that doubt/fear that says, "I don't want to be a dirtbag."

The greatest performers/NFL Quarterbacks/songwriters, etc. always have that slight bit of fear that's nagging at them, saying something like, "Don't screw this up.  You know what bad looks like...don't be it."  How do I know?  Well, I'm just going off what they say in interviews years down the line.

If I have to pick between Jim Kelly puking his guts out in the locker room before the kickoff, or Ryan Leaf posing for pictures with cheerleaders wearing his cap, I'm taking Jim Kelly every time (please, no Super Bowl jokes).  Jim Kelly HAD what Hughes was talkin' bout.  HE is the Hall of Fame passer.  Ryan Leaf did not.  HE is probably doing hard time somewhere in Montana...or something.

* Admittedly, he never said it was a simple in-and-out type of function.  I kinda stretched w/using him as the lead there.