April 21, 2019

Integrity: The Most Valuable Thing You Own

Related image

Integrity is the practice of being honest and showing a consistent and uncompromising adherence to strong moral and ethical principles and values.

Integrity is essential at the highest level of your business, 
otherwise your corporate culture will erode to the lowest level.

February 26, 2019

Gradually, then Suddenly

There's this concept called "Gradually, then Suddenly"

It's from a quote in Hemmingway's "The Sun Also Rises"

“How did you go bankrupt?" 

Two ways. Gradually, then suddenly.”

It was demonstrated quite clearly last week when Kraft Heinz stock tanked.

Who’d have thought that cost-cutting your way to glory wasn’t an effective strategy after all.
(sarcasm alert)​

That's "Gradually, then Suddenly" in action.

Well, if cost-cutting is an ineffective strategy, then increasing prices is also an ineffective strategy.

The only effective strategy is to SCALE RAPIDLY.

In the words of Michael McCafferty:  

Sales Solves All Problems

February 9, 2019

The One Essential Habit for Massive Success

It has been called the Ivy Lee Method, after the man who 100 years ago first documented it to help make one of the richest men in history even more wealthy.

When you read about it, you are likely to dismiss it as too simple to be effective. Surely there must be more to it.

All you need is a pen and paper; forget about apps and computers. And it takes only a few minutes each day. But it works only if you do it! Most people will not do it. Will you?

In my 55+ years of starting and running businesses, and 20+ years of advising entrepreneurs with their businesses, there is one elemental truth the ignorance of which leads to business failures. We Know what we should do, but we just don't Do it. This is the well known "Knowing-Doing Gap".

It seems we are always looking for the next Silver Bullet, the Shiny Object Syndrome, the secret to success that will propel us to success. There are tens of thousands of books, seminars, podcasts, consultants, coaches that are really all the same: repackaged and hyped to appear new and true, but it's all BS. What seems to be most true is that there is "Nothing new under the sun." That bit of advice goes back thousands of years!

Here's the short story, excerpted and simplified from the post by James Clear*, the link in the first sentence of this post.*

Ivy Lee was a successful businessman in his own right and is widely remembered as a pioneer in the field of public relations. As the story goes, Charles Schwab (no, not the one you are probably thinking about, but the other one, the CEO of Bethlehem Steel, the largest steel and shipbuilder in the USA at the time) brought Ivy Lee into his office and said, “Show me a way to get more things done.”
“Give me 15 minutes with each of your executives,” Lee replied.
“How much will it cost me,” Schwab asked.
“Nothing,” Lee said. “Unless it works. After three months, you can send me a check for whatever you feel it's worth to you.” 

The Ivy Lee Method

During his 15 minutes with each executive, Ivy Lee explained his simple daily routine for achieving peak productivity:
  1. At the end of each work day, write down only the six most important things you need to accomplish tomorrow. 
  2. Prioritize those six items in order of their true importance.
  3. When you arrive tomorrow, concentrate only on the first task, until finished before moving on to the second task.
  4. Repeat this process every day.
The strategy sounded simple, but Schwab and his executive team at Bethlehem Steel gave it a try. After three months, Schwab was so delighted with the progress his company had made that he called Lee into his office and wrote him a check for $25,000.
A $25,000 check written in 1918 is the equivalent of a $400,000 check in 2015. Not bad for a few hours work. But you now have the secret for free!
Will you do it?
* James Clear is one of my favorite authors on the topic of creating habits.
Charles Schwab started his career working for the richest man in the world, Andrew Carnegie, quite probably the richest man who ever lived, estimated at 3x today's richest man Jeff Bezos, founder of Amazon.com.  Schwab was promoted quickly to become, at the young age of only 35, the president of Carnegie Steel.
I was unaware of the Ivy Lee Method when I independently formulated my own version of it 10 years ago (2008), at a time when I was in a philosophical mood and attempted to create the simplest possible 3-step process for success: Think-Plan-Do-Repeat.  The bottom line is that it's all about the habit of taking Action.  "Fear is the disease, hustle (Action) is the antidote" (Travis Kalanick, Uber founder).

February 7, 2019

Best Seed Pitch Decks - YouTube

Starting with the simple YCombinator pitch deck template
YouTube was acquired in 2006 by Google for $1.6B.
Only 10 slides in this original pitch deck.

Note the stark black and white theme.
The only thing I would add to this deck is page numbers on each slide.
It's that perfect!

Best Seed Pitch Decks - AirBnB

Seed round.
Elegant in its simplicity.
11 slides, no frills, closely follows the YCombinator pitch deck template,
because they were in the YC class.
This deck was used to raise $500k. Current valuation $29.3B.

"Perfection is achieved not when there Is nothing more to add, 
but when there Is nothing left to take away"  

Antoine de Saint-Exupery

“Investors are not solely evaluating your company’s story. 
They are also evaluating your ability to convey that story.”

Bill Gurley

January 30, 2019

Effective New Year Resolutions: Focus on Systems, not Goals

If you're like most people, your goals for the New Year are a faded memory.


However, there is a way to think about those resolutions that is far more effective: focus on the Systems, not the Goals.

James Clear is the best there is when it comes to Habits. I've been following him for years, and he is the clear-est (excuse the pun) thinker on the subject I have found. He wrote a post about this concept last year, and if you have any interest in self improvement, read it here.

If you need video instead of reading, shown below is his interview on CBS This Morning. But you really should read the post.


Good employees quit when management is bad.
Bad employees quit when management is good.

Peter Drucker

January 11, 2019

Amazon 14 Leadership Principles

14 Principles seems like a lot to Focus on, but they're Amazon
and they can get away with it, they are professionals at execution.
Here are the principles that guide their actions.

Short lists like this, when published by THE most valuable company in the world, are gold.
This is better than an MBA.

Customer Obsession
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job".

Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here". As we do new things, we accept that we may be misunderstood for long periods of time.

Are Right, A LotLeaders are right a lot. They have strong judgment and good instincts. They seek diverse perspectives and work to disconfirm their beliefs.

Learn and Be Curious
Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.

Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others. We work on behalf of our people to invent mechanisms for development like Career Choice.

Insist on the Highest Standards
Leaders have relentlessly high standards - many people may think these standards are unreasonably high. Leaders are continually raising the bar and drive their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

Think Big
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.

Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.

Earn Trust
Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.

Dive Deep
Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdote differ. No task is beneath them.

Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

Deliver Results
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

January 2, 2019

Lessons from above


On the last day of 2018 I woke up with the plan to do a time-lapse series of the clouds as they passed by my front window, here by the sea in Del Mar, CA.  The results show in 30 seconds what happened in 8 hours. A simple photography experiment.

After playing it a few times, I was struck with the great lesson that applies to our lives as entrepreneurs...

If I were to look out the window at any moment during the day, I would simply think "Cloudy" and that would be it. I could look out the window 50 times and still get the same message "Cloudy". 
Nothing more, nothing less. Not much to be learned.

However, by taking a look (a photograph) several hundred times, with the time between looks consistently the same, a completely extraordinary thing happens. Putting these consistently spaced photos together we can learn the clouds' speed, direction, altitude, coverage, variability, and more! 
Now let's apply this to our roles as entrepreneurs, founder/CEOs.

If you were to look at your business, briefly (a random look out the window), you might get the feeling that business is good, or bad, or somewhere in between. Not much information from a single look. 

However if you apply the principle of Time-Lapse photography to evaluating your business progress, you will gain extraordinary insights not otherwise possible.

The "photographs" you take we can call KPIs (Key Performance Indicators). The time between "photographs" can be annually, as some individuals do around this time of year, and compare where they are now to last year, and resolve to make changes, corrections, etc. 

If you did that in your business, taking an entire year to re-evaluate your progress, you would have a very high probability of going out of business before you took a second look. That's why meetings of the Board of Directors/Advisors usually happen at least quarterly, and better yet if done monthly.

It is an absolute truth that the more quickly you iterate the Think-Plan-Do-Repeat loop, the faster you will achieve your goals. 

Break your annual goals into quarterly goals, and as each quarter nears, break it down into the next 3 months, and at the beginning of each month break them down into weeks, and at the beginning of each week, break it down into days. The concept is utterly simple. Just do it.

This requires that you have written goals, and that you measure your performance against the goals in writing.  It is essential that you Delegate the responsibility for achieving the goals to individuals who have the authority to do what needs to be done, and that you hold them accountable (Trust but Verify) on a consistent basis (usually weekly 1-1 meetings).

So there you have it in one paragraph. The key to success in business, simplified. Look at your own management process and see how it compares. 

If you make only one resolution for the new year, resolve to manage your business more effectively.