Why profits are better than wages

profits vs wages

Profits are better than wages for two reasons. The first is, you can make money when you are not in the room. The second reason is a bit more curious:

You can sell a profit making ‘machine’, while you can never sell a wage. This means that every dollar you earn from profits has a natural multiple built into it. If you earn a dollar through profits you may be able to sell that dollar for 2, 3, 5 or more than 10 dollars.

In the end, it’s the simple difference between carrying buckets of water, or building a pipeline directly from the source.

You should totally read my book – The Great Fragmentation.

 

 

Irrational fear and the waterfall

Jumping off a waterfall

You walk up to the edge of the waterfall. You look over the edge at the drop. It seems a bit higher than it really is. It’s a few meters or so. The water underneath is a beautiful green blue. It’s a popular place to swim and jump off. It’s deep enough and wide enough for some safe fun jumping action. You know it’s cool to do it. In fact, you’ve jumped off the same place a number of times. It’s always been a bit scary, but worth taking the plunge and a joyous relief when you do. But still, looking over the edge is nerve wracking, and the longer you look, the worse it seems. The fear takes over, and you become irrational about the risk. You hesitate and doubt yourself. Eventually you jump, and it turns out OK. Then you remember that it was always going to be Ok and you should’ve jumped much sooner.

I had a week full of waterfall moments.

I’m working on a number of projects where I’ve had to have uncomfortable discussions, and all of them have seemed more daunting than they actually were. Afterwards, it was clear I should’ve jumped much quicker.

A mate of mine calls this waterfalling – jumping off the waterfall. He says, ‘Just waterfall it Steve’. He refers to this story when he is scared of something as ‘un life threatening’ as a business conversation or cold call. We all are. And just like the waterfall, the more we hesitate the more our self talk creates fear. So the next time your at the edge, just jump. Remember it’s water down there, not concrete.

You should totally read my book – The Great Fragmentation.

 

Don’t waste time finding the best person

The best person

Every now and again there’s a rock band who are global superstars, who also happen to have world class musicians in the band. Eric Clapton and Cream, Chad Smith of the Red Hot Chilli Peppers. But more often the great rock bands have a style and an ethic which is amalgamation of the players. But these players are not world class on their own. I’d put U2 in this category. The four Beatles make the Beatles. John Lennon was a brilliant genius and successful solo musician, but he couldn’t make girls scream on his own. He was different.

In startups what we are really building is a team and a culture. We talk about trying to find the best coder, the best UX guru, the ultimate growth hacker, but we should focus on is having the best culture where amazing collaborations can happen. If we want to be the best at something, we should probably be working on our own.

You should totally read my book – The Great Fragmentation.

How to clarify your goals in 1 minute

The Jerk Store

Setting goals can be harder than it sounds. Here’s a simple way to do it. Write down the answer to these 3 questions:

What am I trying to to Achieve, Avoid and Preserve.

They are much easier to answer because they provide a value set and a guiding philosophy. The answers will come as soon as your start writing…. try it.

Here are my three answers for my work:

  1. I am trying to achieve a reputation for thinking, writing and speaking on technology & business.
  2. I am trying to avoid working with jerks.
  3. I am trying to preserve my independence with my work at all costs.

These answers inform what I should do with my time and opportunities. To do number 1 I need to write and think everyday. I need to undertake projects and startups to gain the knowledge to write and speak about. To do number 2 I need to be focused more on people than the size of opportunity. I need to sample people I work with before I engage in a long term projects with them. To do number 3 I need to create value for others so I can work as a freelancer, which then funds my projects. I need to think twice about accepting offers for venture capital (say with Sneaky Surf) or highly paid projects which take up too much time.

Oh, and when it comes to questions about goals and what it is that we want to do with our life, it’s important to remember that we can change our mind without notice. Just because your wrote a script, it doesn’t mean it can’t be revised. After all, it’s your script.

You should totally read my book – The Great Fragmentation.

You own prime time now

Punch Clock

Prime time used to be a big thing, sure it’s still a thing, but a diminishing one. You can probably remember when the 6 o’clock news mattered. You can remember when the sitcoms hit the airwaves at 7.30 and the movie at 8.30pm. They all made sense because we all worked until 5pm. The shops used to be closed from 12pm on Saturday, and not opened on Sunday. The clock, above all things defined the industrial era. Time zones themselves where invented to serve national railroads. The clock told us where to be and when. We had special clocks at work to punch to show when we arrived and left. And smart media worked around this. While time is the key asset in the attention economy, the clock itself is losing its power.

Old media still thinks the clock matters more than it does.

We still have prime time. We still have that time when we sit down and absorb or participate in entertainment, but the time we do it is determined by us. Maybe it’s 5-6pm on the train listening to a podcast. Maybe it’s 11pm in bed watching a Youtube video, maybe it’s placing ecommerce orders at 3pm. The enslavement that goes with prime time is finally evaporating. We have our own airwaves now.

While this trend has started with media (Tv, News, The Press, Web, Radio, Movies) it’s part of the great fragmentation in all commerce and culture. The only question left is whether we are doing business at times which serve history, or those we serve.

You should totally read my book – The Great Fragmentation.

A tyre is only flat at the bottom

flat tyre

When I got my first car I once had a flat tyre and asked my dad if he could come out and help me change it, show me how to do it. And he said;

“I wouldn’t worry about it, it’s only flat at the bottom.”

A pretty funny dad joke. But a very good analogy for problems we face in business.

The entire business is running smoothly, except for some cultural problems in the warehouse.

The UX and product market fit of the app is great, the server is just a bit slow.

The retail store layout, the range and prices are all perfect, we just keep running out of stock.

Our startup is perfectly placed to disrupt this industry, it’s just there’s no way to scale it.

Our customers, supply chain and brand perception are as good as it gets, it’s just our margins are too small to make a reasonable profit.

While the tyre may only be flat at the bottom, it affects the entire operation.

You should totally read my book – The Great Fragmentation.

Innovating too early is the same as being wrong

The EV2 Electric car

I’ve had a few startups where I was a bit early. I’d put my former startup rentoid in this category – not to mention the amazing potential pivots I missed. When someone is early to an emerging market we often say these simple words.

“He had the right idea, he was just a bit early.”

Here’s the truth. Early is the same as wrong. I know it sounds mean, but we have to be honest with ourselves. If the idea is not at the right time, then put simply it is the wrong idea. But I will admit there are complexities with being early, and it leads me to these thoughts.

  1. I’d rather be wrong by being early, than wrong with a dumb idea.
  2. There’s always a good chance of being early with something new.

Number 2 points to the importance of keeping costs low. A low cost operation has more time to learn and iterate. They have a better chance of getting closer to todays needs, and or the market catching up to their initial vision.

You should totally read my book – The Great Fragmentation.