Browsing the "Business" category...
Pick Two
- Fast, Cheap, Good
- Schedule, Scope, Resources
Once upon a time, I wondered whether there was a natural law dictating three choices. Now, I understand that three is the minimum number to graphically demonstrate the need for compromise. Two makes it look like you’re pitting one against the other and four makes the choices too complex.
The bottom line is that any commercially desirable goal requires compromise. The sooner you accept the need for compromise, the sooner you can make some decisions and get on with it.
From Florida and Only Florida
Brand loyalty is a finicky thing – strong enough to guide purchases over years and weak enough to evaporate in a flash. We had always been a Tropicana family, recently fending off a brief incursion of Simply Orange at the hands of a visiting nephew.
Then PepsiCo introduced a major overhaul of the Tropicana packaging:
The brand is what gives the product its authenticity and credibility. The brand includes everything from the name, the look, the logo, the color and the package.
When you change the look of the packaging, you lose some of the power of the brand in the mind. It no longer looks authentic. And worse, consumers think you have also changed the contents.
We weren’t outraged by the change in packaging. We bought some of the new containers. But with the change we took a closer look at the package … and discovered that Tropicana includes oranges from Brazil.
All things being equal, we try to support local business. Which is why we’re now drinking Florida’s Natural – “From Florida and Only Florida”.
Someone Just Doesn't Get It
When I first read about the $18.4 billion in bonuses, my first thought was that “They Just Don’t Get It”. I was amazed that anyone who had witnessed the pillorying of the automobile executives would have the gall to sign off on those bonuses while the entire financial industry went down in flames.
At the time, I thought they had made a serious error. That if they had been properly acquiescent, then it would have business as usual next year. And that $4 billion in bonuses would poison the well for years to come.
But the more I read, the more I think that I was the one who didn’t get it. We may have just seen the end of an era. It’s always been possible for people to attain serious wealth by creating a business. But when it comes right down to it, the financial industry didn’t create a thing.
Over the past years, the financial industry has created vast wealth based upon a bit of an edge and a lot of leverage. Leverage was what allowed them to rake in the bucks. And leverage was what drove their massive losses when their edge was exposed.
After what we’re going through, it is going to be a long time before financial companies will be allowed to become so heavily leveraged. Maybe the financial execs didn’t care that they were poisoning the well because they knew that the well was going to dry up anyway. This was their last chance at a big payday and they were going to milk it dry.
Know Thyself
A man’s got to know his limitations.
A successful technology company has to steer a course between the rock of good enough and the hard place of anything worth doing is worth doing well.
Good enough is by definition, good enough. It gets the job done. Unfortunately, it doesn’t pack any wow. And you need some wow to build the word of mouth that wins you acceptance on main street.
Doing well provides lots of opportunity for wow. But it can take too long to bring your product to market. Time that your competitors, who have deftly balanced good enough against doing well, will use to take your market away from you.
I have a serious case of perfectionism. So advising me that something is good enough is invariably the right thing to do. Because good enough to me is pretty darn good to most others. And there will be a generous helping of doing well.
But if you’re the type who stops when things are good enough, then you probably need a good strong kick to take things to the next level. Because your idea of good enough is apt to be another’s idea of not quite. And you’re probably missing that little something that makes a product special.
Product Manager
SourceGear is looking for a Product Manager. Eric suggests that an experienced developer might be interested if:
You love to develop software, but you want to consider a broader range of opportunities. Maybe you’re looking up the corporate ladder and noticing that all the rungs above you require some business savvy. Maybe you want to be an entrepreneur.
Since my geographic handicap (CT not IL) takes me out of the running, let me add my 2 cents.
You love writing software because it is one of the ultimate expressions of creativity. You start with an idea, you shape it into a usable form and you bring it to life. You’ve been working your way up to higher levels of abstraction for most of your career. Each step up the abstraction tree increased your leverage and let you create something bigger.
Product Manager is the next step. Your vision will determine what problems your product will address and how users should address them. You’ll miss writing code and you’ll be frustrated with the fickle variability of the market. But you will forget all that as your vision to life with each release.
Risk and Reward
The greater your risk, the greater your reward. If you ever find yourself assuming greater risk without a corresponding increase in potential reward, then it’s time to re-evaluate what you’re doing.
It is never easy to start a new business. But there is a significant difference between trying to replicate an existing business and trying to create a new market.
Suppose you want to start a new restaurant. You could open a new McDonald’s franchise. You could open a diner serving standard food. Or you could open a new place serving cuisine unfamiliar to the local population.
The McDonald’s is the lowest risk option. In addition, it will likely take the greatest up-front investment. Starting a new diner will be a higher risk, but it will take a much smaller up-front investment. And being the first restaurant with a new cuisine is the highest risk.
Erik Sink advises that you pick your business so that you can compete against the big and dumb. And that is great advice to optimize your chance for success. But because it is an established market, it has the side effect of limiting your upside as well. You can still become comfortable and successful. But you’re not going to be sinfully rich and famous.
If you want a chance to be seriously rich, then you don’t have the luxury of mitigating your risk. You need to go for broke and attempt to build a new market. You don’t get on the cover of Time for competing with the big and dumb.
Personally, I’d be happy with comfortable and successful. But a VC won’t even listen to a business case that makes the founders comfortable and successful.
Startup v. New Business
Conflicting positions aren’t always in conflict. Consider Paul Graham and Mike Taber.
In The 18 mistakes that kill startups, Paul Graham states:
Have you ever noticed how few successful startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more.
And in The single founder myth, Mike Taber asserts:
for Paul to say “Starting a startup is too hard for one person.” is incorrect and misleading. I’m doing it now. ... Having been in the situation before, I’d prefer to have no partner and have to do all of the work than have a partner who isn’t pulling his weight.
Personally, I just wonder if they aren’t using different definitions of startup. I suspect that Paul Graham thinks of startups as companies that either create new markets or revolutionalize existing markets. As do I. And I suspect that Mike Taber takes a more literal definition of the startup as a new company.
You may disagree, but I find it difficult to see a company as a startup when it simply replicates an existing business. Other than the product, what is the difference between starting a computer game company and starting a restaurant? And why would you consider only one a startup.