Ian & Stuart's Australian Mac: Not for Sale

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Internet Message Format | 1994-04-11 | 11KB

From: Sameer <sameer@soda.berkeley.edu> Date: Sun, 10 Apr 1994 17:50:28 -0500 To: Multiple recipients of list <nexus-gaia@indial1.io.com> Subject: Jamie's talk at cypherpunks Here are my notes. Jamie Dinckelacker Cypherpunks meeting 4/9/94 Small Business Considerations Perspective + small business orientation + organizational development + management/marketing + pragmatism Guideposts + benefits sell, features don't + stick with what you know + too much vision not enough mission + survival of the quickest Phases + diffusion model + thing: idea prototype, product business + organization: startup employer sustaining/beuracracy + market: crossing the chasm (g.moore) Friends and enemies + Calendar + clock + government + press Understanding Money + Basic metric + Jargon + revenue /overhead + expenses/profit + Margins Challenge of Management + Communication and Understanding + Personalities + Negotiation: internal/external + Dispute resolution + Competitive interests + Creating options: before you choose, decide Warning signs + Poor accounting + ignorant arrogance + enthrallment with a visionary's mythology + failure to respect competition + exception handling protocols + analysis into paralysis: indecisiveness ----------------------------------------------------------------- jamie@netcom.com - 415-941-4782 -------------------------------------------- Notes taken by Sameer <sameer@soda.berkeley.edu> Starting a business ------------------- Credentials: he had many failures, learned many good lessons works with investors.. due diligence studies the risks of investments Has not been a big success will talk about things he's run across small business orientation -organization development -management + marketing Marketing is critical the best engineers are overhead the products themselves do not generate cash the marketing-types bring in the money sources + uses contrasting/opposing mindsets need to bring in cash Basic pragmatism Business world is run by cliches if wishes were horses beggers would ride A good idea does not make money its the quality of the execution benefits sell. features don't. what benefit will they get has to be a way of giving benefit manipulate the information environment Advertising - communicates perception - abstract label to a phenomenon Marketing -packaging, delivery, design STICK TO WHAT YOU KNOW ====================== Where the competitive advantage is Knows how to manage the clock VISION DOESN'T COUNT FOR SQUAT ------------------------------ Mission counts ******* too much vision, not enough mission execution makes it on the market need people who can *do* the mission Survival of the quickest: many companies fail by lateness ------------------------ drive to perfection 100% solution when market wants 50% know how to manage time need a strong contrarian against all the wonderful things pay heed to time sinks Mid-course correction --------------------- PHASES ****** Pair of golden triangles company/market/vendors:suppliers product/market/management => engineering/marketing/management conflict + conflict resolution must be able to deal with conflict Diffusion of innovation: How does a new idea penetrate the market diffuse ideas designs products deliver to produce benefits 1) Product never seen before might have a niche huge hill in educating the market More unique is a positive higher hill--changing the public hard little things that create beachheads find a vein into the market and mine it AMIX: brilliant idea + poor execution new model of behavior not a part of business plan KNOW WHY YOU ARE STARTING IT ---------------------------- 96% of startups fail need ability to perceive interpersonal conflicts + solve them 1/2 life to everything Be infuriating to the big guys. Get out of the way quickly. Be nimble. Put thorns in their path. Market groups: The innovators spend money on things an easy new market early adopters - get information from innovators word of mouth stops here early majority late majority laggards RISK: avoid venture capital. the most expensive capital if only source don't say no 1) Simplest Risk: technical risk - of the engineer can it be done? can it be done feasibly? 2) Financial risk: engineering manager enough money to do it? where are tradeoffs made? can it be cost-effective? 3) Marketing risk: how is it positioned? what are design constraints product marketing manager has all the responsibility none of the authority how does the money come in? can it be positioned right? 4) Management risk: the toughest risk The NIGHTMARE risk make the decisions deal with the personal conflicts EXPECT IT be nimble deal with vendors management is really hard \/\/\/\/\/\/\/\/\/\/\/\/\/ Don't just look at the big wins can be a fluke examine the little wins.. those show what works 4 levels of risk. technical/financial/marketing/management Ramping Up: factors of 10 ---------- Each level of testing/risk assessment is 10 times more costly key to success is knowing when you are wrong CUTTING LOSSES perfectionism doesn't get anything done. ORGANIZATION thing will choke - not being able to handle the information 2 secretaries will do more good than another product designer create information processing entity does not work as a computer When you hire you invoke the IRS Do not cross the IRS Forms to fill out put the money aside + hire a cpa STICK TO WHAT YOU KNOW Contractors have no loyalty. an employee gets them to accept share of risk worth all ofthe overhead to have employees profit-sharing from the getgo spread wealth = spread risk develop buearacry - protocols for procedures accounting + human resource specialists should be on the outside MOST IMPORTANT is how to fire (than how to hire) Questions to qualify them not worth negotiating rates worth to negotiate upper bounds of pprices ask about followups + tasks BUY EXPERTISE ------------- ============= ************* Mind rules of succession how long will a product last life cycles Inventory value of a fad is zero know when to cut your losses Key Personell Succession: The smaller you are the more important the personal relationships are often the points of conflict are not known tothe peoeple in conflict Know where to find replacements for people from day 1 I want X as Y. if not x then who. ALWAYS HAVE ANOTHER OPTION Crossing the chasm: geoffrey moore ------------------ applies diffusion to marketing Nothing last forever profession expertise get loyalty from employees risk management Friends + Enemies: Biggest enemy/ally is time heaving something to deliver beating someone else being late Trying to do too much is not being realistic of how long it will take Government: -common set of rules commeon set of costs also rules that can send you to jail IRS: guilty until proven more guilty how to manage an audit can't win with the irs If there is an interest penalty 0 pay the penalty 1 negotiate to get it reduced later Always think about the press - the press's interests are always served by controversy - don't be controversial unless economic advantage Hard to manage press Public Relations People you buy their ROLODEX people often spend more on advertising when they should spend it on P+R. articles make much better ads than paid-ads Can be both friend + enemy -Bring in people who can pitt the press against each other to cover the stories Should know how to use the press NEVER ON YOUR SIDE XXXXX in the press are you paranoid enough? sensitivity to ads Understanding Money. ------------------- ******************* ------------------- Money is the metric of business money keeps score finite + the basic metric. Chaum's outlines. attention to the financial will determine success developing the mindset of how to run the business managing money making is not hard KEEPING IT IS A NIGHTMARE think in dollars Revenues - what comes in and how you get it the more off book transactions the better work in kind take no informational prisoners time sensitivity of price How to *cost* things Where does the money allocate Know where the money goes ------------------------- Profit at the end of the year and be used to buy stuff reduce tax cpa helps think in terms of money. Margins - way to look at incremented benefit-received be mindful of not losing the trees Margins are a weighting yo apply to revenue Track personal finanaces to get the mindset THe challenge is the challenge of management -------------------------------------------- always more opportunity than time all moot if you can't manage or bring in people who can manage Know how to detect conflict every decision hurts SOMEBODY -------- Can't please everybody. Personalities are critical. high tolerance of ambiguity persuasion cajoling not getting away diplomacy Learn how to negotiate how to get what you want give up what you can difference between being abrupt + polite is only a few minutes Dispute resolutions - spotting problems women are generlaly better/quicker than males *extremely* important Competitive interests otheres want to put you out of business using the right language show benefits always making choices -decide which is better -be mindful of time + money -articulate the options the cost/benefit of each -more options will appear by hammering The Art of the Long View - Peter Schwartz ------------------------ DANGER SIGNS ------------ 1) Poor accounting poor cost accounting know where the money goes spend the money to do the job 2) Ignorant arrogance seen more than anything "build it and they will come" doesn't work people don't accept the market reality constantly gather intelligence from the market 3) Enthrallment with a vesion the vision does not pay the rent NEED A MISSION - Mission statments more important than vision statements can be taken to an extreme - what will be done - how will it be done - how much will it cost 4) Failure to respect competition 5) Exception handling elaborate attention to bugs very few things are what we expect need protocols to handle exceptions can't be bogged in details 6) Analsys into Paralysis indecisiveness - sometimes you have to make a choice BUSINESS IS A GAME OF MANAGING CONFLICT often within yourself unique thrills.