Tuesday, June 29, 2004

BPM: The Road Ahead :: AO

Michael Brown of Battery Ventures writes about BPM: The Road Ahead in AO.

Historically, senior management's view into a company's performance was limited to the financial data and metrics produced in statements by the CFO. Needless to say, there were very little, if any, objective non-financial measures with which to manage the business, and all the financial information available was historical. This method of management is analogous to driving a car while spending a majority of time looking into the rear-view mirror…with only one eye open.

The implementation of large transactional systems, such as ERP, CRM, SCM, and so on, in the 1990s significantly improved the collection of both financial and non-financial data. However, the data resident in these systems delivered only marginal relative value to management because the analysis and reporting of the data were limited to each individual application or a specific subset of applications through the implementation of a data warehouse; thus, it could not provide a holistic picture of a company's performance. Given the batch-process requirements of these systems, the data was not in real time and, consequently, of limited value.

This growth trajectory is primarily driven by three macro trends in the market:

1. Large ERP foundation.
2. New generation of BPM technology.
3. External market factors.

how do analysts think the industry will evolve? Although there are several schools of thought, the two primary theories are as follows:

1. The big getting bigger. Similar to the ERP market before it, some market pundits believe the BPM industry will continue to consolidate to the point where an overwhelming majority of the economic value and/or market cap is dominated by the top three or four vendors.

2. Market bifurcation. Believers in this theory state that vendors either have to achieve scale or specialize by developing either horizontal functionality or vertical market expertise. In short, there is no middle ground for a vendor to occupy.

Regardless of how the market structure changes over time, we believe there will be both evolutionary and revolutionary innovation as it matures. From an evolutionary perspective, the market will naturally demand a greater level of verticalization. Although a handful of vendors have tailored their solutions to address the requirements of a specific industry, most of the current solutions are akin to one-size-fits-all. The issues with this approach are longer implementation schedules and higher long-term maintenance costs. As the market matures, we believe vendors and/or their partners will look to verticalization as a way to both differentiate their solutions and drive incremental market growth.

More interestingly, we believe the market will significantly benefit from the next generation of BPM, which will include revolutionary technology such as predictive analytics. Not only will BPM solutions have the ability to predict how an organization will react to external economic events, but they will also prescribe actions/solutions to senior management to address the specific situation. This level of visibility and foresight will enable management, like the driver in our analogy, to concentrate on what's ahead, while only looking back to see how far the competition has fallen.

Fasten your seat belt and enjoy the ride.

Monday, June 28, 2004

Art of the Start

Brendon Wilson puts up the Art of the Start Guy Kawasaki conf online.

I struggled (this is the introduction chapter of the book) to come up with a Top Ten the things you really need to do to start your company off correctly. And there are not ten things - the most that I could come up with (that are crucially important) is five. So this is a top five for you - I'd like to go through these top five things and discuss them in rather great detail from The Art of the Start.

Lesson 1: Make Meaning

The first thing I learned that, you know as Bill alluded to, is that we have seen literally thousands of companies over the past six or seven years, and we have met tens of thousands of entrepreneurs and entrepreneur teams. And with hindsight, although we were honestly swept up in it as much as they were, I think the thing that we learned the top level thing you must have. If you're going to create company and that company's going to be successful, it is because the founders of the company want to make meaning. Not money. Not prestige. Not power. Not status. It is about making meaning.

I would encourage you entrepreneurs as you're contemplating your companies or forming your companies to think about what is the meaning going to be? Not the money. Money is the outcome of successful meaning-making, if you will.

Let's analyze the types of meaning - I think there are principally four types:

* One is to make the world a better place by a product or a service.
* The second is to increase the quality of life of people.
* The third is to right something that is wrong, to fix something.
* The fourth is to prevent the end of something good.

Lesson 2: Make A Mantra

Lesson number two is a passionate request from me for you to focus on making an organization mantra. Now a mantra is very different from a mission statement. A mantra is typically shorter - arguable the shortest mantra ever is "om" (the Hindu mantra) - it is a sacred verbal formula. It is thing where if you could ask any employee "what do you do?", they would understand it immediately and be able to consistently communicate the purpose and meaning of the company.

A mantra is short and sweet. Let me give you some examples.

Nike's mantra is "authentic athletic experience". If you were to ask a Nike employee "what do you do?", it is about "authentic athletic experience'. Disney is about "fun family entertainment". The Green Bay Packers football - "winning is everything". Those are mantras, they are not mission statements.

By contrast, let me give you a mission statement. Starbuck's mantra is "rewarding everyday moments". Starbuck's mission statement is: "established Starbucks as the premier provider in the world of the finest coffee in the world while maintaining our uncompromising principles while we grow". Which one do you think is easier to remember?

Lesson 3: Get Going

...to be continued

Entrepreneur's VC Pitch

Rajesh points to this article on the questions a Entreprenuer should answer before pitching to a VC. This is true for starting any business.

- What is your big vision?
- What problem are you solving and for whom?
- Where do you want to be in the future?

- How big is the market opportunity you are pursuing and how fast is it growing?
- How established (or nascent) is the market?
- Do you have a credible claim on being one of the top two or three players in the market?

- What is your product/service?
- How does it solve your customer’s problem?
- What is unique about your product/service?

- Who are your existing customers?
- Who is your target customer?
- What defines an "ideal" customer prospect?
- Who actually writes you the check?
- Use specific customer examples where possible.

- What is your value proposition to the customer?
- What kind of ROI can your customer expect by using buying your product/service?
- What pain are you eliminating?
- Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)

- What does the sales process look like and how long is the sales cycle?
- How will you reach the target customer? What does it cost to "acquire" a customer?
- What is your sales, marketing and distribution strategy?
- What is the current sales pipeline?

- What is your cost to acquire a customer?
- How will this acquisition cost change over time and why?
- What is the lifetime value of a customer?

- Who is the management team?
- What is their experience?
- What pieces are missing and what is the plan for filling them?

- How do you make money?
- What is your revenue model?
- What is required to become profitable?

- What is your stage of development? Technology/product? Team? Financial metrics/revenue?
- What has been the progress to date (make reality and future clear)?
- What are your future milestones?

- What funds have already been raised?
- How much money are you raising and at what valuation?
- How will the money be spent?
- How long will it last and where will the company "be" on its milestones progress at that time?
- How much additional funding do you anticipate raising & when?

- Who is your existing & likely competition?
- Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
- What are their strengths/weaknesses?
- Why are you different?

- Who are your key distribution and technology partners (current & future)?
- How dependent are you on these partners?

- How does this fit w/ the investor’s portfolio and expertise?
- What synergies, competition exist with the investor’s existing portfolio?

- What assumptions are key to the success of the business?
- What "gotchas" could change the business overnight? New technologies, new market entrants, change in standards or regulations?
- What are your company’s weak links?

Sunday, June 27, 2004

Essential Abilities of Intelligence

  • To Respond to situation very flexibly
  • To take advantage of fortuitous circumstances
  • To make sens out of ambiguos or contradictory circumstances
  • To find similarities between situations despite differences which may separate them
  • To draw distinctions between situations despite similarities which may link them
  • To synthesize new concepts by taking old concepts and putting them together in new ways
  • To come up with ideas which are novel.

  • Source :

    Tuesday, June 22, 2004

    The Future Buddha

    The Future Buddha

    Buddhism has been waiting for the Future
    Buddha for 26 centuries.
    Christians have been waiting
    for the “second coming” for two millennia.

    Oddly they have not figured out
    the future never comes.

    The Buddha, the Christ, can only come in the present.
    In fact I am certain there has never been a time,
    during the period of humans on this planet,
    when enlightened ones have not been here.

    The proprietors of religions
    want us to believe
    enlightened ones only come
    ever few thousand years.

    The future Buddha
    Is the man across the street
    Who leads a quiet life,
    Who does not go into debt for things.
    He simply begins and ends each day
    In the silence of internal refuge.

    The future Christ is the mother
    Next door who never yells at her children.
    And, before and after her day,
    when all are asleep,
    she communes with the Infinite.

    The future Avatar works at the convenience store,
    And two other jobs, to put food on the table,
    while going to college.
    He is always patient,
    even when his customers are not,
    Because, he begins and ends each day
    In union with the divine.

    The future prophet is never unkind.
    He never raises his voice to his wife
    Or children, because faces Mecca
    every day at noon
    in submission to the One.

    The future enlightened one is not
    Just one divinely inspired being,
    Who Moses-like, parts the seas,
    Buddha-like turns into a rainbow, or
    Jesus-like, walks on water.

    The future Buddha is you and me
    Beginning and ending each day
    In communion with what we hold as sacred
    And, by connecting all of the moments
    of each day with a calm and still presents,
    So that we walk all of our days, upon days,
    In the presence of the Shining One.

    The future Avatar, Buddha, Christ is now
    And, we are emerging,
    not in grape-like clusters,
    but thinly dispersed, like wildflowers in the desert.
    It is you and me bringing our craving
    To rest, and becoming living
    embodiments of peace, patience and compassion
    In every moment.

    -- Jeff Brooks --
    © 2004

    Exchange is the key.

    Ripples provides adivce for Micro-business. His main point is that "understanding customers" and providing goods or services to them is the most important thing. Everything else just follows that.

    Let me share the most basic facts I know to be true about business:

    - All legitimate business is based upon the principle of exchange
    - Exchange is providing something valuable and getting appropriate value in return
    - Value can be established through communication with the prospective customer
    - You find out what the person wants and is willing to pay for it
    - If you provide exchange in abundance, that is the most certain way to grow a business as you will have customers telling others about you.

    All of the other activities of a business are only there to support the creation of an exchange of goods or services with a continuing series of customers.

    Exchange is the key. It is the fundamental activity of any business, especially a micro-business where you are self-employed. Many people have it backward. It's not about your product or service. What is important is: What do people need and want and how can I provide it?

    If you concentrate on finding out what people want that you can provide, you will inevitably come to a point where your resources and the prospective customer's needs line up and the way to proceed will become clear. It may take a lot of research to work out how to produce a uniformly acceptable product or service, but it will all be worth it if you can deliver what is needed and wanted. The next thing to do is to become more efficient so you can start making a profit.

    The important thing is that you have created an exchange. If you have chosen well, you should have more exchanges coming up. If there are no more prospects, repeat the process of finding out what people need and want until you find a need that will keep you busy for a longer period of time.

    If you follow this advice, your micro-business will expand before you know it. If business start dropping off, go back and read this post again and see what has dropped out.

    Marketing - Your Highest Payoff Activity

    Ducktape marketing suggests that you decide your PAY or Personal Average Yield and the figure out the area in which you need to concentrate on. Obviously Marketing, Innovation and Customer service comes out tops. Everything else is a cost.

    You only have so much time in a day right?

    So wouldn't it make sense to focus as much of your time as possible on the things that produce the highest payoff.

    I don't know about you but most small business owners are do-it-yourself types and get sucked into doing the littlest silly work faster than you can say "Oh look, the copier is jammed again."

    If you want to achieve any of your goals and finally start making what you are worth then you’ve got to stop doing $5/hr work. Period.

    As you might have guessed by now, I believe that every business owner's highest payoff work or best use of time is any amount of time spent doing effective marketing.

    Here's a little math quiz that I suggest you play with to help drive home this point. Figure out how much money you make annually or, better yet, how much you want or need to make annually to achieve your dreams and goals.

    Now, divide that number by 2080. (That's the number you get if you work 40 hours a week for 52 weeks a year - I know, I know, you work 80 hours a week but just work with me here.)

    The answer you get is what I call your PAY(sm) or Personal Average Yield.(sm) The idea here is to pin down what you are worth an hour and realize that if you can hire someone to do any of the things you currently spend your time on for less than that number, you can't afford to do it yourself - did I mention that you could use the spare time to do some marketing.

    So let's run some numbers. Let's say that you want to make $150,000 per year. Well, using our little formula that means that you need to be doing work that is worth a little over $72/hr - 8 hours a day.

    But guess what...we haven't even factored in any overhead or costs of doing business. That number might really get big if you've got those as well.

    This is the point at which many people finally come to understand that they are undercharging for their services…but that’s another issue all together.

    So I ask you. Is fiddling with the copier, chatting with the mailman, running to the office supply store, making deliveries, or returning meaningless email paying you $72/hr? For that matter, doesn’t mowing your own grass, washing your own car, cleaning your own windows take you away from marketing your business? I know, now I’m asking you to give up most of the fun things you like to do everyday but hey, if you can get the neighbor kid to mow your grass for anything less than $100/hr, therefore giving you 3 hours to write a killer sales letter - it’s probably a steal

    Figure out your PAY number, paint it on the wall in your office, and then go about setting up your business in a way that allows you to focus on the only things that can really pay that kind of money: marketing, innovation, and customer service. – cause everything else is just a cost.

    High-Tech Branding: Can't Build It, Must Earn It

    Evelyn blogs about Branding and recommends the newsletter of David Taber. Som gems from him :

    In high tech, a brand cannot be built: it has to be earned. A brand is the effect or consequence of your actions: it's your reputation boiled down to a name and a logo. The most powerful brands do not come from "marketing", but from great customer experiences: terrific product quality, creativeness in feature set selection and design, value, and consistency. Most branding exercises in high tech are a colossal waste of resources.

    Although there are short-term tricks, the serious players know that the way to build a brand is to make their customers successful. The most powerful force in all branding is word-of-mouth.

    10 Questions for Effective Business Planning

    Today in Decker Marketing we look at the business planning and some of the questions which will help us plan better.

    Entrepreneur posted an article called 7 Habits for Business Success by Brian Tracy, exerpted from his book “Million Dollar Habits”.

    There’s one section of the article I really like…it’s the first habit: Plan Thoroughly. It lists 10 questions for better business planning…

    Plan Thoroughly

    The first requirement for business success is the habit of planning. The better, more thoroughly, and more detailed that you plan your activities in advance, the faster and easier it will be for you to carry out your plans and get the results you desire once you start to work.

    There is a "Six P" acronym that says, "Proper Prior Planning Prevents Poor Performance." Very often, the first 20 percent of the time that you spend developing complete plans will save you 80 percent of the time later in achieving the business goals you've set.

    To plan better, develop the habit of asking and answering the following questions:

    1. What exactly is my product or service?
    2. Who exactly is my customer?
    3. Why does my customer buy?
    4. What does my customer consider value?
    5. What is it that makes my product or service superior to that of my competitors?
    6. Why is it that my prospective customer does not buy?
    7. Why does my prospective customer buy from my competitor?
    8. What value does he/she perceive in buying from my competitor?
    9. How can I offset that perception and get my competitor's customers to buy from me?
    10. What one thing must my customer be convinced of to buy from me, rather than from someone else?

    These are applicable in a small business or for managers in a division of a large company. Yet most managers don’t stop to ask these basic questions. Planning and strategy does not have to be left to expensive consultants -- you can just ask some simple questions and get paid a lot less!

    Marketing Collateral

    Another blockbuster article from Marketing Sherpa. This is about the need to create different marketing collateral [brochures, websites, power points etc] for different products and sales situations. Also, some advice on managing sales force.

    "It used to be that the most successful organizations had a value proposition that was: We'll give you a slightly better product or service and charge you slightly more for it," says Neil Rackham, author and internationally known consultant for sales forces at companies such as IBM, Xerox, AT&T, and Citicorp.

    That doesn't work anymore, he says. Today, there are two different kinds of customers looking for value in different ways: transactional vs. consultative customers.

    Rackham explained to us how you can create collateral materials for each type:

    Marketing to transactional customers

    "The transactional customer is only concerned with cost and ease of doing business," Rackham says. "They're the ones who will see your product as pretty well substitutable with anyone else's product." With these more 'simple' sales, the customer knows the problem and the solution, and is looking for the best deal.

    "I want to buy 17 laptops and I want them to have a Pentium III processor and I want them to have these characteristics. What's your price?" Rackham explains.

    With transactional sales, the sales force doesn't contribute much value, because the sale is based on a product that already exists.

    "A standard off-the-shelf software package doesn't need a sales person," says Rackham. In fact, sales channels for these products are moving toward call centers and the Internet. It's the marketing collateral -- brochures, Web copy, catalogs -- that shows the value of the product.

    Marketing to consultative customers

    A consultative transaction is more complex: the customer has a problem but doesn't know the solution. The sales force must show the value of the product to the customer. "The role of marketing here is very different," says Rackham.

    You can't produce collateral material in a traditional way on consultative sales. "Products tend to be customized so standard brochures work against you," Rackham says. "What marketing can do is understand that most of the value lies in how the sales person uses the product to solve the customer's problem."

    Every major sale goes through three distinct phases from a customer's point of view. In each phase, marketing materials that support the sales force's efforts should change. For example:

    o Phase one: "Do I have a problem?"

    Here, the customer is considering whether changes should be made. They're saying, in essence, "I think I might have a problem. I don't really have good data on my customers and I'm wondering if I ought to do something about it," Rackham says.

    In this case, a brochure on a CRM system won't help. Instead, offer analytical tools that show the customer how big the problem is. For example:

    --benchmarks on what other companies in the same industry are doing, ie: 78% of companies have implemented some sort of CRM system

    --10 questions to ask to see if you have a CRM problem

    --data on what it's costing the company to have a CRM problem

    o Phase two: "Who can solve my problem?"

    By now, the customer has decided they have a problem that needs attention and is struggling to find criteria to help choose a product or service.

    "At a macro level, offer ways to help customers think about how to make the decision," Rackham says. For example, IBM has been very successful producing collateral materials that help customers who have never bought a major enterprise system set criteria for how to judge systems acquisitions.

    "Collateral is provided not to help them look at the product the way a brochure would," he says. "It's not interesting to a customer to know it's green and seventeen inches long," They want to know how the product compares, what it will cost to own it, what it will cost to maintain it.

    Collateral material might include:

    --quantified data showing cost of ownership

    --analysis of your performance vs. a competitor's performance

    --criteria that show how successful companies make purchasing decisions for products like yours

    --steps on how to assess best performance

    o Phase three: "But what if…?"

    The third phase is based on fear. Customers wonder: what if the product doesn't perform, what if something goes wrong, what risks am I taking?

    Marketing tools should minimize risk in the mind of the customer, and case studies can be very powerful tools. "Show what you do that makes implementation successful," Rackham suggests, such as a case study that illustrates how you manage to install your product without disrupting the workflow.

    Testimonials also minimize perceived risk in this phase.

    How to get the sales force to use marketing materials properly

    "Sales people have a phenomenal capability of snatching confusion from the jaws of clarity," Rackham says. "You may believe you have created very clear tools, but the evidence is that sales people will be highly confused."

    To keep this from happening, he suggests two techniques:

    o Technique #1. Go on sales calls

    Introduce your tools by working through an actual major sale with the sales team.

    "Have a direct involvement with selling, almost in an apprenticeship way," he says. This helps the sales team understand how to use the tools, and helps you to know which tools work better than others.

    With transactional sales, marketers don't particularly need to go out in the field -- you can get a picture of the market by surveys and other research. But in a consultative sale it's very much "one-on-one, so the best marketing departments are actively involved with sales to get close to the customer."

    o Technique #2. A "solemn vow"

    The relationship between sales and marketing is relatively uneasy these days, Rackham says. "Too many marketing people sit in an ivory tower when it comes to tools. They provide wonderfully analytical and beautiful PowerPoints, none of which mean much to sales or customers."

    Without an understanding between sales and marketing, it may be difficult to get the sales force's buy-in to allow marketing to go on sales calls.

    "A lot of companies right now are experimenting with new ways to put sales and marketing together, and the first step is that the most senior group in sales and marketing have to get together and make a solemn vow that they're going to be on the same page," says Rackham. "If they start there, there is hope."

    Don't ask sales to gather information from the field and report back: reporting and the filling out of forms take time away from the business of selling. Rather, position marketing as a means to provide the sales team with the tools to help them succeed.

    "Top sales managers are feeling that the only people selling are the rock-star sales people, and nobody knows how they're doing it. The answer is that marketing works with them to provide tools to allow ordinary mortals to succeed."

    Tuesday, June 15, 2004

    In order to qualify as a genius....

    .......you have to have at least two great ideas in your lifetime.

    Wally Bock
    in his latest post card profiles Tim-Berners lee, the inventor of the Internet.

    Tim Berners-Lee: Good Guy and Possible Genius

    Tim Berners-Lee has been called a genius by a lot of people.
    He's also one of the good guys. This month, in Helsinki, he
    receives the first Millennium Technology Prize, given by the
    Finnish Technology Award Foundation.

    In case you don't know, Tim Berners-Lee is the fellow who
    invented the World Wide Web. And, in case you're wondering,
    unlike Al Gore's claim to inventing the Internet, Berners-Lee's
    credential is real and undisputed.

    Here's how it happened. Back in 1980, Berners-Lee was working at
    CERN, the physics research lab in Switzerland. He noticed that
    scientists who worked there often had trouble sharing information
    over the lab's computer network.

    The scientists who worked at CERN came from many countries and
    spoke several different languages. They called lots of different
    educational and research institutions home and those institutions
    all had different computer systems. The computer systems they
    used didn't make it easy to get information even on your own
    computer in your own language.

    The inspiration for Berners-Lee's solution to the information
    sharing problem came from two sources. The first was a Victorian
    Era self-help guide that he remembered from the library in the
    home outside London where he grew up during the Sixties. The book
    was called "Enquire Within Upon Everything."

    The other inspiration was Berners-Lee's own experience of how the
    human brain works. Your brain doesn't need elaborate programming
    commands. Instead the brain easily makes connections between
    different bits of information.

    In 1989 Berners-Lee submitted a proposal to the powers that be to
    use existing tools such as hypertext linking to create the system
    that would help CERN's scientists easily share all kinds of
    information. The powers that be thought it was a dumb idea. But
    with the help of a creative boss Berners-Lee persevered to
    develop what became the World Wide Web.

    The Finnish Technology Award Foundation isn't the only group
    that's recognized him for his invention. Last year Queen
    Elizabeth knighted him. Time Magazine called him one of the 100
    greatest minds of the 20th century. He's received the Japan Prize
    and a Macarthur Foundation "genius grant."

    Some of those honors come with pretty big money. The Macarthur
    grant is worth a million bucks. The Finns are giving him more
    than that.

    Between those awards and what he's paid for his work, Mr.
    Berners-Lee and his family are probably quite comfortable. But
    he would have been rich beyond counting if he'd chosen to patent
    his invention. He didn't.

    The reasons he gives sound simple and even corny. He has no
    desire to amass great wealth. He wants to make the world a
    better place. So, in effect, he gave all of us his invention and
    it's changed our lives.

    What do you do for an encore when you invent the something like
    the Web and you're still in your thirties? Mr. Berners-Lee is
    doing what he loves to do.

    He's teaching at MIT. He's the Director of the World Wide Web
    Consortium, the body that coordinates Web development and
    technical standards around the globe. And he's working on
    something he calls the Semantic Web.

    Mr. Berners-Lee thinks that his Semantic Web concept will be a
    dramatic improvement on the current Web. He thinks it might just
    be more important than his original Web idea. He may be right.
    We'll have to wait and see.

    Is Tim Berners-Lee a genius? According to one definition, in
    order to qualify as a genius you have to have at least two great
    ideas in your lifetime. If that's the test, then the jury is
    still out on Mr. Berners-Lee, but he's looking good so far.

    While we're waiting for someone else to decide if the man's a
    genius, we can enjoy the World Wide Web, Tim Berners-Lee's great
    invention and great gift to us all. And we can revel in his
    success. It's nice to see one of the good guys win.

    Monday, June 14, 2004

    “Nothing happens until somebody sells something.”

    I found this great site for Entreprenuers, Entrepreneur America. It is a place where you can ask and get answers for the basics in business. This article is about how Sales is Job # 1. Greg Gianforte, CEO and Founder RightNow Technologies makes a great case for Sales.

    There's a sign that I keep on the wall of my office. It says simply, “Nothing happens until somebody sells something.” In other words, sales is where your business begins. Sure, you may have a great product or service that you’ve worked hard to develop. You may have hired a fantastic staff. You may have cash in the bank, a logo and letterhead, a beautiful office, computers on the desks, all those things that come to mind when we picture a business. But that’s not what makes a business. Only sales can do that.

    This is good news for bootstrappers. Bootstrappers can’t afford fancy offices or big staffs. They may not even have a finished product yet. But the bootstrapper doesn’t need those things to get started. As soon as you can start selling—that is, go out and find customers willing to buy his product or service—you have a business.

    So when you’re bootstrapping a business, you don’t worry about the nonessentials at first. Your first concern is sales. Everything else can come later, and sometimes that includes the product or service that you’re selling. In fact, if you approach it the right way, sales is the best way to come up with a product that people will buy.

    In other words, I used the sales process to do my market research. Had I been awash in start-up capital, I could have hired a marketing firm to run some focus groups and do some surveys of potential customers to figure out what the market wanted. But my way didn’t cost anything, and when I was done, I had a stack of orders. If the reverse had happened, if no one wanted to buy my product, I would have learned quickly and relatively painlessly that I didn’t have a viable business idea. Rejection isn’t easy, but it’s a lot easier than raising money, renting office space, hiring staff, producing product—and then going out of business because your brilliant idea didn’t pan out in the marketplace.

    In fact, I would argue that going out and talking to customers myself taught me more about my market than a dozen surveys or focus groups. For an entrepreneur, real learning doesn't start until you actually have real customers. So the goal of the bootstrapper is to get a real customer as quickly as possible.

    At first I didn’t charge for it. It was more important for me to get the software into the hands of real customers, so that I could find out what they liked and didn’t like about the product, and then fix it.

    The beauty of it was that I got a lot of feedback at first. So I ran really fast and I kept dropping in changes, and eventually I heard the response, "I'm not happy because...” less and less. That’s when I knew that I was starting to get a mature product. It probably took about ten months of iterations to get a mature product.

    In other words, I used the sales process to do my market research. Had I been awash in start-up capital, I could have hired a marketing firm to run some focus groups and do some surveys of potential customers to figure out what the market wanted. But my way didn’t cost anything, and when I was done, I had a stack of orders. If the reverse had happened, if no one wanted to buy my product, I would have learned quickly and relatively painlessly that I didn’t have a viable business idea. Rejection isn’t easy, but it’s a lot easier than raising money, renting office space, hiring staff, producing product—and then going out of business because your brilliant idea didn’t pan out in the marketplace.

    In fact, I would argue that going out and talking to customers myself taught me more about my market than a dozen surveys or focus groups. For an entrepreneur, real learning doesn't start until you actually have real customers. So the goal of the bootstrapper is to get a real customer as quickly as possible.

    I really believe that sales is the only job that has to be done well in building a business. There's no more important thing. A lot of companies think sales is like a necessary evil, but it's actually the life blood of your company. I'd much rather have great sales and a good product than a great product and good sales. Now, realistically, you've got to have both. But given a choice, I'd always take great sales.

    No One Gets it Right the First Time

    In The Rhythm of Business Jeffrey Shuman writes about how nobody can get it right the first time you start the business.

    Entrepreneurship has never been more popular or more important. By some estimates more than 4.5 million new businesses are started every year in the United States. That's more than 12,000 every day of the year--one every 7 seconds!

    But there's a dark side to these statistics. About 80 percent of these businesses, more than 3.5 million, do not survive to their 5th birthday.

    Why? Is it because the entrepreneurs were unlucky or lacked some other quality such as determination or tolerance for risk?

    I don't think so. It is my belief that the number one reason businesses fail is because entrepreneurs are focused on starting a business--a very specific type of business, no matter what. The 20 percent of businesses that survive, I believe, succeed because the entrepreneurs who run these businesses don't start a business. They start a process.

    Let me explain what I mean. The number one reason so many startups fail is because the entrepreneurs follow the "convention wisdom" and make a very simple assumption. They think they can get "it" right the first time. That is, they are willing to "bet the ranch" that the business they are starting is THE RIGHT business. One which will satisfy their customers wants and needs better than any other business in the world. And they are wrong. You simply can't get it right the first time!

    Peter Drucker, the famed business guru, once said, "When a new venture does succeed more often than not it is in a market other than the one it was originally intended to serve, with products or services not quite those with which it had set out, bought in large part by customers it did not even think of when started, and used for a host of purposes besides the ones for which the products were first designed."

    In other words, change is intrinsic to business. And change means rhythm--The Rhythm of Business. In order for you to be successful in business, you've got to listen to that rhythm or you are soon going to end up out of business.

    Here's a couple of examples. In a recent Boston Business Journal (3/13-19/98, pp.12), I read a story about Virtual Knowledge, Inc., a company that develops and markets the Sylvan Children's Skill Test, a CD-ROM-based exam which allows parents to measure their children's academic skills at home. When first introduced the product was marketed as a quasi-IQ test and sold poorly because as David Blohm, the owner and CEO found out, parents were less interested in knowing their children's IQ and more interested in measuring and improving their children's skills. After analyzing his customer feedback and quickly repositioning and relaunching his product last September, Virtual Knowledge has sold over 200,000 copies and is on target to hit the $5 million revenue mark by years end.

    And then there's Top of the Tree Baking Company of Londonderry, New Hampshire, a company I heard about just a few days ago. While the company is currently flourishing, that wasn't always the case. Three years ago when Gordon Weinberger started the company, he insisted that all pies be made in his own baking facility. But two days before an investor was supposed to give him the money for a new, more efficient facility, the investor backed out. It was a devastating blow. The vision Weinberger had spent nights and days building was gone in one short phone call. He couldn't make enough money to survive in his old facilities. Depressed, he piled his wife, kids and dog in the family car and went away for a long weekend, convinced he was going out of business. However, by Monday, he had a new plan. He'd outsource the baking. His fresh apples wouldn't come from New Hampshire any more, but from New York. The baking would no longer be done in Londonderry, but in plants in Quebec and in U.S. locations outside New England. And in just a few short months he went from losing money on sales of $500,000 to a profit on annual sales over $3 million.

    So, what's the message? It's not persistence or luck. The message is: In business, no one gets it right the first time! Virtual Knowledge had the wrong understanding of its customers and Top of the Tree had the wrong understanding of how to produce its pies. Both of these examples clearly illustrate the simple but critical point--most companies do not succeed with the idea with which they began.

    So, how do you get it right, eventually? The answer is pretty straightforward. You must understand that every business goes through a natural development process; a natural development process which requires change. This is the Rhythm of Business.

    How do you follow this rhythm? In this column, I'll continually point that out but the short answer is you have to listen to your customers, listen to your employees, listen to your vendors, listen to your investors and, eventually, you will succeed most likely in a different market than the one you started, with different products and services sold to different customers than those with which you originally set out but most importantly with a profit!

    As David Blohm of Virtual Knowledge remarked to me on the phone the other day, "If you have the mind set of listening to customers and keeping yourself nimble enough to make the changes, you can succeed."

    That's the Rhythm of Business. That's the dance. And it's a dance where the customer always leads.

    Monday, June 07, 2004

    Munger Goes Mental

    Atanu Dey passed on a speech by Charlie Munger to me. I tried to find the source and of course it was Whitney Tilson of Tilson funds who has been writing his notes and commentary in the Fool on everything Buffet, Munger and Hathway. Some notes from the transcript. You can find the transcript here.

    Warren Buffett and Charlie Munger are undoubtedly the greatest investment duo ever, so I think any sensible investor should try to learn as much as possible about these two men and how they achieved their success. In the case of Buffett, it's not hard -- there are many books about him, he's published lengthy annual letters for decades (you can read the last 27 of them for free on Berkshire's website), and he gives speeches and makes public appearances regularly. But Munger is more private; there are only two books about him, he is a far less prolific writer, and rarely gives speeches.

    Thus, my heart skipped a beat when a friend gave me a recording of a speech Munger gave to the economics department at the University of California, Santa Barbara last Oct. 3. It's 85 minutes long and entitled, "Academic Economics: Strengths and Faults After Considering Interdisciplinary Needs."

    With that kind of title, it sounds like a real snoozer, eh? But it's not. In this speech, Munger applies his famous mental models approach to critiquing how economics is taught and practiced, and I think the lessons he teaches are profound -- both for investors as well as anyone who seeks to be a better, clearer thinker.

    Munger is the best when it goes to explaining mental models and helping us understand the use of them. Nobody else comes anywhere near that. So get a hold of the transcript and read it in its entirety.

    Tilson ends with this:

    I'll conclude this column with a bit of classic Munger humor: While Buffett bends over backward to appear humble, Munger's the opposite -- he jokes about his big ego. In his opening remarks, he said:

    As I talk about strengths and weaknesses in academic economics, one interesting fact you are entitled to know is that I never took a course in economics. And with this striking lack of credentials, you may wonder why I have the chutzpah to be up here giving this talk. The answer is I have a black belt in chutzpah. I was born with it.

    For more on Tilsons collection of speeches, check it out here.

    Salesforce.com - The New ASP model for business software

    You work in the software industry, say in the second largest software company in the world, work your way up and start a company called Siebel. You the big daddy in your vertical now and can call the shots. Your previous boss and colleague start a new upstart called Salesforce.com which is exactly opposite to what the leaders do.

    This is the story of how two employees of Oracle have created two of the best known CRM companies - Siebel and Salesforce.com.

    Like all good Silicon Valley brawls, this one is complicated by the intertwined personal histories of the executives.

    A Salesforce representative said several weeks ago that the company could not comment for this story because of the quiet period before its IPO -- despite Benioff's interview with the New York Times.

    Benioff and Siebel both got their starts working at Oracle for Larry Ellison. Siebel left in the early 1990s after a falling out and founded his company.

    Benioff continued to climb the executive ladder at Oracle, but he was also an early investor in Siebel's company, which -- along with his Oracle options -- made him fabulously rich by his mid-30s.

    All that money caused what Benioff has described as a personal spiritual crisis. In the late 1990s, he took a leave from Oracle to find himself, which is when he also hatched the idea for Salesforce. The company was founded in February 1999. Ellison invested more than $1 million and became a board member.

    Now Salesforce.com is trying to go public and is fighting a whole lot of companies which is following its business model including Siebel.

    It will be interesting to see how things shape up and the market for other ASP companies too.

    Microsoft starts PPP pricing

    Microsoft has started providing its Windows OS and Office suite of software at "low low" prices of $40 in Thailand and Malaysia for government sponsored programs.

    This is the first step by the Redmond giant to change its pricing policy, which could be a bold step, and has many repurcursions.

    But in Southeast Asia, the software giant seems more like an ardent suitor, wooing governments with sweet promises and gifts - such as unprecedented bargain prices on its Windows operating system.

    Microsoft executives suggest that pricing policies for government-promoted PC sales pioneered last year in Thailand and used again in Malaysia this year presage a new marketing approach for emerging markets.

    So far, the localized versions consist of Windows XP minus English language support. The company also has hinted that it's developing a kind of "XP Lite," a leaner Windows with features more appropriate to developing countries where "high tech" is not a reality of everyday life.

    Microsoft executives are themselves being lean with details, citing competitive strategy. But they're willing to discuss the concept.

    "This is a new market with very different needs, from an economic perspective, from a social perspective, from a technical perspective," Barry Goff, group product manager for Windows Client group, said in a telephone interview from company headquarters in Redmond, Wash.

    Setting prices based on geography is not new in other industries. Pharmaceutical firms charge lower prices in developing markets like Africa than in mature ones like the United States. Even McDonald's sets different prices for Big Macs based on geography.

    But the software industry is just beginning to move beyond a one-price-fits-all strategy.

    Sunday, June 06, 2004

    Company Parties

    We used to have a lot of company parties at my previous employer, ADP Wilco. It was a young crowd which was ready to enjoy and dance and drink into the wee hours of the night. [The company was good enough to understand the needs of the female members and provided company cars which would leave the ladies home at the end of the party. This obviously had a direct impact on the party, we had more variety!]The organization understood the importance of parties because we used to have a lot of them, mostly at expensive restaurants accompanied with some good Disco Jockeys helping providing the "beat" for out steps. Not that it was needed, we would have anyway danced!

    The parties providing us with a opportunity to meet and talk to our colleagues in an atomosphere which was more open and inviting than a office setting. This increased the comradrie among us and made us into one strong team. This has a direct effort on performance. Ultimately working in a organization is working with people. Working together. Winning and losing together. It helps if you know these people better.

    We had a similar party and I had a hell of a time. Due to my job profile here I do not interact with the software development team. This was my great chance to be with these people, dance and drink with them and have fun. It was a good bonding exercise.

    Partying is one of the best team building exercises! So what are you waiting for, lets party.

    Freedom isn't free

    Eammon writes a wonderful piece on Freedom.

    I come from a country that opted for neutrality in the existential 20th-century fight to save Europe from fascism, and I live in the country that had to be defeated in this fight, so you can be sure that on this anniversary of D-Day I have some pretty strong feelings about freedom.

    First, my homeland, Ireland. Its decision to stay neutral in the Second World War was based on the memories of its war against Britain for independence, its grievances over the partition of the island and a fear of Republican insurrection. It was this domestic agenda that led Eamon de Valera, the Irish Prime Minister, to remain neutral. Churchill, in his 13 May 1945 victory speech, vented his anger at the Irish stance, when he reminded his listeners of how perilous Britain's situation was in the early phase of the war. If things had taken a turn for the worse because of Ireland's resolve, he said, "we should have been forced to come to close quarters with Mr. de Valera, or perish from the earth. However, with a restraint and poise to which, I venture to say, history will find few parallels, His Majesty's Government never laid a violent hand upon them, though at times it would have been quite easy and quite natural, and we left the de Valera Government to frolic with the German and later with the Japanese representatives to their heart's content."

    That latter jab about frolicking was, not doubt, provoked by the 30 April decision by de Valera to visit the German embassy in Dublin and sign a book of condolences memorializing the death of Hitler. De Valera regarded his gesture as a perfunctory diplomatic act by a neutral government. However, despite his ghastly observance of diplomatic niceties, and despite Ireland's adherence to a policy that threatened Allied security, there were Irish people who had the courage to act. Some 43,000 from the south and 38,000 from the north joined the British forces and fought the good fight.

    As regards Germany, the participation of the German Chancellor in today's ceremonies is Normandy is to be welcomed as it should help put to an end the debate within Germany about whether 1945 represented Besatzung (occupation) or Befreiung (liberation). The fact is that the Allies liberated Germany from itself, and freed Europe forever from the nightmare of Germany's desire to be a superpower.

    Today, we should remember and honour those who paid the ultimate price that Europe might be free. How high that price was can be measured by the numbers who died on the beaches of Normandy, but it is also transmitted to those of us who were born long after D-Day in a more accessible way, in a book, a bestseller in France, called L'Américain, by Franz-Olivier Giesbert.

    Giesbert's father was a former GI who never recovered from the trauma of D-Day. "He remained all his life in a state of shock, scarcely able to smile, his soul wounded to the core, for having survived by leaving behind him the dying carcasses of so many friends." As the young GI Giesbert and his comrades advanced along the beach, forming "floods of fresh flesh," they experienced a horror we can scarce comprehend. "Behind them, the beach was filled with remorse that would never cease to torment my father." The result was that the GI who survived beat the author mercilessly throughout his childhood.

    It's easy to say that the best things in life are free. Well, freedom isn't one of them. It has to be defended. And, at times, fought for. We owe an outstanding and permanent debt to those who fought and suffered and died for our freedom on 6 June 1944.

    Absurd Patents

    Wired reports that Microsoft has been awarded patents on "double clicking" and holding down a button on Palm PCs

    A patent recently obtained by Microsoft for its Palm-sized PC product line is raising concerns among intellectual property experts who say it could be used to demand licensing fees from other mobile-device makers.

    The patent, issued by the U.S. Patent and Trademark Office on April 27, covers what Microsoft calls a "time-based hardware button for application launch." Microsoft said the technology was developed for use in handheld computers, such as its Palm-size PC, which use buttons to open files and start programs.

    But the wording of the patent is drawing fire from some critics of the patent office, who view it as another example of how companies are obtaining patents that are either overly broad or apply to technologies already widely in use.

    "What was the patent office thinking?" wondered Brandon Shalton, founder of Fight the Patent, a site that protests questionable patents. "I'm just kind of amazed that this patent was filed so late and was approved. It's a double-click. It was novel and unique 10 to 15 years ago."

    Microsoft filed for the patent in July of 2002, but its application includes content from an earlier filing, made in 1999, which was subsequently abandoned.
    Moreover, Bernstein said, it's possible that Microsoft will never attempt to enforce its patent. Instead, the company may merely use the patent defensively to ward off suits from holders of similar intellectual property claims.

    Of course, Bernstein could also envision the software company taking a different approach.

    "If Microsoft were to become more aggressive in its Pocket PC business, I could see them asserting this patent offensively," he said.

    Friday, June 04, 2004

    Analysts Reports - Hype or Education

    Richard Luhr writes a very good piece in the ALways-On network on Analyts. His main contention is that the "forecasts" are highlighted to sell the reports whereas one of the impportant jobs of a analyst is to provide education and a balanced view.

    Many people think that analyst reports are all about forecasts. After all, the big flashy forecast is inevitably what leads the press release or news articles. In truth, forecasts are often the least useful part of any analyst report.

    Education is the most valuable service an analyst can provide. For without educating the reader, forecasts have no context—and hence no real meaning. Unfortunately, education doesn't sell well. So even great studies with exceptional explanations of context and subtlety tend to get marketed with an emphasis on forecasts.

    Hey, trends are good. Trends are where the money is, and bean-counting is an important discipline. But before you get excited about how much money there is to be made in an industry sector, shouldn't you first understand what the heck people are talking about?

    Let me explain why the lack of emphasis on education and over-emphasis on forecasts are unfortunate.

    First, because in many cases there's a much greater need for education than forecasting. For example, when reading various news reports on wireless technologies, I inevitably see a lot of energy wasted in endless debates of which technology fits where. Wi-Fi, Wi-Max, Bluetooth, Ultrawideband (UWB), and Zigbee (just to name a few examples) clearly have distinct roles. It may be tempting to compare Wi-Fi to Wi-Max, but in a few paragraphs, any analyst worth paying can easily differentiate the two—and save everyone a lot of time.

    Good analysts have always done this, and there are many customers who specifically buy analyst reports to rapidly get up to speed on a subject. I just wish that the marketing departments of the analysis firms would recognize this need and emphasize the clear-spoken educational nature of some of their studies, rather than always leading with the tried-and-true "big forecast."

    There's another reason why leading with forecasts is "unfortunate." It's because technology subjects without (in the eyes of an analyst) great forecasting opportunities tend to get short shrift in the marketplace. This is about competitiveness—it's hard to sell a report which doesn't say something unique. Education is perceived as a low-value product, something "everyone can do."

    Dave Cappuccio provides a valuable comment in which he explains the difference between two type of analysts.


    I would add that there are two distinct types of analysis that folks generally get confused about. Quantitative analysis are the numbers folks who continually put out charts for the trade magazines to use and base their analysis on widgits built, sales projections and trend analysis. Generally called Market Research, some have called it steering by the wake. It's good advice based on known values - which precludes getting solid advice (or education) on the unknown values.

    The second group are usually called Advisory Analysts and base their research on conversations with trend setters, early adopters, vendor labs and the like. Sometimes called opinion based research, this is more qualitative and generally results in a longer term but more speculative view of the world.

    The real problem of late is that both these research categories are getting melded together in the publics mind (and in some cases the research houses), so that all questions about industry trends and directions result in the same answer; "it depends".

    So, who should we believe? None of them completely, but like you said, they should be used as part of our education, and like a good textbook the data gathered becomes one small piece in the overall education process.

    Web users to gain Creative Commons access to the BBC

    Web users can now download the BBC's programs for free from the BBC Creative archive. This is a major initiative by the BBC to provide digital content to geenral public.

    The BBC's decision to let British surfers download TV footage and share it between friends could help to drive broadband and the take-up of new, faster PCs

    The BBC has given a major boost to the Creative Commons movement this week by revealing how it plans to open up its archive of broadcasting material to UK Internet users.

    The corporation has decided to allow surfers to download, distribute and modify digital clips of BBC television programmes through an initiative called the Creative Archive.

    While users won't be allowed to resell the material, they will enjoy increased access to content that many potential users effectively paid the BBC to create through their licence fees.

    A Creative Commons licence allows content creators to dictate whether or not anyone can copy their own work, creative derivative works from it, or use it for commercial purposes. It is an attempt to create a middle-ground rather than making content owners choose between putting something fully into the public domain or controlling it tightly through copyright.

    The BBC's decision to let British surfers download TV footage and share it between friends could help to drive broadband and the take-up of new, faster PCs

    The BBC has given a major boost to the Creative Commons movement this week by revealing how it plans to open up its archive of broadcasting material to UK Internet users.

    The corporation has decided to allow surfers to download, distribute and modify digital clips of BBC television programmes through an initiative called the Creative Archive.

    While users won't be allowed to resell the material, they will enjoy increased access to content that many potential users effectively paid the BBC to create through their licence fees.

    A Creative Commons licence allows content creators to dictate whether or not anyone can copy their own work, creative derivative works from it, or use it for commercial purposes. It is an attempt to create a middle-ground rather than making content owners choose between putting something fully into the public domain or controlling it tightly through copyright.

    Really Simple Explanation to Really Simple Syndication

    Dave Winer launches a new site on RSS for non-techies and explains in simple terms what RSS is.

    RSS is...

    1. A format.

    2. Content management tools that generate feeds in the format.

    3. Aggregators and readers that subscribe to the feeds.

    4. Search engines and utilities that crunch the information and ideas.

    5. Services from technology companies like Microsoft and Apple.

    6. Authoritative publications like the BBC, The New York Times, CNET, InfoWorld, PC World, Time, Wired, Salon, Yahoo, Reuters -- that distribute news and opinion in RSS.

    7. Many thousands of weblogs covering virtually every aspect of life on this planet.

    8. A vast and growing community of thinkers, writers, educators, public servants, and technologists.

    The revolution of RSS is what people are doing with it, what it enables, the way it works for people who use technology, the freedom it offers, and the way it makes timely information, that used to be expensive and for the select-few so inexpensive and broadly available.

    RSS is the next thing in Internet and knowledge management. It's big. A lot bigger than a format.

    This is the inaugural post for a new website devoted to the community of people who create and use RSS. It's just a beginning.

    Let's have fun!

    Thursday, June 03, 2004

    there are only two kinds of VCs

    Guy Kawasaki explains the different kinds of VCs.

    Fundamentally, there are only two kinds of VCs: those that will invest in you and those that won't. That's the most important distinction. Your job is to increase the likelihood of an investment. To do this, you should look at several high-level characteristics:

    * Are you in the right geographic region for the VC? Most VCs don't want to fly around the world for a board meeting.

    * Is your company in the right stage? Some VCs want "proven" companies that already have revenue. Others will take a flier with dropouts sketching out business plans on the back of envelopes.

    * Are you in a sector that matches the VC's interest? For example, if you're a semiconductor company, don't go to a VC that specializes in life sciences companies.

    * Do you like the VC partner that you're dealing with? Your relationship with the firm will be primarily with this one person.

    If you want to Write

    Guy Kawasaki mentions the book If you want to write by Brenda Ueland as the best explanation of entrepreneurship that I've ever read. He asks us to trust him.

    I tried to find the review to this book and this is what I found.

    If you want to write, this is the book to read right after Brande's "Becoming A Writer." The similarities between Brande and Ueland are striking: both are female, both are writing on the same subject, and both wrote their books for publication in 1934. Both are worth reading, studying, and most of all following the directions they give for the free-writing process, the early morning writing, and the setting of writing appointments with yourself. These work, but only if you do them, so either be serious about your writing and do free-writing for a year or admit to yourself that you want to be a writer but you don't want to become one.

    Note how carefully the two titles are chosen: Becoming A Writer is for people who want to write and need some hints about getting started. If You Want To Write is for people who want to become writers and need some hints on how to channel their desire to write in productive ways. Both of these writers understand how the unconscious can be tapped by the conscious mind. One cannot find material in either of their books that dated them (except the reference to reducing a meat budget for a household for a year by $3.70). Their psychological insights are as pertinent today as any NLP Master Track graduate might conjure up. One of the major insights for me was that following the process for a long period of time was a prerequisite for judging whether the process worked. There is no other way. Since I had been free-writing for a year before reading these two books, I was in a position to attest to the efficacy of the suggested exercises from personal experience.

    Very interesting. Here's his reply to classroom learning helping Entre.

    If I had to weight the major factors, I'd say experience is 20%, classroom learning is 10%, hard work is 30% and luck is 40%.

    800CEORead Blog

    Evelyn points to this blog. It provides new book ideas and blogs about the authors and of course books.

    I found some links really fantastic.

    1. Guy Kawasaki. - This guy is one of the best writes I have seen on Entre. He is really straight forward.

    He writes this article Art of the Start in Forbes. Here's a link to his articles.

    2. Another quote from Kawasaki.

    Q:Who do you think is a good role model as an entrepreneur?

    Let me answer this in a different way. Here's the best book you can read about being an entrepreneur: If You Want to Write by Brenda Ueland. Suspend your disbelief and buy/read this book. Trust me, it's the best explanation of entrepreneurship that I've ever read.

    This is really interesting.

    Tuesday, June 01, 2004

    The Curse of Great Expectations

    Seth Godin writes what could be his best blog entry till date. You can follow from where Seth would have got this idea. What is interesting is that Seth has been working on his basic idea of Permission marketing and has extended it.

    Now we know how to spread a idea virus and more importantly ideas are everything. We also understand memes and how an organization can use that. From that we have moved to the "Purple Cow" and how the product we create has to be the most remarkable or else it will not be noted in the clutter of the market. Then he teaches us that a Free Prize Inside provides an easy way to start spreading an idea.

    Now keeping this background Seth tries to understand how can a individual create something remarkable. What follows is the answer to this question.

    The Curse of Great Expectations
    By Seth Godin

    I can benchmark everything now.

    I can benchmark my morning workout. The rowing machine tells me if today’s workout was a personal best. Even better, I can go online and compare my workout to the efforts of thousands of other people.

    On my way to work, I can track my mileage. (My record is 89 mpg). Once there, I can watch the status of my books on Amazon, comparing their sales to every other book published in the English language… and then go check out JungleScan.com, where I can track the book’s performance over the last 90 days.

    The problem with benchmarking is that nothing but continuous improvement (except maybe spectacular results) satisfies very much. Who wants to know that they will never again be able to beat their personal best rowing time? What entrepreneur wants to embrace the fact that the wait time at her new restaurant franchise is 20% behind the leader—and there’s no obvious way to improve it?

    Our interconnected, 500-channel world lets us be picky. We can want a husband who is as tall as that guy, as rich as this guy and as loyal as my brother-in-law. We can ask for an apartment that is in just the right location, with just the right view and just the right rent—and then reject it because the carpeting in the hallway isn’t as nice as the one in the building next door. Monster lets us see 5,000 resumes for every job opening… and imagine that we can find someone with this guy’s education and that woman’s professional experience—who works as cheap as this person and is as local as that one.

    In the old days, data was a lot harder to come by. You didn’t know everything about everyone. All the options weren’t right there, laid out in Froogle and compared by epinions.com. We didn’t have reality TV shows where each and every component of a singer’s presentation or a bridal prospect’s shtick were painstakingly compared.

    Yes, benchmarking is terrific. Benchmarking is the reason that cars got so much better over the last twenty years. Benchmarking has the inexorable ability to make the mediocre better than average, and it pushes us to always outperform.

    But it stresses us out. A benchmarked service business or product (or even a benchmarked relationship) is always under pressure. It’s hard to be number one, and even harder when the universe we choose to compare our options against is, in fact, the entire universe.

    Of course, the boomers have this problem even worse (and we’re all boomers, aren’t we? Even if you’re not, we don’t care—it’s all about us). Boomers are getting older. We can benchmark our eyesight, our rowing speed, our memory or even our ability to come up with great ideas at a moment’s notice. As a result, we benchmark ourselves into a funk. We get stressed because we have to acknowledge that nothing is as good as it was.

    In addition to the stress, benchmarking against the universe actually encourages us to be mediocre, to be average, to just do what everyone else is doing. The folks who invented the Mini (or the Hummer, for that matter) didn’t benchmark their way to the edges. Comparing themselves to other cars would never have created these fashionable exceptions. What really works is not having everything being up to spec… what works is everything being good enough, and one or two elements of a product or service being AMAZING.

    So, I’m officially letting go. I’m going to stop comparing everything to my all time best, to your all time best, to everyone’s all time best. Instead of benchmarking everything, perhaps we win when we accept that the best we can do is the best we can do—and then try to find the guts to do one thing that’s remarkable.

    Was this my best blog entry ever, or what?