Tag Archive for 'lesson'

The Startup Bus on failure

Hard to believe it’s been two months since the event. A lot’s happened since then which had me pause this blog series, but I’m now going to restart it and share the lessons during and after the experience.

Pollenizer is an agency that helps startup’s grow, run by my good friend Mick Liubinskas and his superstar business partner Phil Morle. They sponsored the bus, with the request an important lesson be shared, which was related to failure.

Below is a short video of Brandon Leonardo – a superstar that I think is going to go very far in his career. He however, had a very unfortunate incident that nearly threw off the entire operation of the bus. The incident revealed an important lesson for Brandon about how you deal with failure. Watch the video the find out what.

This blog post was done in honour of our proud sponsor Pollenizer. This post is part of a series on the Startup Bus, an event that occurred in March 2010 that was powered by Alassian, mentored by the eStrategy Group and supported by several other very generous sponsors.

Social melebrities and the externality of arrogance

The biggest impact the web and the Internet has had on society can be described using one word: "social". Social computing, social networking, social software, social media – the list goes on. The ability for humans to connect sounds simple, but it’s literally shaking up entire industries. With the rise of mass collaboration however, there has been the creation of a new class of denizen.

Social melebrities
Social media is a broad-based buzz word now becoming mainstream, to describe technologies that enables many-to-many communication between humans. A defining characteristic of social media is that it’s a public discussion. It’s like having a conversation with someone around a water cooler and the people sitting nearby join in on the conversation. Although the message is directed to one specific entity, that same message can be seen by people not originally intended to get the message.

Enter the social melebrity: a social media celebrity. They are people aware of how others can see their message, and consequently, modify their behaviour accordingly.

Celebrity

The problem with social melebrities. As someone becomes more engaged in "social media", a natural fact that emerges is that you become better known. People will subscribe to your content and communications, which in turn creates this sense of self-importance. It implies if people are watching you then therefore you are influential.

An externality of this process however is arrogance. It feeds into the day-to-day language of people, and creates unhealthy behaviours. Like the obsession of people getting more followers on a site like Twitter, is really a symptom of someone chasing for influence to feed their insecurity that they somehow matter.

Extending Twitter as the casestudy,
– most people that follow you are spam and inactive accounts. That growing number of followers doesn’t mean anything. That’s not influence.
– Most people that use Twitter have a job. That means, they cannot physically track every Tweet and at the same time be productive. In other words, if they are people that are doing amazing things in this world, they haven’t got time to track everything you say all the time. That’s not influence.

Arrogance

Remind yourself that you’re unique – just like everyone else. Once you delve into this world, just assume you are going to get a lot more exposure of your personal brand. Good on you if you do – but remember, it doesn’t matter. Real influence comes from the types of people that follow you, not from the amount of people that follow you (and following can vary in itself depending how how engaged they are in you). There’s no easy metric to determine "real" influence or reach, but there’s a lesson in that nevertheless: drop the arrogance. You might be famous now – but so is everyone else.

The most important lesson in business

Over the weekend, I attended a conference (I was even quoted in the press, despite disclaiming before one of my presentations I was scattered from a terrible hangover!). In one of the sessions, where the brilliant guys at Australian start-up company Good Barry shared some of their lessons, an audience member asked the question of when should they get lawyers and accountants to help them out.

I think this was a very good question and one I will answer here. Why can I? Because I am (nearly) a chartered accountant ; an experienced external auditor; and an employee in one of the biggest firms in the world that makes money from guys like me doing services for people like you.

There are four areas accountants help a business:

1) Reporting & compliance. Whether you run a business and want to know what’s happening (ie, measurement on your employees output so you can track how big their bonus will be) – or you need to create some type of reporting to external stakeholders (like investors, banks, shareholders) – accountants have the skills to ensure you create the appropriate reports. Reports can vary from custom internal ones to help assess things, to government mandated ones like financial reports to statutory authority’s or the tax office

2) Tax. It wasn’t until I studied tax, that I realised how valuable tax accountants are. Tax is the biggest expense of anyone – individual or company – and there are plenty of legal tricks to avoid paying. Specialist accountants can help you structure your business in a way, where you minimise this expense. People can spend an entire life understanding just one aspect of the tax code. It’s massive. Trust me, a good tax adviser is worth their weight in gold.

3) Assurance. If you produce financial reports, you need to get audited by special types of accountants, who will verify your numbers to make sure you are not talking crap. However auditors are also very experienced in understanding how businesses should be run (so would you if you visited dozens of companies every year analysing them inside out), so they can also add a lot of value by helping assess your business during the audit and making recommendations on improving how you run. They do this, because during an audit they see everything and often have a more complete view of a business than management. A very useful thing accountants can help with, is by developing your internal control framework. What this means, is helping set up systems so that it runs like a proper business. For example, making sure two people sign a cheque is a ‘control’ – and a very important one, because without it, people can be signing cheques to themselves and running away with your money (it happens more frequently than you think).

4) Decision making. These types of accountants are called management accountants, and they can help analyse the numbers of a business to assist strategic decisions. For example, should you buy a company? A management accountant has the skillset to provide the analysis on whether it will be worth while. Management accountants help interpret information, to make important decisions for the business.

What help does a start-up company need from an accountant

The most important thing you need to know, is CASHFLOW. You need to maximise the amount of working capital – cash you’ve got on hand – at any one time. It’s seems simple enough that you need to make sure you make more money than you spend, but you will be surprised how easily people overlook this. Possibly in the Internet startup culture funded by vulture venture capitalists, people forget that the money they are spending is not real money.

Accountants can help maximise your cashflow. They can help with cash strategies like for example all that money sitting in the bank, why not put it somewhere and earn interest on it? They can help with cash management to maximise your working capital: smart ideas like pay your creditors as late as possible (people you owe); chase your debtors every day (people that owe you). However you don’t need an accountant to watch your cashflow. You just need you to recognise its importance. Get that? Accountants can do a lot. But if you are a startup, cashfow is all you need to know.

Do you need an accountant for fix up your controls? This only matters when you have hundreds of people in an organisation and things get complex. Controls are the difference between a small company run like a family business, and a big business. Matured startups like Atlassian that make $30million a year, need to consider controls. You? No.

Do you need an accountant for your tax strategies? Well hey buddy, if you aren’t making money, you haven’t got any tax to pay, right?

Do you need an accountant to help make management decisions? Sure you do – but if you have common sense, you can to. Accountants can give you a better analysis of your business from your untrained mind, but you need cash to pay them to do that.

Do you need an accountant for financial reporting? In Australia, unless your gross operating revenue is over $10 million a year; and you have over 50 employees or $5 million in assets, you are considered a small private company that is not required to lodge reports. So stop dreaming about your goal to list your company on the stock exchange, and get back to thinking about the cashflow.

So going back to the question of when does a start-up need an accountant. Well look, if you hire me I can whack some sense into you. But if you have half a brain, you will take this lesson in understanding that cashflow in king. Focus on that first, and then you can worry about the rest if the cashflow is there.

How to piss your customers off – a lesson courtesy from eBay

I get e-mails from companies. Sometimes I request it; but on the whole I always tick the option “please do NOT send me promotional material”. So when I receive e-mails from companies, I give them the benefit of the doubt that it was my error, although this is being extremely generous because I know I never allow them to send communications above what I need. The fact I am getting an e-mail from them already has me tense.

So if a company is going to send me promotional e-mails, I expect courtesy because they are taking up my time. Note to companies about how not to do it:

ebay

“…to change your communication preferences, log into eBay…” and click through the barrage of poor usability options to find that hidden box that allows you to stop being spammed. After all, a one click unsubscribe option or even a link of where you need to go makes it more likely that you would unsubscribe so we adopt of model of trying to discourage you, because we know most people haven’t got the effort to action and would rather delete it than remove the sending from the source. Hey, marking us as ‘spam’ or deleting each incoming e-mail is a better option because the more numbers we have on our mailing list as ‘receiving’ the more it makes the marketing director feel all warm and fuzzy that we have distribution outlets for campaigns, even though we know you don’t read them.

“Please note it may take us up to 10 business days to process your request” because it takes 10 microseconds to technologically do so but we are a bunch of losers who are going to hope you forgot you tried un-subscribing and will send follow up e-mails in that time hoping to win you back, because we refuse to accept we screwed up and have ruined our relationship with you”.

Landed

I’ve landed safely – finally!

It’s been an interesting experience so far. When I was at Sydney airport, waiting in the check-in queue which was chokka-block, my mind drifted and I kept perving at one of the airport workers. Unfortunately, every time I looked, she caught me out. But it obviously paid off, because she let the guys in front of me as well as myself to jump the queue and line up at the business class section which had nobody waiting!

So as I am checking in, making idle chit-chat with the attendant, she tells me I have been upgraded to business class. I told her she was making a mistake, because I’m just a plebian that got lucky with the queue situation, but it turns out that because the flight was over booked, and because I am a “high-level customer”, I had my seat upgraded! United Airlines is part of star alliance, and due to my trip to Greece in 2003, I had acquired ‘Silver Status’.

As I walked to my gate, I looked for my passport to board the flight. It was missing. Somewhere between immigration and the gate, I had dropped my passport. With 15 minutes until the gates closed, I ran around like a chicken on ecstasy. It was finally found by some guy underneath the X-ray machines – it must of slipped out of my plastic travel case as I was collecting my items. Reconfirmation of a lesson previously learnt #1: When they say never lose sight of your passport, it means literally, never lose sight!

As I am sitting in my business class seat, thinking I had used up my luck for today, I started speaking to my neighbour. Anyone ever heard of GATX? Me neither, but apparently they own most of the aircraft we fly on. Anyway, it turns out I was sitting next to Alan Coe, the guy in charge of the company’s two-billion-dollar aircraft division! Naturally of course, I asked all the pesky questions like how he got to where he is, and what he looked for in interviews. Even though we spent most of the flight sleeping, the chats I had with him about his life were really interesting. Although he has probably forgotten about me now, his words of wisdom will most likely make an impact on my career.

After that, the flight was rather uneventful. I had to transit via San Francisco and Chicago Airports, before I actually got to Dayton in Ohio. The only fun I had was asking a woman in San Francisco to look after my bags, whilst I went to the toilet – I did not give her a chance to reply, and when I got back she told me she had wet her pants, because you are not allowed to leave bags unattended (bombs and stuff). She was still shaking as we walked on the plane

My friend Debbie thought I was coming the next night and wasn’t at the airport. My phone battery had nearly died, and she was not answering her phone, but luckily I got through to her eventually and just in time. She abused me for misinforming, and I apologised profusely (even though they are not – always say a woman is right – until they realise they are wrong). However when we checked the e-mail I sent her with my flight details, she was wrong and she is indulging herself in some humble pie. Reconfirmation of a lesson previously learnt #2: Women are the same no matter where you are.