Porsche 911 is not just the longest running production vehicle, it’s also one that thrives in it’s niche as a flexible sports car and a versatile daily driver. In continuous production since 1963, this car continues to improve every year and take advantage of seemingly doing more with less, something that has become a matter of tradition. As have continuous pricing increases, with even entry level trims costing nearly $100,000.
Part of Porsche 911 appeal are numerous PCA racing clubs in which Porsche owners regularly get together and spin their cars around the track for fun. So a guy goes and watches these 911’s scream around the track, he gets excited and decides this is something he’d like to do on his weekends. Time to get some adrenaline. So a guy goes to Porsche ready to race.
Guy: I’ve been a fan of Porsche 911 for years, I see them everywhere on the road which makes me think it’s a decent car I can drive to work, and I love the idea of racing.
Porsche Sales Guy: Oh yeah, you’ve come to the right place. Porsche has a long history of racing and as a matter of fact I have a few 911 GT2 and GT3 models over here that would fit that perfectly. But you said you’d like to drive it to work as well?
Guy: Yeah, drive during the week, race during the weekends.
Porsche Sales Guy: Ok, in that case you may want to consider the 911 Turbo – it’s a fantastic race car with tons of power but also tons of luxury and it’s easier to handle as well. I have one here for $146,000.
Guy: American? Does it come with this building, I just want the car? Oh dear god, no no no, that is insane – how much is the less luxurious model?
Porsche Sales Guy: Well this GT2 has a few tasteful addons and it comes in at $162,000.
Guy: Oh my god!!! You are insane! I don’t intend to drive this car 200 miles per hour, I just want a fun weekend car… What is this smaller one over here, I see those a lot as well.
Porsche Sales Guy: Well, that is a Fiat 500 Abarth, it’s a turbo charged race spec..
Guy: Yeah, yeah – tell me it’s not $100,000!!
Porsche Sales Guy: Well no, it’s actually $16,000 but it’s not even clos..
Guy: SOLD! Listen, I love the Porsche, it sounds great, but it says here this will go 120mph? That’s a ton and it’s all I’ll ever need on the track!
Porsche Sales Guy: It’s actually not something I would even..
Guy: Listen, it’s got the same looks, Fiat makes Ferrari’s so I’m sure this will be enough for me.
So the guy drives away in his Fiat and feels great about it. “That sales guy tried to take me for $160,000? What kind of a fool does he take me for? And listen to that engine roar!!!!.” It’s Saturday, guy takes his Fiat to the race track and lines up behind the Porsche “suckers” confident both in his car and in his ability to have a thrill and do so within the budget. So cars start piling out of the pit and the Fiat is right there with them “Boy, this is going to be a ton of fun!!!” but as the road widens and the others race away from his almighty Fiat the realization that this is not quite the same starts to set in. So the guy clears the curve and punches it on the clear straight road ahead of him. 80.. 90.. 95.. 100.. “I’m flying now,” as another Porsche pulls up right behind him, “How’s my smog taste back there in your luxury race car Mr. 911?” But just as he is about to high five himself they reach the curve and as the track starts to bank the car starts inching up towards the wall. Slam on the brakes! Turn towards the track! Sadly, it’s a little too late and the mighty Fiat races towards the wall ending in a crash and significant damage.
Next day the guy calls Porsche to yell and scream at them for selling him a broken race car. He threatens a lawsuit, asks for a loaner Porsche and claims he will even lose his job because he doesn’t have a car to take him there. Porsche must have been angry at him for being so smart and negotiating such a great deal that they messed with his brakes, suspension, airbags, safety equipment… “I came to Porsche to buy a race car and you gave me something that nearly killed me! I don’t understand why I need to pay for a Porsche when Fiat fits my needs perfectly – you guys must have messed with it!”
Now substitute MSP for guy, Vlad for Porsche Sales Guy, IT solutions for race track and the Fiat 500 for.. well, I don’t want to offend the fine people at Fiat by comparing them to what I see passed on as “cloud” out there.
The Backup Costs Too Much
This car dealer scene happens on my phone daily… Millionaires want a high end product that will give them productivity and the peace of mind but spending $2 extra month breaks the budget. Besides, what could go wrong? Until something actually does go wrong – and they are back losing millions and millions of dollars with every hour of outage sitting there in utter disbelief that technology could possibly fail and spending half the time yelling at a support person and half of it with their lawyer trying to figure out how to take a $2 compromise into a lawsuit to cover the millions they are now losing as a result of clearly negligent outage… in the middle of the day nonetheless!
Two weeks later they are back.. with the same sob story.. I need to make this happen but I can’t sell it at $15.. the client saw it for $3.
My internal thoughts are always as follows:
1. You can’t sell. You can’t explain the difference? You shouldn’t be in this business at all.
2. How the hell did I end up on a phone with someone that wants to sell IT to a customer that can’t make $20 a month in their budget? Why have I not hung up yet, even if this goes through with financial stability like that there is no way they stay in business.
I rarely say that out loud and I usually polish it up a bit but I’ve been burned so many times by stupid compromises that every time I am asked for one I immediately look at the worst case scenario. Not because I’m a pessimist but because I know that I will only hear it when their compromise turns out to have been misguided – and then it will be my fault.
So… I try to be polite, offer the value propositions and then I move on to people that are going somewhere. That’s my prerogative. But ExchangeDefender is a business with lot’s of people and lot’s of different opinions and target markets worldwide. So I am constantly pitched ideas and I want to introduce you to the unfiltered thoughts on how this sounds to me.
Vlad’s Inner Monologue
So we are being pushed to provide a cheaper solution so our partners can compete with others on price?
OK. Can we make money doing it? Yes? But not nearly as much and we’d be diluting our offering.
Well, what kind of ridiculous compromises would we be making? … Seriously? But that’s worthless, who would run their business on something like that? … OK.
So we make them sign a contract or prepay? Why? So we can be financially stuck to this bad decision for a while?
Oh, you mean by cutting our support levels on the product? So that the only time they actually need us they will be even more pissed off at us?
What’s the point of it at all, to have them upgrade to a better product down the road? That won’t happen if the very experience we thrive at and are scored the highest on is the very one you want to strip from the offering to make it financially viable.
So we can’t make enough money at this. It is clearly against our value proposition and everything else we sell. Our partners are digging a hole for themselves. Nobody can think of a single way that this realistically plays out well. The upgrade and upsell potential is limited. OK. Why the @#% am I being pitched this again?
Because our partners are losing out on deals that they shouldn’t be inking in the first place.
So our business model, of offering end to send secure messaging with tons of integration, service, support and single provider everything is going to be priced down to help people that can’t say no to something they know is a terrible idea?
At times I feel less like a CEO and more like a drug dealer enabling people to harm themselves even further. Now is one of those times. Now can someone please tell me why we’re debating a suicidal path over talking about our top tier partners and how we can help them?
Oh. Because we’re a business and in business people need variety.
My responsibility is to the team at Own Web Now Corp and their families. We don’t have shareholders – we have business partners – and our business partners are asking for something I strongly disagree with. But that’s the thing with partnerships: I am here for you even though I think what you’re asking for is friggin stupid. So I’ll help. All I ask for is that you don’t get mad when things don’t play out the way you had hoped and I send you to this blog post instead.
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Long story short: one. Is your business a highly skilled technology provider or a flea market with a bunch of random crap? Because, shocker, only one of the two is a high paying / high margin enterprise.
On my world tour with ExchangeDefender I’ve discussed this with a lot of partners as they list one obstacle after another that is holding them back and keeping them from breaking out to the next level. For most, perfection is the enemy of good enough: Remember how many people bought a Celeron-powered SBS server from Dell with 2GB ram just because it was on the back of a magazine? How about Windows Me and Vista and 8? In business you are constantly facing challenges and disappointment be it with technology or people – but the goal is to keep on moving forward.
One of the things that I am proudest of in my career is what we’ve been able to do with Shockey Monkey – we gave so many people the tools and services to help them establish an MSP practice and grow a process oriented technology business for free. Now I’m doing it again with the ExchangeDefender migrations, taking the annoying bits of work that IT people shouldn’t be doing in the first place, and giving partners that much needed influx or revenue and client base that can be serviced at a higher level. It’s all about defining your value.
You only need one.
I’ve met many partners that get confused by garbage marketing toolkits and marketing copy in a trashcan or whatever the current hip name for writing essays as marketing happens to be. But Vlad, it works and it keeps me accountable! Yeah, but what kind of people does it bring in – cheapskates with essay like technology problems.
Your problem typically isn’t that you don’t offer enough value points. It’s typically that you offer the one that the clients care about the least.
Why did the client call you. Unless you’re a mind reader the best way to figure that out is by saying the following words: “How may I help you today?”
MSP sales are ridiculously complex but the business decision (as in: the problem the guy who owns the bank account cares the most) is quite simple:
We have some IT problems that we don’t have the time to deal with and we want the problem to go away without causing others or costing us more.
Building your value tagline out of that problem should be relatively simple.
But if you hit someone with a 50 point bullet list like you’re Microsoft trying to sway someone away from buying Vmware… all you’re really doing is shooting yourself in the foot. The business owner is sitting there thinking: I don’t have the time for this 50 questions shit, I thought I called these people to sell me on saving me time from dealing with tech problems but it seems like I just got another inquisitive idiot employee. Hold on, let me let you talk to our technical person. If you ever got that treatment, you lost.
Business values are simple as is a company mission – be it one employee, ten or hundred. You exist to serve a certain kind of customer and solve certain kids of problems. Don’t try to copy someone you are not or market with the content that doesn’t appeal to the kind of a client you don’t want.
Define yourself and let the market come to you.
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Can you fix stupid? Can anyone, externally, fix stupid? Correctional facility system seems to think so. I don’t. Yesterday one of my friends offered her opinion on this topic and I felt it would be valuable to offer mine… because I often get asked what makes an ideal employee and what sort of qualities we look for.
First let me offer you my definition of stupidity:
Unwillingness or inability to learn and adapt.
Your definition may be different from that but as the university system has proven through so many MBA diplomas issued to people that wouldn’t be trusted with the fryer at McDonalds.. Just following basic directions and ability to regurgitate facts does not make you smart. It just means you can follow direction. Without someone beating you into learning, you would remain incapable of growing mentally.
In other words, you can’t fix stupid. You can inform a stupid person but when there is no willingness and no drive in them to continue improving.. all you’re really doing is creating a more dangerous idiot. Microsoft and CompTIA have a certification system and prove this fact daily by giving one moron after another the inability to understand technology and just enough skill to possess a license to kill IT & productivity.
So what’s the difference?
I hate to sound like the meme version of me but if you have to ask that question you are an idiot. If your boss sent you this blog post, s/he probably thinks you’re an idiot too.
The difference is that stupid people have a false sense of security that assures them they need no further knowledge or further ability/skill to deal with the world around them. You know “set in his ways” kind of a person. Stupid people are happy and even proud of their ignorance, they feel like they know everything they need to.
Smart people can’t stand feeling stupid and put effort towards improving and better understanding things around them. They don’t stop because they got a diploma, raise, promotion, reward – because it’s not about that. It’s about solving problems. Stupid people don’t solve problems, they wait for someone to tell them what to do.
It’s not merely a matter of initiative either, it’s a matter of passion. There is no end game at which you become “smart” (or “learned”) and that in part is what we look for when we hire people. We look for people that won’t sit there and stare at the screen waiting for something to happen, we look for people that see and understand the inefficiencies and try to do better.
But Vlad, I’m a janitor, not everyone has the authority to do stuff to improve the.. <shut up>
There is no point at which you start or stop being a problem solver. Problems are everywhere and everyone faces them: Yet a very small part of the population tinkers and changes and attempts to change things from the way they are. Road signs are out there because too many stupid people walked in front of a bus. Smart people spent a lot of time going over data for the criteria for the threat that shows the likelyhood that stupid people will kill themselves. They determine when to place signs, how to make them stand out, how to orient them. Then they send some dumbass to dig a hole, pour cement and stick a pole in it.
In my opinion, you can’t fix stupid. I’ve had a lot of stupid people work for me and all I’ve ever been able to do is make them more dangerous. I’ve also had a lot of smart people work for me – they came dangerous and through education they managed to become less lethal.
And that’s the difference.
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Today I had a remarkably good day, the kind you only dream of as a business owner. I hung out with my kids and my wife in the morning, got in to work at about 9am, had a few meetings and by noon I was on my way out of the office in a convertible to hang out with friends at Disney.
Naturally, I shared this on Facebook. Of course, none of this ever saw the day of light on Facebook. In all honesty, I have two Facebook profiles just to keep my real life separate from the industry life that so many people are either cheering or hating. To further illustrate this, I did txt a pic to an actual friend but asked him not to mention it on FB and got the following response that is pretty telling:
Hahaha I hear you man and perception is crazy different. I catch so much shit from people who think I don’t work which is far from the truth. I just don’t post about it because it’s not interesting!
You don’t take pictures of yourself when you’re sad and you tend not to be thrilled to share the rockstar events such as setting the budget and reviewing project progress. But why is there such a fascination with people that seemingly do nothing? Why is that the celebrated goal of business ownership – to not work?
I’ll spare you the rest of the post if you’re busy: You’re being conditioned by sales charlatans to believe that success is not found in work but in not working. If you truly and honestly believe that then you seriously need to consider your career choices. Now read on for some fun ranting:
Why is social media so deceptive?
Because it is used to sell everything from lifestyle to political arguments; and much like anything you read on the Internet you will percieve the message according to your own mood and not neccessarily in the light that the writer intended. If you’re having a bad day “Good morning” can sound an awful lot like “I hope you get hit by a car” when you read it online.
But why do people percieve that there is relatively little work getting done? Mostly because we have been conditioned to believe that the hard work is a suckers bet.
Why should you work smarter not harder?
Because unless you challenge the fact that success is an outcome of hard work you cannot scam people into buying a get-quick-rich scheme that is so prevalent out there.
Don’t get me wrong, you need cheerleaders. But they should be motivating you to overcome the reality that earning money is indeed difficult, not dumbing you into a false sense of security (another Facebook post):
Looking for a way to be more successful at anything? Hang around with, associate with and engage with people who are SUCCESS-minded people. People who focus on positive achievement and HOW to achieve success, NOT who find every cynical reason why something can’t be done…why it’s too hard, too expensive, too good to be true. Befriend people who don’t constantly gripe, complain and find fault. Listen to people who focus on SUCCESS rather than failure, the positive WINS rather than the struggle. These are the people who encourage you and BELIEVE in YOU in the moments in life when you don’t believe in yourself. Here’s a little exercise: Honestly assess what you watch and read…are they a fountain or a drain?
Beautifully said. When you turn off your skepticism, your instinct, your ability to assess risk there is no limit to what you will blindly spend your money on in your quest for the dream.
And that folks is why hard work gets a bad reputation: Nobody in their right mind would spend thousands of dollars on snake oil if it said you needed to break your back and even if you do everything right there are still odds that failure is possible.
Success isn’t found quickly by cheating and changing the odds.
Success isn’t achieved through blind faith and positive thought.
Success is found by overcoming constant adversity and setbacks, by refusing to give up at the numerous obstacles, dealing with difficult people and never taking your eye off the ball.
But you’re not going to fork over $1,000 to hear that bullshit. You want a turnkey business that’s an ATM that someone else magically refills with cash every month while you sip fruity drinks on the beach. You want to ski and sip cocoa in the winter, be on a yacht in the summer, work half days while your staff made up of expertly recruited flawless employees takes care of your never-difficult clients.
Wake. Up. Optimism, positivity, success-minded — it doesn’t mean what you think it means. It doesn’t mean ignorant of your problems, reckless with your money, irresponsible with your time management, disrespectful of your challenging clients and employees: It just means that no matter how big of a challenge you have ahead of you hard work is eventually going to make it happen.
And they don’t sell a bullshit kit for that.
, IT Culture
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I’ve made my opinions of the SMB IT events very clear in the past and given some of the humorous proposals we’ve gotten so far I can assure you we’ll continue to chop away at our schedule of 2014 conferences. I for the life of me can’t figure out why any IT Solution Provider would want to go to a large scale conference given how much of what conferences provide is now available online. That said, here is my travel plan for Q1:
Australia (Sydney & Melbourne) – February 3-8
Dubai – February 9 – 11
UK (London & nearby) – February 12-16
USA – All day every day
Agenda in 2014 is primarily to help our partners grow faster by doing their migration and support business (why would you do all that work if someone is going to do it for you for free?) and in Q2 promoting the soon to be renamed Shockey Monkey for SMB.
ExchangeDefender 2014 Strategy Meeting
Thursday, January 23, 2014 12:00 PM – 1:00 PM EST
This section is more appropriately titled “Count the ways in which Vlad was wrong” but here is the short summary: People don’t read anymore. When they read they don’t pay attention. Even those not easily distracted or otherwise occupied rarely take the time to implement what we deliver effectively. So all the support and handholding services that we’ve provided in the years past are effectively getting an axe.
Here is my math when it comes to business investment: If I have to spend $100,000 on salary and another $100,000 on promotion of the service/content and then burn another $100,000 supporting it all, I’m in $300,000. And ROI of this investment depends 100% on whether or not you read the documentation, attend the webinar, train and properly incentivize your employees to do their job instead of blaming us, etc.
Or I can just spend $200,000 on the entire project lifecycle and just do something for you directly. It’s on me to do a good job or lose the business and the return is nearly directly proportional to my effort not yours.
The math becomes pretty simple. I can either keep on burning tons of money trying to search the marketplace for the IT Solution Providers that haven’t heard of ExchangeDefender or try my odds at finding them on the month when their current provider did something to piss them off, or I could spend even more to go direct.. Or I could just focus on helping my existing partner base grow faster.
I can take what I save in this process and expand my other solutions into filling more holes in the product portfolio that businesses need and are paying for through inefficiency like crazy. One thing we’ve turned up in virtually all of the migrations we’ve done so far was a messed up and completely crackheaded way small businesses collaborate and manage correspondence. The way some route mail or assure responses or customer service is so insane it’s a minor miracle they are using computers at all. In my opinion and with a few tweaks all of these folks are potential Shockey Monkey clients and I have another solution that can print money.
For more details please tune into my webinar in two weeks. If you’d like to meet on my trip along the kangaroo route let me know as well!
, IT Business
, Shockey Monkey
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It’s the new year and the opportunity for every blowhard to blindly toss their darts on the wall of IDC and Gartner data and proclaim the next cash cow. And with that in mind, the future is robots and drones which through a innocent mistake by the summer intern flip the bit from delivery to repossession and Amazon ends up with everything you’ve ever bought for them. And they’ll need it – in 2014 Amazon gets hacked beyond belief and needs to fortify it’s headquarters to keep angry customers who lost their life savings in the identity theft. Google comes out with a car that can drive itself around the obstacles placed in the road by Bezos & Co and Microsoft naturally responds by adding smartphone functionality to a NERF foam rocket launcher, marking it’s most significant innovative contribution to the field of security since retiring ISA.
I don’t know about you, but that’s sort of how I feel when journalists that don’t work in the IT industry take guesses about the industry. Kind of how like I’m a world class chef because I’ve seen Mario Batali cook a trout on Food TV.
That said, here is how I’m spending my money.
Unemployed on Easy St
The bottom of the IT world has fallen out and it will continue to erode. There can only be so many Verizon employees out there and IT ain’t hiring: If you’re only capable of answering simple technology questions and following a simple cookie cutter process this is going to be a rough year.
The reality of our industry is that everything that is easy is getting automated and everything that is automated and measurable will be controlled by the vendor in order to eliminate third party middleware from becoming a part of the picture.
It’s not just mobile, it’s the variety
So many people predicted that BYOD and MDM were going to be the biggest change and indeed the solutions arrived with a massive thud of indifference. Truth is that everyone is concerned about the mobile and sees it as a major game changer in corporate IT – but the reality that nobody wants to spend a lot of money for something that doesn’t manage 100% of the end-to-end solution is the rude awakening to the dream of controlling everything and anything – especially when the corporation doesn’t actually own it.
Going forward, the challenge will not be “managing” these devices but pointing out the issues and addressing them before they become a problem. This means having data to back up issues related to how the work gets done and reacting to changes quickly. A year ago it was all about getting a handle on iOS or Android, now it’s a matter of a lot more than just two mobile operating systems.
It’s not maintenance, it’s project
Getting paid just because stuff works is no longer a viable future business model when stuff doesn’t actually break a lot. If you’re in the camp of “But my clients still have XP, it will take a long time for…” I hope you’re actually investing those profits to be ready for the future that not only doesn’t have Windows XP but has a built in video help system that came for free. Would you put any of your techs in front of a webcam and stream them to your users?
The area where IT talent will continue to be massively profitable is projects with organizations that made massive investments in IT and need to keep it up. There are still ads for AS/400 admins out there.
I like a lot of what Vlad says but I don’t agree with all of it
Translation: “I only like the opinions that fit my own biased view but the rest of it is just crazy.”
The way we look at the rest of this decade, as far as where we can play, is to focus on the backend services that will help consolidate the massive surge in different services people rely on. Email remains the single sign on protocol of the Internet and also the single point of transaction records or backups (everything relevant to what you do on Facebook, Amazon, Twitter, etc is also emailed to you) – not by accident either, all these services need to find a way to keep dragging you back to their sites – and if you aren’t typing in the URL or launching the app then they need to prompt you to do it: Facebook wants you to wish someone a happy birthday, LinkedIn wants you to congratulate someone on their new job, Pinterest thinks you’d like to turn an empty roll of toilet paper into a cable extension organizer and the former Prince of Nigeria still needs your help to get his billions of dollars out of his war torn country.
We are aligning our business (ExchangeDefender) with our partners and taking over mindless tasks related to email migration projects. We are extending the service management to include these new communication protocols. In a way, we’re using our size to grow the portion of the business that doesn’t have very exciting long term prospects in order to have a larger deployment base for the service that helps manage multiple communication and notification networks.
Truth is I can’t build a Nokia and I’m not brave enough to launch a drone: But I know that business gets done through talking and so long as I can make sure people can talk (and can keep the content of their conversation secure) I’ll be alright. All the gadgets, fads and hype in between is just noise and we don’t get paid for that.
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Making resolutions is not as easy as finding friends that will keep you motivated and pointed in the right direction 365 days of the year. Everyone is entitled to wishful thinking – reaching your goal takes a little more. So for the moment, let me say I’m very thankful for Facebook. It helped me run over a thousand miles this year:
Oh, and over 1.8 million Nike Fuel points as well.
Folks, this in a nutshell is the power of social networking. While so many in the corporate America are afraid of their own shadow and weasel out at the first mildly controversial thing they might say out out, so many people are finding so many things they have in common with everyone else. We cheer each other on, we motivate each other and we share tips on how to get better.
Don’t let the above confuse you: I’m an IT guy. I look like one too, or I did a year ago. But nearly 30 pounds later I have one of the few New Year Resolution wishes granted – not solely on my will power but by encouragement of more than a thousand people worldwide. Some of whom are my partners, business associates, partners, friends of friends or random enthusiasts.
I have a healthier life as a result of all this.
Keep that in mind for 2014: Everyone gets ambitious at the idea of a clean slate. But you can’t get there all by yourself, and trust me, it’s so much easier when you have people cheering you on.
To Erinn Davis DeJose, my Facebook pals, everyone that cheered me on, liked my annoying Nike+ sync posts, txt’ed me while I was struggling to stay alive/awake through the Ironman or many half/full marathon races: You’ve all had a part in helping me get better.
I appreciate it.
Have a great 2014 folks.
P.S. That is 1,001 miles over 222 runs. Which equates about six and a half days of running or nearly 2% of the whole year – spend running. And some swimming, biking, training and weights in between.
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My head is spinning from all the amazing conversations I’ve had this week and I wanted to offer a bit of an explanation regarding my animosity towards VC involvement in the SMB space. As I hinted previously I am working on building another business and have had the “pleasure” of spending some time with the attorneys and consultants that specialize in the financial world. On one hand I’m incredibly thankful these folks exist, on the other hand it makes me long for the good ol’ days of $500/hour IT and corporate law attorneys charge. Yes, my butt hurts.
And on the subject of anal rape, why the hate towards the VCs? First of all, I don’t have a problem towards the model itself – venture has a place in the world helping larger companies get even larger, helping fund projects banks would otherwise refuse to undertake, helping finance complex deals and provide the means for all sorts of debt reduction, leveraged buyouts, etc.
Which in short is the exact same reason no small business (let’s say under $100m) should ever deal with one. But don’t take my word for it: Go talk to someone that has taken funding without a clear exit strategy that involved the IPO. What they will inevitably tell you is that even though the VC typically steers away from day to day, they shackle the kind of big picture and strategic moves that help small companies make it big.
But how could this be? Isn’t it common knowledge that VC is the very fuel that helps companies grow in the first place? Yes. Big companies. That you can count on your hands – the rest of them are in essence private money that is putting the money on either red or green and only hoping for the ball not to land on black. They’ll take losses and they’ll take big wins but nothing in between works. You can’t just build a highly profitable business with a long term strategy: You have to blow it out of the park so they can either win big or cut their losses.
Now that you know..
What is the lifecycle of a funded company that doesn’t go public?
Well, they’ll let it ride forcing big moves and expenses. While the illusion of grandeur (most of the time a delusion) makes things look amazing the course is to make even bigger and bolder bets.
But once things slow down a little, things get ugly. The employees that are working below their market worth get antsy because they want to be bought out. Things are always on track, everyone is winning (except the employees) and you’re just one step short of retiring to your own private island. But then your boss starts getting really interested in your expense report. And your hours. And your conversations. And increasingly trivial big projects while the costs are cut left and right. How can a company be blowing up big time and at the same time selling it’s Aeron’s on Craigslist? Because it’s being gutted, books cooked and working towards being served to a scrap buyer that might make more with it than the sum of it’s parts.
While this may sound ugly and heartless, this is the norm and this is the process. These folks aren’t evil, they are after returns. I ain’t mad at them.
But the part I don’t like is when a small company, who let’s face it lives or dies on the passion of it’s founders, is shackled and distracted towards someone else’s agenda. This is not VC’s fault: they aren’t funding you to believe in the magic of your dreams. It’s more of a steroid shot.
Borrow money from the bank: It’s your name, your credit, your decisions, your call all the way. But get taken over by the VC and well, for the convenience of not having absolutely assessed risk you are trading away your ability to control your own destiny. Yes, even if you own 49% you’re still a minority and now you work for whoever owns you.
That is my beef with the VC world: People do business with people. And when that trust is broken and it’s a matter of customer vs. logo and everything else be damned, the small business and innovation loses it’s spirit and it’s potential. I have seen so many friends and so many great business and ideas get ruined in this process.
And it’s that process of killing a successful long term business that I mind the most: When people take a shortcut that both mathematically and business-wise leads to a fundamental change in the values. Because people aren’t throwing money at you to keep on doing what you’re already doing well, they are doing it to maximize the leverage and get their returns to grow faster than they would than if they gave you a loan.
Money is simple that way: It just wants to make more money.
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It’s not a big surprise to many of my long time readers that I am a huge fan of Shakespeare and British/imperial/colonial history. I owe most of that to the copious (meaning: shitload) amount of reading, theatre, history and other liberal arts electives while at the University of Florida. Where, after two degrees, I graduated perfectly unemployable.
I am done for the year. Yesterday was my last office day, 407-536-VLAD will be redirected to someone else at work and I will catch up with you all at some point in January 2014.
One of the things I wish I knew when I was 22 would be that life is not fair. And so long as you know the rules and choose not to play by them, it’s your own damn fault for missing opportunities in life. When I was done with Gainesville I could have gone to Silicon Valley – but I didn’t. My bad. Would have been fun to be a part of the .com bust and resurgence. I’ve done pretty damn incredible even without it. But I’m not one of those “in spite of all my struggles I wouldn’t change a thing because without it I wouldn’t be who I am today” dumb jocks and rappers say after overcoming a bit of adversity. If I had a rocket launcher for all my dumbass mistakes I wouldn’t have any hair left.
Point being, you rarely get second chances in life to be a part of something amazing. I feel like I have a tremendous opportunity to do something incredible and I’m going for it even though it’s not the most conservative/safe thing in the world.
So I’m gonna go work on something else for a while. Not an IT thing so don’t worry, this blog will continue to be the ongoing massacre of the Kings English. Except for Shakespeare:
Our doubts are traitors and make us lose the good we oft might win by fearing to attempt.
Usually the only thing stopping us from achieving our potential is our own internal argument. All you have to do is change your mind.
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Thanks for your concern, I appreciate it.
Pretty misplaced though. Things have been going so well that it’s hard to believe and I’m one of those folks that doesn’t really get much easy in business: so when everything is going well I try to figure out the ways it could all go to shit in a heartbeat and stay ahead of it.
The migrations business we introduced in October has been insane. We will be launching a hiring spree in January that will likely double us in 2014. Shockey Monkey and our mobile solutions have been maturing and due for a huge release shortly. Ditto for the Unicorn remote support and monitoring tool.
That said, the move from a pure software to a service business has not been easy. Far from it, unfortunately. Even though it’s been a grueling, grunting, bruising exercise it’s what gives me faith that we will more than double and become an irreplaceable component of our partners strategy in 2014 and beyond. Here is why:
Every time we get burned on some service aspect I hear the following: “We need to better define what we will not do and not touch so we don’t have to do this again.”
My response is always the same: No. It just means we need to ask more questions and define a better process for it the next time.
If you can sufficiently define the scope of what you’re willing to do and not there is no limit to the amount of business you can lose. And in real life people don’t grade on the curve or love you for what you do for them – they judge you by how often you’ve failed them and how many mistakes you’ve made. Trust me, I’ve got refund checks to prove it.
So how do we move this forward? Well, as I discussed in this weeks webinar it’s all about surrounding our partners with the end-to-end solution: marketing that makes sense, process and support that extend it beyond just tech work, mobile strategy, support strategy and coming soon – a training strategy.
The strategy of the service business is simple – do whatever it takes to get the user to the cloud, once there make sure they leverage the power of the cloud. This has been a bit of a tough bargain between me and some partners that want their clients to be limited and kept in the dark on many of the features but what’s the sense of going to the cloud if you’re going to keep the same crappy process that’s gotten the on-premise solution to choke in the first place? A lot more on this later.
Although I haven’t had the time to blog here as much as many of you would like, I did also hear and notice that the “channel” has been kind of quiet too. It’s a sign of maturity – by now all the hype has kind of died down and only a handful of vendors have proven themselves to be trustworthy and capable of innovating and moving their partners up.
The rest are being unwound, cost controlled and being financially book cooked for a sale (garage or rollup); it’s a natural progress of any business particularly the short sighted one.
As far as I can tell, IT in SMB is doing really well or it’s going out of business entirely. It’s somewhat polar: few really big winners and many losers. And when you’re doing really well but see the carnage of Marketing-In-A-Can and Indian-In-A-Box MSPs and VARs all around you then you probably thank your lucky stars and try not to brag too much about it.
I of course wouldn’t really know much about the humble part but I know this much: It’s one thing to be a perpetual hype machine and quite another to be a valuable revenue generator. Any jackass can throw a great show and be the next big thing, but after the champagne bubbles out and people go back to work and start solving true business challenges they are back to dealing with the real world problems and people problems. That’s where we’ve been for years and that is where we’re moving to become even more valuable in 2014: It’s just a whole lot more work. But given the choice of more work or unemployment is an easy one: None of you would make it working at a Verizon store.
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