Archive for the 'IT Business' Category
Now I know these sorts of posts aren’t popular (after all, everyone wants uninformed predictions about 2016 ala Nostradumbass of IT) but they are necessary. As you know, I’m a huge fan of not fighting the calendar and doing business every single day – but towards the end of the year you need to kick into a new gear because people with big budgets and decisions that need to be made are making them as things slow down – December. So here is a quickie checklist that I go through. Hope it works for you.
Focus on company
– Sit down with the CFO, CPA, another CPA and discuss new tax strategies, rules, etc. If you employ people in multiple states (or do business on multiple continents) it’s time to look over the new rules.
– Once you know what the rules are… design a game plan around it. At ExchangeDefender we are launching 3 major new products and one large line of business, all of which we need to let people know about before the 1st.
Focus on staff
– What do you need to do in order to keep them employed? My people never believe me when I say “I am the most thankful for you because without you, I’d have to do your job” – But I used to, after all this at one point was just me. And every day that I don’t have to think about something is a day in paradise city. Here are some things to consider:
– Not everyone is the same
– Everyone doesn’t get motivated by the same benefits
– It’s usually something stupid that they need/want that you never would have imagined. But that’s sort of the thing, when you have a grain of sand in your shoe and you have to deal with it every day.. it’s a big deal
– “What do you want to do next year” – Everyone has projects, ideas, kids, life issues, etc. Sort them out.
Focus on clients
– Thanks. Thank you for all your money.
– What can we do better? It’s clear you keep on paying us for some reason, what else can we do better to make your life easier. Just like employees, everyone you deal with has a relationship with you and it’s on you to make everyone happy.
– How is business? What sort of issues are your clients facing? How can you help?
This is pretty much a boss shirt at OWN but “What are you working on?” is an ever present thing if you’re in IT – our field changes all the time and if you keep on doing the same thing one day you’ll lift your head up from the desk and be out of a job.
The last part of the last month of the year is an inward look to evaluate what you are doing to drive your business forward, to make your employees more fulfilled and what your clients need you to do. What are you doing to make people happier? More successful? More effective? More valuable?
I always shake my head during the partner calls when people say “Nothing new, just busy” to me. Business is an evolution of your service – to your staff, to your clients, to your community. You need to be moving, not busy. Really busy all of a sudden – outsource, contract, chop, sell: You shouldn’t be busy. You should be profitable and valuable. Busy is the word people who stuff envelopes for $7.75/hr do at home because they looked at classifieds in the newspaper at the low point in their life and ended up in a job about to be nuked by a robot. It’s for telemarketers. It’s for burger flippers during lunch rush. It’s not for IT. If you’re busy, you’re screwed.
Close 2015 like 2016 will be the best year of your business. For ExchangeDefender, Own Web Now, Shockey Monkey, etc it has been and it will be – and I thank you all for that. Have a wonderful Thanksgiving.
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There is a reason why 40oz beer comes in a plastic bottle, they know that by the time your life has fallen to the point that you’ve pounded one by yourself some bloodshed is about to occur. Or in the IT world, you’ve reached the level of being a product manager of an application framework, aka API:
API: Aspiring Programmer Improvises (better known by it’s marketing term Application Programming Interface) is a Buddhist take on the modern software development where two otherwise unrelated parties independently conspire to induce great pain and suffering on a third party unintentionally. Have you ever wanted to punch someone in the face really hard for no reason but were afraid of the consequences?
Fear not. You can be an API developer.
Now, I cannot say what I really want to say on this topic because people get really upset. Here is how API championing work is done.
Step 1: Someone from marketing fails at marketing. You can’t trust those people with swag anymore but people like them because they handed out a lot of swag in their lifetime so now they are responsible for the least accountable part of the development process: convincing other companies to put their intro level developer apprentices and interns into splicing the crap together so it barely passes Q&A. On a Friday.
Step 2: Well, thing is, we don’t really have the money for this. Or time to train you. Or really any motivation to explain this to you but here are 3 year old help files we wrote and here is this guys phone number – he refactored our code a while back and almost has it working so bother him.
Step 3: Thing barely works. Intern uses Babelfish to translate what he thinks his project does and sends it off to marketing. They set aside $50,000 for banners, booths and collateral explaining how this will make their piece of software bigger than Microsoft Windows in the 90s and perhaps even more relevant to modern life than fire and round wheels.
That is exactly how it works. Every software company, ever.
Now this is where the people who don’t work in software development should really just STFU and repost crap fed to them by marketing.. but they don’t.. so let me clear it up for you. It’s not about Open API. Those words don’t mean what you think they mean. Literally everyone will open up their API (i.e. introduce you to the spaghetti code written by last summers intern) just to avoid a lawsuit. They don’t break competitiveness by “opening” their API or providing this mythical “intellectual property” any developer working for $3/hr in Bangalore can refactor and implement. No. The way you crush your software business enemies isn’t with lawyers and restrictions and NDA and confidentiality. From the Art of War by Sun Tzu:
To defeat your software enemies you must give them the illusion of weakness. Open your API. Then defeat them through plausibly deniable incompetence, constant changes, lack of documentation, lack of accountability and robo-updated support requests sent to the purgatory (aka QA/dev).
By now most of real developers are ripping out their hair. Kiddding. You’re already bald. But seriously, let’s kill this bullshit myth of open API. It’s not about defeating your enemy with a “no” – it’s about perpetual emasculation of their credibility through constant changes, delays, promised features, bad documentation, and so on. If you’re not evil enough already, follow these simple steps:
Illusion of an API is more powerful than an API
The best way to get people excited about working with you is to completely get them vested into your mutual failure. Invite every developer you know to your development meeting and treat them with the Magna Carta of false hope: a yellow note pad. Sit in front of the room with a pen in hand and say “What would you like us to open up in our API next?”
This same methodology is used by 900 sex lines (are those still around?) where you pay $3.99 for the first minute and $0.99 for each additional minute as you explain exactly what kind of fantasy you want. Except with the removed benefit of having to keep your pants on. Euphoria is still the same. Sell them on the fantasy of two unrelated platforms freely exchanging information.
Bring your own bastard. Other developers might be snarky, sarcastic or god forbid actually call you out on your bullshit. It’s good to have a real developer there, crouching in the corner behind the podium to assertively dismiss any idea or misconceptions that might lead to additional work. Remember, it’s not about opening up your API and creating further workload that won’t give you any additional revenue streams. It’s all about hope and dreams.
If you and your bastard developer dance well the whole room will leave with hope that things will work but everyone will mutually hope it doesn’t go beyond people actually trying to use the frankenstein and lead to more support.
But that one dude will still try
Some people have too much time on their hands. So they’ll try to turn your pile of body parts, failed projects, Fiver contributions, open source files dragged into the wrong folder and a company logo into a fully functioning system. Let’s face it, you’ve failed as a product manager. Take accountability, admit fault and resign. Or…. Make those bitches pay:
Step 1: Randomly change your API without notice. This is the simplest way to break someone at their core and send them down the swirling vortex or uninformed people and half hearted escalations. It buys you at least a month or two. It’s like giving someone an overcooked steak and a double edged knife to cut it with – the harder they try to prove it’s not their fault the more they bleed!
Step 2: Keep the API the same but change data types. This way you can claim that your API has not changed but it will break the integration nonetheless. You used to have a txt field? Well toodaaloo motherfucker, it’s encoded HTML now.
Step 3: Rate limits without documentation. Some people will straight up make it past the hair pulling and bleeding all over their keyboard – too late for Sun Tzu methods now – it’s time to go on full Chinese water torture now. Drip. Drip. Drip. Make your system randomly drop API calls and requests at certain hour. On certain days. For certain vendors. Make sure you have your vendors pass an ID string so you can randomly discriminate against them. Don’t bother randomizing this, even when you get called out on it so what – it’s their word against yours, here have a free tshirt.
Step 4: Come up with a new API. Let’s face it, eventually people will grow tired of your incompetent/evil stuff and to fix this stalemate they will fix it with the new API. That is still in progress. By a developer whose skills are still in progress. Who wants to earn the respect of his elders through revolutionary ninja code fixes and brand new code framework toolkits that will definitely never grow defunct when their developer gets a real job. Bonus: Newbie has no f’n clue how to optimize software either, making the new API more inefficient as it gets more users. It’s how developers reach enlightenment and get promoted to actual software projects – when their initial stumbles work but produce catastrophic rewrite-from-scratch-worthy crap down the road.
And there you have it folks. The completely accurate and factually correct assessment of how to look like the nicest, most open, developer friendly and growing platform in public while being a complete sadistic sociopath hell bent on making your partners realize it would take less effort to write their own platform then spend another fucking minute supporting yours. But this is of course totally unrelated to this.
Now the 64k question: Who wants to be an integration vendor?
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Every now and then I have what I like to call existential crisis conversations with my partners: I don’t know what I’m going to do next?!?!
And to an extent, I understand why some people get into this frenzy – you’re being fed a steady diet of “what’s next” usually by people who flame out and are back at doing the exact same thing a year later. Folks… I’ll say this slowly: that’s not success. For every guy that loads up on debt, gets lucky, sells his business and makes a killing there are millions of those that don’t. And like I said, if that were a winning strategy those folks would be out on a yacht, not in a job. Or worse, same or lower job.
So now that we’ve clarified that bit of fantasy..
Success in IT business is no different than success in any other business – you learn to benefit from change, you learn how to hire and train people to manage a business and you pursue the next idea.
Not all ideas will be winners.
But once you know how to build, manage and scale a winning idea you start to diversify, you start to invest and you begin to invest in ideas and people – not in the process and perfection. I’ve seen so many people fail trying to be perfect operators of a business and end up failing to deal with the change.
This is why it hurts me so much when I see CEOs of companies out going to trade shows that double down on sales, process and marketing. No. No. No. No. You’ve already proven you know how to sell, market and implement stuff enough that someone paid you to get you to the point of having employees and enough time away from clients to attend that show – now is not the time to invest in yourself – unless you intend to never get ahead. This is where you invest in your people, send them to these conferences, give them ownership of tasks, projects and services. It’s hard to give up being a control freak but nobody is coming to take away the CEO job – so move on.
So the answer – what are you doing next? First, what else are you doing? What sorts of investments do you have? What other side businesses do you have? What does your portfolio look like? You can run more than one business effectively at a time – and if you can’t then you have the wrong people working for you. If you can’t trust your team then you need to work on that first.
Perfection is not the be all end all of business. Selling your business is not the goal. Entrepreneurship isn’t about finding a greater fool (because if you’re selling you’re admitting you don’t know how to have it make any more profits than it’s currently making) it’s about creating multiple profit streams.
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When you’re in my position you get to hear a lot of pitches, ideas and schemes that could learn to great riches.. if only they had a ton of money. You’ve all heard it before “You need to spend money to make money” and it was probably told to you by a person that either had none or sold advertising for a living.
To make money.. you need to learn from your mistakes, make fewer of them and above all else understand that elbow grease is more powerful than anything else.
Here are some things to ponder:
Mistakes are not fatal
When you start with something small and are just building things up, even if the marketing campaign or business model or target client base doesn’t work out you didn’t gamble a lot on it and the biggest hit is to your time and your ego. Consider the alternative: loading up on debt, credit cards or third party loans – you might still be on hook for some of that stuff if you fail. And god forbid you actually succeed then you’re really up for a disaster down the road as it puts you into a gambler mentality instead of a risk manager.
You become more conservative with risk taking
When you start small you will naturally have fewer options. Which means you will probably give them a whole lot more thought and due diligence than “let’s see what happens and how things work out” – when you have fewer decisions to make, the outcomes of those few decisions are far more important than just having a single big one work out.
You know everything won’t work out every time
Inevitably, you will fail. But when you aren’t distracted with a ton of other stuff going on, and you aren’t funding your dreams with your imagined proceeds from things hopefully working out.. you take the emotion of winning or losing out of the process. While emotion and passion do drive and motivate entrepreneurs, our ability to handle risk and defeat and quickly move on is the learning experience that makes us better with each new venture.
Fundamentally, you will be far better off starting small and learning and perfecting what you’re trying to do. And by starting small and learning along the way the better off you will perform. The more work that goes into making things work the more you will appreciate what you’re built and more conservative you’ll become when making decisions that could lead to you losing.
When I started Own Web Now it was with less than $1,000. When I opened my first Datek account it was with less than $4,000. My biggest victories started small and ended up getting built into something really great. My biggest hardships and difficulties came from growing and moving too fast – but live and learn.
All these conversations, where people have unrealistic expectations of what they need to get something done, are usually summed up like this: There is a reason why people with money have it and why those that need it don’t. You need to act and manage your strategy the same way someone with money would. That is the only way they will hand you money – if they see you as an extension of themselves and feel secure that you will make decisions the same way they do.
That’s the zen zone: Once you do start acting and behaving in such a way, you won’t need anyone else’s money. Which is usually when everyone wants to throw money at you.
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Over the past year that I’ve been off the road I’ve been working very intensely with my partners on getting them rocking in the cloud. As you may have noticed here, I have for the most part given up on the general IT provider population and have declined a very large number of invites for presentation and training because.. quite simply.. the easy cloud money will put enough people out of business in very short order as they let that v in VAR become largely minimized. So be that as it may, I have no real agenda here beyond just stating my opinion.
Let me just sum this whole thing up by saying that I’ve seen this movie before. I know how it ends. I know what happened to IT staffers that didn’t keep their skills up, what happened with massively vertical-focused shops that dealt with Y2K and cars and real estate/builders when the economy collapsed, what happened to people that were system builders and many of my fellow SBSers through the years. Cloud is a commodity and a transactional business, if you are not making a moat around it then you’ll soon find yourself out of the castle along with all your “services” the client could really do without. So let’s get started:
For most people, the migration to the commodity cloud will be the last large project of their career or business.
Cloud is a commodity, no argument there. But if you’re one of those VARs, MSPs, etc and treat it as such you’re pretty much putting up your tombstone.
There are many great reasons for someone to “sell” a client Office 365 hosting or Gmail, who can beat the appeal of a cheap mailbox. It’s what the clients are asking for: Vlad, I need the $4 mailbox. Convince me why I should pay double or triple? Hypothetical question of course, I’d hang up on someone that was that clueless. But we do get to compete against Gmail or Office 365 often so here is how we do it:
Case: Client needs Office 365. They want it. It’s $4.
Vlad: Not a problem, I can have that contract for you by the end of the day. There are some terms but let me ask you a few questions…
Few questions later, the person sort of realizes just what a crappy deal they are getting and how many compromises they are about to accept. While on the surface everything looks the same, people that run businesses or are responsible for IT departments don’t buy the bottom shelf Dell hardware specials for a reason.
And to be honest, we have not had an issue selling anything from our Exchange at $4 to the full “Office 365” stuff at over $25/month (I use the quotes around the office because it’s the same software/features that Microsoft offers it just runs off the network and the servers we control).
How Much Is Your Expertise A Commodity
I ask my partners this all the time.
Another one (credit to Lee Evans): Should your expertise save them money?
One of the misconceptions about small business is that in small business we all have each others back and we try to save one another a ton of money. Guys that thought that went out of work/business last decade.
There are two kinds of business models that are thriving today:
Cloud transactional – people selling a ton of different cloud services due to the demand and their ability to roll them out quickly.
Project and legacy models – from web design to hardware maintenance to hybrid of MSP / project based solutions.
Only one of these will survive. And if you think I’m on the side of the cloud… you haven’t been paying attention.
For the past few years we have been at an inflection point between buying stuff and buying services. The moment people buy a service (and get on it) the need for an IT person is eliminated. Smart people are partnering with companies that enable them to be the sole provider of that service – folks that don’t pay much attention are simply connecting the dots and facilitating the sale and effectively removing themselves from the IT channel. Yes, they delude themselves into thinking that their MSP contract means they are tied to the client but I hear from more and more people each day that are dismayed that their client decided to give up the office, the hardware, the infrastructure that was being managed.
Imagine offering your clients a great phone system and managing their PBX and providing service with their phones, etc. Then one day you saved them some money by moving all that stuff to the cloud but they kept their gadgets on their desks and everything was the same. Well, new release came out and there was no real need for the desk phone, their cell could do the same thing and thanks for the years of business but it doesn’t seem we need these cables, phones, contracts or warranty. Replace the phones with computers and the PBX with the cloud services and there you have what I’m seeing more and more out there.
The inflection point – preparing you for which I’ve made endless blog posts over the years – was to help you create your own plans, your own support, your own backoffice (hopefully powered by ExchangeDefender and Own Web Now). You either built it or decided it didn’t matter because you had all these other gadgets that needed to go in play. All I can hope for is that either you gave us (or similar) a shot and that your luck is different from the hordes of people that are suddenly knocking on my door.
The notion that that cloud.. is just a computer that is in some other office.. is a gross oversimplification that eliminates experience, skill set, training, investment and a common goal of providing an excellent service. But suppose all of that was indeed worth nothing, how would you explain your client what you are charging them for stuff every month?
Something to ponder as you think what your business is actually worth when put up against a commodity.
So I’ll say it very simply and succinctly: If you are rolling out a cloud solution where you are not in control of the account, not in control of the data, not in control of the backup and disaster recovery… You are outsourcing the part of IT the business actually cares about. I know you think your service is important, I know your tools are sophisticated, I know your knowhow is earned and your relationships are strong. But you are digging your own grave. Good luck with that.
P.S. The really ugly thing, for folks that aren’t naive, is the aspect of the cheapness and liability. In the past when clients decided to go cheap and make mistakes you at least had billable hours and projects to help them roll out of their mess. When those mistakes happen to services, and trust me cloud is far beyond flawless, who really has your back? Your clients? What sort of control do you have over the situation? How about that data? Folks consumed with the dizzying array of Azure and Amazon Web Services options and services are running around trying to do their best to sell more, find more clients, get more leads, specialize in a more lucrative vertical – but all they are doing to themselves in the process is cutting away client dependence and future profit prospects. While the liability explodes because there is no way to throw money at fixing a problem after the lawsuits start to fly. Again, something to ponder. Cause if you think you have a simple and easy answer to this.. it’s going to hurt.
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Earlier this summer I decided to take over two months off of work and really had the minimal contact with the office and with most of the employees. What I had to figure out is whether I am done with ExchangeDefender, Shockey Monkey and indeed with the rest of IT world.
This is a tough business. When you’re in the technology part of it, your motivation and your reward is the man triumphing over the machine and making that underlying technology work better for the business that invested in it. You know what to do. If you’re any good at that and happen to like people you’re on the business side, helping people not waste their money and productivity. Then you make money. You know why you’re doing it. Lot’s of money. Really, rather obscene amounts of money.
So there I was.
When you’re making so much money that you don’t know how to spend it, but still have responsibilities, things get rather monotone and boring. It’s just a number. You go through the daily motions but the process itself kills you. You want to put the pedal to the metal and get a new feature rolled out but that takes time. New marketing agenda – needs to be researched, sold to partners on which benefits work and where, designed, tested. New business lines – ditto, starting it from scratch. I’m not going to lie, it bent me.
So I went on a vacation. Around the world. Did all the things I love to do. No, still didn’t sleep, I’ve come to peace with the fact that it’s just who I am. Ate a camel burger. Rode camels in multiple countries. Hey, it’s Wednesday! Hi Andy.
It wasn’t a soul searching expedition.
I wasn’t trying to ask myself what’s next.
I wasn’t making plans in my head or hoping and wishing.
I just enjoyed my life.
And then it hit me
All my adult life I wanted to make $100,000 a year. Then somehow that changed to wanting a million dollar business. As I got more successful the obsessions added zeros but the bank balances never really did much for me other than giving me the confidence. What I got out of ExchangeDefender, when it’s all said and done some day, won’t be the money. It’s the relationships I’ve built, people I’ve trained and made into professionals, companies we’ve helped build and seen each other (and our kids) grow up.
So I did no work this summer. But I kept on chatting with partners who are actually more my friends at this point rather than the people I work for. And that in the end is my value – in seeing that people like myself beat the odds. I founded my company on the promise that we will not screw or exploit people, staff or customers. Over the past 18 years lot’s of people worked very hard for it. Don’t get me wrong – we’ve done great – but it’s been an effort that is more than a paycheck. When someone wakes up at 3AM to deal with an issue that could be handled by someone that just got hired that’s no longer a “I need this job” mentality.
I cringe when people tell me they are building their business on top of a partnership with a giant company who is accountable to it’s shareholders and barely even to their employees, much less you. And then what do you tell your staff? Your clients – your family?
To me, Own Web Now has been and will be a company that helps small business succeed. And we have a lot of cool things we are working very hard on – with a management team that has rendered me completely useless and replaceable. I can’t tell you how liberating that feels. And just how awesome that is going to make the next 5 years that I’m mapping out for us right now.
As always, thank you for all your money and your confidence in us. I appreciate it.
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I got an interesting email (excerpt):
… so it’s just a matter of time till my job is outsourced or just dismissed.
If you were in my shoes what would you do because I like the place I work at. I just don’t see it lasting.
I hear this from a lot of people. You fall into a job where you happen to be good at a few tasks and your boss piles your plate sky high in the same task until they move on to something else and you cease to serve a purpose.
I often get criticized for writing in a brutal tone that cuts very deep and today will be no exception. I am not trying to sell you anything, I am not your buddy, I am not writing this for the sake of getting you signed up for a seminar or a book tour – I do this as repaying a debt to the community that has made me a very wealthy and successful guy. And this is an important part: I hear this very same “getting stale; I think I’m done” sob story from my MSP partners who are feeling like their days are numbered.
I’m going to say this only once and very slowly, read it as many times as you need to and chant it away until it sinks in.
People hire people.
People buy services.
Got it? Good.
When something doesn’t matter but is necessary for the operation of busines, it is handed off to a temp employee or the cheapest licensed vendor available. It’s temporary, necessary and finite.
When a business is spending money on personnel it’s not looking for a cheapest person barely capable of doing the job. Those jobs are in China now. If you were invited for an interview it was because the company felt you were capable and qualified of doing the job. If you were offered the job it is because the employer thought you would be a valuable addition to the team and could grow to be more than what they needed right then and there. Why else would they go through the hassle, it’s so much easier to deal with a vendor than to train, manage and motivate an employee.
You are here because you are valuable
Most employees forget that. Most employers and managers forget this over time as well but that’s the truth – we fall into a rut and into a process and the longer we do the same thing the longer we don’t feel we are making progress or a difference.
It is critical for employees, and their managers, to come up with tasks and projects that staff can work on somewhat independently of their core responsibilities (and this is where most people that were gonna forward this to their employees just stopped reading because nobody wants more work) that give some meaning, purpose and independent creativity to an employee.
The best employees see what needs to be done and manage their projects on their own. The ones that just wait for stuff to be handed to them on a platter are sort of missing out because odds are you’re going to be handed stuff you really don’t want to be doing. So take some initiative, talk to your boss, point out stuff that needs to be done.
Remember, people hire people. You got hired for a reason – if you do nothing in the face of becoming obsolete then yes, you will inevitably find yourself without a job. But if you reinforce why you’re there, if you excel at your core responsibilities while proving that you’re worth and capable of more.. They’ll find something to keep you to do.
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A lot of people seem to like Trump, despite or in spite of the seemingly idiotic stuff he says. As I try to explain this to my friends abroad, it has more to do with the general disgust most sane people have for the media and for the climate of political correctness that is slowly crushing our ability to say anything negative about truly insane stuff that is going on.
Here is the thing with Trump – he is direct, he is visceral, he is everything you need to actually succeed in business dominated by lawyers, committees, boards and people put in place to keep things from moving forward. We’ve all had those clients.
I don’t find Trump to be mean spirited. Someone with that much power and that much money wouldn’t stay in business or in the media long, who wants to fight all that backlash when you can buy an island?
I recently had a conversation with a friend about relating to Trump and how being an asshole is not a bad thing people always make it out to be.
Not being an asshole, not being critical, not being able to raise your head above group think is perhaps the worst thing you can do when you realize that far too many politically correct super networkers around you are perfectly polite but also working their own agenda that is actually damaging and actually mean spirited. Folks that are really out in complete self interest and screwing others do not want to have difficult things discussed because it sheds light on their behavior.
I can relate – here is a personal story without naming names. I feel like the biggest problem MSPs (who are a decent size of my client base) face today is lack of education. So I get invited to donate my time to a non-profit to help design stuff for folks to get a better handle on the cloud and how to do so profitably. Sounds like a win win right? But when that non-profit is generating 50 million a year in a certificate business and decides to waste the groups time on generating one more worthless commercial certification track who is the asshole there – the guy who doesn’t have the time for that or the guy that is pushing for it with both hands and suddenly ends up with a part time job with the non-profit?
When activity like that goes without comment and without criticism, many people get actually hurt. Not in sense of hurt feelings, which people get over with quickly, but actual value destruction. And folks like that want an environment where nobody ever says anything stupid or offensive or critical – because negativity is a bad thing and we need to focus on good and positive and forward and up (and let them get away with it)? Bullshit.
This is why guys like Trump are always called out for the stupid, ignorant, negative and critical stuff they say – somewhat because it’s easy to get the people to think you’re an asshole with snippets and sound bites and be angry about it (so you tune in more often) – and it’s far more difficult to get the people to rationally consider all the fuckery and swindling going on. People overreact when they are confronted by such crude or honest behavior because they have become disaffected and sterilized by the cordial, polite and friendly interactions that they deep down know do nothing but screw them. And it’s easy to point to it and say “My god, what is wrong with them!!!” because that shifts the conversation away from the ACTUAL problem.
So every now and then I work with people who after a while feel comfortable saying “Man, I heard you’re such an asshole” and I look at them wondering why they thought that was such a bad thing. Sometimes being an asshole is a good thing, particularly when the “normal” is the insanity we’ve given up to take for granted because that’s just the way things are.
For the record, as many of you may have been offended by this blog (and if you haven’t been yet, stick around), keep in mind that none of it was mean spirited to tear something down. Visceral as it may be, you can probably count on your fingers the number of folks that have been hurt by me – wish I could say the same for those that live to criticize it as they fail from one job to the next.
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Before I get out of here for my summer vacation I’ve spent quite a bit of time on the phone with my partners and we’re chatting about the usual stuff that’s required for growth. If you’d like to chat please call me – if you’re waiting for me to call that’s a 5 figure queue and my schedule gets set by demand… unless you’ve got something fun going on then I’m there.
Making money from IT Solution Providers
I should first offer a disclaimer that the word VAR is a four letter word in my business. So for the purposes of this discussion (and our business model in general) the following doesn’t include businesses that aren’t first and foremost about service.
There are four successful business models for making money off SPs:
1. Overpriced, high touch, we-do-it-all solution.
2. Free solution that sells something else on the side.
3. Reasonably priced but widely distributed thing everyone buys.
If you are considering going into a business that provides any sort of a solution to the SP base you need to pick a horse and stick with it. Here are brief descriptions:
Overpriced, high touch, we-do-it-all solution. This works if your solution requires quite a bit of skill to put together and maintain. Here you’re actually providing more of a service and consulting/implementation than an actual product. Think of it like Mark Zuck – “If they were going to build Facebook, they would have built Facebook” – if your solution was both easy and simple most companies that have a lot of money would have already built it – so good luck trying to sell them something if they already have middleware in place. Ditto on the low end, they want it but can’t afford it and you’re not going to make money by selling things at a loss.
Free solution that sells something else on the side. If you don’t have a large sales force and a support team then you likely also have a weak marketing budget – good luck getting in front of the client and harassing them into buying your stuff. But if they are already using some of your stuff it’s infinitely easier to get them to pay a little for some other stuff. And eventually they’ll end up in the product #1 where they are actually paying a lot for something very personalized and custom. Yes, Shockey Monkey.
Reasonably priced but widely distributed thing everyone buys. Think things like antivirus and backup software – expensive to develop, expensive to support, difficult to build out, requires track record and increasingly higher costs as audits and certifications are required for even the most elementary stuff.
Pick one and stick with it. As every failed IT business will tell you, once you give into the temptation of a “big client” that soon becomes a major part of your revenue and then bends your profit margins over.. it’s far less risky to get a ton of clients that contribute a little than to kill yourself over that “whale” client. But that requires hard work and vision and strategy and…
Service business is about relationships. But what do relationships look like when you’re likely never going to meet most of your clients in person? The key is availability and responsibility. I wish I had a dollar for every time an existing client has told me that I come off like a total dick on my blog and Facebook. No shit, why do you think you’re reading this horseshit in the first place? When you’re actually working with us things are obviously quite a bit different – and the persona that you will play on the Internet to people that will never see you better make it seem like they can approach you and rip you a new one when you fail. Your clients need to know that they can come to you at any time, for any reason and that someone will take care of them.
Long term strategy. Some stuff will work and some stuff will not, that’s the nature of business. But working with solution providers isn’t like working a transactional retail cash business – solution providers will see you as a part of their business. When you do good, they don’t notice. When you mess up, you make them look bad. It’s the instant Office Space moment where you get to be kicked by their client, their clients rep, their low end IT guy that took abuse on the ticket and likely the manager/owner that now has to apologize for you. So if you don’t have the mindset of “I will not fuck up” then this is a non-starter. When you sell them something don’t ever expect them to cancel. Communicate as such, lead up as such, explain as such.
Beware of hobbyists. This is the most important thing and most valuable piece of advice I can give you: Money talks. If your client comes to you with more problems, questions, inquiries and requests they are likely very diligent and thoughtful people. And in my experience, they don’t have a lot of clients that will make this a good business venture for you both because they spend more time tinkering than selling and managing. Unfortunately for me, I was that fucker that spend most time trying to make things perfect early in my career and I advise you to avoid that type of a person like a plague. Ditto for coaches (I still get daily emails and calls from one expert after another promising to bring me business if I hire them on to help my clients with business, newsletters, web sites, sales strategies, marketing, cold calling, etc), ditto for prominent personalities that you can’t pinpoint a revenue stream (professional conference attendees, vendor shills), people you can’t reach on the phone (if you can’t get to them how do their clients?), professional networkers and dealers (we can connect you with a person that can connect you with 5,000 leads) and other common sense scum of every business line.
If you build it… they will come. But will they come in an adequate volume to make you profitable? Remember that folks that have a lot of money to spend may already have some sort of a solution in place and those less fortunate probably don’t have the time, resources or willingness to put the solution in so you’ll have to do it for them. Whatever you do, be nimble and test multiple models until you start building up a base from which you can hire, replicate and grow your enterprise.
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Once upon a time in the long long ago, right after college, I went for an interview with a Fortune 50 company and after a few interviews for an engineering job they went with someone else. About a week later they called me back and wanted me to come in and discuss a VP role. Quote: “You just seemed too sociable and too friendly to work in engineering long term and we think you’d do better leading the place”; few more interviews, all day meetings and calls with different offices later they again chose someone else. I was pretty bitter about that for a long time but it was good to be crushed at such an early age:
High profile jobs, with few exceptions, are not given. They are earned.
That’s not the lesson, I’ll get to that in a moment. Bringing in outside talent to an already thriving organization breeds disloyalty and crushes the corporate culture that is built on climbing the ladder. Why climb at all? Because to lead effectively and grow not just the profits but the team it’s about far more than just being qualified. It took me a while to figure that out.
Now.. what I’m about to tell you is not something a book can be written about because it’s not glorified feel-good bullshit people tend to seek out while they fantasize their way out of the daily struggles to manage and grow a business. Here is the truth.
Making money is hard. Sustaining it over the long haul it’s extremely difficult.
And that’s the way it should be.
The sooner you accept that – the better off things will be. It’s hard, it’s brutal, it’s without external motivation and very few people are cut out to do it. That’s business.
I have disagreed on this topic with many of my ex employees. Among the more triumphant failures I’ve tried to mentor are scores of stay at home moms, SEO experts, multilevel marketing sales frauds, sandwich flippers, family business part timers and other lifescapers who thought they knew better. I wish them all the best. But in so many ways I feel sorry for them and for the day when they look for a real job again and realize what HR does to resumes that have large holes between jobs and how hard their “willingness to work” will be questioned some day. But that’s their problem, not yours if you are trying to build a strong organization.
In a workforce full of dreamers is the reality of overworked and underpaid people who channel their frustration into solutions and success. If you think about what it took to build your business, that most certainly describes you. And while peons and dreamers will come and go, the people that can make it through the thick and thin are the ones that will be there for the long term and will ultimately succeed in the long term.
Not really a feel good motivational tidbit, is it? But it’s the truth. While people are stuck daydreaming about working at Google and being given a free paycheck and time to go find themselves on spiritual journeys through Indonesia (of which I’m almost certain there are like 6 people with those choices just for the sake of PR) the rest of the people are grinding it out like everyone else.
Don’t dream. Work. It doesn’t get easier, you just make more money. People that win have the mentality that it isn’t about the temporary annoyances but about smashing long term expectations.
And that pursuit, of overcoming adversity while excelling at your craft, is what careers are made of. And damn it feels good when you finally make it. Maybe it’s for you, maybe it’s not but I’ll tell you what – earning something always beats being given something and it sure as hell beats holding a sign asking for $15 an hour for a job that people beat you down at.
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