For the past two weeks (and going for the next two or so) I am really in the overkill Ironman mode trying to clean things up both personally with respect to Own Web Now and professionally with respect to everything that I’m doing.

Have you ever seen a dumbass jock on ESPN scream “We must execute. Execution is the key. We are just not executing” - same stupidity applies in business where you go head first towards the results you’ve set and process you’ve implemented that when it works remarkably well you don’t take your head out of the picture for long enough to see the mounting pile of little problems.

I think that’s something we all struggle with. We’ve been remarkably, by all expectations and projections, successful over the past few years but we’re neither as efficient as we possibly can be nor as focused as we probably should be. That sort of a shotcoming is generally flows from the top down, as you’ve read on this blog before.

What I generally do not talk about is how we overcome and fix the issues that pop up.

Last week was big organizational view / review / rebalance. Since quite few of you run as large of an organization I won’t bore you with those details.

Today, I sat through the pipeline with an axe and went through all the quotes and promises and well wishes we were thinking about doing and I started swinging. When you are struggling you’ll take any deal, any project, sign up for everything that may lead to success. Once you’re successful, you have to rebalance a little and try to be more optimal with your practice instead of chasing any dime. Not that there is anything wrong with chasing per-se, but if your chasing of little stuff impedes your ability to be responsive with the big stuff and you start backing yourself up….. well, you owe your plan a big reality check because things have changed since the time you’ve put it together or since your last measurable accomplishment.

So today I got myself out of the expectations and promises and doubled down on the things we intend to fulfil. Already got the apologies/retractions out and have a goal to have all the outstanding quotes submitted and fulfilled by the end of the week.

This hasn’t been easy, and it has really impacted my ability to be as responsive as I’d like. I know I’ve missed a lot of email responses and IMs as I’ve just flagged the conversations I need to continue but haven’t had the time to give them the just attention and response they deserve.

The point of this whole thing, even condensed down to a single activity like email responses, is that regardless of how big you are you still have the issue of finite resources and finite opportunities you can turn into results. One suffers as a result of the other and the reason why it is done to begin with is to improve your company, services and deliverables as you grow - instead of precipitously declining quality to increase revenues until you’re pretty much the biggest thing out there but everyone thinks you suck (See: AT&T)

How have I done this so far? First, I bumped up my hours from 4-6 a day to about 10-12. I then organized my to-do list not in the order of urgent, important, high priority, standard, normal, low, inquiry but in the the order of resolution and delegation. That is, I tackled the issues that were largely not involving me but were waiting on me as a small part of the equation. This way I can attack things first and hand them back over so they can continue to progress without my direct involvement.

Then moving on to the optimization tasks - instead of doing a process equivalent of data entry and then fixing the issue I’ve moved to fix the issue first and then work through the backlog - this way my pile is static and every issue I handle directly decreases the workload and backlog by that amount. Remember, you don’t fix problems by making a pile of those problems or people complaining about those problems smaller. You fix it by stopping the problems from coming up in the future.

I’m not superhuman. Last night I had some of the Halloween candy and apparently wasn’t watching just how much of it I was eating while working. I decided to take a short nap around 10 PM and the next thing I remember is walking the dog around 7:30 am I’ve had to cut out the blogging, marketing, partner calls, movies, lots of TV and sports (haven’t seen a full football game in 2 weeks now) and am back to driving to work with Katie. Each of those activities contributes a few hours a week back to my fixing efforts.

It’s not really easy and I am not complaining - it really is a blessing to have growth pains - but I think it’s important to keep in mind that everything comes at a cost.

Regarding the previous post, someone asked whether this stuff really matters of if we should be more focused on the IT stuff which seems to be ignored as of late.

Here is my thing: I am not here to tell you how to vote or who to vote for. The problem I am here to spotlight, as I have for years, is that social, political, technical, financial and business factors make a big difference between success or failure. If you are not aware of all or at least follow them all, you are doomed to poor performance at best and total failure at worst. In the business of technology we no longer have the luxury of always being employed because things are too complex, people need new gadgets and want upgrades. Things are getting serious on one end, commoditized and outsourced on the other, and you have some big decisions to make.

Your decision on November 4th will affect you, regardless of where you are and who you vote for. It may make a difference in your ability to grow your business if you own one, or your ability to keep your job if the business you work in is blissfully ignorant of what is going on. You have to be aware of the wide array of things these days.

That is why I write this blog - to stay a level above and beyond the bullshit.

Some people enjoy the comfort of lies and sitting in us vs. them groups - but the reality is that you are in control of things, it just takes a lot of effort and learning. But hey, it’s not for everyone, and folks stuck in that comfort zone are the ones I pity the most - on the other hand someone still has to work the fry station until that is automated as well, so to each his own.

Don’t you hate it when professional liars get smacked in their face with facts that prove what we all think of them? If you don’t live in America you’re in luck because you likely got to miss Obama vs. McCain presidential debate, the ongoing farce of pandering, where the two foamed at the mouth over trying to please the ordinary man: Joe the Plumber.

If you are a fan or follower of American politics you know that a politician running for office has more shoutouts than an award-winning rapper or an inbred Nascar driver combined. To help connect with the people they are serving screwing they like to talk about their touching stories of ordinary people that shape their thoughts and (pay no attention to special interest lobbying that effectively controls their every move) this year it was Joe the Plumber’s time to shine.

McCain brought up how his good friend, Joe the Plumber, looked at Obama’s tax plan and realized that paying higher taxes may make it impossible for Joe the Plumber to buy the plumbing business he has been working at for the past 10 years. Awe. Doesn’t your heart just die when you hear something that horrible? Mans hopes and dreams, crushed, by a marginal increase in taxes.. To which any small business owner was likely thinking:

New shirt available from tshirt hell. I am so wearing this.

What’s the problem with Joe? Why do actual business owners likely hate guys like Joe? I’ll tell you why:

Joe the Plumber is not exactly a plumber, he’s “not even close” to making the kind of money that would result in higher taxes from Democrat Barack Obama’s proposals and has such an aversion to taxes that a lien was filed against him by the state of Ohio.

Source

Hold on a minute. Not only is this guy a fraud, an unlicensed plumber but also has a tax lien against him? Filed almost two years ago? And he is hanging out at rallies and appearing on TV interviews?

This is the profile of a hard working American entrepreneur? One that is running around and not working while bitching about how others are bringing him down? I’m here working at 4:49 AM on a Sunday morning and THAT fraud is the depiction of the hard working people that politicians are concerned about? An unlicensed handyman that doesn’t pay taxes?

On behalf of the business owners and tax payers everywhere, fuck you Joe.

How strongly do you feel about your brand and the unique services that you deliver?

Those of you that follow me on Twitter know that I’ve been in Miami for the past two days. One, well the only one, thing I love about my old home town is the incredible sense of opportunity and the enormity of the markets to make your dreams come true if you work hard. I work with a lot of entrepreneurs and I feel that many are mentally crippled by their own small vision of their world and the possibilities - some are so scared and petrified of it that they have mentally locked themselves down to their routine that they can’t even think of a way to grow into the future.

Time for a field trip to Miami.

I kind of grew up around this culture which in no small part accounts for what drives me to keep this stuff moving and growing, here and abroad. What kind of culture is that? Well, true story (cause you can’t make this stuff up):

Earlier today I was driving back from breakfast down Broward and a silver Tahoe pulled up to my Vette. Guy rolls down his window, leans out, starts pointing at me.

Did I leave my trunk open? Is there a hobo I’m dragging behind me? Who knows, I roll the window down:

Vlad: What’s up?

White dude: Hey man, we install home theatre systems and we just had a cancellation. I can give it to you half off!

Vlad: Sorry to hear man, appreciate it but I don’t need one?

White dude: I hear you but it’s over half off, everyone needs one!

Vlad: Thanks man, but I live in Orlando.

White dude: <shrug> It’s a great system, maybe for an extra room? We can have someone come out and install it for you there.

Vlad: I appreciate the offer, good luck with the sale.

Now, was the system hot? Unlikely, company logos all over the car and he wore a logo shirt.

Could it be that they really just got an order pulled after they drove all the way to the place to be rejected at the doorstep? Doubt that too.

So what is the deal really?

The deal is that you can count on wealthy or busy business people not to be aware of what the things are actually worth. But one way they got to that point was by working hard and taking advantage of every opportunity that comes across. You want to come into my home and install some stuff that I’m practically stealing on the street? Who am I to say no?

The unique selling opportunity is that these guys likely travel up and down the street all day long between installations and they pull up to the cars and run a sales pitch that is far more sophisticated than most of the people reading this post can ever pull off.

Profiled audience (expensive car) with vanity issues (”VLAD” license plate) and most of all a captive audience stuck in traffic likely bored out of their mind.

It’s like ghetto Skymall - I’m stuck here with nothing to do and someone wants to entice me to play with shiny toys?

The largest component of marketing for sales and leads is originality. Most of the time it’s not about the price (that comes later) and it’s not about the features (remember the purchase is emotional for the benefit not logical) and everything else comes only after you have their attention.

Folks complain that their marketing isn’t working because they are operating in a crowded market with indistinguishable alternatives all trending towards being commoditized. So the only way to uniquely distinguish yourself is your marketing - and many opt out for the cookie cutter advertising, pre-canned and sent by other people in your own market. Your ability to convert a disinterested third party into someone that will pick up the phone hinges on your marketing budget to continuously slam the person with junk mail and phone calls - all of which they receive all day long from your competitors.

How much money could you possibly save if you could clearly communicate your differentiation on the very first interaction that sets you apart from the others - good or bad?

This is how I roll..

I know you’re probably thinking that this is a nice story but how do you implement it. If I told the 60,000 of you reading this then there would be 60,000 of you doing it and the whole concept would fall apart. Does it actually work to stand out? Well, you are reading this, so yeah, it works.

The last bit of unapologetic, shameless, slimy vendor whore, pimping I’ve done was in Dallas a few months ago. I have long term hopes of replacing my staff with a webcam and a Lego robot. It’s a dream.

I was installing a webcam that pointed at my development server rack (read: fire hazard compiled from things Vlad found on eBay) and while I was working I invited people to hang out with me. So people came on, chatted with me, I talked, did tours.

One of my Twitter followers emailed me for the first time and told me that they were thinking about going with us but got a contract in the works with RackSpace because they didn’t know what the infrastructure looked like.

Oh reeeeeeaaaaaly? 

Hard selling - 4 TB on my shoulder, bitch!

I added the guy to my MSN messenger, started the webcam on my laptop and took him on an impromptu tour of the data center. This is the server room. This is the switching cage. These are your options of racks. This is the cage we can do when you want to grow. This is the HVAC. This is the readout on the A/C - 65 degrees, brr.

Then I showed off the raised floors, the Diesel generators, the different cage configurations. I did a on-demand pimp session of the data centers that I never could have recorded on the camera and put up on the web - nobody would watch a goofy guy run around a data center blowing his pants off by the air flow output from a huge 42U rack.

But by the time I had made it back to my development cage and put my servers down there was a quote copy in my inbox that we beat by 20% the same day and by Monday closed a huge contract.

Aaaaalways be pimping.

Is it so different from the guy leaning out the window trying to push a home theatre system? Is it so low to take pride in your work that you can sum up the courage to show what you’ve built and can offer people?

If you are in this market and you’re struggling… you need to step your game up.

Got a pretty disturbing IM earlier yesterday, which will probably explain why some of us keep such a watchful eye over the economic events:

“side note most of your AUS clients are now getting screwed hard by the AU/US Dollar changes.. we lost 35% in the last 3 weeks”

Ouch. Now, if you’re only charging 30% markup on ExchangeDefender you’re better off just burning money. If you are letting go of it for less than $4/month you’re really missing out on the point of the product - people pay hundreds of dollars for just Exchange backup features in their backup software - to get the client back in business a few hours or days later - you mean to tell me you can’t show the value in having their exact Exchange 2007 replica on a 10 second notice (or however long it takes you to open Internet Explorer and type in https://livearchive.exchangedefender.com)

That’s besides the point though, if you are doing business with any foreign entity you are at the mercy of exchange rate fluctuations which means your profitability margin is tied to the economic prosperity (or perception thereof) of another country - not to the value add that you provide.

Food for thought people. The world may be flat in terms of communications and idea exchange, but it ain’t flat when it comes to money. How do you deal with the fluctuations in pricing that impact your profitability margin by an unpredictable amount each month? This isn’t just a pricing change that you can announce, adjust and move on…

If you’ve got an idea people are listening….

To this day Office Space is probably the best depiction of what life is like in corporate America. You show up after a great weekend just to face the crap from everyone you interact with - then you pass the buck on to someone else and hope that the person downstream from you doesn’t have suicidal tendencies that would loop the problem right back to your desk.

By now you’re pretty familiar with my business model - we are the big data center provider for apps and services to resellers, large corporate IT departments, etc. This means that Monday morning is when we get every complaint about everything that has popped up on other peoples networks. I know exactly how this process works:

“Ok, I could fix this in 45 minutes… or I could watch youtube and say that I’ve alerted the vendor who is working on it. Ah well, it’s Vlad’s problem now.”

So what we’ve instituted to keep entrepreneurial laziness from affecting our support flow is “Case of Mondays” blog post. Every Monday by 9 AM folks are to report the issue they are working on across product groups. Consolidate down to a single paragraph or hopefully a short bullet point list.

This way we can preempt questions and close them out on the spot as problems that are being worked on. This will hopefully optimize support time because requests will no longer be investigated individually but will be tracked by a team and notified through the blog. This also eliminates the followup questions from people that obviously didn’t read the manual. “It’s an issue, being worked on, we’ll fix it and update the NOC site.”

Then when the resolution is here we can neatly document it under our KB and NOC as well as Shockey Monkey announcements so that everyone gets to stay in the loop with us. This is just a first step of the goal to integrate our process and support flow into ConnectWise and Autotask and eliminate a lot of waste from support cycle.

I know many of you are MSPs and are accountable to your customers for the state of the network. Take a look at what we are doing, what do you do beyond that to keep the clients who want to know in the know about your activities?

Wayne started this one on his blog but his issue is more about the tighter economic times than what I’d like to address here tonight: the underlying change in the service delivery model for IT is an opportunity, not a threat. The commoditization of a portion of the IT space spells doom to the one-dimensional quzi-businesses and IT consultants who

For the rest of us this is a tremendous opportunity to expand our businesses across new markets and new client bases using the core businesses as the base for the buildout of a versatile technology business that transcends beyond computer repair and installation.

This thesis is the subject of my first newsletter that you can sign up for here.

I decided to leave the free signup ride through the weekend since new signups are still coming in fast and strong. Since I am already tipping a hat that this will not be another piece of SPAM of self-promotional gloating but actual IT content, I figure I also ought to come clean and say that my readers that already signed up will stay on the subscription for free while future subscriptions will be for pay.

v…

It seems that the worse things look on Wall Street, the more people start to pay attention and show their disbelief at the way the financial systems actually work. Do companies actually borrow funds in order to keep operations flowing? Are bad financial decisions actually bundled, bought and sold without regulation of any kind? You mean the SEC doesn’t regulate the quazi-markets in which banks play with funny money loans in much the same way as the people in the ghetto shoot craps at the wall of a stop-n-rob convenience store?

True.. True.. True..

So what is wrong with the markets? What is wrong with my stocks?

Most stocks carry a P/E multiple. That means that the price you pay for a stock is generally at a higher (at times much higher) multiple of the actual profit the company generates annually. For example:

Microsoft’s P/E is 12, meaning for each share you buy at $23 you are actually paying 12x the amount of their annual profit. Apple is at 18x, General Electric at 9x, and Google at 22x.

Why are you compensating a company several times their income potential? Isn’t that just insane? Yes. It is. You do it because these companies are not valued just on their income, profits, dividends and general financial health, but the hopes and dreams of the investing public that these companies will continue to grow and with growth improve your portfolio and over the long term be worth far more than you paid for them initially.

Ah, the American dream. Full of hope, promise and expectations.

Alan Greenspan coined the term “irrational exuberance” as the .com boom was just getting started, to explain how investors become irrationally excited about the prospect for stocks and investments to do better as the fundamentals of the economy (low unemployment, low interest rates, low inflation, low energy costs) concern your average investor less and less.

Stock markets, and investments, are emotional reflections of our faith in the health of our country and businesses that make up it’s economy. We buy stocks because we believe the country, and all its citizens (particularly corporate citizens) will be better off in the future than they are today..

As you can tell by the numbers, the legacy of the Bush Administration and the prospects for the next one, are signaling that most people believe the worse times are ahead of us, not behind us.

All the more reason to learn about the economics, free markets, globalization and run a business that answers to the customer demands and needs.

You know we are in trouble when even Bush can’t dumb it down just how messed up the financial systems are. When I explain to people the business of banking I get a range of epiphanies from “oh, so this is supposed to happen” to “that’s just not fair“

Truth is, not only is it right, it is the very definition and spirit of the American way and capitalism itself. In a nutshell:

Financial prosperity of a capitalist system is dependant on volume always increasing. More credit extensions, more sales, more deposits, more loans, more taxpayers more people. In effect, your very social security benefits and retirement are dependant on there being enough suckers in the workforce making deposits between the age you retire and the age you drop dead. The profitability of the banking system is dependant on ever-expanding credit, with ever-expanding deposits followed by ever-expanding loans. Believe it or not, the bank business profits do not come from your personalized check orders every 5-7 years.

So how do banks make money? In United States we have what is called a fractional reserve banking system under which the central bank sets the reserve rate, or the amount of money the bank is required to keep in reserve to meet the demands of daily withdrawals and other business. So every time you make a deposit into a bank you are not dropping a pile of gold coins which then goes into the back of the bank to be loaded onto a horse drawn carriage and pulled across the dusty planes of Texas. What you are actually doing is making a loan to the bank expecting a full repayment. What the bank does is set aside the reserve rate (let’s say 10% of the deposit) and use the remaining 90% of the deposit for a commercial loan to someone else. They in turn take the loan and deposit it into the bank and the process repeats - save 10%, loan out 90% and so on.

The profitability of the banking industry is tied to the loans it makes. As it makes these loans it then packages them up and sells them to another financial institution which is the designated backer of such loans. Freddie Mac and Fannie Mae, two names you’ve heard a lot about, were the designated backers or purchasers of such loans.

Here is where things get ugly. During the Clinton years there was a huge push for financial institutions to deregulate the process of who backs loans, how and when. It established a deregulated quazi-market under which the loan packages could be traded almost like stocks and the companies that purchased these securities had to mark them to market - that is, the values of these loans had to be adjusted on the books to what their real value was. So long as the housing prices appreciated in value, so would the value of these loan packages and the more money that was loaned out for housing, regardless of whether the borrower was able to repay the loan, the better it looked for the financial institutions because the value of their books kept on going up. It’s like holding a stock that perpetually increases in value.

You know what happened next As the housing bubble popped folks holding these loan packages could not get rid of them fast enough. They piled up at Fannie Mae and Freddie Mac as well as at some of the largest brokerages in the world which served as a medium for these transactions. As they could no longer sell and offload these loans, and as their value started to fall through the ground, so did the company.

Sure, that’s ugly. But here is the really messed up part:

Remember the 10% (or currently sanctioned amount) that the bank has to hold in reserve to meet daily withdrawals and regular business operations? Yeah, that works great if everyone doesn’t try to take their money out at the same time.

If more than the 10% of the deposits get called in the bank has to liquidate some assets (i.e., the $30,000 loan it extended to a college kid so he can rice out his Scion sC and put spinners on it) and as more stuff heads for liquidation so does the bank - it fails, just like any other business, because it is unable to meet its financial obligations.

In fact, this is how the Great Depression started, people started a run on banks so their money wouldn’t disappear. In part this gave birth to FDIC, the federally insured deposit accounts and so on. Psst. Did you know that a bank can actually temporarily suspend withdrawals and keep you from your money? What is the first thing you are thinking about right now? I’ve got bills to pay, time to get some ca$h. This is called a bank run.

So what are we bailing out?

The $700 billion dollar package being debated in Washington DC is to help back the loans that are considered insolvent. You’ve read that right: We are being asked to shell out $700 billion to cover the repayment of loans that the banks deem impossible to collect. The dude behind this proposal? Henry “Hank” Paulson, former CEO of Goldman Sachs that presided over the company while the current deregulation took place and made it possible for the ridiculous loans to be traded around, current United States Treasury Secretary and board member of IMF, whose job is to support regulation of financial markets and financial health of the United States of America. What he is asking for is $700 billion to spot the bad decisions made by him that eventually lead to the problems we have now.

And you know what - you’re going to pay it.

Here is the bottom line: The reason there is a panic right now and you haven’t heard anything about this for years is due to the fact that there is a huge bank run underway in United States. As this is going on, the banks are refusing to issue loans no matter how good and solvent the loan may be. The banks are concerned about the massive debt they have on books that they are not sure they will be able to collect, so they are refusing to extend any credit because they need to keep the bank operations going.

Back to the financial prosperity of a capitalist system and how it impacts even us - even Karl Palachuk, recession blindfolded and cork 2″ in his ears, is unable to ignore this one. If you do HaaS and depend on readily available credit and ability to pay off the infrastructure purchases over time you might find your next big purchase and next big financing deal declined for no apparent reason. We are a nation that depends on readily availability of huge sums of money to make business deals happen without having 100% asset solvency (ie, cash on hand to buy stuff).

The $700 billion is going, in part, to keep things going as they have been going and effectively forgive the massive near criminal greed of bank executives, and it will be approved and go through because the financial prosperity of our system depends on our ability to overindulge and pass the bill off to the next sucker in line.

So long as the line of suckers is perpetual and we can print funny money to get a free pass whenever we are called on the inherent flaws of our society, the American dream lives on.

Only in America and God Bless America.

Or so says Larry Ellison. (here is a shorter summary):

“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?

We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. That’s my view.”

This from a guy that effectively pushed for cloud computing during the middle of the last decade, dearly funded the Network Computer concept that many cloud providers now see as the future and even powers the cloud computing’s shining star: SalesForce.

So what is pissing off Larry and Oracle?

The same thing that’s pissing off Microsoft, Apple and any other traditional infrastructure company. The fact that their premium solutions are becoming a commodity, that their premium solutions require so much training, upkeep and migration scenarios and planning that even the most skilled of IT staff need retrain every few years while the software companies themselves push for software licensing subscriptions while offering no compelling financial or operational reason to keep the data center in the office.

What’s more, guess what the kids are writing apps on these days. It’s not Oracle. It’s not Visual Studio.

This creates a huge problem for Software+MandatorySubscription+MandatoryMigration that companies like Microsoft offer. And as they struggle to implement the new partner programs and go to market as service organizations that they really are not, a whole new generation of application is coming with the next generation only bound by it’s creativity not by the built-in features it can afford or that the other vendors demand be in place.

Hardware has long been a commodity. Operating systems are almost there.

Where does that put guys like Larry, that make multimillion dollar sales orders for what is effectively becoming a near-free product?

Bashing the solutions they themselves envisioned and conceptualized a decade ago.

Evolution………… No, the dinosaurs aren’t going to disappear overnight, but their numbers are greatly diminishing. It’s not fashion Larry, it’s business, and I can assure you that lots of it is leaving your pipeline and going into mine.