Vlad Mazek – Vladville Blog

Last night I had a very interesting conversation on where the line is drawn between producing a quality product and maximizing profitability. Believe it or not (software, MSP, IT Solution Provider, SPF) there is a tradeoff between perfection and profitability – the better you try to get your product, the more it costs and less it makes because it diverts money from sales and marketing efforts to make a better product that fewer people will buy.

But where is the line? Let’s for a moment forget the beta culture most of us younger entrepreneurs have brought up in and assume that there is a happy place between shipping shit for money and burning the midnight oil checking all the t’s and dotting the i’s.

The question is: Where is the line and how do you find it?

I don’t have an answer, earlier in my career when I was very close to the product development and support I spent far more time focusing on perfection but we made a lot less money. I worked very hard and we grew slowly and patiently – but we didn’t take it to that “next level” until I focused on the product distribution and growing the scale of what we do here. In the end, we’re able to deliver a product that has a higher quality and reliability with a better profit margin.

One piece of advice I have for people that are just starting up is to focus on building the business, not the products. You can always hire amazing people and build amazing things – once you’ve got the money. The line between where you can be proud of your solution and run a profitable business – that I don’t know. I’m proud of what we’ve build and what we deliver but I also know at least a dozen holes that we’re working on and I have another 200 that I haven’t even thought of yet. But by the time I perfect ExchangeDefender there won’t be any SPAM around to block anymore 🙂

We’re on our way back from a long week in California, closing some fantastic meetings in Los Angeles, an awesome Xchange Service Provider event and the CharTec Academy. Fantastic partners, great people, ton of fun but not easy stuff by any means.

I had perhaps one of the most interesting conversations in a very long time that started with the following questions:

They seem to work really hard – barely seeing their kids.

He puts in insane hours just so his wife can stay at home and raise their kids.

But here is the response that my best friend shared with me last fall when I went to visit him and asked why his wife seems to be stressed out:

“She’s at home stuck with the kids and she wants time off but I just can’t give it to her right now.”

He works so that his wife can stay at home and can get the joy out of raising their kids. Yes, that too is a sactifice because there are times when we’d all rather do something else – but we all sacrifice for what is really important in life.

One thing I’ve learned in life (at my old age of 31) is that really successful people tend to sacrifice (at times a lot) to get to the next level and become successful. One of my friends in the industry recently shared with me that everyone thought she was a lesbian because she didn’t have a man and worked so much. Ouch.

I won’t speak for those people. And please understand, I am not trying to preach here – this is my life and this works for me, your life is your own and I am not trying to change it or challenge how you live it. At all. Please don’t look at this as anything other than an explanation of how us weird “workaholic” people see the world.

Believe me, if I could do this on a sofa in my tighty whities eating M&Ms from my bellybutton (oh yeah, you pictured it didn’t you?) I wouldn’t be writing this blog at 30,000 ft on a redeye flight on a Saturday night after an 80 hour workweek. Alas, Ferrari’s are expensive. As are Porsche’s. As is kids private school and college education. As is a big house, big house cleaners, insurance, Disney passes and Snaussages.

I was raised to respect money and my parents always told me that they both worked hard because they wanted me to have an opportunity to make something of myself in life. I don’t recall mommy and daddy ever handing me the Corvette keys – I had to earn those myself. And now that I have a family of my own, I want my kid to have a chance to have a better life than I did.

I wouldn’t trade my life with anyone I know. So it takes a few extra hours to earn it, will I really remember this redeye flight in a year? Doubtful.

About balance..

Lot’s of people seem to talk about “balance” in life. I for one don’t really find my life unbalanced, I’m blessed to love what I do and I would be on this computer doing this stuff at 2 AM no matter what. I don’t particularly enjoy the meetings with lawyers and accountants, or apologizing when we fail, but there is no such thing as perfection.

I also do not believe there to be such a thing as “balance”; Oh, I know a lot of people that talk about balance – and talk about it a lot – but truth of the matter is that someone always feels like they are losing out no matter how much you think you’re balancing it out.

— “ Your spouse thinks you’re working too much and you’ve got problems at home. Your boss doesn’t think you’re working hard enough so you’ve got problems at work. You bring your home problems to work which affect your performance which affect your compensation which leaves you to go back home to your loved ones and unload on them when they hit the wrong button during the “how was your day” talk. So you stay awake past your bed time to try to make it up with sex, wake up exhausted and just can’t wait for some sucker to call you up and as John Wayne put it – “Go ahead punk, make my day”  “

That little bit of darkness is courtesy of my friend Steve who delivers the above rant to a perfection in person. Gloomy, ain’t it? But there is a grain of truth there, we all have to sacrifice.

So why do it?

The reason I am writing this post is to tell you that there is an enormous sense of urgency among the technology providers to become a full technology solution – because so much is now possible without physical presence, all of the traditional “suppliers” and “vendors” are going direct to the consumers and the old “business2business” world is no longer an entity onto itself – it’s just an extension of consumer experience.

Everyone is racing at a frantic pace to offer VoIP, BUDR, cloud, commodity monitoring, remote services and support. We all want a spot on that clients org chart.

And among my hard working friends there is an understanding – hard work and dedication over time breeds winners. We become so critical, so essential, so core to the success of our organizations and our clients businesses that the payoff is guaranteed and proportional to our effort.

It’s the equivalent of the universe saying: the money is yours, all you have to do is put in the effort pick it up.

Some people only want to reach down for $10. Some will reach deeper for a $20. Some will roll up their sleeves and try to pull out a $50.

This is the greatest, most profitable time to be in business. And what you build now will stay with you for years. Make yourself indispensable.

So from the 30,000 ft in the air on the red eye flight after a 7 day workweek, with my laptop in one hand and gold plated revenue digging showel in the other… good night and happy Monday.

Long title but it gets the point across – how do you stay commercially viable when your offering is not something people are willing to recognize as a problem worth paying you to solve?

I’ve been on record stating that I believe the SPAM / Virus filtering is something that is rapidly losing value and will be free. Later this year we will be launching a barebones antispam/antivirus cloud solution that is a fraction of the cost of whats currently out there and aim at making it free eventually.

The response of the security vendors has been to nickel and dime the client base because there is still a lot of value in filtering and lots of money can be made on the things like encryption, web filtering, etc. Our response has been to eliminate wasteful resources and reallocate them to those features that the users are actually willing to pay for. Here is a concern one of our partners voiced in our portal:

During these financially stressed times, it gets harder and harder to provide justification to a customer on why they should spend the slightest penny on anything. With that said, after the upgrade to ED5 and the induction of “SMTP Tempfail,” the numbers of SPAM messages being filtered out by ED servers and listed in our customer’s daily reports has dropped dramatically. This is great for both OwnWebNow, by reducing the loads on the ED servers, and our customers, for having to filter through less junk in their ED quarantines and daily reports. But the unintended result is that we, as OWN partners, find it harder to justify to the customer why they need to have or maintain the ED service. The reason being is that the numbers on the Domain Security and the SPAM Trend Reports have dropped dramatically. These reports gave us the numbers and graphical proof that our customers needed to wrap their minds around to see the service working and made it easier on us to justify the need for the ED service. The feature request in all of this: Even if the message is dropped via the SMTP Tempfail, couldn’t those messages be counted, and listed on the reports, as being filtered in the total number of messages for that domain? Or maybe adding a section within the report for the SMTP Tempfail that list the number of messaged dropped.

Here is my response:

Dear Steven & Nathan,

Unfortunately, the tempfail is something that is issued during the SMTP transaction and we do not know the destination of the email – it could be heading to any email address or domain on the network. Logging that information is not just pointless, it would only require more resources and cause users to be even more unhappy with the service and the amount of junk they are dealing with.

I will tell you both that this is not the first time I’ve had to answer this question.

I will also admit that I share your concern, however, I have chosen to address it in a different way.

I can’t build a company on top of a fear for something that the technology has already addressed. That is to say, I can’t sell a solution to a problem that has already been largely solved that shouldn’t have existed in the first place.

Now, how do you create a compelling value offering considering that the original problem is already a component of the solution? Grow the solution. Add web filtering. Add business continuity. Add encryption. Add large file web sharing. Add it all for free.
That’s been my answer. Honestly, if a user is so unaware of the widespread SPAM problem that keeps on growing year over year, and all it takes to aleviate their fear is a chart, we’re not really dealing with sophisticated people. The kind that will likely not place value on the rest of the stuff we do either. So I can’t address them.
However, I can grow the sophistication and the value in my product by giving them more security, not just the illusion of it.

Please feel free to email me at vlad@ownwebnow.com, I don’t want to be insensitive to your concerns Steven because I’ve had to answer them and the above is what we came up when it came to the product design. I hope it also helps you in your discussions with your clients and gives a better footing for your managed services solutions because this goes hand in hand with the total solution.
-Vlad

There is a larger question here that the managed services providers have to answer to remain in business and address the pricing pressures from the big boys. I’ve been doing a series of “cloud” presentations with MSPU trying to explain to people all the vectors that need to be considered here because the truth is: When you are paid to solve the problem, and you solve it, the client no longer experiences the pain and their willingness to pay for it diminishes the further they are removed from the problem.

Basically, there is a diminishing value of providing managed services. Response? “Screw them, if I stop doing what I do for a day their network will explode.” Ok, guess that would work but I don’t know that it’s great customer service. From experience, bunch of charts and graphs isolating the problem don’t work either – When you are not directly experiencing a pain, charts and data points do not have an emotional impact which makes the client wonder why they shouldn’t consider an alternative (cheaper) solution.

Now, I think I wrote a blog post or two about commoditization of services 😉 Remember, it’s too late to think about this stuff after you’ve lost a client. You need to do it now because I can guarantee you they are being bombarded with alternatives. You can’t call me a day after Microsoft swiped your client and you want to get into Hosted Exchange business but you never introduced it to your clients before because you’re a LAN guy. You have to be faster, better informed, less biased than Google, Microsoft or _____.

Bottom line is: Ignorance As A Service doesn’t work. And as painful as it may be, we need to approach our clients with different set of collateral and value propositions than we did in the past. What that entails and how effective it is going to be is a matter of trial and error.

Warning: Adult situations and topics ahead.

Have you ever heard these?

   Seize the day.

   Live each day as if it were your last.

   Live life to the fullest.

People like to say these things. But when it comes to doing, they tend to bring up other quotes like: “Oh, I can’t do that, need at least 8 hours of sleep or I can’t function.” or “I just can’t get that done, I have other plans.”

Every now and then I try to picture their conflict of desires and efforts and it looks a little like this:

“So you mean to tell me that if you knew you had 1 day to live you’d first make sure you had a really good night of sleep instead of doing something that would make the life worth living?“

Hi, my name is Vlad, I run marathons.

I am for all practical purposes an obese guy. 6’1”, 205 lb.

Yet every year I tell people that I run marathons and half marathons for fun. This year I did the “Goofy Marathon” at Walt Disney World which is a Half marathon on Saturday followed by a full marathon on Sunday. Over 40 miles including all the walking from the parking lot.

I’ve done marathons and half marathons all over Florida for years now because it’s the time I get to disconnect from my life and business and gain some perspective about how easy it is to give up and just how much nicer it would be to do nothing at all.

Yet, when I talk to people that are in far better shape than I am, I constantly hear one thing: “Oh, I could never do that. I just can’t do long distances. I just can’t do running. Or jogging. Or walking really. I can’t do cardio.”

The words “I did a marathon” don’t imply that I ran 26.2 miles and that it was down to me and a Nigerian who just happened to be a better sprinter in the last quarter mile. I was behind him. Way, way, way behind him. I’m pretty sure that by the time I was half way though my marathon the said Nigerian was already getting his first drink on his flight back home. You get the picture, I jog. For hours.

The Secret To Failing

I am not arrogant enough to tell you that I know a secret to success.

I am however experienced enough to tell you that I know the secret to failing. I’ve failed at stuff more times than I can count and it all comes down to one thing:

I didn’t try hard enough.

Now don’t get me wrong. I had fantastic excuses. Really, really, really good ones.

However… As I’ve gotten older and slightly less foolish I’ve realized that I have a rather limited amount of time around here (life) to do my thing and earn the kind of lifestyle I want.

If you honestly look back at all your failures you can probably track down at least half of them to the lack of effort, care or time you put into seeing them done.

The Reality

The reality is that yes.. you can do a marathon. People that survived horrific diseases make up an unusually large number of marathon participants. Practically crippled and astonishingly old do as well. Anyone can run a marathon. And trust me, you can make it through the day without 8 hours of sleep.

So you’re gonna go register for that marathon today, right? Wake up at 6 AM tomorrow instead of 8 AM? Yeah?

Of course not. Cause what’s in that for you, right? And I don’t mean what’s in it for you like a year down the road or four years later – what’s in it for you right now, immediately?

There is a reason why most people don’t have college degrees. It’s not time, it’s not money, it’s not brains – it’s effort. It takes a heck of a lot of dedication to pursue something that’s four years away for which you’ll be in debt for a decade and benefits won’t be fully realized even longer than that.

Yet, people are able to see beyond that. People are able to walk / run / jog. People are able to go to college. People are able to have kids, sleep 4 hours a night and keep on making things better with each and every day.

Optimism vs. Pessimism vs. Reality

I’ve fired a lot of people who felt their barely-40-hours-a-week were enough for them to keep their job. I’ve passed on a lot of resumes that felt cover sheets were not necessary.

The reality, whether you’re a pessimist or optimist, is that you’ve got to treat everything like it’s your own and your own benefit it on the line. If you’re cynical about that, you’ve already lost.  And that’s what happens – people go into things with the best of intentions but get cynical, tired, exhausted… they give up, slack off and ultimately they are out of work.

The same happens to entrepreneurs. We get excited about projects and potential revenues, we start building a business plan, we fund it, we build it, we market it, we start to really see the results but it’s just not enough right now. We want more. Faster. Different. We lose interest, we let someone else deal with the difficult stuff. We ignore the leadership we need in our business.

So… what now?

Nobody is going to go run a marathon as a result of all this, nor are you going to go get a college diploma or put in any more hours at your job.

The point of this blog post is to understand how things fail.

Do you want more than what you’ve got? Do you want a better life? Well, then you’ve gotta do more than you’re doing now and do it consistently and persistently.

If you need the qualifiers like how much time, for how long and how hard – then don’t bother. Desire for success is an internal quality and work ethic is something you build every day. You’ve either got it or you don’t.

…

So this is a brief introduction to my answer I promised in this post. The first question in trying to determine if you need to continue or quit is in being honest with yourself about your current predicament. Did you get yourself in this position and do you believe that by working harder or longer you actually have a shot. If the answer is yes you’re on the right path.