Vlad Mazek – Vladville Blog

Yesterday I wrote about the fact that there is a lot we can learn from people that failed in business because books are often written by people that win talking about how awesome they are, not by those that fail and why they failed. No matter how awesome the winners may feel, we all have issues in our organizations – some that we are aware of and some that we have not yet identified.

I got a lot of email yesterday and have tried to categorize it as quickly as I can. Most people listed multiple reasons for closing. All listed poor economic circumstances leading their clients to scale down IT spending. Here are others:

43%: Not enough time/money/resources spent on marketing/selling

27%: Disorganized, lost client base to competitors or economy

13%: Made more money as an IT employee than a startup

Among other issues people listed overspending for PSA/RMM tools that broke the bank, poor hires, clients not seeing the value in their services, etc.

Interesting factors:

– Most people blamed themselves for going under.

– Nearly everyone had more than one issue/problem.

– Nobody mentioned lack of training / skill / competency.

– Everyone mentioned “money” as a factor.

– They still read Vladville? WTF! 🙂

I’ll make my point again for those that skimmed through yesterday’s posting.

Everyone has issues in their business which are problematic and when they go unchecked or unresolved for long enough lead to catastrophic failures. Most people are aware of the issue but refuse to look at the ugly stuff because.. well.. it’s depressing and there are few cheerleaders for the CEO.

I think the bottom line is whether you like what you are doing or not. If you like what you do, you have to take the good with the bad and constantly work on improving yourself. That ought to be all the motivation you need, just imagine what you’d do with your time otherwise.

* Ridiculously small sample size – I scanned through about 100 emails. Still, interesting to see so many similarities.

Over the past year I’ve brought a lot of focus to the defunct and failing IT shops, for some reason none of my blogging friends in the SMB space have decided to talk about it. Is this merely a case of beating a dead horse or is there a lesson to be learned from the mistakes others made?

The other day I talked about effort and how lack of it leads to professional failure. Today, let’s talk about side effects of weed:

“apathy, loss of effectiveness, and a diminished capacity or willingness to carry out complex long-term plans, endure frustration, concentrate for long periods, follow routines, or successfully master new material.  Verbal facility is often impaired both in speaking and writing.

“Such individuals exhibit greater introversion, become totally involved with the present at the expense of future goals and demonstrate a strong tendency toward regressive, childlike, magical thinking.”

While the amotivational syndrome above is widely associated as a collection of symptoms associated with marijuana use, it is strikingly similar to the small business IT providers that are no longer with us. Namely:

1. “Choosing” to stay small – An organization that is not designed from the ground up to seek out new clients is only waiting for it’s current clients to disappear leading to #2:
2. Inability to build a diversified company – The side affect of not wanting to grow a company means your client base is constrained either financially (ex: really small businesses) or vertically (ex: only focusing on car dealers) which creates a business that is overexposed to any radical market changes leading to #3
3. Unwillingness to change –  Businesses that are stuck in their solutions have no motivation to explore other solutions, or solutions that dramatically challenge the status quo (ex: cloud services) leading to #4
4. False sense of security – Without challenge, business owners that are not constantly growing and evaluating their situation are no longer true trusted advisors – they are gatekeepers. Sayings like “my customers will not pay for that” or “my customers will never do this” are clear indications that your business is no longer that of someone that runs an advisory service business but just taking orders.
5. Death: “Thank you for the years of business loyalty” or “We are currently only doing onsite business between 11 AM and Noon to control costs” (meaning: I got a job and can only handle emergencies during lunch for some extra cash) or “We are not taking on any new clients” or…

This is nothing new to any serious business owner. However, it is important to recognize these warning patterns in our own business so we do not suffer the same fate that so many other businesses have. Namely: if you don’t have strong business fundamentals, you are only relying on the demand and that can only go for so long.

Part of running a solid business is constantly evaluating, adjusting, growing and scaling your offering – not just for your own sake but for the sake of the businesses you service.

P.S. Every day is a learning opportunity. Some of us are lucky enough to have an open relationship with our clients, partners and peers that constantly kick us when we are down because that is the only way to change. This specific point is one of the core disagreements I have with Susan Bradley, who approaches this same topic from the exact opposite side: treat everyone with kindness, respect and swag. While we agree on the tshirts and buttons part, there are times when people that are in our business need to be told they are completely batsh*t insane and that they are in fact not smarter than the thousands of people that have written thousands of books covering the fundamentals. No, you can’t have a four hour workweek. No, you can’t aspire to running a technology business out of your garage. No, you can’t make something out of nothing. And if you’re unwilling to listen to the people that have made the same mistakes you’ve made – and are lucky enough to still be in business to talk about it – you deserve no respect. You know what I want? I want the people that failed in IT business to anonymously email me at vlad@vladville.com and say what their greatest shortcoming was – so that future businesses can see the track record that got us all to this point. There is much to be said for Good to Great, but there is also a ton we can learn by avoiding Ok to Gone.

Happy Easter. Happy Easter Bunny Day. Hope you had a wonderful holiday. If you’re lucky, you got Friday off and made it a 3 day weekend. If you’re even luckier, you’re going to take tomorrow off as well.

If you’re a business owner or someone in search of a promotion, you likely caught up with a bunch of work and enjoyed some peace and quiet to focus and implement some ideas you’ve had on your mind for a while.

Talk about a polar opposite!

In all my years in business I’ve been able to narrow down the difference between success and failure to one thing: effort. Not money, not education, not lack of creativity. Simply, effort. As in people that fail never showed any effort beyond what their job description called for. Same for business owners: so many people closed doors this year because they never put in the effort to build a diverse company.

Even in my personal shortcomings, I can pinpoint the failures and missed opportunities simply to the lack of effort that went into a product and a feature. It happens to everyone, it’s just that some people make a career out of doing the bare minimum in order to survive.

Inverted Week

I recently blogged about turning my week upside down. Concentrate all the work and deadlines at the end of the week, not at the beginning. This way nobody is stressed on Monday and folks look forward to starting the week on a positive note.

For business owners and driven people, there is such a thing as the sixth day. Yes, I know, we all dream of working a 4 hour week selling drugs on the Internet in a questionably legal operation, but that is just not feasible or sustainable in the long term. However, you can always count on results that come from hard work.

Once upon a time I talked to K*** who told me about his job in his previous lifetime and how he would do his calls at 7 AM because he knew school administrators would get in early to get things done before everyone else showed up.

Most people that are failing at work or entrepreneurship are often surprised that I don’t work on Fridays. That I don’t have a business cell phone. That I don’t do 9-5. Then they proceed to explain how they don’t have the time to move up to Managed Services, that they’ve been meaning to read this book or that blog, that they intended to go to that conference and are otherwise full of best intentions and regrets.

Nothing happens with wishful thinking alone and nothing comes to you as a result of only hoping for it. Over the past 3 days I’ve put in 30 days of work. I’ve enjoyed several long meals, visit from parents, a fantastic radio show on Friday. Personal life doesn’t take a back seat to the professional life.

However, professional life deserves respect and sacrifice in order to move up and grow. This is of course easier said than done but I’ve spent years with people who year in and year out have the exact same issues and problems. The disappointing thing is that they are not difficult – but they are very demanding and time consuming.

Which brings me to my point – if you are hoping to move up or grow by working only during business hours, you are doomed. Business hours, or rather – operating hours – are meant for the purpose of delivering a service or producing a product.

Improvements, expansion, creative work and all the other things can only happen when you have the time to work on them without interruption. Find the time.

About 18 months ago I started blogging more extensively about business, trying to offer some perspective about what is going on in the SMB space, emergence of cloud services and eventually the unfortunate recession. If you saw it early enough, and listened, I hope you are as lucky as I have been. As I have said on a number of occasions, this stuff is not easy but there certainly are payoffs for hard work.

As for what I’m up to next – I’ve blogged about it before – I’ve assembled a little team in Central Florida that can help bring consistency to the things I’ve done over the years in the areas of community contributions, education, support integration and a few other cool projects. It also means we will be more proactive in seeking out feedback and fixing things that go wrong. This year, or rather the 3 quarters of it that are left, we will:

Eliminate Type Qualifications – For years we’ve made an expensive and extensive qualification process to make sure that we are not working with end users but IT Service Providers. Over the years, that line has blurred and has affected both us and our partners. On one hand, we’ve diluted our support and our reputation by doing business with people who were IT providers on paper but far less than that in reality – all while we turned away businesses that would have been great leads for our partners if we had brought them in our system. Starting soon it won’t matter who you are or where you come from – if you can understand the technology we’ll hook you up – and when you stumble we’ll have thousands of partners there for you. On the other hand, if you are a Gold Certified Partner that can’t figure out what the MX record does, look at the next paragraph..

New Low Cost Airline – I am going back to product design with the objective of pushing our products further into enterprise and growing our worldwide presence. I believe enterprise grade quality of software and services is paramount to the performance and success of any business – and have made a career out of making those services available at a reasonable cost. However, we are a business and our business is making money – so if there are idiots out there willing to take on a crappy substitute just because it’s dirt cheap or free, who am I not to take their money? People want quick, cheap and direct – and they can go down swiping. A new organization that has been built under OWN will make this possible.

So, so much for business. I hope you learned something, it has been a true pleasure helping so many folks through this process.

Looking forward to talking about the new stuff. The reality of this business is that it’s always changing and we always have an opportunity. I’ve probably caught more lucky breaks than anyone out there which motivates me to work as hard as I do. What you read here isn’t just Gospel according to Vlad, it’s letters emails and opinions from a worldwide audience that I’m happy to give a voice to.

The other day I updated my facebook/twitter, rejoycing about how well we’re doing:

ExchangeDefender – seven months ahead of goals for 2009 & competitors employees sending over resumes.

Jose, a Microsoft PAL from Slovenia asked if this was a sign of success. My response:

Kind of sort of – it puts us in a position where we have to expand much faster than we had planned to and since virtually all issues over the years can be chalked up to growth…. It rocks for the company, it sucks for me.

Jose responded again:

Exactly! That…  Read More’s why I made the comment. If this crisis is teaching something to me and my company is that “growth” doesn’t have to go forever and ever… but increasing profitability should be the goal.
In my case growth is synonym of more employees, therefore high expenses. At the end, before the new employees get in sync with the new job profitability drops; revenue expands together with the level of stress.
We have decided then to limit growth, improve customer satisfaction and increase profitability. At the end we work for better life and more professional development.

Now… this is so totally, humangously, inescapably wrong… That I couldn’t be even more sure of it unless I actually made the same mistake.

Except I did. 🙁 And it hurt cleaning it up, took me nearly the past two years of cleanup which will finally be done this weekend.

What I have learned from my mistake is that there is no such thing as stepping on a brake when it comes to business. The moment you take your eye off going forward and up you have nowhere to go by down.

Now sure – in the short term the profitability does go up – but only so at the cost of acquiring new business. This is why so many companies downsize when going gets tough – it makes them look good in the books. But in the long term it costs them creativity, skill, fierce competitiveness which leads to complacency. Eventually death.

I was lucky enough to start thinking about the way out of our “we’re big enough” problem early enough, to bring around new product lines and to be kicked in the balls, mercilessly and repeatedly, until the things turned around at a great pain to me and many of the people @OWN. Was it worth it? Yes, we’re still around and more profitable than we’ve ever been.

Had we continued to push in the single direction – that of SMB – we’d be either dead or dying at this point like much of our SMB-centric competition. Those guys are out there burning cash and favors for numbers, losing money with each new client.

What I, and my small troop in Central Florida, did for OWN was an enhancement of diversification. We took a very, very small part of OWN revenue-wise and we decided to innovate just for it, completely outside of OWN’s direction. This in turn allowed us to sure up our base without sacrificing the growth and portfolio. It allowed us to expand without the traditional problems that expansion brings along.

It taught us how to build lines of business without building a business around a solution. In IT that happens to be the only way to survive.

…

Having said all that, I would not recommend it. The past two years, regardless of money and accomplishments, have definitely been the toughest I have had.

So why do it? Because thousands of people depend on people @OWN not giving up on them. And if you tell people that you’re not really looking to work for them anymore and instead just want to focus on your own happiness and profitability, why should they continue to do business with you? All companies have it in their best interest to make one another successful – if and when you no longer match up on those goals, you are no longer traveling in the same direction and it’s just a matter of time till you’re gone from that account.

If there is one thing we’ve all learned from the economic downturn is that lack of focus/discipline are fatal when people think twice about what they are doing. In good times the biggest crooks and the smallest charlatans make well off thanks to the infinite supply of idiots with money and incredibly poor judgment. The second people get a moment to take a second look, at times like the ones we are in now, those folks are gone. Everyone from big time vapor brokers to small time trusted advisors – you are either in business or not and in business you only have one goal 🙂

What should you always be doing?

This is probably one of those long flow posts that goes on for pages but I will make it rather quick as I’m just waiting for a quick SM replication job to complete.

Right now, your smaller peers in this business are dying. Their clients are dying. I know because we do business with a ton of people in this market and we know when we drop the ball – the agents stop logging in, the MX records go elsewhere, the web sites have their passwords changed – not so much lately. Folks are just logging in and either cancelling services outright or dropping them.

Things are not getting better out there, at all. Anywhere. They are getting worse, far worse, and accelerating down. We are not likely to see a bounce anytime soon.

OWN, thanks to experience and diverse portfolio, is growing rapidly. Most of our partner growth is through larger partners (acquisitions) and sales focused (anything for money) operations. Their growth is far exceeding the carnage on the lower end of SMB.

So what should you do?

Karl, Erick and I have an answer, it’s in a show coming to you this weekend – but it won’t be free – I figure the view into the future is worth $2.

But did I write all this simply to sell you a product (that I don’t even have yet) or to get you to think about the next step?

What I would like to know is when would be a good time to extend focus and offer cheaper services in a VAR-only model and grow the market share / client list at the expense of pushing a maintenance agreements and high margin projects for everything sold? It is clear from looking at the deathpool that the IT shops that are now long gone are only gone because their largest accounts disappeared before they could be replaced. If we are to be stuck in the downturn for the next 18-24 months, should the “full service” managed providers rethink their messaging to capture a larger client base that will deliver $ in projects and references. Let’s face it, “predictable revenues” are only “predictable” so long as your client base stays in business. If you can count your clients on your hands, you are only predicting the going concern for the survival of your business.

I’ve blogged extensively what we are doing, but I would love to hear what are you doing because folks are getting scared, I can hear it in their voices every day.

Michael Jordan was inducted into the Basketball Hall of Fame today. Here is one of the quotes from his trainer:

“Michael would go for 40 or 50 points one night, and the next morning he was right back at it in practice,” Grover said. “He just couldn’t take a day off. His mental toughness was unbelievable, but the reason was that he was so physically ready every day. He used to have a saying, ‘I practice so hard because that makes the games easy for me.’ ”

It certainly draws a very clear line of separation between people who are really damn good and people that just put up with barely enough to get by.

Gotta love this economy though, it is certainly making the separation easy – through a process of removing people that aren’t serious / competent / dedicated.