Paul Wallbank | Paul Wallbank - Communications Professional

Why do executives see romance in the startup culture?

Many managers think startups are romantic – could it be because of the corporate lives they lead?

One of the fascinating phenomenons of the modern era is how corporate managers have appropriated the startup culture.

At the announcement of the Australian Centre for Broadband Innovation’s Apps For Broadband prizes, Foxtel’s CIO Robyn Elliot described her experience of working in a startup.

“Foxtel was once in the category of startup itself,” said Elliot at the start of her speech.

Apples and Oranges

Comparing Foxtel to a scrabbling startup in the modern sense is bizarre given the company was a well funded joint venture between News Limited and Telstra – the company being a good example of modern Australian crony corporatism rather than a risky undertaking by daring entrepreneurs.

This conceit about startups isn’t unusual among corporate executives, in the early days of Australia’s National Broadband Network it was quite common to hear NBNCo managers talk about their startup ethos – this from a company backed by around 30 billion dollars of government funding.

At one stage I interviewed for a job at NBNCo and I struggled not to start giggling when the “startup ethos of the organisation” was earnestly emphasised to me several times during the meeting.

Not surprisingly the job went to an ex-telco staffer, as did most of the team’s roles. No doubt their corporate experience was far more suited to the company’s ‘startup ethos’ than that of actually having worked in four startups. Giggling in the interview probably didn’t help either.

The romantic dreams of executives

Given most corporate staffers would curl into the fetal position and weep after two weeks of working in a real startup, why do executives indulge in the conceit that their business is ‘just like a startup’?

The answer could lie in “The Consequences to the Banks of the Collapse in Money Values” written by John Maynard Keynes in 1931.

A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him. It is necessarily part of the business of a banker to maintain appearances, and to confess a conventional respectability, which is more than human. Life-long practices of this kind make them the most romantic and the least realistic of men.

So it is for the modern corporate executive who has spent their working lives fighting for the corner office having met their KPIs and spending years cultivating their network of like minded managers.

After two decades spent writing stern memos on the use of paper clips and climbing the corporate ladder, it must be tempting for a middle aged executive to look at those funky youngsters getting billion dollar payouts after a couple of years grabbing three hours sleep a night among the pizza boxes under the desk and get pangs of what might have been…..

A harmless startup fantasy

In some many ways the executive startup fantasy is touching and largely harmless, even if it does attract sniggers and giggles from the unwashed and underpaid who’ve actually been there.

The real risk is when a senior executive tries to shoehorn a Silicon Valley startup culture into an organisation.

While most large companies could do with some of the hunger and flexibility found in smaller businesses, there’s many ways that could go terribly wrong – particularly when driven by a starry eyed romantic manager.

For most executives though, the dreams of being in a startup will remain a fantasy – and that’s probably best for everybody.

A startup’s journey – what businesses can and can’t learn from Silicon Valley

There’s a lot small business can learn from the tales of Silicon Valley startups, but not every lesson applies.

Tech Crunch has a fascinating story on the journey of failed startup, Los Angeles based Flowtab that hoped to create an bar tab smartphone app.

In many ways Flowtab is a story of our bubble economy times – a cheap, easily built service that addresses what is, at best, a minor first world problem.

Flowtab failed when it turned out solving that problem was a lot harder than just writing an app, which is something often overlooked in the current startup hype.

However had the timing of Flowtab’s founders been a bit luckier they could have hit the jackpot.

Dave Winer describes the herd mentality of venture capital investors and had the hot trend of the time been bar ordering apps then the Flowtab team could have been one of the beneficiaries of the Silicon Valley business model.

Along with being a historical insight into today’s investment mania, Flowtab’s story is an illustration of how a new business needs to pivot when the original idea turns out not to be as compelling as the founders first thought.

Even when a business does a pivot, it’s not guaranteed the company will survive, but that’s part of the risks in starting a new enterprise, particularly when it’s undercapitalised as Flowtab was.

There’s many lessons from Flowtab’s failure, but not all of them apply to every business.

Google’s lost Docs mojo

Has Microsoft seen off Google’s threat to their office suite dominance?

Last week I spent the day at Xero’s Australian convention speaking to various cloud service companies, bookkeepers and accountants.

One of the notable organisations missing in the conversations was Google – two or three years ago, Google Apps would have been at the front and centre of conversations about cloud services and integration. Yesterday the company was barely mentioned.

Part of the reduced buzz around Google Apps at XeroCon is due to Xero’s closer relationship with Microsoft, but it also betrays how Google Docs is no longer the smartest, newest product on the block.

“We tried to eat their dog food, but our staff rebelled,” one manager of a marketing agency who worked with Google told me. “We thought we’d go Google Apps for all the work we were doing with them but we just found the products lacked the functions we needed.”

The main problem for business users are Google Docs’ slimmed down feature. While most people don’t use 95% of the tools included in Microsoft Word or Excel, each person uses a different 5% and find something critical missing from the cloud based challenger.

For writers, Google Docs’ lack of a word count function is a deal breaker. Speakers find the Presentation function far too basic concerned to the Microsoft Powerpoint or Apple Keynote packages.

In the cloud computing industry, Application Program Interfaces (APIs) are all important as these allow other services to plug into data and enhance value for users. Over the last two years, Microsoft have done a good job in cultivating their developer community while Google have taken theirs for granted.

Most importantly though is that Google seems to have lost focus on their productivity suite, it may be another example of the company’s corporate attention deficit disorder, or it may be be that Microsoft have seen off another challenge to their dominance in that sector.

If it is the latter, then Microsoft have done a good job with Office 365 in seeing off the threat that Google posed.

Despite the company’s challenges in the post-PC, post- Gates era it would be dangerous to write Microsoft off.

Coffee machines, the Big Blue W and the barriers to new technology

All new technologies involve a learning curve and sometimes people don’t have time to gain that knowledge.

Last week my wife bought a new coffee maker, an impressive, all singing and dancing device that’s a vast improvement on the decade old machine it replaces.

Despite drinking three or four cups of coffee a day, for three days after the new machine arrived I didn’t make one long black or cappuccino. The reason was I didn’t have time to figure out how to use it or the high tech coffee grinder that it came it.

Being time poor is one of the greatest barriers in adopting new technologies as business owners, managers and staff often don’t have the time to learn another way of doing things.

The coffee machine reminded me of something I learned with a business I was involved in the early 2000s. We were trying to sell Linux systems into small and medium businesses.

We had some success selling into small service businesses like real estate agents and event managers where the owners could see the benefits of open source software and, in many cases, had a deep suspicion or resentment towards Microsoft’s almost monopoly on small business software.

Despite the success in selling the systems, the business though came undone because many of the clients’ staff members refused to use the Linux machines, as one lady put it to our frustrated tech “I want to click on the Big Blue W when I want to type a letter.”

That Big Blue W was Microsoft Word and no amount of cajoling could convince the lady to use any of the open source alternatives — she knew what worked in Word and she had neither the time or inclination to learn any thing different.

Eventually that customer gave up trying to convince their staff to use non-Microsoft systems and the computers were reformatted with Windows, Office and all the other standard small business applications installed.

This happened at almost every customer’s office and eventually the business folded.

For those of us involved in the business the lesson was clear, that time poor users who are content with their existing way of working need a compelling reason to switch to a new service.

In many ways this is the problem for legacy businesses — the sunk costs of software are more than just the purchase price, there’s the time and effort in migrating away from existing products and training staff.

When we’re selling new technologies, be it cloud computing services, linux desktops or fancy new coffee machines, we have to understand those costs and the fears of users or customers who’ve become accustomed to an established way of doing things.

In the eyes of many workers new ways of doing business are scary, challenging and often turn out to be more complex and expensive than the salesperson promised. In an age where marketers tend to over promise, that’s an understandable view.

For those selling the new products, the key is to make them as easy to use and migrate across to. The less friction when making a change means the easier it is to adopt a new technology.

Dealing with the corporate digital divide

Does the real digital divide really exist in the business world between old businesses and new organisations?

It’s fashionable when talking about the ways different generations use computers to split users into two groups – the digital natives and digital immigrants.

Born after 1990, digital natives are believed to have an intuitive understanding of digital technologies born from never having known a world without computers.

Digital immigrants on the other hand are from an era where computers were not common outside big corporations and government departments, so most people born before 1990 had to learn to use computers.

like many similar demographic divides, the line between digital immigrants and natives is contentious and probably more unhelpful than useful.

A fascinating question though is whether corporations can be digital natives and immigrants.

One of the challenges for older corporations, the corporate digital immigrants, are the legacy business systems that have their roots in the pre-digital era. A good example of this is United Airlines which struggles under inflexible management and old aircraft which can’t provide the levels of service and reliability expected by modern customers.

A similar problem faces retailers who’ve haven’t invested in modern logistics, point of sale and online commerce systems – these businesses simply cannot compete with those who have up to date technology.

Part of this problem comes from the difficulties in upgrading both technology and management systems in complex organisations, it’s not an easy task and the cost of failure is high so it’s understandable that many businesses don’t attempt it.

In the meantime there’s the corporate digital immigrants, the more recently founded businesses that aren’t weighed down by legacy management and technology.

The problem for the legacy businesses is the digitally native companies are able to take advantage of cheap and powerful tools that older organisations struggle to integrate into their operations.

So the digital native-immigrant divide could be actually a business problem rather than one of how different generations discovered computers.

Evolving cities and Silicon Valley’s private buses

What do Silicon Valley’s corporate buses tell us about the way our cities are evolving?

One of the phenomenon of Silicon Valley’s development has been the rise of the ‘Google Buses’ – the private services run by the big tech companies to shuttle their workers between home and their workplaces.

The Bay Area’s private bus shuttles are a real time illustration of how regions evolve around industries and economies and how cities and communities are in many ways dynamic, living creatures themselves.

An effect of the Google Buses is that San Fransisco is experiencing a ‘reverse sprawl’ notes Eric Rodenbeck in his Wired Magazine story Mapping Silicon Valley’s Gentrification Problem Through Corporate Shuttle Routes

It’s about more than gentrification as we’ve experienced it thus far: It’s about an entirely reconfigured relationship between density and sprawl, and it’s going to need new maps to help us navigate this landscape.

Driving those buses is instructive as well and Buzzfeed has an interview with an anonymous driver employed by one of the bus companies. The driver’s tale shows the scale of the phenomenon.

This bus holds 52 people and that is 52 cars that are not on the road in one trip, and we have 70 routes in our system. That’s thousands of cars everyday.

Driving cars is fundamental to the American – and Australian – lifestyle. The modern American city developed around the motor car and that mobility is the defining feature of the Twentieth Century.

So maybe the Google Buses are an early part of the redefinition of our cities to meet the the needs of the 21st Century and cars are not the driving factor.

In this vein, Jarrett’s Walker’s Human Transit blog teases out some of the issues behind these developments.

Finally, this joke is on the lords of Silicon Valley itself. The industry that liberated millions from the tyranny of distance remains mired in its own desperately car-dependent world of corporate campuses, where being too-far-to-walk from a Caltrain station — and from anything else of interest — is almost a point of pride. But meanwhile, top employees are rejecting the lifestyle that that location implies.

While I don’t agree with Jarrett’s proposition that the geeks riding these buses want to mingle with strangers given the locations they live – I’d argue they’re attracted to those locations because their peers live there and downtown amenity to good restaurants and bars – he raises a very good point about the mismatch between where the workers and the jobs are.

Jarrett’s point touches on land use zoning and its effects on the evolution of cities. An excellent piece by Alexis Madrigal in The Atlantic tracked Silicon Valley’s iconic techonolgy sites, most of which have been demolished due to the pollution partly caused by zoning requirements for underground tanks.

The issue of zoning is also raised by Rodenbeck who points out that zoning issues with carparks are what has made employee buses more attractive to the giant tech employees.

Zoning different land uses makes sense on one level as no-one wants to live next door to a tannery, heavy metal waste dump or quarry, but there’s a risk with fixed ideas that our cities will become less responsive to economic developments, particularly in an era when people don’t want to, or can’t, dive across town to get to their jobs.

What Silicon Valley’s corporate buses really show is that our cities are evolving around the needs of today, not yesterday. It’s something governments, businesses, investors and communities should keep in mind.

Image of Google shuttle bus stop from David Orban through Flickr

Collecting tolls on the information superhighway

The failure of Melbourne IT’s management proves that clipping tickets on the internet is not always the path to riches.

The news that internet services company Melbourne IT is looking at cutting management costs and returning cash to shareholders in the face of declining revenues doesn’t come as any surprise to observers of the firm.

In many ways Melbourne IT is a historic relic, one of the last examples of the late 1990s dot com boom where management from those heady days survived unscathed by the realities of the 21st Century.

Melbourne IT story illustrates the poor management and flaw investment strategies of the big dot com float and also illustrates the risk of under-investing in key areas, as anyone using the site or the services of its Web Central subsidiary will understand.

Both companies feature clunky sites and extremely poor customer service. For resellers and customers using the Web Central command center, the experience and technology is straight out of the late 1990s.

While overseas businesses like Rackspace, GoDaddy and Bluehost innovated and invested in their platforms, Web Central and Melbourne IT sat back and how expected their dominant position would guarantee them profits.

Much of that management complacency was born out the founding of Melbourne IT when it was spun off from the University of Melbourne to exploit the then monopoly the university’s computer faculty had on granting Australia commercial domains.

In 1998, as the dot com boom was entering its most heated phase, Melbourne IT was floated and immediately attracted anger and allegations of wrong doing – none of which was proved – as the stock debuted on the stock market at four times its listing prices which generated huge profits for the insiders who were fortunate to get shares allocated before the sale.

Melbourne IT’s huge stock valuation was based on the belief the company would exploit its dominance of the critical domain market – it was similar to other technology floats of dominant players at the time such as accounting giant MYOB in 1999 and Telstra’s spin off of its small business Commander operation the following year.

All of these stock market floats proved to be disastrous as each company’s management showed they were incapable of exploiting their privileged market positions.

Of the three, Melbourne IT’s management survived longest partly because of the riches expected to flow into the company’s coffers through Top Level Domain sales as gullible government agencies and corporates being driven by a Fear Of Missing Out overpay for new online addresses.

Now it appears ICANN’s top level domain river of gold isn’t going to flow, partly due to arrogance and management incompetence in that organisation, so Melbourne IT is now going to have to cull its executive ranks.

Steadily, both Melbourne IT and Web Central have gone from being dominant to irrelevant and provide a good case study of how poor management and complacency can squander a dominant market position.

The failure of Melbourne IT’s management proves that clipping tickets on the internet is not always the path to riches, particularly when you don’t invest or innovate.

Coping with Generation LuXurY

Starwood Hotel’s Phil McAveety describes how tech will help hotel understand a new generation of customers.

Speaking at the recent ADMA Global Summit in Sydney, Starwood Hotel’s Phil McAveety described Generation LuXury – the changing hospitality expectations of Gen X and Ys.

McAveety sees the new generation of travellers as being more diverse, younger, female and increasingly from emerging economies making them very different from the middle aged Caucasian male from Europe or North America which seems to be the focus of most of the hospitality industry.

The lessons from McAveety’s presentation weren’t just for hotels, much of his message applies as to almost every other business sector.

3D printing featured heavily, with McAveetry seeing the technology as delivering the personalised experiences demanded by Generation LuXurY, as an example he cited a concierge being able to create a pair of running shoes for a guest in exactly the size and style required for a guest.

Big Data played a role too with McAveety illustrating how hotel managers used to watch for important, valued guests with hidden windows letting them see who was checking into their establishment, a role that’s now carried out by Big Data and social media.

McAveety though had a warning about social media in the risks of giving away business intelligence and intellectual property to the services.

The big risk though is in technology itself – that hotels treat it as an end in itself instead of tools to deliver better experiences to guests.

“It’s not about tech,” warns McAveety. “If so, we are going to lose.”

That’s a lesson all industries need to heed, that technology is a means to the end of delivering better products to customers. Understanding what Generation LuXurY perceive as a better product is one of those uses for tech.

A question of incentives at Microsoft and Apple

Incentives create a company culture as we see within Microsoft, Apple and Amazon

Ben Thompson on his Stratechery blog speculates what Apple would be like were Steve Ballmer running the company.

Thompson makes an excellent point – that Ballmer has been very good in building a company driven by incentives like salaries, bonuses and titles. It describes Microsoft very well and highlights the companies strengths and weaknesses.

Were Ballmer to run Apple, Thompson concludes, it would be a far more profitable company than it is today but it would be fading into irrelevance just as Microsoft is.

That makes sense as Microsoft under Ballmer has been able to profit from the dominant market position it built up in the late 1990s, but the company has struggled against innovative competitors or the big market shifts following the arrival of smartphones and tablet computers.

Where Thompson is on more shaky territory is citing Amazon as another example of where profit is less important than innovation;

Amazon famously makes minimal profits; Microsoft made more money last year than Amazon has made ever, yet Amazon too is far more relevant in the consumer market today than is Microsoft.

Amazon may well be more relevant to the consumer market today than Microsoft, but that’s largely on the back of a business model built on shareholders subsiding customers – something that Apple has never done.

It may well be that when investors get sick of propping Amazon up, the company’s business model will have to change. Should Amazon have a Microsoft like dominance of the online retail or cloud computing markets then customers might be in for a nasty dose of sticker shock as profits are maximised.

Ultimately incentives are what shapes a company’s culture – whether the incentives are built around stack ranking, commissions or currying favour with the founder, they will determine how the business behaves.

On running late

Is chronic lateness a trait shared by the entire tech industry?

Business Insider’s unathorised biography of Yahoo CEO Marissa Mayer is both enlightening and scary while giving some insight into the psyche of the tech industry.

Nicholas Carlson’s story tells the warts and all tale to date of a gifted, focused and difficult to work with lady who’s been given the opportunity to lead one of the Dot Com era’s great successes back into relevance. It’s a very good read.

Two things jump out in the story; Mayer’s desire to surround herself with talented people and her chronic lateness.

When asked why she decided to work at a scrappy startup called Google, which see saw as only having a two percent chance of success, Mayer tells her ‘Laura Beckman story’ of her school friend who chose to spend a season on the bench of her school varsity volleyball team rather than play in the juniors.

Just as Laura became a better volleyball player by training with the best team, Mayer figured she’d learn so much more from the smart folk at Google. It was a bet that paid off spectacularly.

Chronic lateness is something else Mayer picked up from Google. Anyone whose dealt with the company is used to spending time sitting around their funky reception areas or meeting rooms waiting for a way behind schedule Googler.

To be fair to Google, chronic lateness is a trait common in the tech industry – it’s a sector that struggles with the concept of sticking to a schedule.

One of the worst examples I came across was at IBM where I arrived quarter of an hour before a conference was due to start. There was no-one there.

At the appointed time, a couple of people wandered in. Twenty minutes later I was about to leave when the organiser showed up, “no problem – a few people are running late,” he said.

The conference kicked off 45 minutes late to a full room. As people casually strolled in I realised that starting nearly an hour late was normal.

It would drive me nuts. Which is one reason among many that I’ll never get a job working with Marissa Mayer, Google or IBM.

A few weeks ago, I had to explain the chronic lateness of techies to an event organiser who was planning on using a technical speaker for closing keynote.

“Don’t do it,” I begged and went on to describe how they were likely to take 45 minutes to deliver a twenty minute locknote – assuming they showed up on time.

The event organiser decided to look for a motivational speaker instead.

Recently I had exactly this situation with a telco executive who managed to blow through their alloted twenty minutes, a ten minute Q&A and the closing thanks.

After two days the audience was gasping for a beer and keeping them from the bar for nearly an hour past the scheduled finish time on a Friday afternoon was a cruel and unusual punishment.

This was by no means the first time I’d encountered a telco executive running chronically over time having even seen one dragged from the stage by an MC when it became apparent their 15 minute presentation was going to take at least an hour.

It’s something I personally can’t understand as time is our greatest, and most precious, asset and wasting other people’s is a sign of arrogance and disrespect.

Whether Marissa Mayer can deliver returns to Yahoo!’s long suffering investors and board members remains to be seen, one hopes they haven’t set a timetable for those results.

Mr Ballmer regrets

The successor to Steve Ballmer as Microsoft CEO has some major decisions about the company’s future.

Following the announcement of his pending retirement, Microsoft CEO Ballmer held his first interview for twenty years with ZD Net’s Mary-Jo Foley.

During the ZD Net interview, Ballmer and Foley ranged over subjects ranging from his possible replacement, reasons for retirement and his greatest highlight during his thirteen year tenure as CEO.

Foley’s asked Ballmer what was his greatest disappointment as Microsoft CEO and, not surprisingly, he nominated the development of Microsoft Vista.

I would say probably the thing I regret most is the, what shall I call it, the loopedy-loo that we did that was sort of Longhorn to Vista. I would say that’s probably the thing I regret most. And, you know, there are side effects of that when you tie up a big team to do something that doesn’t prove out to be as valuable.

Those side effects of Vista’s botched development were felt across the PC industry as the operating system’s overlong development and disappointing performance broke the three year upgrade cycle that underpinned the sector’s business model.

Unlike the similar debacle eight years earlier with Windows ME where Microsoft’s market position was unchallenged, Vista came along at the time the computer industry itself was being disrupted by smartphones leaving the entire PC industry exposed to a major shift.

Now Ballmer’s successor will have to deal with the industry’s broken upgrade model along with the post-PC era where desktop and server operating systems are no longer the key to controlling the market. Every option is a challenge to Microsoft’s existing businesses.

As discussed in Ballmer’s interview with Mary-Jo Foley, Microsoft still sees its future in consumer IT, whether that includes continuing the company’s three screen strategy of supplying Windows on the desktop, tablet and smartphone will be one of the early and critical decisions the next CEO will have to make.

While Microsoft Vista might have been Steve Ballmer’s biggest mistake as Microsoft CEO, the challenges ahead for the company’s board and management are great, it’s going to take strong leadership for the once dominant software giant to maintain its place in a radically changed market.

Song of the day – Ms Otis regrets by Kirsty McColl and The Pogues.

Keeping sane in business

How can business owners and startup founders reduce stress and depression?

Last night some of Australia’s best small and medium businesses were celebrated at the 2013 Telstra Business Awards. There were lots of happy winners, particularly Tasmania’s Bruny Island Cheese Company who won the overall prize.

Speaking at the business awards, previous winner Jason Wyatt of Sydney’s Bike Exchange mentioned some the “stumbles on the way” and keynote speaker Mark Bouris described some of those ups and downs.

“Accept the downside and dream of the rewards on the upside” advised Bouris.

Sometimes though those upsides are hard to find, behind the glamour and glitz of having a successful enterprise the toll on proprietors’ mental health can be tough and this month’s Inc magazine looked at the psychological downside of running your own business.

Running your own business – whether it’s a plumbing service, cheese company or a tech start up – is hard work and risky with not everybody suited to the often demanding lifestyle.

If you aren’t suited to running a business, or you’re unprepared, then those mental health costs can be high.

My own experience is instructive, in fact it’s a case study of what not do as a business founder covering everything from being undercapitalised to choosing bad business partners.

Find good business partners

Running a business alone is a mistake, partly because few have the full range of skills required to successful run an enterprise and mainly for the fact being a sole trader or boss is a lonely, isolated experience.

A business partnership though is like a marriage and it’s just as important to choose those co-founders as carefully as you would a spouse.

Good business partners have the skills that complement yours – if you’re good at sales or the technical side of the business then you’ll probably need someone good at the administrative or accounts side. Business is a team effort.

What’s very important is that all the partners in the business respect each others’ strengths and understand their own weaknesses. This makes a powerful team.

Probably the most therapeutic thing about having trusted business partners is that you have a sympathetic sounding board. At the very least you kick back on a Friday afternoon and have a bitch about your customers, staff and the government. That in itself is very important in keeping sane.

Watch the money

One of the biggest problems in business, and one I’ve encountered many times, is that many people don’t understand the difference between cash flow and profit. They see the money in the bank and they spend it.

If your business partner has blown the company’s working capital on a flash car and an overseas ski trip for the family, you can bet the clients, staff and creditors won’t be expecting them to clean up the financial mess.

Should you find yourself in that situation with your partners, get out of the business early before it wrecks your relationships and sanity.

Have sufficient capital

Stories abound of the successful business that was founded in a garage by a couple of penniless college grads and bootstrapped from nothing but they are the exception, not the rule.

While it is possible to bootstrap a successful business – I did it with PC Rescue – it’s a tough, hard road and having insufficient capital exponentially increases the chance of failure. Get some money from family, friends or fools.

Don’t hold out though for the million dollar capital raising though, the Silicon Valley investment model is only suitable for a tiny subset of business and it is possible to be over capitalised as we saw in the dot com boom of the early 2000s.

Stressing about money is one of the greatest problems for business owners and founders, having a little bit of capital makes commercial life a lot more enjoyable.

Watch your business plan

It’s fashionable to say business plans are useless – that is bunk. A business plan gives you some idea of how you expect to spend your money and where the revenue will come from. It’s a good reality check.

However, the 19th Century German general Helmuth von Moltke said “no battle plan survives first contact with the enemy” and it’s true that even the best business plan won’t survive first contact with the customer.

That’s fine because tweaking your business plan in the early days will give you more understanding and control over your business. More control means less stress.

Pivot when necessary

Some of the world’s most successful businesses were started as something completely different, Microsoft being one of the best examples. When it turns out the market doesn’t like your original idea but there’s a similar but different opportunity, grab it.

Executing a business pivot can be time consuming and stressful, but it’s far better for your finances and mental health than riding a failed business plan into oblivion. If you’re the type that enjoys building businesses, then you’ll probably find a business pivot is fun.

Take a holiday

I cannot emphasise this enough. In PC Rescue I went ten years without a holiday. It was a stupid mistake and both my family and my own health suffered for this.

Create limits

Micheal McQueen points out that Baby Boomers are poor at creating limits to their worklives, for many it’s a matter of pride in working punishing long hours. In small or startup businesses there’s no shortage of opportunities to work twenty-two hour days.

The difference with working 90 hour weeks for the law firm or bank is that managers have a nice salary, sick leave and workers compensation. As a proprietor you don’t and in doing so you’re putting undue on yourself, your business partners and your family by working too hard.

Delegate

One key to success is finding good employees – this is something I totally suck at. While I’ve had the privilege of hiring a few good people, I’m spectacular at finding duds.

Being able to delegate is one of the key skills to business survival, it allows you leave work at a decent hour, take that holiday and – most importantly – get time to think strategically. If the owners, founders or managers can’t delegate then the business potential is limited and the risk of burn out is far higher.

Sack the troublemakers

Something that always bemuses me is how small business owners constantly moan about staff. While it’s true one dud staff member can cause untold damage to a business, bad customers are far, far worse.

Pareto’s law – otherwise known as the 80/20 rule – comes into play here. 80% of your troubles will come from 20% of your customers and rarely will the slow playing, demanding troublemakers be your most profitable clients.

If you’re in business long enough you’ll eventually encounter the psychopaths who actually enjoy stringing out invoices or creating commercial disputes. It’s your duty to your own sanity to get these people out of your life as quickly as possible.

So sack them, write off their debts and get them out of your business. Your time on this earth is too short to be dealing with bad payers, the crazies or the one percenters who get their kicks from screwing other people around.

Watch the warning signs

“Five years in tech support will turn you into an axe murdered, I did twelve” is a joke I often make.

There’s a strong element of truth in that line though as IT support in particular is a stressful, thankless trade and running a business in that sector exposes you to a lot of negativity.

While I genuinely enjoy customer service, tech support and running a business I hadn’t realised just how that negativity and stress was affecting me.

It was only when I noticed the signs of stress in a couple of my good contractors that I started researching depression in the IT industry and did the Beyond Blue K-10 anxiety and depression checklist. The results weren’t pretty.

The exit from PC Rescue and IT support in general started shortly afterwards.

In retrospect I’d stopped enjoying the business and dealing with customers about five years earlier and that should have been the warning sign to get out.

“Love what you’re doing” was Jason Wyatt’s advice at the Telstra Business Awards and he’s absolutely right – the moment you stop loving your business is when it’s time to start looking for something else.