I lost my Kindle on my last business trip and I’ve been super upset about it. I need my screen back for doing research because normal computer use causes me a great deal of grief. I nearly turned around and bought another Kindle, but hesitated because I believe the next wave of these products is coming out 1st quarter next year, thanks to the Pixel Qi screen that I’ve been following. I’m also hopeful that the Plastic Logic Que’s form factor will serve my purposes better than the Kindle (and I think that the reason for the profile shots of the Que are because it’s going to sport the Pixel Qi screen itself).

Yet, in the long run, if I like the Pixel Qi screen and Microsoft or Apple launch a tablet I can use for reading and for my email, I’ll probably head that route over a dedicated reader.

In the meanwhile, the wait and staring into the flashlight of my flat screen are both killing me.

My son has become interested in business at a very young age (he’s 6 right now) and I would like to introduce him to inspiring stories of young entrepreneurs to give him ideas.

A little background. My son, of his own accord, has successfully sold his jokes by giving 1 for free and charging a $1 for more. He set up a toy sale out by the driveway at 5. He asks questions about the difference between Walmart’s and Apple’s margins. He hires his sisters (with his Halloween candy) to do work for him to make more money. This is a greater level of interest than his Dad for his age.

I want to encourage his interests in business and need some help.

We recently read of James C. Penny (founder of J.C. Penny) who set up a watermelon stand near the fairgrounds (his Dad scolded him for taking advantage of those within the fairgrounds who paid for selling permits). We read of Orville Wright and when he partnered with his 8-year-old sister to collect scrap iron from the neighbors and sell it to the junk yard (they had a bully attach them when they took the metal to the yard). Great stories.

This morning it occurred to me that if we could read together inspiring stories of young entrepreneurs, then it would give us both ideas.

Particularly, he wants to sell something this year for a project and has discovered from his toy sale (that only earned him $0.25 because he did it on a country road with little traffic) that he needs to find something he can sell and a place with more people to sell it. He needs ideas.

So, what are your favorite child entrepreneurial stories that my son and I can share together?
– Something a famous entrepreneur did when s/he was a child (famous examples).
– Something someone close to you has done that was interesting (non-famous examples).
– Stories you’ve heard as alternatives to the lemonade or toy stand (perhaps ideas that could work for a boy who lives in the country).
– Any children who’ve created very successful enterprises.

Please answer on LinkedIn, via a trackback from a post on your blog or in the comments. We’ll both be grateful!

Ever since reading this book I’ve experimented with different tools for implementing the system. The best I had found was Life Balance, but I didn’t like how it was stuck on my PDA and computer…I wanted a solution online. Leave it to John to solve my problem…his latest post gives you everything you need to start making the Getting Things Done system work for your life. Thanks John.

I’ve been reading Call to Action: Secret Formulas to Improve Online Results and the authors advocate persuasion as the real goal of a commercial website, not usability.

Wandering through a website endlessly, but very easily, doesn’t do customers any good. They need answers. Answering the questions of different personas that visit your site persuades them to stick around and eventually buy.

The Persuasive Process
1. Who needs to be persuaded?
2. What actions does this person need to take?
3. How will you effectively persuade that person?

The book is fantastic and only getting better. More thoughts to come.

In C.S. Lewis’ Screwtape Letters, Screwtape, one of the devil’s servants, writes his nephew about the importance of disconnecting each generation from all others.

“It is most important thus to cut every generation off from all others; for where learning makes a free commerce between the ages there is always the danger that the characteristic errors of one may be corrected by the characteristic truths of another. But thanks be to Our Father [the Devil] and the Historical Point of View, great scholars are now as little nourished by the past as the most ignorant mechanic who holds that ‘history is bunk.’

Game of Work

goals must be:
1. Written.
2. Your own.
3. Positive.
4. Measurable and specific.
5. Stated in inflation proof terms.
6. Stated in the mosst visible terms available.
7. Made with a deadline.
8. Open to personality changes.
9. Contain an interrelated statement of benefits.
10. Realistic and obtainable.

Individual goals are the foundation of corporate human-resource development and planning.

SCOREKEEPING
No management by observation.
By measurement.
Winners keep track of results. Loosers keep track of reasons.

Sources of inadequate cash flow.
1. Too much inventory and other non-liquid assets.
2. Overly-high receivables.
3. Inadequate gross-profit percentages.
4. Unwillingness to implement cost-cutting measures.
5. Inappropriate compensation for the owner or key decision makers.

Scorekeeping basics:
1. Scorekeeping must be simple and objective.
2. Self-administered.
3. Offer a comparison between current personal performance, past personal performance and the accepted standard.
4. Scorekeeping should be dynamic.

FEEDBACK
spaced repetition is crucial to conditioning oneself to change attitude to change behavior to succeed.

FIELD OF PLAY
Define the following for each position:
1. Terminal Out of Bounds (fired)
2. Operational Out of Bounds (correction)
3. Minumum performance standard
4. Safety zone – humble player and helpful coach.
5. RRRs
6. Paydirt.
7. Between MPS and Paydirt is GOMB or “get off my back.”

Create a field of play agreement.

“People will pay for the priviledge of working harder than they will work when they are paid.”

-Chuck Coonradt

Last night I researched network marketing and direct selling on the Internet and then went to the library to pick up a half a dozen books. I was the very first to check out Creative Memories: The 10 Timeless Principles Behind the Company that Pioneered the Scrapbooking Industry from the Provo Library. They hadn’t even placed it on the shelf. I felt a connection to the book before I even read it last night and this afternoon. Cheryl Lightle and Rhonda Anderson truly had a vision for doing something good for the world. Their mission sounded so similar to FamilyLearn. Starting in 1987 with 2 consultants and no formalized compensation plan, they pioneered the scrap book industry and in 2005 they plan to generate 1/2 billion in sales.

Here’s the book captured:

Purpose: What principles were behind Creative Memories’ success?

Central Message:

  1. Operate from least to most.
  2. Embrace the abundance mentality.
  3. Keep the promise.
  4. Make it easy.
  5. Communicate clearly and concisely.
  6. Protect the relationship.
  7. Respect personal choices.
  8. Go for the good of the whole.
  9. Don’t knee jerk.
  10. Ensure sustainability.

Before I give an overview of these, read the beginning of their mission statement:

Creative Memories believes in and teaches the importance of Preserving the Past, Enriching the Present, and Inspiring Hope for the Future.

Sound like the FamilyLearn mission? Because we are a business of people just as they are, I had a lot to learn from Cheryl in this book. Now for an overview for my future reference.

  1. Operate from least to most. Cheryl talked mostly about transitioning to technology after 1996. Their first attempt was a total failure and left a bad taste in the consultants mouth for the Internet. They learned to introduce changes slowly and give people time to respond. They really fought the temptation to overhire during the growth of the 1990s and tried to outsource everything. They didn’t want to fire people later.
  2. Embrace the abundance mentality. Don’t spend you’re time fretting about the competition! Just make yourself better than the day before. Competition means more recognition in the Industry (of course there was no industry when this company began).
  3. Keep the promise. Simply doing what you and your mission and your guiding principles say that you’ll do. At Creative Memories, they have scientists who test and develop new products so that they will be archival quality. They define very carefully what archival quality means. Interestingly, they are 100 % ESOP (employee stock ownership plan) and proud of it. The employee ownership inspires success in the company. They have a “Great Performance” for each person in the organization that defines what the employee-owner can do to ensure the performance of the big picture of the entire company, of the department and of the team. The employees are also encouraged to work on their own albums to have passion for what they are doing.
  4. Make it easy. First for consultants to do business with the company, second for customers to do business with consultants and third for employee-owners to perform their job responsibilities. (Interesting that the consultant precedes the customer in this principle) For example, (1) they still spend lots of time on fax and phone orders because not all consultants like the Internet or feel comfortable with it. (2) They changed the packaging just to make it easier for consultants to dispose of it. (3) Resource One is a project to get the consultants onesies for their customers so that they don’t have to break open entire sets. This is not very profitable and a lot of work for the company, but it helps the consultants. (4) BusinessMate is a downline and business management software that they developed especially for team leaders.
  5. Communicate clearly and concisely. They explain “why.” They expect clear, concise and frequent communication that expect to be perfect, but they’ll accept excellence.
  6. Protect the relationship. This is very important to a direct sales organization. The business is built in relationships. Us, Not Us and THEM In the beginning they sold albums in retail while they were trying to define the business. They soon realized that they had to make a final decision about whether they’d be direct sales or not. It was self-defeating to compete with their distribution channel. This is a decision that we face right now. NOTE: customers make decisions to buy based on the following: (1) If they are treated with respect – 70 percent, (2) If they feel they are under no pressure to buy – 65 percent, (3) If they believe the returns policy and process is fair, (4) If they feel they receive outstanding service – 58 percent. All people related.
  7. Respect personal choices. This is important and most manifest in the way the compensate and give bonuses. Today, I read in an presentation encouraging golden handcuffs. The term bothered me a bit but I thought I understood the concept. Make more financial reasons over time that the top people will stay with the organization and continue selling it. Creative Memories doesn’t do golden handcuffs because they prescribe a lifestyle and the company feels that consultants and employee-owners should choose their own lifestyle. I like their style. I learned they use a UniLevel compensation model as described in this presentation.
  8. Go for the good of the whole. Sometimes, like when they discontinued their teal binder and many consultants complained, you have to do what’s best for the whole even if it’s difficult. In the case of the teal album, the discontinuance made room for the consultants to have more room in their inventory for more popular products. Only a few thousand out of 60,000 consultants were affected by the move. Give charitably where it will help the most people.
  9. Don’t knee jerk. They struggled with this in the beginning as a growing organization. Changes influenced all the consultants and they couldn’t make them too sudden or too often. However, when you make a strategic change with specific objectives in mind, you need to let it runs its course (sometimes taking over a year) to see if it produces the desired effect. Don’t go back on a change prematurely.
  10. Ensure sustainability. They have employee-owners work for other direct sales companies to understand and empathize with the consultants. They have executives be Creative Memories consultants to catch the vision themselves. These are good ideas. She also spoke of preparing the company to pass the torch.

Interesting things I noted in the book:

I’ve just finished another book I’m adding to my list of favorites. The Art of The Start by Guy Kawasaki. Guy gets right to the point of what really matters and he’s entertaining.
For example, his chapters end with FAQs and his final FAQ of the final chapter was:
Q. People are always asking me for my expert advice, but it’s interfering with my ability to get my current job done. What should I do?
A. Write a book and tell everyone to buy it.

I laughed and laughed imagining how many ask him for advice.

Well, here’s my attempt at a capture and reference for the future:

Purpose:
How do I get a start up going?

Central Message:
Simply define what it is you’re doing (in less than 10 words) and focus, focus, focus on those things that will propel it forward and cut out anything that won’t. Most importantly, start doing.

Validations:
The art of starting
Things that matter:

  1. Make meaning – make the world a better place with your product or service.
  2. Make mantra – forget mission statements and take your meaning and make mantra out of it.
  3. Get going – create and sell your product or service and don’t spend time on business plans, writing and pitching.
  4. Define your business model – create a sustainable business model that’s already been proven.
  5. Weave a mat (milestones, assumptions and tasks) – for staying on track when everything goes nuts, which it will.

Excercise: If FamilyLearn didn’t exist the world would be worse off because of family stories lost.
Mantra: The heart of life.
Business Excercise:

  1. Calculate your monthly costs to operate your organization.
  2. Calculate the gross profit of each unit of your product.
  3. Divide the results of step 1 by the results of step 2.
  4. Ask a few women if they think you have a chance of selling that many units. If they don’t, you don’t have a business model.

LOL, hilarious but so true.

Most important milestones:

Assumptions:

Major tasks (not as critical as milstones):

The art of positioning:

What do you do?
FamilyLearn: We help you record and share family stories. (dry, but it’s what we do. I’m sure there’s a better way to say it)

Niche thyself!
Make a name that can be a verb. Google it.
FamilyLearn it. Ok, we blew that one, but oh well.


Don’t start into an auto-biography! Sorry Paul, you were one of my first victims on that one. I’m learning.
10/20/30 Rule
10 slides
20 minutes
30 pt font text

Guy gives a great presentation format:

TO INVESTORS
Slide 1: Title and contact stuff
Slide 2: Pain/ Problem
Slide 3: Solution
Slide 4: Business model
Slide 5: Secret sauce or magic in your product or service
Slide 6: Marketing and sales – how to market without breaking the bank?
Slide 7: Competition
Slide 8: Management team
Slide 9: Financial projections and key metrics
Slide 10: Current status, Accomplishments to date, Timeline, and Use of Funds

TO CUSTOMERS
Slide 1: Title and contact stuff
Slide 2: Pain/ Problem
Slide 3: Solution
Slide 4: Current customers, clarity on the value
Slide 5: Secret sauce or magic in your product or service
Slide 6: Demo
Slide 7: Competition – why you’re good
Slide 8: Management team – make them feel comfortable buying with a start up
Slide 9: Trial period or test installation

TO PARTNERS
Slide 1: Title and contact stuff
Slide 2: Pain/ Problem
Slide 3: Solution
Slide 4: Partnership model
Slide 5: Secret sauce or magic in your product or service
Slide 6: Demo
Slide 7: Competition (optional)
Slide 8: Management team
Slide 9: Next steps

Upon starting, ask:
“How much time may I have?”
“What are the most important things I can communicate to you?” (do as much of this in advance as possible)
“May I quickly go through the presentation and handle questions at the end? However, please feel free to interrupt me if you need to.”

Let them fantasize about the potential of your product or service.
Shut up and take notes, summarize, regurgitate and follow up!

Pitch constantly. Rewrite constantly.

The art of writing a business plan:
You have to have a plan. Focus on the executive summary. Pitch, then plan. Make it just like your pitch.
1. Clean, no more than 20 pages. Less is more.
2. One person should write the entire plan.
3. A staple, no fancy stuff.
4. Financial projections to two pages.
5. Key metrics.
6. Assumptions that drive your financial projections.

The art of bootstrapping:
Manage for cash flow, not profitability. Choose an auto-persuasive product.
Build a bottom up forcast. Each salesperson can make ten sales per day, there are 240 working days…
Ship, then test. Get it to the market.
Forget the proven team and go with energy and inexperience that believes in what you’re doing.
Start as a service business.
Focus on function, not form.
Pick your battles. Make money from your magic. Margins!
Go direct. Stay close to the customer. No multi-tiered stuff. You have to sell, not fill demand.
Position against the leader.
Take the “red pill.” Reality checks. Honesty with yourself.
Get a morpheus. Realist in the organization.
Understaff and outsource.
Build a board.
Sweat the big stuff. Pay for the stuff that matters rather than saving pennies.
Execute.

The art of recruiting:
Hire “A” players.
Hire “infected people”
Ignore irrelevant.
Use all your tools. Board, connections, etc.
Wait to compensate.
Double check your intuition. Would you avoid them when shopping?
Reference check. If they send you to a desk of a secretary, bad sign.

Applications:

Value:
“The true measure of a man is how he treats someone who can do him absolutely no good.” –Samuel Johnson
Successful businesses and being good to the world are not opposing forces.
“There are few joys greater than helping others.” –Guy
Interesting note, he speaks in the last chapter of theories where there are different “classes” in Heaven.
I wonder if he was thinking of the 3 Degrees of Glory as one of those theories? Maybe I’ll ask him.

Seth Godin has rights to an ebook he wrote and he’s giving it away for free. I downloaded a copy and thorougly enjoyed the entire book.

THE JOY OF SMALL

Advantages of the big corporations
1. Distribution – they have huge, established distribution chains.
2. Access to capital – these guys are big and can borrow big bucks. They use this money to beat anyone out if they can.
3. Brand equity – Nike can command a pretty penny and has built a reputation.
4. Customer relationships – established customer relationships are a huge advantage. It’s hard to lure customers away.
5. Great employees – big companies, with their security and famous reputations, attract amazing people.

But the underdogs can play many things to their advantage:

Advantages of Bootstrappers
1. Nothing to lose – HUGE. While the big company’s beauracracy fumbles to make decisions trying to protect their old ways of doing business, you can move on the market and embrace new territory.
2. Happy with small fish – the first animals to die in the ocean are big fish because they need soooo much to eat.
3. Presidential input – the pres can actually positively influence the entire company.
4. Rapid R&D – Sometimes bigger teams doesn’t give a company an advantage.
5. The Underdog – Others are willing to help you out with discounts. Big companies are always charged full price.
6. Low overhead
7. Time – you aren’t forced to do things at certain times because you’re not answering to public shareholders. Big companies don’t have that luxury.

Don’t play the big companies’ game or you’ll get eatin. Play your strengths.
Id became famous for Castle Wolfenstein. The 4 guys who built it decided to follow their own rules against the big boys. They built Doom, gave it away for free, and millions loved it. Then in stage two they offered a deluxe version with more levels, more monsters, more everything and sold it directly by mail order. Id redefined the business and won.

A GREAT IDEA CAN WIPE YOU OUT

“What’s a great idea? Something that’s never been done before. Something that takes your breath away. Something so bold, so daring, so right, that you’re certain it’s worth a bazillion dollars.”
Stick with things that have worked before, in other industries. If it’s been done once, it can be done again. Get a real business model.
Key elements:
Distribution – Where is it sold to the customer?
Sales – Who is selling it for you and how will they be compensated?
Pricing – What do wholesalers and retailers and consumers pay?
Production – How do you make it?
Raw materials – Where do you get what you sell?
Positioning – How do the ultimate users position the product in their minds?
Marketing – How do consumers find out about it?
Barrier to entry – How will you survive when competitors arrive?
Scalability – How do you make it bigger?

First off, start the right business.
1. Profitable.
2. Protectible
3. Self-priming
4. Adjustable
5. Exit strategy (optional)

Decide whether you’ll be a free-lancer (skills) or an entreprenuer (for business models’ sake).

Great bootstrappers find an existing business model and embrace it.
1. You can be certain it can be done.
2. You can learn from previous mistakes.
3. You can find a mentor.
4. You’re not alone.

Look at the value chain in looking at a business model.
1. Who’s going to buy your product or service?
2. How much are they going to pay?
3. Where will they find it?
4. What’s the cost of making one sale?

Take an extra month to get the business model right. Don’t plan too much because you’ll never get out and do it.

DOING THE MATH

A few pointers on debt:
1. Don’t, unless it’s professional.
2. Only get into professional debt when it’s to make money.
3. It’s better to save the money than to go into debt for it.
4. When you borrow from family and friends, spell it out very well.

The most important things is that you sale. You have sales. You can do almost anything.
1. Sell something that people want to buy and know how to buy.
2. Own the sells process.

RINGO WAS THE LUCKIEST BEETLE

Rule 1. Find people who care about cash less than you do.
Rule 2. Survival is success.
Rule 3. Success leads to more success.
Rule 4. Redo that mission statement and business plan every 3 months.
Rule 5. Associate with winners (customers, employees, vendors, and peers)
Rule 6. Beware of shared ownership (or, why Ringo was the luckiest beetle) Try 5/5 and split the other 90 over time according to performance.
Rule 7. Advertise! Spend regularly as investment, Persist, be clear, test and measure
Rule 8. Get mentored.
Rule 9. Observe those birds that clean the hippos’ teeth

keep looking »