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#111/111: Anything You Want

Some will already know Derek Sivers from his blog sivers.org. Sivers started CDBaby, a CD distributor for independent musicians, in 1998. He sold it 2007 when the company had $100m in revenue. He tells his story of CDBaby in detail in this book and it’s quite interesting.

Sivers was a musician before starting CDBaby and he created a small online shop for his CDs and other musicians asked him if he can offer their CDs, too. After a while more and more musicians asked for distribution and CDBaby grew. He said that after a while he talked to his first employee and said that they maybe need a second employee and he don’t want to grow the company.

It’s quite funny how he found a perfect opportunity but didn’t realize then that it was one. One main objective or like Guy Kawasaki would say the mantra of Sivers was to help musicians. Everything should help musicians to distribute their CDs.

If you are the owner of a company you can do with it anything you want. You don’t have to follow some strict rules or even some “common sense”. Sivers avoided lots of formalities and did just the stuff he wanted. For example, often people think that CEOs are handling the business deals - Sivers never wanted to do that - he looked for persons who were motivated and good at doing deals and let them do the work. But he enjoyed coding and thinking about improving his business and this was what he did.

He also talks a lot about delegation and overdelegation. At one point he delegated nearly everything to his employees, even the profit-sharing plan. After a while somebody said to him that his employees take all the profit, which wasn’t really into his intention. The result argument lead him to leave the USA and work alone from the UK.

Anything You Want is a really interesting story because he talks so much about things that gone wrong but it never appeared that he was unhappy in retro-perspective. I think the main points are that you should somehow help other people in providing products or services to them and that you can do anything you want with your business. All in all a real nice book, quite short but insightful. Do what makes you happy!

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#98/111: The Passionate Programmer

What is it about?

Most people are mediocre at their job. Some are not like Chad Fowler how talks about being remarkable. This doesn’t only apply to programmers, it applies to every kind of occupation.

What can I learn?

Don’t be a jerk: This one is actually a pretty important thing to learn for programmers. I know a lot of them and many think that people who don’t understand how to program are inferior. They like their tech talk and they isolate their selves from the rest of the company. I don’t know if people can learn this that fast but maybe it’s an beginning. Stop talking tech talk if you talk with non-tech people. They don’t care about every minute detail. They got problems and want them solved. Think more about them and how you can solve their problems.

Learn about business: The next step is to open yourself to new areas like business. You may laugh about sales persons but they make the money. You don’t have to be friends with business people, however it is recommended. Learn about what they are doing. How that accounting work. What do the marketing people do? This insight is extremely valuable among software devs because most of them know a thing about such stuff. You will learn about new problems, new solutions and new persons.

Market yourself: If you realized that there are people out there who actually appreciate if you help them solve their problems and became less a jerk, then it’s maybe time to market yourself actively. An easy way is to start a blog. Write about what you doing, about solutions for problems that you encountered. A big blog will often lead to some invitations to conferences or book deals.

Conclusion

A great book for every specialist. It doesn’t matter if you’re a biochemist, software dev or designer, a lot of tips will help you to build a remarkable career for yourself.

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#74.0/111: My Life in Advertising

What is it about?

This book is actually two. My Life in Advertising, the autobiography of Claude C. Hopkins and his famous publication Scientific Advertising. In this post I will review My Life in Advertising.

What can I learn?

Fun is subjective: Claude C. Hopkins was raised in a highly religious household. His mother forbid him seeing plays or playing cards, because she believed that these are diabolic activities. Therefore, he looked for other activities and began cleaning at his school and distributing fliers. He said: "The only game I’ve ever learned is business.". It’s his occupation and recreation.

Simple, natural ads with a coupon: His most successful ads followed this scheme. Firstly, he said that he was raised as a simple man, so he could only sell to other simple man, which were the majority. Secondly, the ads were natural, i.e. no lies, no marketing speech. Often he described how something was created and built a campaign on this obvious fact. For example, he created a campaign for Schlitz Beer in which he described how everything was cleaned twice a day and the bottles were washed four times. This was industry standard but nobody ever used it in an ad before. Thirdly, he inserted coupons for free samples because he wants to decrease the prospects risk and truly convince them that the product is excellent.

His great mistake: There is a chapter called My Great Mistake where he talks about don’t starting a company on his own. Many of his former scholars, i.e. which learned from him how to create great advertising, started their own companies and succeeded. He said that he never had enough self-confidence. After many years working for other people and agencies, he finally decided to start his own businesses which were successful. However, he thinks that this isn’t an advice for the majority. Everyone should decide on his own where he fits and what he wants.

Conclusion

I truly enjoyed My Life in Advertising. This is an other vintage classic from 1927 and most observations are still true today. It’s interesting how he worked his way up from a fruit picker. Then decided to get a degree in accounting. There he realized that accounting is just a overhead and costs will always be minimized. Therefore he started to switch to the money earners, i.e. into advertising. In the last chapter he wrote that he helps juvenile delinquents to love work as he do which is impressive for this time.  All in all a great biography. Recommendation.

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What is it about?

Andrew Warner interviews Dane Maxwell who founded Zannee which offers tools and services for real estate brokers. He talks about building a nice lifestyle business, direct mail marketing and testing ideas.

What can I learn?

Test ideas with squeeze pages: A simple method to test product ideas is to build a single page website with information about your future product and a subscribing function if your prospects are interested. You can be sincere, write that you consider building this product if X people will subscribe to your email list. To promote the page you can use online ads. If you have gathered enough people, you will have a client basis which jump-starts your new business.

Decrease the purchasing risk: There is a saying: no one ever got fired for buying IBM. Your company probably isn’t IBM, so you have to build trust. A major action is decrease the purchasing risk. That means, you are going to offer testimonials, money back guarantees, demos and of course a mailing list where people can subscribe. In this mailing list you offer them useful information (articles, book summaries, how to lists, etc.) and slowly build trust.

Use case studies: Another method is writing real life case studies. Talk with your customers about how your product solved their problem. If possible try to quantify these results. Whats more compelling than Our average customer saved $5000 a month using our product?

(via How To Build A Profitable Lifestyle Business In Web Apps, Info Products And More – with Dane Maxwell | by mixergy.com)

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#57/111: The New Business Road Test

What is it about?

How can you increase your probably of success? John Mullins takes a scientific-like way to explore why startups fail and how it can be fixed. Each major point is illustrated by case studies and a short section “what investors want to know”.

What can I learn?

What are your goals? Before starting you should define your goals. Do you want to build a multi million dollars company or a lifestyle business? Do you want to work 80h/w or rather 25? This is the general framework to later decisions.

Market and Industry: Often these two things are not really understood. Your market exists of your customers. Your Industries are your competitors. Often there are great markets but the industry sucks. A example are restaurants. There are a mass of people who have to eat every day but the industry is gigantic and competitive. There are lots of restaurants or people could cook for themselves. That is, you market should be acceptable and your industry.

Obey the Critical Success Factors: If you have chosen your market and industry, you have to identify the industry’s Critical Success Factors (CSF). What is really important in your industry? For example, you can’t build a successful news site if you don’t have topical and good content.

Choose a great management team: Your management team should be complementary to you. Firstly, you have to know your strengths and weaknesses. If you suck at finance look for a smart CFO. If you suck at managing people, look for a smart COO/CEO. You don’t have to do anything for yourself and probably better don’t.

Conclusion

This is a pretty good book. The New Business Road Test is well structured and each chapter includes case studies which support Mullins’ assumptions about starting a successful business. The book is very practical and definitely worth reading if you want to start a business. Recommendation!

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#51/111: Predictable Success

What is it about?

What are the ingredients for a successful business? Les McKown thinks money, people and structure. You can see a illustration of his business cycle theory below. On the x-axis is time and on the y-axis success.

(Picture from Les McKown’s Blog)

What can I learn?

Whitewater: While you are growing things get more complex. Your company slows down. To get to the next stage you have to introduce some processes and structure to manage your company.

Predictable Success: In this stage there is a equilibrium between entrepreneurial zeal and structure. This is the ideal state and theoretically you can be in this stage forever. An important key attribute in this stage is ownership and self-accountability, i.e. your employees are accountable for results. You focus on people instead on processes.

Treadmill: Your company gets into this stage if processes take over risk taking and entrepreneurial zeal. Processes become more important than people and individual gaols. To get back to predictable success you have to cultivate personal development. Focus on results rather than on compliances.

Conclusion

At the beginning, Les McKeown writes that he became an accountant and learned that financing are is the most important factor for a company. I was really disturbed and though: That’s why accountants don’t start companies. However, later he revised his answer. In Predictable Success, McKeown describes each stage thoughtfully and with examples. It’s a real pleasure to read this book because he tells a lot of his own experiences as a business owner and consultant. A clear recommendation for everyone who want to know how to a company transforms over time and how to achieve predictable success.

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#48/111: Seizing the White Space

What is it about?

What have Amazon, Hilti and Hindustan Unilever in common? Each company revolutionized its business model. Mark W. Johnson studied these and more companies and found a process for business model innovation.

What can I learn?

What’s the job-to-be-done? Don’t ask your customer what he wants your product/service to be. Find out what tasks he have to do. This allows you to use your expertise to build a better solution. This will be your starting point.

How can you satisfy it? Now it’s time to build a company around your product. What are your key resources, your key processes and how can you make money out of it?

Let’s take the first business model of Amazon for example. The job-to-be-done was offering a wide range of books. You can only make profit, if enough books will be sold. Also the warehouse costs have to be reduced. Furthermore, people want to read their books as soon as possible.

To ensure that you are going to sell enough books, you have to build a platform. So the key resources and processes are the technology for warehousing, IT infrastructure for the website (channel) and a partner for shipping.

Change is hard: Often there’s a discrepancy between your company and your new business model. If possible, take the easy way and build a new company. It will save your lots of time, discussions and compromises.

Conclusion

I really like Seizing the White Space. It is more practical than Business Model Generation which focuses more on building a meta solution. There are lots of interesting case studies with uncommon companies. Furthermore, I like Johnson’s approach of Customer Development, i.e. searching a solution for the job-to-be-done and then building the rest of the company around it. Great recommendation for everyone who wants to start a company and solve a job-to-be-done.

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#46/111: Startup

What is it about?

If you want to start a business, you need an idea and a business model and money. Elizabeth Edwards focuses about the latter. She shows you how to cut your personal expenses, how to calculate your financial numbers and why venture capital isn’t always the best option.

What can I learn?

Is your business profitable? Before starting your business, you should check if your business model can generate enough profit. How high is your initial investment and how much does it cost you monthly to operate your business? The next step is to calculate your profit on this basis. How long does it take you to break even, i.e. you aren’t losing money anymore? You should reject your idea if it will take longer than two years.

Capital can be expensive: Before you are going to look for venture capitalists, you should think about your need of outside capital. If you can do it alone, go for it. If you can’t do it without outside money, she recommends you to thoughtfully calculate your costs. Don’t forget to include your opportunity costs for searching investors.

Know your metrics: A business runs on numbers. You should monitor your industry key metrics (e.g. page impressions for social sites) and of cause your ordinary indicators like sales, costs and profit. Even if you aren’t a numbers person, learn how to read your key numbers.

Conclusion

This book is an accumulation of tips but lacks the explanation of why you should do they. This is a bit of a downer. The good parts of Startup were clearly the financial and legal knowledge. If you start your business in the US this information is possible pretty valuable. Lastly, besides of the financial and legal advice most advice is out of other books like Made to Stick or Business Model Generation. I would recommend reading those, if you want to deepen your knowledge.

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#22/111: Eyeballs Out

What is it about?

What is life about on an aircraft carrier? And how can it be applied to business? Donna Sturgess experienced this for her own for two days and wrote about her discoveries she made.

Key points?

Create thrill: Often big organizations lack of risk-taking people. If you want to turn risk-averse people into risk-taking people you should try to create thrill. Introduce new concepts, let people take risks for themselves. This action can revitalize your company.

Immerse yourself: One key point of IDEO’s success is observing the consumer. Mrs Sturgess recommends a similar concept. You should immerse yourself into a new setting (e.g. NASCAR racing, glassblowing). This allows you to get a new vantage point which probably results into new ideas.

Use games: I really like this point. Use games - built a game-like environment. That is, you can use badges for achievements, e.g. first 100 sales, first product shipped or first marketing campaign launched. Furthermore, she proposes to use more interactive strategy games for business (maybe realtime?). It’s an vague idea but somehow really cool and exciting.

Empower young employees: Empowerment isn’t new to business but this approach is. On the USS Stennis (the aircraft carrier) the average sailor is 20 years old and they got a lot of responsibility. In companies, the average age is usually much higher. But if you don’t allow young people to learn and take responsibility, you don’t empower them.

Conclusion

This book is pretty short but got some really great ideas. I can’t really estimate the impact because it was published this year though I think that it can improve the business world. In conclusion, read it for yourself and decide if it is worth or not.

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#14/111: The Wizard of Menlo Park

What is it about?

Thomas A. Edison - the inventor of the modern world! Really? Randall Stross investigates Edison’s story and tries to find the real Edison. He doesn’t talk so much about the technical achievements, he rather focuses on Edison’s self-marketing. Showing how Edison exaggerated, told lies and played with the media.

Key points?

Famous doesn’t mean profitable: Edison got famous while working on the first version of the phonograph. But it took him four years for the first commercial version and another 20 years for the improved one.

It’s not about you: Edison’s life and business was about Edison. He wanted that the phonograph was used as a dictating machine. But the customers wanted to use his machine for music because its dictating abilities were pretty poor. It didn’t interest Edison, he was too pigheaded to commit himself to his customers.

Don’t try to control everything:  Moreover it did not stop there. Henry Ford called Thomas Edison "the world’s worst business man" but it didn’t bother Edison. Also, there were so many opportunities which were missed. Furthermore, he had big problems operating his companies efficiently. While building his first power grid he needed about $30,000 per square mile to install the power lines, while his competitions only needed about $500.

Look into new fields: Edison worked in lots of businesses. From providing electricity to mining. He immersed in different fields which helped to stabilize his aura as the inventor of the modern world.

Conclusion

The stories are highly interesting because you see how he failed (See: Confessions of a Serial Entrepreneur) and you’ll learn about his most remarkable move: He built a strong relationship with important journalists how praised him continuously. He knew how to market himself.

In conclusion, Edison didn’t invent the light, but he did invent personal branding for business people.