In short, we’re back in the software business!

Why did we do it:

• Most importantly, we wanted to add value to our current customers with a tool to help them sell more.
• We wanted to something to build more value to the business and products get a higher multiple than services.
• Unlike 99% of what I do now, I actually sort of understand the software business.

So, the long and short of it is: go to www.TestimonialDirector.com and see what we hath wrought.

Sadly, this is also the end of my adventure with this Micro Biz Journal. What I have discovered is that I really can’t devote enough time to do it properly and make this new venture successful.

Thanks for your time and attention, Chris

There is a very cool design guy my friend Eric introduced me to, named Edward Tufte. He wrote a great book called The Cognitive Style of Powerpoint: Pitching Out Corrupts Within, making the argument that the typical charts only serve to weaken verbal and spatial reasoning, and almost always corrupt statistical analysis.

However, I did find a new use for PowerPoint in a development process we’re using for the stream-lined MicroBiz Development Process (MDP – a new acronym!). Why a new development process? Well – I guess the long and short of it is that the traditional development process I’m used to is way too slow and expensive.

I’m used to writing long, gory specifications, complete with personas, etc… and handing it off to a development team for detailed functional specs, design specs, UI specs, QA plans, etc… Those are great if you can have millions to spend and 6-9 months. I have neither…

Instead, with the MDP (wat dat? oh yeah…), the goal is to compress these activities by leveraging a very important factor – a detailed and clear picture of what the application will do in the mind of the “Product Manager” (aka me).

Traditionally, I’m used to letting the gory details of the application get sorted out by the experts as part of the discovery and specification process. If we want to compress that, it means that I have to have a very clear picture of what the app will do and how it will do it. That cuts out a bunch of steps although still leaves the risk that one develops something that then blows up capabilities or the schedule or the cost or all three…

So what did I do specifically? For our app, I create two documents… 1. A high level specification complete with a list of functions that the app has to do that and the role of the people who do them. This is pretty much like a standard requirements document except I focused on the stuff that was behind the covers (performance, scalability, security, etc…).

2. The second thing I did was what really made this project fly… It was to dust off PowerPoint and used it to create a UI wireframe. That is, to go through and show the various screens that the app presents. In my case, I had one section for the end user and one for system administrators.

It was an incredibly effective but laborious process. Each screen was mapped out including what info would be presented and what actions the user could perform. Essentially it was compressing the requirements spec and UI design into one document. Along the way, it forced me to examine every aspect of functionality – essentially reducing each user interaction to a series of inputs, a series of processes, then a series of outputs.

Was this the final UI design – nope. That the dev experts can work. But what it clearly showed is what the application needed to do and the wireframe was close enough to the UI design that it was a relatively straightforward transition.

But coming up with the wireframe slides was a painful process  as it required a very crisp view of what the app was to do. It took me at least five run-throughs till I was happy with the 80-slide result.

Then the real payoff occurred. The MDP relies on rapid prototyping. That is, quickly implementing somewhat rough hunks of functionality for review and testing. With the Powerpoint wireframes, the dev team was able to crank out the first half of the app (ie. about 50% of the functionality) in only three weeks. And they’ll have the whole thing ready for alpha in another three weeks.

So six weeks from delivery of these documents to a fully functional alpha… Pretty cool. That, combined with some intensive testing by the Quality Assurance team (aka me), and we’re developing this application faster than I would have ever guessed was possible.

Now, will we hit speed bumps that impact our cost and time and effort? Absolutely – that is to be expected when moving so fast.

Is it still an order of magnitude more efficient for us than the traditional large company dev process? Absolutely.

We’ll see how it goes – only two months till beta and four months till commercial release. What could go wrong? (oh yeah – it’s software…).

C.

I could justify it by saying that we’ve been very busy: our Powerhouse Event was last week (with double the attendees of last year!) and Colleen’s new book is hitting the book stores (go to honestysells.com, now!).

Those items (listed above purely for promotional purposes) have taken a lot of our time but the real exciting news is that we’ve decided that I get to be a nerd again… That’s right, we’re getting into the software business.

I have to be honest: I love the software product business. But based on my experience at my former employer, I thought that it was mutually exclusive with the lifestyle that Colleen and I have grown to love. Too much money was required to launch a product, too much effort was required to market and sell, etc…

But then I started to run into folks that were launching software solutions as micro-businesses and I was inspired. Development could be done inexpensively. Sales and marketing could be done cheaply yet effectively. The big difference is the goal: no desire to go public and make tons and tons of cash. Instead the goal is to launch a product that does relatively well, provides a revenue stream and allows for the continued   lifestyle.

So, Colleen and I agreed on an area where a software solution could add tremendous value to our clients and we kicked off the project! But to do so, we agreed on a few core tenants:

1. Self Funded.

I don’t think I’ve ever heard a single person say, I love my VCs… We don’t want to deal with the stress of all that so the first criteria is that we be able to develop, launch and grow the product only with funds that we generate in the business. So no investors – we own it all.

Now it does help that our business is currently throwing off a bit of profit so we don’t have to borrow any from the bank on the ol’ Line of Credit at this point. But if some point we have to, that’s OK. As long as we don’t get ourselves into the position that any debt on the product could take down the company.

Does that mean the product won’t grow as quickly and we’ll not generate as much revenue. Absolutely! But that is the trade-off to keep it ours…

2. Lifestyle Preservation

I am addicted to our lifestyle. The not shaving or wearing pants on most days. The three months in Miami. The lack of PowerPoint in my life. And this project cannot change that.

So, we will need to do things virtually – working with contract developers. Getting sales and marketing help without hiring. Etc…

3. Complementary to the Business

At the end of the day, we need the product to be complementary to the business. That’s how we get a multiplier effect. We’ve got over 10K people in our database which is an amazing starting point to up-sell and cross-sell. And it means we can leverage Colleen’s high visibility in the market to promote this as part of our overall portfolio of services.

So in April, we pulled the trigger and began development. And we’re moving fast, aiming for commercial release in the fall.

I know there are a thousand things I’ve not thought about and will learn by trial and error… And I’ll make sure I share them all on the blog. Hopefully, together we’ll confirm that you don’t have to be a big, VC-backed company to successfully launch a technology product…

Next week: lessons learned in getting stuff developed…

Thanks, C.

Why you ask? Surely, there are many motivated sellers given the glut of properties and the hard-asset-starved financial institutions sitting on these worthless mortgages. Surely, in such a buyers market, those with the most to gain from the sale (ie. the banks) would be bending over backwards to move these properties.

Well, sadly, the only ones bending over are the buyers…

In the last two weeks, we have tried to buy three foreclosure properties and each time have been met with  unresponsiveness and a general screw-you attitude.

You’d think that with a mountain of these condos, the banks would go the extra mile to provide the buyer with information to ensure there were no objections in moving the sale forward. Instead the bankers are radio silent. Ask a question and you get crickets chirping… Request to see a piece of information and you hear the echo of your own voice.

There is no question that in this process, you are marching to the bankers’ drum-beat. I remember in the military there was an expression, hurry up and wait. Well this is alive and well in the real-estate market here. Submit a bid and you hear nothing for days and days (and days). Then, all of a sudden, you have hours to provide some info or respond to a request for a new bid. Ask any questions about the process, again with the crickets.
Finally, you really are left with the impression that you are being screwed. Submit your bid and several days later, you’re told that you have only a few hours to submit your best and final bid with no indication of what the bidding was currently at. Then a few days later, another request to submit your final best and final bid. And then you never hear anything again…

One of the big horror stories was a place we were bidding on that had been stripped down to the studs. Not a big deal – for the right price you can remodel just the way you like. The contract said you were buying it “as-is” and the seller had no knowledge of anything bad (mold, asbestos, etc…). Well, I did a little digging with the condo board and it turns out that when the previous owner was booted out by the bank, he turned on the hot water tap and left. Fast forward several days later – the mold was  bad, the drywall was black from floor to ceiling. So the entire Sargeant Shultz (I know nothing!) routine was BS. Oh yeah, and there’s a huge bill for the clean-up that the buyer will have to foot.

So we leave in a few days without a property and a thorough bad taste in our mouth from the whole experience. And with the knowledge that next year there will still be lots of properties ’cause the way the banks operate, they won’t be selling many.

What the heck does this have to do with a microbusiness? Not much – but it did remind me that I need to hug our banker when I get back to Ottawa. We have the world’s best business banking rep (Barb) at the Royal Bank. She’s responsive and always is acting in our best interest. If you don’t have a great banker, then switch. There are great ones out there…

C.

Often, the fervor spilled over to pretty-over-the-top dissing of the competition. I specifically remember putting up pictures of competitive CEOs and superposed shots of our own management team punching them in their respective heads. It got the sales team rev’ed up and more confident to go do battle.

Despite the energy spent bad-mouthing them, one thing was always true: we never dismissed the competition. Understanding the strengths and weaknesses of the opponent is critical to beating them. And it requires the acknowledgement that the competition is doing somethings better than you.

While admitting that you were being beaten on a particular front was a little tough on the ego, it was critical to understanding what lessons you could borrow from them and what counter moves you could mount. The alternative was to live in a self-absorbed fantasy land – one in which business continues to suffer while you tell yourself that you’re the best… Not good.

That’s why I was shocked late last week by the response to one of our marketing pieces. An email we sent out discussed the need to be an effective presenter/speaker as a sales professional and referenced Obama’s recent visit to Canada. Specifically, it cited his ability to inspire and motivate – a fact that anyone objectively must concede he’s good at, regardless of your politics.

Well, some of the response was the most viceral I’ve seen in my life. Here are two examples:

 I believe you should keep your political opinions to yourself as this so-called president is destroying the America we once new. If successful, he will eliminate any motivation to be self sufficient and take risks to become successful. He’s ordering us to redistribute our wealth to those who are irresponsible. He will destroy our health care system with rationed health care. I am really tired of seeing this usurp in the news and watching the stock market tumble every time he speaks. I would say he is far from being inspirational! He is a sociopath, terrorist, liar, and agitator. Furthermore, I compare the likes of him to the anti-Christ! His loyalty is not to the United States but to his home country. I am not alone; 20 states are currently in the process of using their sovereignty to resist the federal government’s efforts to spend this Country into oblivion.

and…

You, ma’am, must be on some serious hallucinogenic drugs. Obama is burying our grandchildren’s generation in debt, with his “inspiration” and ‘motivation”. You Canadians may embrace socialist tenets, but America, even as bad as our economy is now, is a great capitalist-based country. For instance, why do you think your countrymen come to the US for state of the art health care? Because our capitalist innovations keep or medicine at the worlds forefront. Please don’t use the Obama inspires and motivates analogy with me – he just taxes and spends.

Now, Colleen is always respectful of such responses and politely responds that we, as business professionals, need to take lessons from the strengths of others, even if we don’t like them or their business. And typically those that write these emails don’t respond.

Let me, with a bit more force, reiterate Colleen’s point:

• Oh, extreme right-wing reader, let me point out that there is much to be learned from Obama, even if you don’t like his politics. Especially as he just kicked your party’s ass all over the country. Surely in his record fund raising (from those that make much less than the average republican supporter), record crowds, record public approval ratings, etc… you may find a lesson that your party could use to be more successful in the next election.
• “Anti-Christ”. Are you joking? It is pretty sad when you refuse to believe that the competition has any strengths and, instead, attributes any success to the work of Satan. Good grief.

For clarity, my political beliefs actually do not align with Obama and that’s OK. I can look at what he does well and think – wow, we could learn something.

And – as a complete tangent and in a humble defence of Canada’s health care system (and that used by every country in the industrialized world, apart from the US) - our system is based on the believe that everyone has the right to medical care, not just those that can pay for it. To fear-monger about such a system is just that – fear mongering… Here are a few stats for your consideration:

• Canadians live longer than Americans. That includes the average for white, affluent Americans (to counter an argument made in very bad taste by a particular TV pundit).
• American infant mortality is twice that of Canada.
• Per capita we spend 1/2 as much on health care than in the US  (combined public/private).

OK – sorry, I guess that was a bit of a rant. But to reiterate, politics is not very different than business. And in business, we study our competitors to learn their strengths so we can copy and counter them, and we learn their weaknesses so we can capitalize on them.

As an old boss of mine used to say to me: you can be right or you can be dead right. By being arrogant and not believing your competition has any strengths you can learn from, you’ll be dead right – and you’ll be broke.

C.

Well – it’s not! We’re working!

But it is tough… Something about all the temptations of a temperate climate…

So I’ve developed several rules that keep me focussed and on-task. I’d thought it worthwhile sharing them as I think that they can be of use to anyone working at home.

Oddly enough, they all involve avoiding temptation. As many know, this is particularly important for me as I am, well, easily tempted by all manner of vices.

Anyways, here are my three rules:

1. Regular “office hours”. First, I force myself to be actually at my desk and working by 9am at the latest and go until 5pm. The former is a bit tough for me as I’ve been trying to get some exercise (running on the beach) and the latter is tough on the dog who struggles to wait until them for his daily romp. Regardless, we make it through and forcing yourself to be at your desk helps to avoid temptation to take an early afternoon and head out to the (many) neighbourhood bars. Sure, both Colleen and I normally work at night and on weekends – but core hours during the day really helps productivity.
2. Daytime Prohibition. There are very few things that I enjoy more than sitting back and drinking a beer. I do suffer from two simultaneous foibles that make this extremely dangerous. First, I am less productive after a drink. Second, I typically don’t stop at “a” beer – so the issue gets exasperated (see foible #1). So, during those hours, nary a single beer cap gets popped and I stay focused. There is a related issue with junk food but that has more about me becoming a dough-boy…
3. No TV. What goes better with that elicit beer than last night’s Daily Show. Stop! Do not turn on the TV – even for that brief time while I make lunch. I do listen to CBC Ottawa radio down here but the TV does not get sparked up .

These three rules keep me focused on the task at hand and make sure I stay productive. There are so many distracting vices – especially when you don’t have a little competitive peer pressure to keep you on your toes.

And when you think about it – it’s crazy to not stay on task. If you don’t focus, work hard and continue making money then you could be forced to go back to the corporate world and a regular job.

Noooooooooooooooo!!!!!

C.

Why did we do it? Well, to make a long story short we confirmed three things about new, higher pricing:

1. We are competitively priced
2. We provide substantial value
3. We are aligned with the way we were selling

The first one is sometimes hard for us in our micro-business. There are many, many competitors out there with different slices/niches of the sales training business. But we can get a sense of the pricing of those that offer similar services and products, ensuring that for what we are offering, we are in the right ball park. Oddly enough, there is a fair bit of consistency (at least in our market).

This is a bit tough for me. I’m used to getting out powerpoint slides with granular analysis of competitors pricing at different volume, studying discretionary discounting, etc… And maybe I’m making excuses for not getting that gory. It’s just that we’ve found our market for our services there is a lot of price elasticity so along as you’ve got good value, you can charge appropriately.

A good example of this is the speaking business. There are speakers that are $1,500 a day and there are speakers that are $30K an hour. In that spectrum of prices you get different value – speakers who are more engaging, more entertaining, more famous, more impactful, etc… And there is good business volume through out that entire range. So the key is maximing speaking fees based on your return-on-investment to the customer.

 That’s a long winded way of getting to my second point. That is, value is king.

So when I said we raised prices, how did we do it? We took each of our services and added additional value. For example, in Colleen’s base level coaching program, we went from one web class a year to four. That has tremendous value and more than compensates for the price increase. And, showing again the importance of managing costs, we can do so with no incremental costs to the business. So that price increase is pure profit (good for us) and the customers get even more return on their hard-earned dollar (good for them).

Finally – one of the most profitable things we did was align what we sell with how & where. For example, when Colleen speaks at an event, she used to offer our base coaching program. That it, our cheapest offering and the same one we sell on-line.

Then we realized that this was nuts. Here is our greatest asset – our sales queen – up in front of a live audience and she’s only selling the base offering. We changed that at the beginning of January and now Colleen sells her mid-tier package (at it’s new even-more-value price). Low and behold, our sales quantities dropped by about a third but the package is over four times the price. So, we’re far ahead.

So, to make a long (too) story short, by taking a look at how you can add more value without increasing your costs and ensuring that you align the offering with how you are selling it (or vice versa), you can raise your prices and make more money. Even in today’s economy.

C.

I did learn a good lesson: focus. I know that everyone is different and there are uber-entrepreneurs who can manage multiple businesses at once. I am not one of them and when there are only two of you in charge – it’s really hard to take your eye off the ball without it blowing up. I’m actually surprised that Colleen didn’t fire me.

But I’m back now and we’re planning for January – typically a good month for us to update our product and services. With the general economic climate – it really is time to make sure that you’re compelling and competitive (without giving up on your revenue targets):

1. Re-confirm your value proposition. If you are selling with the same messages that you were using a year ago – you could be in big trouble. A year ago, helping customers to sell more, to go faster, to build team spirit, etc… was fine. Now – it’s a train-wreck. It takes a different value to get those increasingly scarce dollars to be liberated from the buyer’s iron grip. Today, messages around cost savings, increased efficiencies, reducing headcount (gasp) is what resonates with business buyers. They are trying to control costs – just like you are – and you need to align with what they care about.
2. Focus on the ascension model by buyer. Here’s a great exercise: sit back and think about your ideal customers – who are they, what do they want, how do they buy. Think to your products and services – what is the first logical thing to offer a customer for purchase (perhaps a particular $ value or product type). What would you do next to step up the value (a product of greater value? a different product/service type). Think about that ascension model of what makes sense for the ideal buyer to purchase in the different phases as they engage with you. Map that back to your sales and marketing programs so you can focus your efforts and move prospects through their lifecycle in a way that maximizes results by delivering the right value to your customers at the right time.
3. Focus on products and services that are the key revenue drivers. Over the last few years, Colleen (due to her prolific nature) has assembled quite a collection of coaching programs, study kits, CDs, web classes, events, etc…  Some of these are key for revenue and profit, some have a negligible impact. Given my love of spreadsheets, we know which are really key to meeting objectives versus those that are nice to have. Given you’ve got a limited number of opportunities to engage a prospect and turn them into a customer, focus on the stuff that makes money! And with the other stuff – instead of actively marketing and selling it, why not include it as a bonus or add-on to incent the sale of those key products/services you need to make your numbers.
4. Deliver more value with current programs & services. Note that I’m not saying drop prices – I’m saying figure out how to provide customers with more value. For example, we’re going to be announcing additional member benefits to Colleen’s coaching programs. These will be benefits that will make our programs even more attractive without increasing our costs. As I’ve written before (here and here), we’ve done a lot to establish a cost structure that has minimal variable components.

These are four quick processes that are designed to make sure you focus in on what is going to make you successful in 2009 – despite what is happening in the economy. Why not sit down in a pub or favourite restaurant with your business partner (or friend who will listen to you as long as you buy the beer) and run through each of these. It’s a couple of hours that can make the difference between blowing away your targets next year and just blowing.

C.

P. S. The title of this blog is from one of my favourite movies from the 80s, “Return of the Living Dead“.

I have officially max’ed out and it was stupid. And I think there is a lesson here.

When I first went to work with Colleen, I suffered from ego-interruptus. That is, the small amount of respect and industry recognition I had obtained as the CTO was a bit addictive. Nothing like telling the story over drinks about briefing Congress or pioneering a new high-growth market. It’s a long way to writing copy and working on a web page design.

So, I went to take on additional challenges that would feed my ego. First, I got a teaching gig at our local University’s MBA program. Then I joined a colleague in doing Product Management training at a large technology. What was I thinking!?!

And it’s not like there was nothing to do with our micro-business. I’ve got things back from last December I’ve not done yet.

But now, I sit here – working from 6am to 11pm each day and doing nothing as well as I’d like. And worst of all, I’m hurting the business that allows us to have a great lifestyle and is going to help us retire.

It must stop. After my current commitments, I am going to re-focus on the one business that’s most critical to us. And if my ego suffers once and a while… in the words of a good friend of mine (and a former post), I’ll have to “suck it up, princess.”

C.

Until yesterday, I thought Colleen had the utmost faith in my work ethic. I had hoped that despite being out of sight when she was travelling, she trusted that I continued to work hard. However, my faith in her faith was a bit shaken when she got home yesterday and asked what the heck I was doing.

I don’t know why – I was in the office, leaning back in my chair with my feet on the desk and my eyes closed.

While I would be fibbing if I said I had never taken advantage of a mid-day siesta to restore engery and vitality, this time I swear my mind was whirling away.

I had just watched the record drops in stock markets but it wasn’t the fact that we’ll now need to work till we’re 80 to retire. It was wondering what fundamental changes this means to our business.

I remember reading a great book, Confronting Reality, shown above. It made the case that people who run businesses need to step back and recognize key market trends. More importantly, it is critical to recognize these realities and act.

An example cited in the book was an American business intensely trying to increase efficiencies in their American operations in the face of increased competition from lower cost suppliers. The prescription was to Confront Reality: Competitors were taking advantage of overseas manufacturing and all the fine tuning in the world wasn’t going to make an American plant competitive. Confronting Reality meant facing the fact that only through moving product overseas would the business continue to be competitive. Strategic action – not tactical – was needed.

So, in today’s tough economy, we all could tweak away with pricing and marketing copy. Or we could Confront Reality. Reality that the economy is going to change what customers are attractive, change what they want to buy and change how they buy it.

So with my eyes closed and my chair-back definitely not in the upright position, I was trying to do figure out what fundamentally was going to change for us:

• What value was the customer looking for. Growing sales versus maintaining sales in a tough market, etc…
• What product the customer was looking for. High-end customized solutions versus cost effective off-the-shelf products…
• etc…

If you haven’t sat back with your eyes closed (or paced, or went for a run, or whatever works for you) and ran through the realities of your situation, you are setting yourself up to be a victim of the times versus someone who capitalizes on the times.

C.