Sunday, May 23, 2010

Culturally Playful; new genre? web 2.5?

Some could say it all started with improv everywhere's mainstream "missions" such as their Grand Central Station Freeze, or their ground breaking MP3 experiments.  Others might argue that the dawn of the Twitter age and its fast, micro communications spawned new creative luminaries.  Regardless of who or what you think is responsible for its genesis, there's a new game afoot over the internet.

There's a growing number of web sites, twitter feeds and youtube channels that are engaging people to be active participants in their "games."  Sites such as Shitmydadsays, failblog, and textsfromlastnight, just to name a few, are growing in popularity and engaging visitors an an offline way that we haven't seen before.  They're spurring book deals, webby award nominations and much more!

On May 7, Twitter user Ferris_Bueller_ gave a practically line by line, real time recreation of the movie, employing foursquare, movie quotes and ad lib commentary.  Aside from great entertainment throughout the work day, it popped my proverbial online cherry with an experience I'd never been through before.  I'm now looking forward to my second time experiencing IT online!

Awkwardfamilyphotos hosts a collection of family portraits that evoke all too familiar memories of childhood, family get togethers with distant cousins and family portraits done at Sears.  It's almost like that trainwreck on MTV, Jersey Shore, where you just can't turn away, but differs in that we probably have something that contributes to the fun.   

The common thread among all these sites is that they take users' web experience out into the real world.  Or, conversely, ask users to take their real work experiences and bring them online.  In fact, they are dependent on it.  Not only are they dependent on it, they are successfully capitalizing on it.  Consider that the founders behind textsfromlastnight found a way to make money from the debaucherous drunken, stoned and sexually exploratory evenings of college students and twenty-somethings!  With the book already released, one has to wonder...when does the movie come out?!

They say that imitation is the greatest form of flattery.  As if a book deal and TV pilot starring William Shatner weren't enought to flatter Shitmydadsays's creator, Justin Halpern, he has inspired a parody on Twitter, shitmydarthsays.  With lines like "I intercepted several transmissions beamed to your phone that I thought were rebel plans, but turned out to be sext messages" and "And now, salad dressing, we will discuss the location of your hidden valley ranch" the parody is almost as enticing as the original.

All these sites, feeds and experiences point to the next generation of internet interaction, communication and engagement.  They are the pioneers at the beginning of the next online movement.  Advertising strives to be more entertainment than ever before and these sites are the next medium for targeted, customer engagement.  They are playful with various elements of our culture and might just represent the next leap in the internet.

Thursday, May 20, 2010

Manage, Take Ownership and Be Proactive

I was recently speaking with a good friend of mine who is a communications consultant for a Fortune 100 Company.  She expressed some frustrations about some of the disrespect the team members had for the communications function and on-boarding people with her efforts.  I suggested she have a team meeting.  Because I see this happen fairly broadly, I’m sharing the advice I gave.

The first thing to do is introduce yourself and your role.  Explain how your work will be furthering the objectives of the team and why it’s important.  You can’t assume that they will automatically understand.  If you have specifically relevant experience you may consider sharing that as well if you feel you need more credibility.

Next I recommend explaining how you will be interacting with the team.  Will it be weekly assignments? Daily?  Adhoc?  If you give a team member a project and a deadline make sure they agree to the deadline.  If you have the flexibility you may even consider asking them when they think they can have it completed by.  If a project deadline is one week and you haven’t heard anything after four days, check in.  “Hey I know you committed to getting me that write up about XYZ in three days and just want to see if you have any questions or problems you’ve run into.  No?  Great!  I’ll look forward to it in three days then.  Thanks!”   This serves as a reminder to your team member and facilitates communication should there be any delays. 

You can NOT assume that since someone has committed an assignment to you that they will remember having done so and that you’re instructions were clear.  In fact, successful managers will assume otherwise until their colleague has demonstrated regular responsibility for their commitments.  At the end of the day, you may have received commitments from people but if their work isn’t done YOU are still the one responsible for the project.  There’s nothing productive about placing blame on others for missing your deadline.  If, despite your regular, proactive, efforts your colleague is late in their commitment, speak to them when you are alone.  “Hey I just want you to know that I was counting on you for your write up.  Because you got it to me late the team leader is really pissed at me and now our project is off schedule.  What could I have done differently so that we would have avoided this delay?”

In short, don’t assume people know what they are doing or will have your request as a priority (until proven otherwise).  Own it.  Own it.  Own it and proactively manage your assignments until you achieve the results you need.  Good luck!

Monday, May 10, 2010

Delivering Happines: Book Review

I just finished reading my advance copy of Delivering Happiness by CEO Tony Hsieh that I received at the Business Growth Conference. Overall, this was a great read! Tony’s casual writing style made it easy to pour through all 241 pages. The official release is June 7, 2010, and I recommend this reading for any entrepreneur who wants to build a solid employee and customer centric (ie successful) company!

The book explores Tony’s background and early entrepreneurial pursuits before becoming involved with Zappos. These provide an important perspective and reference to how and why he has shaped Zappos to be what it is today. Tony then goes into some of the early struggles of the company and how innovation, creativity, out-of-the-box thinking and PERSISTENCE, kept the company going after many flirts with failure. From here, we move into the core of what Zappos is about; its culture. It’s employees! has 10 committable core values that they are dedicated to. By committable I mean that they are willing to hire and fire employees around these values. That’s how important they are! It’s not just lip service. While they’re all very relevant, a few values of note are Deliver WOW through service, Create Fun and a Little Weirdness, Pursue Growth and Learning and Be Humble. People who work at Zappos and interact with its customers and vendors LOVE working there! They feel valued as employees and people, feel a shared sense of purpose, and are encouraged to grow. Are these virtues reflected in their interactions with customers and vendors? Absolutely! And this is a big part of why I endorse so strongly that Tony “gets it.”

Having spent five years in HR I appreciate that it can cost a company between 30% and 250% of an employee’s annual compensation to replace them. That’s a whole other subject on its own, but Zappos has created an environment where people are HAPPY to be there and want to stay and THRIVE. While there aren’t any specific turnover statistics provided, I expect its VERY LOW for Zappos. In addition, they encourage people to self select out of the company by offering $2,000 for anyone to quit between weeks 2-5 of their orientation training. Makes perfect sense! If you have happy employees who want to be there, you’ll have happy customers , both of which translate into company profits and smart business.

With such focus on company culture I couldn’t help but be reminded about Southwest Airlines and a book I had read about them, The Southwest Airlines Way. With cover tags such as “Using the Power of Relationships to Achieve High Performance” and “If you want to understand how one organization can change the competitive rules of the game for an entire industry, read this book,” it’s abundantly clear the Southwest book was an inspiration at Zappos. So much of what Tony describes echoes what Southwest set out to do.

Southwest airlines isn’t the only apparent source of solid inspiration for Mr. Hsieh and his Zappos team. There is respect to Sun Tsu’s The Art of War (“when you are weak appear strong and when you are strong appear weak”), Tom Peters and creating “WOW” (The Brand YOU 50 is the first book I came across this), and even Buddhism by stating that while we take different paths to get there, we all have the same goal in life: happiness. There are also many strong customer service themes that I had found in What’s the Secret to Providing a World-Class Customer Experience (endorsed by Tom Peters).

Delivering Happiness is a noble book and great story of the inspiring company that is Enjoy!

Growth Conference Notes

Following up on my trip to the Business Growth Conference, I attended four breakout sessions: 
* Financing Growth with Debt: Fuel for your business
* Cashing in For Maximum Value: Finding the Best Exit Strategy
* Private Equity Funds: Insights about deals that get done
* CEO Confessions: If I knew then what I know now

What follows are my rough notes and observations from each session. 

Financing Growth with Debt:
            Venture Lenders
                        want warrant coverage as a % of loan
                        want security against loans
                        currently they are in a position to be "highly selective"
                        recent terms for a deal were 3.5% in fees, 12.65% interest, 8% backup fee (fee against the unused loan amount), and 80% warrants
                        monthly and quarterly payment terms

            Asset Based Lending (ABL)
                        primarily against AR (preferred) and inventory
                        80% advance on AR
                        6-18% in fees with 8-12 as the sweet spot
                        different from factoring because - w/factoring there is no risk to borrower, ABLs prefer to lend $500k and more, and factoring is more expensive

            Traditional Banking
                        discussed ways to get around a PG if a Co can stand on its own
                                    look at Cash Flow, LTM EBITDA, Growth, and EBITDA as a % of cash flow
                        often ask the question - is it debt or is it equity that I"m ultimately on the hook for

Cashing in for Maximum Value
            there is currently pressure for PE firms to invest
            acquisitive companies are flush with cash
            expect activity in the deal markets this fall
            strategic buyer valuation = DCF + synergies
            diversification of a company's channels mitigates risk
            an entrepreneur who sold 70% stake to a PE consortium had the following comments
                        had a lot of data and info on the biz which was a plus for the buyers as he was able to anticipate the next three or four questions and provide data against them
                        took 1 year to complete the deal.  Took his time FT and relied on another exec to run the business
                        you need to define your objectives for your exit/liquidity event
            deals are closing in a much longer time frame than in the past - buyers are more actively looking for "things that come up" for which they can they adjust the term sheet
            need to consider 1 time events that are reflected in the financials and are the FS reliable
            consider: what are the industry trends?
            best way to handle due diligence is to prepare ahead of time
            DD will cover several areas, thoroughly
                        Legal, IT, Financial, Tax, People, Commercial (partners, contracts, etc.)
            use an "e-room" for doc storage to allow others access to them
            the entrepreneur described his process for selecting professional service providers:
                        interviewed 5 IB firms, all top and highly qualified
                        wanted to be the "big deal" for them, not just some other deal
                        didn't want big egos to get in the way of the deal

Private Equity Funds
            looking for CEOs with proven track record of success
            and companies with thick Gross Margins
            generally looking for companies with between $20 - $250M in revenues requiring $10 - $50M in equity capital
            I asked a question about target Co's cap structure and how that affects their decision - ans: look primarily at senior debt and anywhere there is 2x EBITDA

            the session had a lot of good stories and anecdotes but nothing specific worth making note of, outside of what I've already shared

Thursday, May 6, 2010

Heart, Passion and Happiness

I'm on my way back to the airport from the 2010 Business Growth
Conference in Anaheim, CA, hosted by the Harvard and USC Marshall
School of Business Alumni Associations and can honestly say I'm blown
away! So many great people with brilliant minds, warm hearts and
passion for what they do.

In my recap, I'll start with the last, first. The last session of the
day was an impressive panel of successful entrepreneurs who talked
about lessons learned. It included Alex Cappello, a director on the
Cheesecake Factory board and CEO of Cappello Capital, Richard
Melcombe, a former TNT exec, Bob Barry,president of John Barry &
Associates and Rob Ukropina, founder of Overnite Express. All great
people! but there was something especially touching that Alex had us
do before we left. "Everyone pull out a dollar" he instructed the
audience of 150. "When you leave, I want you to leave this on your
chair as a tip for the people that clean this room," he explained.
"TRUST me, it will make a difference in these people's lives and it's
the last thing they'll expect from a room full of Harvard and USC
alumni." Consider the power of this one small gesture! I love it! I
can't wait to lead a ro again and copy it. I hope my readers will pass
it along as well.

Next mindblowing excerpt from the day was the keynote address by
CEO, Tony Hsieh (pronunced Shay). Tony built zappos to a billion +
company by focusing on....products? No. Price? No. Customer service?
Not really. His secret sauce? Unflinchingly committing to a company
culture of "delivering happiness." I can't wait to read his new book
by the same title. From other companies I've studied and been a part
of, I can tell you, this guy gets it! I feel very privlidged to have
heard him speak this morning.

Gotta run but more to come...

Wednesday, May 5, 2010

Be an Expert!

Last night I had the pleasure of spending time with James Hickey, a managing partner at Tatum (rockin' CFO talent), and Nicole Ward, a fellow Board Member at ArtPoint and colleague of James.  Both are great people, super nice, uber motivated and well connected (for good reasons). 

We talked about a lot of fun stuff but at some point the conversation went into CPA firm partners and their Biz Dev efforts.  James explained that frequently partners will ask him for an introduction into a certain industry where "they'd like to be (and are not)."  What followed from there was a discussion around if these CPA partners want companies to recognize them as experts, or "go to" people, in a certain field, they have to establish themselves there first.  We gave credit to their ambition to recognize where some of the hot markets are and their desire to be there.  We concluded that without having the perception of being an expert, they're not going to be successful in developing clients.

So how does one become established as an expert?  In his book The Four Hour Work Week, Timothy Ferriss outlines some very simple techniques.  The first is to join organizations in the field you want to be in.  So, for example, if you want to provide services to the music industry, join the Blues Music Association or the American Federation of Musicians.  This one step will immediately open doors.  Next, get quoted or published.  Peter Shankman has told me that he founded Help a Reporter Out (HARO) to level out the playing field in journalism.  By doing so he's created a huge opportunity for people to become recognized in and associated with their field of expertise.  Next, attend related trade shows.  Simple.  Easy.  Of course, there's the whole social media field of blogging, tweeting, etc. that are great vehicles to establish credibility as well. 

What I've failed to mention thus far and is perhaps the most important, is to actually BE an EXPERT.  "Fake it 'till you make it" will only get you so far.  If you say you can deliver the goods, you better be able to actually deliver otherwise you'll quickly develop a reputation...and not the kind you want.  Do your research.  Ask lots of questions to people who are already established in the field.  Partner on some projects with them.

The context of this discussion is not limited to CPAs and their firms but is applicable to all businesses.  Motivated entrepreneurs are consistently looking for ways to grow their business and enter new markets.  By following some of the above suggestions, these entrepreneurs can establish themselves as experts and successfully evolve their businesses through strategic growth.
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