Erich Stauffer

Category: Entrepreneurship

  • e-Commerce Metric: Time to First Sale

    This is not just a record of the amount of time it took to get to first sale, a metric called “time to first sale”, but a story about what it took to go from idea to first sale. This is a story of how one idea can lead to another and how people can influence each other. This is the story of how Catchrs and Skinny Coconut Oil got started.

    TL;DR; After months of discussions and meetings that started in August of 2011, Skinny Coconut Oil officially launched on August 26, 2013 and had its first sale on August 31. From the first meeting specifically about coconut oil on April 4, 2013 to the first sale on August 31 was 3 months and 27 days, 5 days after the store opened.

    The Beginning

    How it Started

    In 2010, instead of starting a normal job after college like everyone else, Luke Geddie decided to take a year off and travel around the world. It was, “an adventure that would open their eyes to the rare beauty hidden in Southeast Asia.” Luke’s brother Matt accompanied him on parts of this trip and, “with their hearts set on exploration, Luke and Matt Geddie ventured through Cambodia, Laos, Thailand, India, and Vietnam with a desire to see and experience everything.” It was Luke’s time in Vietnam when he met Kim Vo, a local celebrity who introduced Luke to many different people, government officials, and business owners in Vietnam. Through these introductions Luke started to get a sense for the value he could provide the local Vietnamese economy by using the business skills he learned while in college and his connections back in the United States.

    On August 1, 2011 I left my day job at First Merchants and went full time consulting. 2 days later Luke’s mom, Joy, called to have me come over and help Luke’s brother’s computer ready for school. Luke had just got home from Vietnam after traveling abroad for a year and Joy wanted me to talk to him about some of the things I had been working on because she knew we were both entrepreneurial-minded. The three of us ended up going out to breakfast on August 18 and that’s when I told Luke about what I was doing with affiliate marketing. Luke started telling me about the ideas he had to have art created in Vietnam, which lead to the first business idea of “art catchers”. This eventually lead to the name of “Catchrs” and after the domain Catchrs was purchased on September 9, 2011 the first official Catchrs meeting was held on September 16.

    Loading the Semi

    The business idea went through several iterations, eventually becoming an import/export business. Luke continued working on the business in the United States where he incorporated Catchrs, LLC through the fall, but in December of 2011 he went back to Vietnam to build the business with his partner, Kim. Matt began going to school in New Zealand where he helped Luke and Catchrs by contacting manufacturers and shipping companies around the world. In May of 2012 I helped Luke launch the Catchrs website while simultaneously beginning to work full-time at his mother’s husband’s dentist office. It was during this time that I developed my relationship with Luke’s mother, Joy. After working with her husband’s business for 9 months, Joy and I decided to begin meeting regularly in February to see if there was any businesses we could start together.

    I had been learning more about e-commerce as a business as far back as November of 2012 when I began looking into drop-shipping and various e-commerce platforms. This is when I first got introduced to Andrew Youderian at eCommerceFuel.com. At the same time I had just started reading Hacker News and was learning more about programming and startups. In February I started working on a software project called Seektivity, but I quickly hit a hard wall in my software skills. I had also just started a new, stressful job that didn’t leave much time for anything else. However, this didn’t stop me from researching ideas at night while lying in bed. It was during one of these nights that I did a Google search for “where to buy…” and noticed that the second to top auto-complete said, “where to buy coconut oil”.

    On March 17, 2013 I reached out to Luke about the rise of 3D printing and on April 2 he asked to have a phone conversation about “traditional medicine and online marketing it in the USA”. On April 4 we had the phone call where we talked about all of the things he had to sell. One of those things was coconut oil. I wrote Luke on April 6, “I’m interested in that because Joy, Suzanne, and my friend, Jason’s wife, Krista, all use coconut oil for cooking and as a lotion. I’d be willing to pay you for a sample to send over so I can have them try it out. I own a website called topical-cream.com and the domain tropical-cream is currently available. I’m thinking that with a ‘cute’ enough package that this stuff could sell well in local boutiques, Fresh Market stores, Whole Foods, and on Amazon.” On April 6th, Luke offered a sample. By May 22 I still hadn’t received the sample so I emailed Luke an image of the Google Trend line for coconut oil.

    Coconut Oil Trend

    On May 27 he had the supplier re-send the sample of coconut oil. The original bottle had been mistakenly sent to Luke’s brother, Matt, in California, who would later become much more involved. On May 31 it was shipped from Canada and on June 5 it arrived at my house and by June 8 I had already met with Luke’s mom, Joy about it and had started to reach out to Matt who was still in California. Matt had experience launching his own product and was currently working as a marketing director. I saw him as an integral part of this process.

    On June 9 Luke returned to the United States along with Kim, his business partner from Vietnam. On June 11 we had our first meeting about coconut oil as a business and decided to call it “Premier Grove”. On Friday, June 14 we had our second meeting about the business. By July 3 we had a business plan for the company that had been renamed to “Skinny and Co” and who’s first product was named “Skinny Coconut Oil” after the tall and skinny shape of the original bottle. On July 12 we had our EIN for the corporation and could finally start setting up Shopify, Amazon, and Opensky.

    On July 9 Matt moved back to Indiana from California and we had our first meeting with Chris Murphy, a boyhood friend of Matt’s who had just graduated from college with a Marketing degree. His mom was best friends with Matt’s mother, Joy. Chris was all about “community” (he even loved the Community, the show). On July 10 Kim visited the United States from Vietnam and we all decided to offer Chris a position with Skinny and Co. He began working on the label design right away and by August 19 we had our first prototype.

    Skinny Coconut Oil Prototype

    After incorporating Skinny and Co. with the state of Indiana in July, the Skinny Coconut Oil website officially launched on August 26 and had its first sale on August 31. Although Luke had offered, I had no equity in either Catchrs, LLC or Skinny and Co. and I had only been paid for the web design work I did for Catchrs. My agreement with Skinny and Co. at that time was to get a percentage of online sales in exchange for my work building out the website’s content, doing SEO, and helping with social media.

    On September 3 we began working on our first brochure, an Oil Pulling Guide, and on September 26, Joy went to her printer to have flyers printed for the upcoming Gluten Free Living festival on October 5th. The printer kept staring at the flyer. She began asking questions about the coconut oil and shared how she sold raw chocolate and was looking for a coconut oil to sell, but she wanted to sell it as a subscription monthly. She sold one jar. This is the beginning of selling coconut oil as a subscription and it paved the way for the second event which was a health fair on September 28th in Southport, Indiana.

    Gluten Free Expo Skinny Coconut Oil Booth

    October 5th was a rainy day. I had to get up early in the morning to be in Richmond at 8 AM. At the same time, Matt and Chris were up early getting ready for the Gluten Free Living festival in Carmel. We had recently hired two interns, Michael and Stephanie, but only Michael was there that day. Rachel from the dentist office also stopped by to help sell. We sold almost 50 jars and I got my first check after 2 years of work. On the drive home Andrew Youderian gave me a “First Sale Shout Out” on his podcast. It was a good day.

    SEE also: The Skinny Coconut Oil Story

    Update: if you’re looking for a coconut oil that tastes, smells, and feels like Skinny Coconut Oil from Skinny & Co., check out Dignity Coconut Oil (affiliate link). Like Skinny, their coconut oil is raw and they use glass jars instead of plastic, but the best part is their mission to raise women out of poverty.

  • Be the Benefit, not the Butler

    How can I move away from ‘being the butler’ to ‘being the benefit’ to my client?

    When you’re a business consultant who works on retainer without any long-term project goals, there is a tendency for the relationship to become more responsive and less proactive. Instead of always ‘seeking to add value’, it can trend towards ‘waiting to add value’. The latter is like a butler who stands beside your client, dutifully waiting for their client to request a website update or to fix their computer systems.

    Contrast this with a business consultant who is more agile, who works in sprints, who has clear objectives laid out on a project plan. The progress they are making is track-able, and like a lean waterfall, is continually making iterations on an ever-improving product. Which do you think adds more value to the client? The always available butler or the constantly improving business consultant?

    Which of these is more like an employee and which of these is more like a business owner? While a business owner would love for their employee to always be improving the reality is that they may be perversely incentivized to do as little as possible in order to maintain the status quo and ‘not rock the boat’ or ‘work themselves out of a job’ whereas a business consultant should always be striving to add value or reduce cost for the client.

    You Are Who You Think You Are

    How are you spending your time as a business consultant? A large part of that is dictated by how you view yourself, your role in the organizations you serve, and what value you provide. The negotiator who is most willing to walk away will most often win the negotiation. The employee or business consultant most worried about losing their job or contract is always the one who gets let go first. This isn’t playing ‘hard to get’, per se, but is more like playing ‘hard to lose’.

    The primary difference is the mindset.

    As a business consultant, it’s easy to think of yourself as being better than others, but doing the work is hard. Business owners expect to pay you a bigger check for a less-risky or less-timely result that they would get from hiring, training, or using an employee to do the same set of work for the same outcome. They are paying for results, not for your time and as a business consultant, you should price accordingly.

    Business consultants are people – people who are known to either undervalue their services or mistakenly charge for time instead of value. This is generally a result of the people we hang around and the type of upbringing we’ve had. Most educational systems are setup to create employees who will show up to work each day and do what they are told. Business consultants who do this are more akin to a butler or an employee than to a trusted advisor.

    Permission to Speak

    Who am I and what right do I have to say these things? What proof do I have? I can only write of my own experiences and what I am learning. I have been blessed to have been raised in a safe environment, been educated in a standard way, and surrounded by people who encourage me. I have only relatively recently entered into a new world of business owners and other ‘doers’ of the world and this has made all of the difference.

    James Altucher recently released a new book called Choose Yourself which is premised around the idea that you shouldn’t wait for other people to give you permission or to choose you for their team. You should instead choose yourself first. To use dating as an analogy, let’s say you’re asking someone out. Instead of saying, “Will you go out with me to the park?” you say, “I’m going to the park. Why don’t you come with me?”

    Be the Change You Wish to See in the World

    “Be the change you wish to see in the world,” is a quote often attributed to Gandhi, but what he actually said was, “If we could change ourselves, the tendencies in the world would also change. As a man changes his own nature, so does the attitude of the world change towards him…We need not wait to see what others do.” This reminds me of another quote, a poem by an unknown monk around 1100 A.D., which one of my clients keeps up on his desk, right in front of his keyboard. Here it is in full below. I’ve hyperlinked how it’s affected me:

    When I was a young man,
    I wanted to change the world.
    I found it was difficult to change the world,
    so I tried to change my nation.

    When I found I couldn’t change the nation,
    I began to focus on my town.

    I couldn’t change the town and as an older man,
    I tried to change my family.

    Now, as an old man,
    I realize the only thing I can change is myself,
    and suddenly I realize that if long ago I had changed myself,
    I could have made an impact on my family.

    My family and I could have made an impact on our town.
    Their impact could have changed the nation and
    I could indeed have changed the world.

  • Leverage

    Mindvalley Insights recently emailed me an article entitled, How to Avoid Entrepreneurial ADD and Pick the Most Viable Ideas to Pursue, which I thoroughly enjoyed and prompted me to write this post. Below is that 7-minute talk where Vishen, CEO of Mindvalley Insights, shares how he uses the principal of leverage to pick business opportunities.

    This video is about how to choose opportunities that you either come up with or are presented to you. Vishen does it by quantifying leverage of existing and possible future opportunities. He uses his own businesses as examples, so I’ll some of my own companies and their subsequent opportunities: Telablue > Watershawl > Costpub/Tenet Marketing > Webories > Content Motors > A/B Insights > Coconut Oil > Apps/Database/Tracking. Vishen says to draw relationship lines between the different businesses/opportunities to see if there are any ways that one leverages the other. The more leverage, the more likely you should do it.

    This is similar to the advice Cal Newport gives, which I highlighted in How to Work a Life of Purpose: build up a body of work that you can leverage for future work. Become so good at what you do that you can do it anywhere any way you want. Whatever you have invested all of your adult working life and school on would be silly for you to not leverage going forward. Whatever you’ve been working on the most is unique. It’s rare and therefore valuable. You know what problems your industry has and are also able to create solutions for those problems. Maybe you’re not interested in solving them, but if not you, then who? There is no one with your perspective other than you.

    If you truly possess a competitive advantage, let me recommend that you do not diversify but instead leverage that skill-set to the maximum. Whatever you do, do it better than anybody else (and if you are one of these unicorns, I applaud you – send me your business plan and let me invest in your venture). – Ching Ho, Restauranteur | Designer | Adventurer

  • Art Inspires Action

    Jack Dorsey, a CEO I admire, is the co-founder and CEO of Square (a service I highly recommend for solopreneurs and small businesses), spoke to a student audience at the Stanford Graduate School of Business through the View From The Top series. Dorsey shares his story about how he came up with the ideas for Twitter (which he created and co-founded) and Square, which gives advice to the entrepreneurs and business students in the auditorium and thanks to Youtube, all of us.

    Jack Dorsey The Future Has Already Arrived - YouTube

    There is a moment in the beginning of this 44 minute video (around the 3:30 mark) where Dorsey begins to talk about about how he starts and thinks about a project. It’s not that he just begins with the end in mind, but that he specifically begins with an image or picture in his mind – and then creates images of all of the steps in between. He falls in love with the end product, but maybe more importantly, he ensures that he will enjoy the journey in between.

    If I could explore the world, if I could craft something and really learn how to build and how to build a vision of what I wanted to see in the world – I could do amazing things…always.

    The most important thing for me to do is to see a picture of where I want to go – see a picture of what I want to do in the world – and then figure out how to work backwards from that.

    William Gibson said, ‘The future has already arrived. It’s just not evenly distributed yet.’ This is exactly how we run our companies as well…An idea that can change the course of the company can happen anywhere in the company. The future is already in all of your heads and your work, everything you have to do in your life is to distribute it.

    Realizing that picture and making sure that I am distributing my idea, distributing my picture…is the most important thing – it’s to have that strong vision – to have that strong sense of what you want to do in the world – to be selfish to build something for yourself and be able to convince others to do the same. -Jack Dorsey

    If you thought this was interesting, you might also like My CEO Heroes or 20 Serial Entrepreneurs – An Analysis.

  • My First eCommerce Company

    While I didn’t think of it as an e-commerce company at the time, I was buying books in real life and selling them on Half.com – something I’ve wanted to get back into for the last year. This is a story of my first e-commerce company, Blu Bukx.

    The Beginning of Blu Bukx Company

    Blu Bukx CompanyLike a lot of companies, this one started as a result of what my friend, Jason, was doing. He had visited a local library with his new wife and discovered they were selling off their old books by the bag. He looked up how much he could sell them online and quickly discovered he could turn a profit. He already had an eye for this type of thing as he was already actively selling antiques on eBay for his dad, a retired antique dealer. For those following along, this is the same dad that allowed Jason and I to have a booth in a closet in his antique store (hence the name Closet Collectibles Company).

    Not one to let this newly found arbitrage go unexploited, I soon found myself visiting every library in town, buying up as many books as I could find and posting them to Half.com. I found that children’s books and non-fiction books sold the best and although I was selling at least one book a day, the books were piling up in my bedroom. I was still in college at the time and during this process had just recently met the woman who would later become my wife and had recently just started working at a bank doing items processing. I would go to class in the morning, come home in the afternoon, package up books to ship, then take them to the post office on the way to work.

    It was a big process to enter in the ISBN codes for every book purchased into Half.com. My future wife would stay up late at night in her dorm room to help me out. I remember one time she entered in hundreds of books on the site and I did something to delete all of her work. I think she cried. As part of the process you would have to price your book. Half.com would let you see what other people were selling it at and you could price it accordingly. One book stuck out. It was a book about the mafia’s role in the oil business and someone had it posted for $150. My soon to be wife thought it would be a “great deal” at $120 off. It sold. She told people about that book sale for years. She was so happy.

    When the libraries ran out of books to sell I had to find another source to keep up my inventory. That’s when I discovered the clearance section at the local Barnes and Noble, Borders, and Half Price Books stores. I could buy a book there that nobody locally wanted to buy for say $3 and sell it online for $15. This was in 2001 when a lot of local booksellers hadn’t really caught on to the whole Internet thing. It wasn’t that there weren’t any websites selling books online: at the time, Amazon.com was still the biggest (and I even experimented with selling some of my books through them as a reseller), but there was also efollet.com and textbooks.com, which is part of one of the funnest nights of my life.

    One of the Funnest Nights of My Life

    The fall semester was about to begin and as was the tradition, Jason and I would walk around campus figuring out where all of our classes were before the first day of school. The campus was mostly empty at this point, but all of the building doors were open. One of the buildings we went into had a large dumpster in the hallway where professors had been dumping old papers and whatever else they didn’t want. As book resellers there was one thing Jason and I both noticed right away: a trunk-load of textbooks. They were the kind of books that textbook publishers would send professors to get them to buy their books, but if the teacher didn’t want to use them, they were of no value to them.

    We loaded all of the books into Jason’s car and drove them back to his house. After getting them all inside his office we began systematically looking them up on efollet.com and the total value quickly got into the hundreds of dollars. Needless to say we were getting giddy, but the real fun started when we “got serious” and started to cross-reference the different textbook buying sites on a per-ISBN basis to create the highest payout possible. Now that was fun. We ended up splitting the money which I no doubt put into food, rent, my computer payment, or more books.

    One of the Changiest Years of My Life

    2001 was the year I moved to Muncie, Indiana, changed colleges, worked four different jobs, dated two different girls, got engaged to one of them, bought my first cell phone, my first apartment, started my first ecommerce business, and watched our country go through September 11th. I was mowing that morning as there was a period of time when I would mow in the mornings, go to school in the middle of the day, and then go to work at the bank in the evening. The first thing I heard when I got back into the truck and turned on the radio was, “It’s an act of war!” My first thought was, “What was?” As I listened to the radio my first inclination was to call Jason and ask him what was going on. He filled me in and said he was recording the news in case I missed any of it. My next call was to my soon-to-be wife. I told her I loved her then called my parents and did the same. It was a weird year and one with a lot of changes, but things didn’t stop changing. They keep changing every year.

    The End of Blu Bukx Company

    Eventually local book sellers did catch on to the whole “Internet thing” and started competing against me directly. The market inefficiencies were gone and it became increasingly harder and harder for me to turn a profit as my margins continued to shrink. I tried to sell the business and it’s inventory to my mom, but she didn’t want to do the work involved. I had got laid off from my bank job in Muncie and got transferred to the same job in Indianapolis. I was engaged, but was now living back at home with my parents. I ended up picking out some books to keep for any future kids I might have, giving away some to friends and family members, and taking the rest to Half Price Books to sell. I still have two of the book shelves (I made one), but the others got sold to a guy at the bank I worked with. My kids do read some of the books I kept from Blu Bukx company, but mostly they just sit there.

    Although I walk by these books every day I almost forgot that I even had this company. Looking back I can see how much time it took (for both me and my wife) and how much it influenced a small part of my life. The one thing I find odd is that because of the way Yahoo! stores it’s mail and because of me switching computers over time I have no digital record of this company ever existing. I can’t find anything in any of my emails, on my hard drive, or on the Internet (via Google search). If I didn’t write this post, no one would have ever known it ever existed. And that would have been okay. I just wanted to write this for my own sake as it touched on a lot of different parts of my life that helped shape where I am today. Maybe I’ll start up another e-commerce company again – and maybe my wife will help me input product descriptions and pack up orders – and maybe we’ll be happy.

  • Presentation Secrets from Amish Shah

    “Some people have the uncanny ability to make more in a week than most will earn over a lifetime. What’s better, they do it all the time. Amish Shah is one of those people.” Below is a screenshot of his presentation secrets, which I have outlined below. Click the image to watch the full video from Mindvalley Insights.

    Presentation Secrets

    Presentation Secrets

    • You are not the hero, the audience is.
    • It’s not about just you. It should be a shared belief.
    • Tell Stories because it conveys meaning.
    • Facts don’t sell. Emotions do.
    • Stand out.
    • Be human and stay connected.
    • Talk to the audience personally.
    • You are the mentor.
    • Help the audience get “unstuck”.
    • Come from a place of humility and be selfless.
    • Combine two things: Facts and Stories.
      • Stories provide an experience.
      • Facts provide information.
    • First create the desire in the audience and then fill it.
    • Formula
      • Intro and unfulfilled desire – Relatable Hero
      • Presents dramatic actions held together by confrontation. Obstacle for the character – Roadblocks
      • Resolution – Transformation
    • Audience needs to change internally and follow you.

    This is similar to the advice Mimi Henderlong of Threadless gives about “telling a story about someone who works at your company and make your customer the hero.” In the following video Amish explains the basics behind his record-breaking launches, his tried and tested theory on how to humanize your work, and how to overcome the single biggest hurdle that all affiliate marketers face – credibility.

  • 10 Ways to Make Money from 3D Printing

    I recently identified 3D printing as one of the 13 Trends That Are Changing the World and compiled 3D Printing Resources for Beginners, but this being a blog about the business of technology, I wanted to create a list of 10 possible businesses that could be created around the 3D printing industry. You can use the STAIR process to figure out which one best suits your past skills, experience, and equipment:

    10 Ways to Make Money from 3D Printing

    • Sell raw materials to 3D printer suppliers – 3D printing materials include many types of plastics to higher-end filament like metals, paper, and ceramics. Stainless steel, for example, comes in powder form and can be infused with bronze. Likewise, silver can be mixed with wax. Any business with access to these raw materials stands to benefit from an increase in 3D printing production.
    • Sell 3D printer supplies to 3D printers – Right now most 3D printers use plastic PLA, ABS, or PVA filaments. There are already a large host of printing material suppliers, but it’s still not something you can pick up at your local Wal-Mart…yet. It’s too late to have a first-mover advantage, but you might not want that anyway. Remember, Apple wasn’t the first one to make MP3 players.
    • Make and sell your own 3D printer – Did you know that the Makerbot is open source? At least it was. With the help of some well-laid plans and an Arduino board, you can build your own 3D printer. Make it your own and you can start your own line of 3D printers. Here’s a guide on how to build a 3D printer, but it’s one thing to build them. You’ll also have to learn how to sell them.
    • 3D print objects as a service – 3D printing services like Sculpteo, Shapeways, and Ponoko are showing us all how this is done, but that’s only three and there’s a 99% chance that none of them are local to where you live. While the Internet is great for many things, there is value to having a local printer to print everything from trophies to customized cup lids for restaurants.
    • Scan 3D objects as a service – If you can afford a $230 Kinect for Windows you can start a 3D scanning business. This is what Reconstruct.me does.  In November of 2012 Microsoft announced Kinect for Windows. In that article there is a link to Skanect, which is “3D scanning made easy”. I’m not talking about writing software here, I’m talking about buying a device and using software as a service.
    • Create a marketplace/trading system for 3D printable objects – I thought I was the first to think of this, but of course I was wrong. That’s exactly what Thingiverse is and it’s part of what Shapeways does. If your’e interested in this business model, think niche – “the riches are in the niches” and the sooner you can drive deep down into a niche and setup shop, the more likely you are to succeed.
    • Sell 3D printer technology to oil companies and/or NASA – This is a process of taking an existing product and finding new markets for it. I did this when I suggested that Pebble Watches could be sold to Dentists. By identifying a market segment who could use a product, you’re going vertical and this is similar to driving down into a niche. In this case, the market is remote workers with big pocketbooks.
    • Consult with 3D printer companies on technology and logistics – Not every egghead who comes up with a new 3D printer is going to know how to run a 3D printer business. That’s where consultants and service companies that choose to go niche and vertical with 3D printing companies have a chance to succeed and grow. By serving the needs of a growing industry, your business can benefit too. Everybody wins.
    • Help guide and craft new copyright laws; give legal counsel – While you’re probably going to have to be or know a lawyer or lobbyist, there is definitely a growing need for legal counsel in this newly developing industry. Questions about what is and isn’t able to be licensed and what is or isn’t copyrighted is going to come to a head when people want to expand trademarked product‘s [fan fiction] universes.
    • Help market 3D printers or 3D printable objects – In the same way business professionals can help 3D printing companies manage customer development, build an e-commerce website, and develop organizational habits, they are going to need help learning how to advertise, how to market a product, and how to get more customers. They are going to need to learn SEO, content marketing, and how to build a platform.

    Money Multiplier

    Erich Stauffer on 3D PrintingIn monetary economics, a money multiplier is a ratio, which is generally believed to be 10 to 1 meaning that any dollar produced, produces 10 more dollars. A similar effect is true for business processes and opportunities. This due to a combination of the adjacent possible of new technologies and from the network effects that happen whenever a new business, process, or industry is born. The implications from this entirely new industry are enormous especially because it is mostly additive. 3D printing doesn’t replace or displace traditional manufacturing, it simply broadens it. Things that could have been created before were not because it didn’t make economic sense, but once people are given the opportunity and resources these new things will be created. It’s similar to how pictures of your food and friends weren’t important enough to carry a camera around for before, but now that your camera and sharing ability is on your phone, companies like Instagram exist and get bought by a billion dollars.

  • Applying Problem-Solving to Business Strategy

    A problem well stated is a problem half solved.” -Charles F. Kettering, American engineer and inventor

    Andy Harris is a senior lecturer in the Department of Computer and Information Science at Indiana University/Purdue University Indianapolis (IUPUI) and has written many books on programming. He was one of my professors at IUPUI and is responsible for developing STAIR, an acronym for a general problem-solving strategy. While originally developed for computer programmers, this same strategy can be used for solving a problem, finding a job, or starting a new business.

    STAIR

    I’ve written about STAIR before in the Business Analyst Glossary of Terms, but here it is again in more detail below. I’ve quoted the original content, but condensed it for clarity:

    • S – State the Problem – “Take the time to describe carefully to yourself what you are trying to accomplish…Some problems are best described with sketches or other tools (like flowcharts and data diagrams)”.
    • T – Tools for the Job – “A tool might be a command, a button on a toolbar, a selection on a drop-down menu, a strategy, a program, or something else, depending on the kind of job…and the context.”
    • A – Algorithm Development – “An algorithm is…a strategy or plan of action….[that uses the] tools from the previous step…[and determines] how those tools will be used to solve the problem.”
    • I – Implementation of the Algorithm – “The actual process of translating our human thought into something the computer can understand…Implementation can mean ‘just do it’.”
    • R – Refinement –  “It is normal…to attempt a solution several times before the problem is solved. A skilled problem solver will analyze what happened, review the other steps, and try again.”

    State the Problem

    Is there a way to use STAIR to analyze a person, job, or business? I’m currently taking the Coursera course, Foundations of Business Strategy, which is meant to, “develop your ability to think strategically by providing you the tools for conducting a strategic analysis.” Could identifying the problem, what tools you have, and your proposed method to to solve it be used in the business analysis process?

    Tools for the Job

    As a IT business analyst I have a specific skill set, background, and experience level that is different from a doctor, lawyer, or programmer. There is a limited amount of jobs I can take and businesses that I can create. Harris states, “Knowing the capabilities of…computer applications…[is one of] the main ways you add new tools to your toolbox…As you gain experience, you will constantly be adding new tools.”

    Algorithm Development

    Algorithm is just a fancy word for a set of well-defined instructions for carrying out a particular task. In other words, it’s like a process. This is different from a heuristic, which is a technique that helps you look for an answer. A heuristic tells you only how to look, not what to find. In this way, STAIR itself is a heuristic that contains an algorithm as Harris notes, “The process is the same regardless of the complexity of the problem.”

    Implementation of the Algorithm

    This is where you “do the work” and start processing the algorithm using the tools in order to solve the stated problem. The process would include making a list of all skills, education, experience, equipment, connections, and clients a person has. The next step would be to compare this list to job and business requirements to look for best-fit. When this process is complete, a list of jobs and business ideas is created.

    Refinement

    Harris says, “We like to think if we learn a skill and prepare ourselves properly, we can solve a problem on the first attempt. Experience shows us this is not usually the case.” The result of the comparison was highly limited to the brainstorming process and what Google Search results provided. As a result the list was far from extensive or complete and the algorithm steps should be reviewed for a better way.

    Each unsuccessful attempt should bring you closer to an understanding of the problem and its solution. Refinement usually means going back and looking at the previous steps critically. Ask yourself if you really defined the problem properly. If so, have you used all the possible tools at your disposal? Are you sure there is not a tool available that you have overlooked? Did you choose the best algorithm for the job? Did you implement the solution properly? (You would be amazed at the number of computer errors that are the result of simple typing or spelling errors!) Again, you will find that practice will make you much more confident at this critical stage of the process.”

    Begin With the End in Mind

    Indianapolis IT Business AnalystI know enough about myself to know that the jobs and businesses I’m able to do and start right now are not the ones I want to be doing or running in the future. I also know that I don’t currently have the skillset to do them. I believe that programming is an essential skill for the types of jobs and companies that I want to have so that is why I am learning how to use Ruby on Rails. Like Andy Harris said, “If you don’t know where you are trying to go, how will you know when you get there?”

  • Thinking About a Starting a New Business?

    I’ve been thinking about starting a new business lately and I wanted to share my process with others as I do it to help those who might be thinking of starting their own business.

    Every business starts with an idea. That idea may come from you or from someone asking you to do their idea, but it all starts with an idea. Five years ago I had the idea to start my own web design business because friends and family kept asking me to develop web sites for them. I wasn’t really interested in it at first, but once I started getting more clients, I was hooked – especially when I saw the paychecks come in, but I had a rocky start. I wished there was someone there to help me get started when I was starting up.

    Inspired by Jim Halperts new business and coming off my last successful business, I have decided to start a new business on the side. One mistake I typically make is to get hung up on the business name and category too soon and too often. I often also jump to see what my future competitors are doing in that space. Instead what I should be doing is creating a product that someone would actually be willing to pay for and then asking them if they would pay for it. This is called customer development, but I don’t always do it. That’s got to change.

    Sell First

    One thing I like to do is to come up with an elevator pitch and make blanket statements like “I’d like to create a Salesforce.com for HR.” While I don’t want to get hung up on a business name just yet, I can’t move on until I’ve at least given the project a name so in this example I call it “Workflow” which I know I won’t be able to use, but that’s why it’s just a project name. Once I have a project name I start collecting information about the project in a hodgepodge of places from email threads to Evernote to Dropbox. All of this stuff is easy. That’s because it’s all fluff. You’ve got to get to the point where you have a minimally viable product (MVP), which is something you can sell. If someone doesn’t buy it, you don’t have a company. I call this philosophy “Sell First”.

    If your idea is a service then quantify, quantify, quantify your idea. Make what I call an “Applebee’s Menu” of your services. Draw pictures that explain what you do. If you’re not a graphic designer, then hire one or draw them yourself using a pencil and paper. The point is to level the playing field between you and your customer by creating a common interface (a picture) that explains to them what it is you are going to do for them and how much it costs. Think about what it’s like when you go into McDonalds: there is a giant menu of pictures on a board. You point to the picture you want with the number next to it and both you and McDonalds knows exactly what you’re going to get. That’s powerful and there are few service professionals who operate this way. Even if you don’t have a product, you can carve products out of the services you provide. Once you have them, ask someone to buy one. If they don’t, go back to the drawing board – literally.

    Simplify Your Idea

    The hardest part (I’ve found) about new ideas or organizations is in restricting yourself. Your business idea needs to be one sentence, maybe three words. A while back I read a book called The Art of the Start by Guy Kawasaki, which I have also listed in 13 Books Every Entrepreneur Can Benefit From Reading. Even if you don’t read the whole book, the first chapter is very good and prescribes you to go after a “mantra”, “make meaning”, “define your business model”. and create “milestones, assumptions, and tasks”. Maybe you’re already doing some of these things. If so, good.

    I’m currently consulting with a new startup that wanted to start 5 organizations in three locations all at once. Part of my job there has been to reel them in and get them to focus on doing one thing first and doing that well. In the book, Little Bets by Peter Sims he talks about how successful companies try things on a small scale before they build out. Here’s an 8 minute video if you’re not interested in the book. Part of the reason I think people (including me) tend to want to make their business (or business ideas) wide in the beginning is because they aren’t sure what will work. Little Bets should help tease that out.

    Who Asked You to Start a Business, Anyway?

    In 2011 I wrote about all of the challenges you’ll be up against when you go to start a new business. Everyone from the government, to your neighbors, to other businesses, to your family will be trying to stop you every step of the way. But none of those compare with the biggest obstacle: yourself. You can plan all you want, but eventually someone has to Do the Work. While I believe management is important, it can be used for creative avoidance. If you can’t figure out what to do next, just do the next important thing. If you feel overwhelmed or depressed; if you feel like you can’t move, just do one thing. Do anything.

     

    When to Quit Your Day Job

    First of all, don’t quit your day job. At least not until you’ve made the decision and can stick with it for at least three days straight. While I started my own business on the side in 2007, I worked full time until 2011 when I quit my day job. I didn’t quit because I was making more on my side projects than my day job. I quit because I wasn’t having an impact, I wasn’t being utilized, and I felt like I was wasting my life. There were things I wanted to do and they didn’t include being 33% utilized for 8 hours a day. I would literally spend 2 hours in the bathroom a day and another 2 hours a day watching a movie at my desk. My manager had nothing for me to do and was absent most of the time. There was zero pressure on me to succeed and management was perfectly happy with me doing nothing at all. Everyone was happy except me.

    In How to Work a Life of Purpose I share how I learned what does make me happy. It turns out that following your passions has little to do with it. It matters much more that you adopt a craftsman’s mindset and deliberately practice to get over the performance plateau that so many of us reach, but few exceed. Once you begin to get better at something, you begin liking it more and happiness is a natural result. Quitting your job will not make you happy. Being the best at something can put you on a path to being happy. Being the best at something can allow you the career capital to start your own business or gain more autonomy in your existing job. What people desire the most is trust, respect, and autonomy in their jobs. You are responsible for building your own meaning and managing your own growth. No one else can do that for you.

    Starting a [Successful] Business is Hard

    Starting a business is fun. It’s exciting and full of opportunities. It’s easy to say what you’re going to do, make lists, name things, put them into categories, compare and contrast ideas, and draw stuff on a whiteboard. It’s easy to tell other people about your idea and write blog posts about it and tweet about it on Twitter. The hard part is making something useful, something that adds value to the transaction. The hard part is getting someone to pay money for that thing. The hard part is not giving up and not believing your own self-doubt when it inevitably creeps in. The hard part is not listening to the doubters who will tell you it’s okay to quit, that there is safety in the doing what everyone else does. But don’t listen to them. Do the work. Make the world better. We need you to help us. There are problems in the world that still need fixed.

    We still don’t have good ways to desalinate sea water or cheap ways to make electricity. We still don’t have cures for all kinds of disease or good methods for distributing ways to prevent them. These are big problems, but I can get more specific. There is currently no way to sync a Microsoft Exchange password on an iPhone with Microsoft Exchange. It’s a manual process that the user has to do. This one problem affects IT departments all over the globe and every time a user changes their password in Windows, their email on their phone stops working. That seems like a problem someone would be able to work on and there are plenty of companies all across the world who would gladly pay for that solution. If you know of one, please let me know in the comments and please share your new business ideas with me once they are up and running. Do the work! Cheers.