Blog Archives: Business

Cost vs Benefit of Rioting

A big news topic right now are the London Riots, and it has got me thinking about why they happened and whether we can expect more of this around the world.

The simplest way to think about the riots is on an individual level. Why would someone like you or me go out on the street, cause damage and trouble for other people?

Having just watched this TED talk by Dan Ariely about why we (sometimes) cheat and steal. He made a very good point about Cost vs Benefit.

If you have nothing to lose and you are at the bottom of the food chain, then whatever you do, can only result in something “better” (for you).

This is the case for so many people in the UK (and around the world). We have been through a financial crisis, right now we are facing a second-round debt crisis. There are millions more people who are unemployed, living off the state – losing money they invested in their retirements and much worse. These people are at their wits end  - “nothing to lose”.

They would hesitate very little if they were presented with an opportunity to make their situation better – even if ever so slightly.

Therefore, what they need is a catalyst. At which stage they JUMP into the opportunity.

This is what I observe happening in London right now. The catalyst (whether true or false) was the provocative shooting of Mark Dugan. For a small group of people who had been abused by the police, UK government and even their own citizens, seeing this happen was a catalyst – they choose to act. A small group of people were the first movers, and it was from them that a riot was started.

From this small group a movement was formed – other people at the bottom merely had to join the movement and they could take advantage of many things that would make their lives “better”.

So the cost vs benefit analysis:

Cost: Jail time for rioting / looting (theft, vandalism).

Likelihood of getting caught prior to the riot: high.

Likelihood once riots had started: low

Benefit: Free TV’s, food, anything they they could steal. This makes life a lot better.

So prior to the riots, people had the choice to steal or just get by – but there would be a high chance they would get caught because they were on their own not in a large group. So the Cost > Benefit prior to the riots.

However, once the riots started and reached reasonable mass, there is a sense of anonymity in the group “I won’t be caught, because they won’t know it’s me.” So now, the probability of getting caught goes down and the Cost < Benefit once the riot protects your identity.

For this reason, more and more people are joining the riots and taking the opportunity to “improve” their situation without the risk of getting caught.

Now, I don’t think this is a London-only phenomenon. There are desperate people all over the world, the USA, Europe – never mind China, India and many other developing nations. So, the question remains…what will be the next catalyst?

What do you think about the London Riots and where they are headed?

Further reading:

http://www.guardian.co.uk/commentisfree/2011/aug/09/uk-riots-psychology-of-looting

When is Polarisation good?

This is more a question-blog than anything else, so please comment with your perspective below. It is also up on Quora so check out what’s going on there.

Polarisation is when you say or do something that creates a reaction that splits people into two or more groups.

When launching a business or cause, a marketing tactic that is quite often great to use is shock tactics or guerilla marketing. But, the result of this sort of tactic often results in polarisation – your audience splits up into two or more groups.

So, when launching a business, what factors must be considered regarding scare tactics and polarisation – state of the market, education of the customer, timing, brand etc?

Let me know if you need more information…see you in the comments :D

Bakers vs. Eaters

An eater is a person who sees a pie, and says “I want to eat as much of that pie as possible”. The pie is a finite thing, so “what I eat, someone else doesn’t eat. What someone else eats, I don’t eat. I need to eat as much as possible.”

A baker, on the other hand, see the world as a potential for baking MORE pies and baking BIGGER pies. A baker believes that a rising tide floats all boats.

Bakers are more trustworthy. They make it so that everybody can win.

What do you do: bake or eat? Tell us in the comments below, we want to know why!

Big thanks to Guy Kawasaki for this analogy, and for helping enchant the world. Guy is the author of Enchantment: The art of changing Hearts, Minds and Actions. I have read this book, courtesy of Sam Dalton (thanks!) and it has been my favourite book this year – let me know if you would like to borrow it before you buy it.

An immovable rock…

How do you move an immovable rock?

One of my clients is currently using a retail POS and e-commerce system that is truly terrible.

  1. The developers of the system haven’t upgraded the software and optimised it for their clients.
  2. There is no in-built SEO!?!?!
  3. It’s incredibly hard to use and complex for a POS and e-tailer system.
  4. It doesn’t do things that seem obvious.
  5. And to top it all off, the developers are not interested in upgrading and fixing the problems that persistently need addressing.

The overall problem is that we hate the system, it causes issues, takes way too long to do routine tasks and costs WAY too much money compared to alternatives.

Now you would think that the sight of a solution would get the client excited to switch and move on, no?

You would be wrong, at least in this case.

I have found an alternative solution that costs 40% of the current monthly price, is hosted in the cloud, simplifies and saves time on routine tasks, integrates with e-commerce solutions and accounting solutions SEEMLESSLY, and covers all the bases.

That’s not all, the company providing the solution is consistently upgrading and improving the service to do what its clients ask. This is fantastic!

But, when you add this all up, my client is still so scared to change that they won’t even consider it.

Right now the business is barely breaking even and needs the simple problems fixed. If we can do that and free up some time and resources to commit to other activites that will drive sales and profit, then we solve an ever bigger, emotional problem – STRESS.

I suspect that it is not that the client is an “immovable rock” but rather needs to be coaxed from a different perspective…

How do I help my client realise the value of this solution? How can I convince them to switch? Has the fear of change held back any of your clients? How did you solve their fear?

 

Kill it before it kills you

I think a common problem in businesses (startup or established) is that issues don’t get solved quickly enough. I say “solve it now, or accept death as the outcome”.

In my experience, issues arise every day. Some of them big, some of them small. But all of them need to be solved – quickly and efficiently. The longer you dawdle and mess around, the bigger and more complex those problems become, and harder they are to solve.

Some problems I have had to worry about in the past:

Founder/Shareholder causing more trouble than it’s worth. I learned a lot from this issue and have applied my learnings on a very consistent basis. If you have a tough problem, ours was a documented shareholder, solve it QUICKLY. We chose to be passive and address the shareholder slowly and cautiously. The outcome was that it took 4 months to get an answer, the company was closed down and friendships were destroyed. The problem had been going on for ages, and we just ignored it.

I learnt: Always have a comprehensive and detailed shareholders’ agreement. Always approach the person face-to-face, and immediately bring light to the subjects of concern. Set a reasonable due date and enforce this. Be personable, approachable, friendly and frank.

Negative colleague causing the team to get frustrated and angry. In a recent job I took, I also trained a new employee, X. I found this guy lacking in self-confidence and self-esteem, and tried to bear with him and help him along the way. Following my extended training time, I left him be and I was moved to a separate location because I was self-reliant. Over the course of the next few days I had various conversations with other team mates, and consistently heard about X being negative, distracting, disruptive and frustrating. He was bringing a whole lot of negative energy and problems top the team which was cause for concern. This was in contrast to the happy, joyful and often humorous landscape that was the team prior to Employee X arriving.

The following day I asked Employee X if he would join me for a coffee and we had a chat. I was frank and to the point about what was happening and why I thought that was. I also suggested that being more positive, joyful and self-confident would solve the problems in the team and improve his relationship with team members. It was a hard conversation to have, but afterwards there was a drastic change. He was easier to be around, more positive, cheerful and much more self-confident. What a revelation! And, the team was a lot less frustrated and distracted. WIN!

I learnt: That approaching the person head on and privately is an effective way to solve a people problem. In the long-run, it is always best to hire Happy People, and get rid of those that don’t meet expectations.

I find myself using these principles every day. Whenever there is something that doesn’t feel right, a reaction I didn’t expect, a hindrance I need to address, I make an effort to enquire, ask about, and solve these issues. This is working great for me, what about you…?

What issues did you leave too long to address? What successful stories do you have about issues you solved quickly?

Opportunism to the #entrepreneur

It’s been a wee while since I last made an appearance on this blog. My apologies, but life has hit me like a 50 tonne train carrying a tonne of bricks. Having read Ben Young’s recent blog post about opportunity and having one of those epic days, I thought I would write about a trait I think every entrepreneur naturally has – or can develop: Opportunism.

Opportunities present themselves at the most inappropriate moments, but they do it often. One thing I think every entrepreneur does well is spot these seemingly inconsequential events (opportunities) and grab them by the horns. Great entrepreneurs are, as Ben says, always prepared for those opportunities. But most importantly, they have an open mind which really helps them see them. I have the perfect example from today…

On my way to a meeting with a potential mentor/advisor/investor I got into the lift, and someone joined me. He was going to the 5th floor, I was heading to the 3rd. I asked “What’s on level 5?” And he told me that he worked for Company X.

Company X rang a bell, I remember hearing about it from the Stephen Tindall talk I recently attended. I asked if I could come find out more after my meeting. And off I went…

Immediately after my meeting I visited Company X and was introduced to the Sales Exec and all three of us went and had a coffee. What an awesome conversation we had. We had an interesting discussion about what their business was and what it was doing, it’s customers and a whole lot more. I learned a lot. But then it was my turn to chat myself up (as you do, right?). After my spiel, they asked what I would do with their online strategy and then how much I would cost. Of course I said “Let me have a more detailed look at your company and what I could do, but can I get in touch.”

Cards exchanged, hands shaken, smiles transferred and what an awesome day.

End result: social media consulting client “sold”

Where did this all come from? One question “what’s on level 5?” An opportunity arose, I grabbed it, I followed up and now I have something exciting to work on. Are you being opportunistic in everything you encounter?

What amazing opportunity arose recently that you grabbed by the horns? Let’s discuss this in the comments below.

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Lawrence of Arabia got it right

“All men dream but not equally. Those who dream by night, in the dusty recesses of their minds, wake in the day to find it was only vanity; but the dreamers of the day are the dangerous men, for they may act their dream with open eyes, to make it possible.”
-T.E. Lawrence (Lawrence of Arabia)

Which do you fall under? What are your dreams?

Entrepreneurial success – Networking is vital

I have been working on my business with a great business partner for over a year now. I think I know a few things about starting and running a business by now – let’s discuss in the comments.

Starting a business is a hell of a task, time-consuming, financially-draining but really awesome and fun. One of the things I am glad I have been doing from the beginning, and something many starting entrepreneurs don’t realise, is building a support network.

You have to get out there! You have to get people to support you (and your ideas)! You have to do it now!

When you are out networking, there are some important ways to go about it. I suggest you approach it as follows:

  1. Go to all the events you can. Meet new people in the areas of your life you are passionate about, and in the areas of your business you need help with. My passions include starting businesses, social media, technology, hockey, rugby and reading. My company needs help with marketing. I attend business networks, entrepreneur meetups, investor meetups, media tweet ups, and marketing events. This has helped me build a professional network of over 800 people (350 on LinkedIn) in the past 9 months.
  2. Have conversations! So many people go out to network, just to “network” and collect business cards. This does not work in the long run. You need to have conversations with the people you meet; find out “who” they are, what they are passionate about, what drives them etc. This helps you identify who the valuable contacts are and those that you enjoy the company of.
  3. Talk about your passions. If questions are directed your way, guide them towards your passions. When you talk about what you know, what interests you and what you are passionate about, people listen and remember. This is because when you talk about these things, your face lights up, you smile, you can hear the enthusiasm and love in your voice. This makes the people around you do the same. Blow them away with your energy!
  4. Get business cards or contact details. Make sure you get everyone’s contact details. Don’t just give yours out, most people are not reliable and you should take the initiative to get in touch anyway. Get their contact details!
  5. Follow up. It surprises me how many people don’t follow up and get further meetings with the people they meet. You have to meet with someone at least three times before you have a meaningful relationship with them. I have been caught out on this before, and it has really hit me hard. I have missed out some key relationships and had to work hard as a result. When you get home after an event, or the next day do these two things: (1) send an email to the person you met – say “it was great to meet you” and set up a meeting – and (2) save all their details in your “people-management” system (THIS IS VITAL). I use Gist.com to manage all my contacts – it’s quick to add new people, their details and it integrates with everything – Facebook, Twitter, LinkedIn, email etc – and its available online or as an app.

Once you take these steps and have a couple of meetings you will grow some great relationships. These people will be the people that take you places, introduce you to people who will help you bootstrap your business. They are part of your community, treat them well because they all know each other. Good Luck with your community-building.

What have you done to build your community and support network?

Alternative futures available to newspapers

Solve the problem of validity as a newspaper agency, and I WILL pay for your service. Why? Because then I know that I am not paying for the information (which can be found for free) but rather for your accreditation.

So what’s the next step for Newspaper companies? How do they create a viable business model out of this?

Firstly, they need a completely new business model: change from a content-provider to a content-validator. This may require a new team, a new philosphy, a complete restructuring – but remember you have the money now, so get ready for the change while you can. To make this model happen, a content-validator will need to employ researchers and analysts that will “dig deep into a story” find the truths and untruths. Once they are happy with the validity of the article, then they should place their “mark” on the article for readers to see.

By accrediting an article, a reader can then trust the news and information found in the article. The newspaper still acts as a gate-keeper in many respects – as long as it retains a perfect reputation. This is the second issue newspapers must manage – their reputation. They are accrediting information as “valid” and thus need to ensure that all their effort goes into ensuring that this information is valid. If a newspaper has a poor record in ensuring validity, then they will lose credibility and therefore lose relevance and fail.

Note, I do not expect a news-validator to keep a perfect record, but near-perfect will be acceptable.

One organisation that does a great job of accrediting and validating is Wikileaks (this link may not always work, so just google “wikileaks”). They act as a validator of provocative information and then publish it through their channels. Check them out.

I see two alternatives business models available to the newspapers (if you have any others, please comment below):

  1. Charging the journalist for your mark and for your validation. You are putting a load of effort into validating a story and the information in it. A journalist knows that validity is key in getting her article read, passed on and viewed as credible. A journalist wants your mark on their article and their website. This gives newspapers the opportunity to charge the journalist for that effort. Do so.
  2. Collect and Charge. All the articles you accredit and validate should be collected in a central place – your website. Collect all the articles that you accredit, and charge readers to access the “newspaper”. If a newspaper’s reputation is good, and they are accrediting articles from a broad range (or even a niche market) readers will go to the newspaper to read all of them, instead of happening upon them by accident. Newspapers can charge these readers a subscription for that service. This may seem exactly the same as what newspapers are currently doing, but readers are not paying so much for the news, but for ease and convenience – all the validated news is in one place.

Another feature I would love Newspapers/journalists to ensure plays a part of the future is; comments and opinions. I really like to read educated comments and discussions at the end of an interesting article – see different perspectives, find different resources etc. Many news-providers are doing just this, like the Economist and Social Media NZ who focus a lot of time and effort encouraging readers to comment and discuss. This is a valuable part of my news consumption, perhaps here is another revenue stream that Newspapers/journalists can take advantage of? You could charge for readers to have the right to see the comments – I wouldn’t charge for people to leave comments though, because you want to encourage this. But perhaps the two go hand-in-hand?

What thoughts and concerns do you think exist with the future of newspapers? Let’s continue this discussion in the comments below.

Is independent accreditation the future of newspapers?

I was reading this article in the Economist, and having just read How Companies Win, it started me thinking about the way Newspapers are “changing”.

The article talks about how newspapers are cutting costs on journalism, attracting younger readers by focusing stories on “entertainment, lifestyle and [more]“. All of these changes are ignoring the obvious shift in their readers’ habits. People are finding new ways to consume information, read news and keep informed. Newspapers fail to realise that readers are switching medium, not looking for different content.

Over the past few years, most newspapers have gone online as a result of this realisation; some have decided to charge readers. Did they really think that through when they started the new business model?

Let us think about that for a second. The Internet is a free resource, easily shareable and free from barriers. Now, imagine that someone wants to charge you to read something that you can, most-likely, find on another website for free. Will you go ahead and pay for the privilege of reading the article? Or, will you spend a few seconds searching for the free version?

I think newspapers are approaching the changes in readers’ behaviour in the wrong way. They are asking “what can we change to keep readers on board?”, instead of asking the readers what issues they have with the current way they are consuming information.

Journalism is an industry that is shifting to independence, away from agencies. This is because any person can create news and, when it is compelling, get that news shared on the Internet. There is a huge boom in citizen journalism, worldwide. Often times, this news is more accurate, and immediate, than news by mainstream newspapers – because it comes from the front-line; journalists in the middle of a war zone or a global disaster can create news and spread it themselves without the need of newspapers.

The effect of this on newspapers is astounding – journalists are being laid off, readership is reducing, and profits are tumbling. So, my message to newspapers is “talk to your readers”. Find out how they consume news, and what issues they need resolved.

My biggest concern, as a reader of news and information, is credibility and validity.

When I read something, how do I know that what I am reading is true and credible?

Tomorrow, I propose a new role for newspapers and two alternative business models. Subscribe now, so as not to miss out.