The Billable Hour Trap

The reality sets in once you start getting busy. What once what once seemed like a badge of honor starts resembling a ball and chain. Even if you thoroughly love your work, you can see the billable hours trap you’ve set for yourself.

In On-Demand World, Networks Need Windows

The TV networks, especially the free-to-air broadcast networks, have always had trouble getting their heads around selling their shows directly to consumers. Now comes iTunes again, on the eve of the iPad launch, with a new proposal to the networks to increase sales of individual episodes by dropping the price of a download from the current $1.99 to $0.99. And once again, the networks are uncertain how to respond. Here’s a hint: The issue isn’t the price, or at least not only the price. The issue is audience segmentation.

Can Coworking Spaces Be Profitable?

There’s an interesting debate on the profitability of coworking spaces unfolding over at CoolTown Studios. Most current coworking communities are focused on building a community and only just break even, or are subsidized by a sponsor. Writer Neil Takemoto suggests that coworking centers could become profitable by providing a “connecting agent” to take over some of the sales and marketing functions that would normally have to be handled by the members themselves, while taking a small cut of the members’ revenue in the process.
Though the collectivism implied by Takemoto seems workable and even desirable, it’s something that’s potentially fraught with dangers. For example, the underlying values of coworking could be challenged when members with overlapping skills need to compete to fulfill a referred client. Mechanisms and processes for harmonizing such potential conflicts need to be robust and transparent, in order to maintain the community’s coherence.
There’s perhaps an alternative “long tail” of revenue opportunities for coworking spaces in providing “à la carte” value-added services. For example: Read More about Can Coworking Spaces Be Profitable?

What you can learn from the sad fate of OLPC

LESSON: Your mission is the goal. Your model is the method. Do not confuse these two things.

The sad story of the One Laptop Per Child project (OLPC) is like a case study in what not to do. I know it’s a non-profit, but in the misguided strategy and execution here are plenty of lessons for you, not the least of which you’ll glean from this interview Nick Negroponte gave to Business Week in the Mar. 17 issue, 0306_mz_negroponte.jpg
in which he said the organization he founded 3 years ago has been operating “almost like a terrorist group” and that it now needs to be managed “more like Microsoft.”

I suspect one reason OLPC has had to operate as an outlaw (if Negroponte is to be believed), is that the mission of delivering a $100 laptop was totally inflexible to practical realities of commercial business models. The goal wasn’t “the cheapest laptop possible without running a deficit” but rather, a $100 laptop “at all costs.” Yet, to succeed, OLPC depended on partnerships with for-profit companies like Intel. When the market economics couldn’t be made fit into the $100-mold, ultimately, Intel walked. Now OLPC employees are, too.

Read the Business Week story for more perspective, but the main lesson here is this: Your mission is the goal. Your model is the method. Confuse these two things at you peril.

From The Burning Bush: How to Choose Board Members

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We publish often about the importance of selecting the right advisors and board members. Plenty of serial founders will happily share their ideas for how to do this, but even the most successful among them will tell you that it is not only as important a choice as your business model, but in many ways, more challenging. (Business plans can’t talk back, change their minds, or fire you!)

So what would someone from the other side of the table — a professional board member — say about how to choose your directors successfully? Read More about From The Burning Bush: How to Choose Board Members

Thought of the Day: When in doubt borrow $$$

The other day I had coffee with an entrepreneur whom we’ll call Shai. Shai was entertaining me with good, and not-so-good, stories about his experiences learning the ropes in the new media business in the U.K.

One pearl of wisdom stuck out.
Shai recalled a period at his last venture where he had grown panicked about his debt-level. You’ve probably been there: already in hock for a few grand more than he was comfortable with; not yet cash flow positive; yet Shai’s company was at a critical inflection, where he needed to ramp things fast to get to cash flow positive.

Shai figured his choices were few. He could: sell equity to raise money; take on a partner and change his b-model entirely (which he didn’t want to do because he “still believed” in it); sell out; or, shut it down. He sought out a mentor to help him choose.

And this is when his mentor tells him:

“Don’t be stupid. Borrow more. At $20,000 in debt, if your business model doesn’t work, you are in trouble. At $2,000,000, if your business doesn’t work, the bank is in trouble.

Read More about Thought of the Day: When in doubt borrow $$$

Plan B: Why ‘What Got Us Here, Can’t Take Us There.’

Earlier in the week we posted about Marshall Goldmsith’s so-called Success Delusion. Today we read a interesting post by one of Inc. magazine’s bloggers named Greg Wittstock, founder and CEO of Aquascape.Greg, who has been writing for Inc. under the blog Pondemonium since November, explains in his most recent post how and why he determined the time had come to abandon the original business strategy for Aquascape in favor of a Plan B, even though Plan A had been successful — very successful. Founded in 1991, the company, a vendor of fine aquatic gardening equipment (that’s backyard fish ponds, waterfalls, and water lily type stuff,” writes Greg) has grown into a $60 million business (annual revenues) with 190 employees and in the U.S. and Canada.Yet, Greg writes about how he’s now set to change course.

For four years running, from 1999 through 2002, Aquascape landed on the Inc. 500 list of the fastest growing privately held companies in America. Yet on December 31, the core business that achieved that feat with will be dead. Why would we kill what was a successful and prosperous business in favor of another model that is completely untested, you ask? Simple. We decided to stop trying to be all things to all people and figure out for the first time what we truly want to be when we grow up.

Greg’s rationale borrows from another Goldsmith maxim, articulated in his book:“What Got You Here Won’t Get You There.” Read More about Plan B: Why ‘What Got Us Here, Can’t Take Us There.’