Category Archives: Advice

There are a number of vital components to any business. You need great people – which is a result of a solid HR process, you need great leadership, a solid vision, and a great product or service. But I believe that perhaps the most important component is the marketing.

A business can have an excellent product but without the communication to connect that product to someone who wants or needs it the business will never be successful. For that reason I believe every entrepreneur needs to have first hand experience and an understanding of how the marketing and advertising works in their business. Marketing is what brings money into the business to pay the bills and salaries.

There are a lot of specialized skills and unique experiences necessary to be good at marketing. However, once you become an expert at marketing you’ll never look back. There are two distinct approaches to marketing:

  • Branding
  • Direct-Response

Unless your company has limitless money to spend on advertising as is the case with companies like Coke, Apple, or Budweiser then Direct response advertising is really the only thing you should concern yourself on.

Direct-response is a measured, scientific approach to advertising where you have the ability to tell if an advertising campaign works. You can test variations of the message, over different media, at different times of the year and see the effects of those changes. It becomes easy to know if money spent on advertising results in sales and profit.

For this reason many advertising platforms would actually prefer you didn’t use direct response marketing.

In Yahoos hey day they made a boat load of money from banner ads. They would fly some sales guy to New York to meet with some of the biggest advertising firms and tell them how much more eyeballs would see their ad on yahoo.com compared to a billboard sign on the highway. They would sell millions of dollars in ad spaces to big companies with deep pockets to run branding campaigns. And because it wasn’t easy to measure the impact of those ads in terms of new sales Yahoo could continue to suck money out of them. Yahoo didn’t want the advertisers to be able to figure out that the value of those eyeballs was much less that what the companies were paying for. This eventually led to a small collapse in the online advertising space as many companies eventually figured out that they were not getting results.

The Yellow Pages have been having a similar problem. For anyone who has ever tried to place a direct-response type ad in the yellow pages can tell you, they try very hard to convince you that it’s not a good idea. There’s a good reason for that. If advertisers could measure the performance of a yellow pages ad then they would probably find out that they’re overspending on it and cancel.

There is a quote from Galileo, who said ‘Count what is countable, measure what is measurable. What is not measurable, make measurable‘. I believe that all aspects of business success revolve around measuring and counting the impact of what you do – including marketing.

I have personally read countless marketing books. They are often the most insightful and inspiring books I read. Here’s a short reading list of my favorites which I think ALL entrepreneurs NEED to read:

  • Tested Advertising Methods – This is probably the penultimate book by John Caples which is referenced by nearly every marketer. It will convince you of the importance of the testing of advertising methods and is a great place to start.
  • My Life in Advertising and Scientific Advertising – This is another classic book by Claude Hopkins which belongs on the shelf of every marketing professional, entrepreneur or CEO.
  • Influence: The Psychology of Persuasion – This is the seminal book about the psychological triggers that make people want to buy. There are seven and each will make a dramatic impact on the effectiveness of your marketing.

The importance of marketing to the success of your business cannot be understated. It will mean the difference between your product or service making money or failing miserably. Selling everything from iPhone games to houses benefit from good marketing. Give yourself a great head start by picking up the three books I mentioned above and continue to be a student of marketing throughout your business career.

How To choose friendsFriends are very influential people in your life. The conversations you have can either inspire you to set and achieve new goals or abandon them and accept the status quo. The power these people have on your life and your future should not be underestimated. Finding and making the right friends is not something best left to chance if you want to control your destiny.

It has been my experience that some of my friends push me forward. For example I have a few friends that are actively on top of happenings with junior oil companies and when I hang out with them I get the occasional stock tip which is worth investigating. In order to contribute to those conversations I need to be doing research myself and learn about the industry. As a result I learn valuable new things that could result in long term financial gains.

Other friends of mine drink, party and play video games most of the time. They’re fun to hang out with but can make me feel like a jerk when I have work to do. The only thing either of us get out of it is a few laughs and a hangover the next morning.

Finding and making friends that will help you achieve your personal goals faster is something that few people take any initiative on.

One thing to keep in mind is that friendship requires work to maintain. Provide value to your friends without expecting anything in return and without “keeping score”.

Where to find Friends

There are two great ways to meet people who may become a great friend.

Ask your other friends. They may already know someone who has already accomplished what your goals are or have similar interests. Getting an introduction through friends is a fantastic way to start warm with the trusted opinion of a common friend to help bond.

Find a meetup, social group or volunteer organization to join. Check out meetup.com for local groups, perhaps join the chamber of commerce in your area for business connections, find a related volunteer group, or join a board. You’ll never make friends with the people you want to if you never get a chance to talk to them – so surround your self with good people.

How to build Friendships

People are interesting animals and the psychology involved in friendship is rather fascinating and complex. But there are few key triggers to keep in mind.

People don’t feel like 50/50 is fair. Friendship is a give and take but if you could count the giving and taking between two people who gave and took exactly equal amounts then asked them what their perception was chances are they would both say they give more than they get. The sooner you can stop tracking how much you get out of a friendship and instead focus on how much more you can give the better off your friendships will be.

Consistant communication. Friendships whither and die without attention. It doesn’t take much – maybe a birthday email, Christmas card, pass on a joke every now and then or a congratulations message if you find out something good happened to them. These short messages take very little effort nowadays with Facebook helping to track all this stuff for you. It’s important to show you take an interest in your friends lives, and continue to be on their radar.

Introduce people. Constantly be thinking of who you can introduce where both people stand to benefit from a friendship. Providing introductions is perhaps the secret weapon of making friends. By bringing two people together there is a chance that big things could happen. Million dollar business deals could be inked, new product ideas created and sales made could be attributed to your helpful introductions. The more people hear about you being the connector the more people will seek you out. This can and will snowball you into success.

Listen. If most people like to talk then who’s going to listen? Being a good active listener is an incredibly valuable skill and one that helps build relationships.

There you go. A bunch of my best tips for choosing and keeping the friends you need to be successful. One last thing though. it’s worth taking the effort to learn and practice any of these skills that you don’t already have. It may not be easy or feel natural but will pay off in droves.

It occurred to me yesterday when I was reading an essay by technology investor and author Paul Graham called What Happened to Yahoo that RIM seems to be making the same mistake.

Yahoo was making a lot of money – so much in fact that they stopped trying to make more of it. They were blatantly ignoring new product ideas, and improvements to their services because it was too easy for the sales guys to sell banner ad spaces for millions of dollars. Along comes a competitor (Google) with a fundamentally more valuable product (Adwords) which very quickly destroys Yahoo’s banner advertising business. The lack of development at Yahoo over the years had unfortunately destroyed the corporate culture leaving them ill equipped to invent new products. They certainly couldn’t keep up with all the smart people that Google was hiring.

And so the inevitable happened. The business shrank forcing them to divest from important products and “re-focus” on core products.

I suspect that RIM made the same critical mistake. They owned the smartphone market until Apple came out of the blue with the iPhone. However it had taken Apple about 3 years of development before the first iPhone was released. Certainly at some point in these three years the pieces of technology that make the iPhone possible would have been discussed and tossed aside by people at RIM. They got far too committed to their crappy apps, and qwerty keyboards to try anything that might be an improvement.

The money RIM made hand over fist was from the enterprises that would buy expensive servers to manage all the corporate phones. It was the only solution for so long that they really didn’t have to sell it. Every new phone was only a minor improvement to the existing model, but people bought them so RIM probably thought they were doing a good enough job.

Now that there’s a competitor in the market RIM is finding itself in a bad situation. The phones operating system had been worked on by mediocre programmers who left it in a state where it now has to be tossed out – what’s worse is that they couldn’t trust the internal programmers to program their own operating system so they brought QNX in to do a proper job of it. The hardware hadn’t seen any major revisions or new ideas. And the backend servers that enterprises spent lots of money on have become obsolete – the iPhone can connect directly to Microsoft Exchange.

RIM’s business is now in decline and I suspect that they will soon find themselves cutting product lines to “re-focus” on key markets. They’ll continue to slide until eventually they become an acquisition target for the likes of Nokia or Motorola.

My suggestion to RIM to get them out of this is to step back and address some internal issues. They need to hire the smartest programmers they can find – steal them from Google, Apple, Facebook, and Microsoft if they have to. Give those programmers the freedom to work on projects that aspire to do amazing things for users (not businesses) and hold them to that vision. Tackle and rebuild the corporate culture to find and embrase new ideas, more efficient ways of doing things, and new business ventures to make money from. Encourage and give employees time to mingle between departments to discuss ideas and provide time and ways for them to work on them.

Want another idea? Start a business incubator program following the model of y-combinator but focused on BlackBerry Apps. Hire students for 4 months give them about $20,000 and help with the legal work for starting a business as well as networking connections. In exchange take 5%-10% equity stake in the business. It will help establish the developer community, potentially some killer apps or games for the platform and could eventually result in a huge payout if these companies ever get acquired or IPO.

I suspect however that RIM is a ship too big to turn.

Earlier this week I downloaded a free kindle book. If you don’t have a kindle, install the desktop application or phone app. This is a book that everyone should read. It’s short – you can probably read the whole thing in less than 1 hour.

It’s called Do The Work by Steven Pressfield. Author of The War Of Art.

The book is for any artist, entrepreneur or anyone with a project to get through. It’s a kick in the ass to help you push through the enviable resistance you will encounter and how to find the support you need to finish.

In this day and age It’s easy to relax. We have machines that do all of the tedious work. Things like Roombas, dishwashers and wrinkle resistant clothes remove a lot of what used to take up the majority of people’s day. With all the free time that having those gadgets should give us most of it gets squandered with hours of TV watching.

Start something if you haven’t already. Use the tips in this book to actually finish it.

Get it free on Amazon.com -> Do The Work by Steven Pressfield

I went to school to learn how to program.  In fact I went to one of the best Computer Science schools in Canada – University of Waterloo.  While there I took all of the hardest courses I could fit into my schedule including 2 of the “big three” – Graphics and Real-time Operating Systems – which lead to many (MANY) nights in the lab that I never got home until 5am.

I love writing software and I love reading about it.  In fact I estimate I do about 3 to 4 hours of reading every day!

Over the last few years I have tempered my reading about computer related topics with learning entrepreneurship skills.  Things like sales, marketing, accounting, financing, leadership, and networking.  This evolution has changed me.  It opened me up to a lot of new ideas and points of view.

There are a lot of entrepreneur skills that make a lot of sense for software development.

Great sales people split test and measure the results of any particular approach they take.  They change headlines, colors, fonts, layouts, images etc to try and gather data about what works best.  They never stop testing new things.  Gathering these types of statistics overtime will improve the sales process and make drastically more money for the business.

I have not seen many (if any) applications that are taking this type of approach to optimize.  Imagine how much better software could be if  there were easy ways to gather and visualize how it’s usage changes between versions as a result of UI changes or how real-world performance changes with a new algorithm or data structure.

Entrepreneurs biggest problem is that they have lots of ideas but it’s hard to finish. It’s tough to get though the resistance to actually ship something before another idea comes up to provide an escape to avoid the fear of failure.  Solutions to dealing with this natural tendency is to not self sensor, be stupidly ignorant and stick to the core idea, and anticipate the resistance by pushing through with more focus as the deadline looms.

These are things that I think programmers should embrace.  The first version of a program should be written as quickly as possible, with little thought put into performance or maintenance.  Anticipate that as you get to the later stages of writing a program the parts remaining will get harder and harder to get through (because you’ve skipped the hard stuff along the way).  When you get to the last few bits of a project the only thing remaining is usually the stuff you hate doing – UI code or graphics or tedious clean up.  Expect it.  Focus.  Do the work.

Good entrepreneurs know that their opinion on their own ideas is fairly useless. Not until the product is available on the market where customers can prove it’s value by opening their wallet is anything for certain. Until the idea is proven in the market place it’s value is a guess.

Likewise until a program is in the hands of users, programmers are just guessing at how it will be used, by whom, and with what level of knowledge. Therefore just get it out there and measure these sort of things after the fact. Don’t make too many guesses about a product before letting people use it. And recognize that until people use it your are just guessing.

Most of the entrepreneurs I have met exude a tolerance for taking risks – for going after the big ideas. Have that same boldness for your own software development work and you’ll accomplish great things.

I have spent a significant amount of money over the years learning how to do a big product launch on the Internet. (One $2000 course, and one 3 day conference in Phoenix)  There are many things to think about and a lot of moving pieces to schedule to pull off a successful launch.

The launch of Automatic Blog Machine is nearing and this will be the first time that I’m going to take what I have learned about launches and put it into practice.  Although this initial launch will be scaled back and simplified.

Planning the launch for me started by thinking about what kind of free stuff and information I could give away.  Then figuring out a timeline and sequence for videos, emails, sales letters. I set deadlines and goals and started writing potential sales script ideas.

Writing scripts, emails and sales letters is proving to be time consuming.  Recording videos is a bit nerve wracking.  Getting all that content onto nicely formatted webpages is tedious.  It takes time.

Even with a scaled back launch, just 2 videos, and a few emails, there is a lot of work to do.  Everything needs to be queued up and ready to go to avoid any late last minute problems.  Indeed, compared to the amount of work it took to program the software I’m selling, the actual selling part is a significant chunk of effort.

Essentially the launch process I’m following can be broken up into 4 phases:

  1. Pre Pre launch – this involves initial list building and would include finding JV partners and/or affiliates if I were doing that.
  2. Pre Launch – This is the run up to the launch day and is used to pre-sell the software, and build interest and traffic.
  3. Launch – This gets kicked off with a email, sales message, and opening the order button so customers can buy.
  4. Launch Conclusion – The offer is only available for a short while.  Emails go out and the order button is turned off.

Each of these phases need to flow and be consistent.  The messages at each stage need to build energy and incorporate the six triggers of influence as much as possible:

  1. Commitment and Consistency
  2. Social Proof
  3. Scarcity
  4. Reciprocity
  5. Authority
  6. Likeability

In addition to that, email subject lines need to be crafted to get the emails open, the logical arguments made, and the value proposition presented.  Getting all these messages into just a few emails and videos takes some creativity.

Hopefully all this work will all payoff.

Within the last week I have nailed down the final set of features and bug fixes for Automatic Blog Machine. It’s now in a stage where the development is finished and I can start focusing on the sales and marketing push and finally release it out to people like you who may be interested in using it.

There are a few different phases to go through in the creation of a business like this. Through my past failed experiences at entrepreneurship I have found that there’s a number of steps that require different skills which can create problems for a one man show like mine.

To be successful you need (at a minimum):

  1. idea generation
  2. development and testing of the idea into an actual product or service
  3. financial and legal organization
  4. sales and marketing ideas and execution
  5. customer support

The vast majority of people don’t have interest in doing all of these wildly different tasks.  They all require different skill sets and different motivations.   All of these steps can be broken down further revealing more mundane day to day details which can bog down even the most determined entrepreneur.

The job of the entrepreneur is to learn which of these pieces they have the desire and motivation to see through themselves and which are better handled by paying someone else to do it for them.  Unfortunately sometimes the way to learn these things is to try and fail.

I have on several occasions tried to get a business idea off the ground.  As the idea generator and the software developer I usually find myself stalling at the software testing phase.  It’s so boring.  Going though a product writing test code and manually checking interfaces takes time and effort which is often the downfall of the entire enterprise.

Your mileage may vary, but for this latest project I was able to get through the testing phase with the extra external motivation I received by attending a conference and meeting people that were actually interested in buying the final product.  That gave me the confidence to get though it.

For the financial and business organization stuff I decided to hire an accountant.  This may have been more beneficial than I expected.  Besides having someone else deal with the paperwork and keeping me from having to dig though reams of material to figure out what the best business structure to use, how to allocate shares and file and register everything with the government.  There were a number of side benefits to having someone else do the work:

  1. Makes it feel more legitimate – I have registered businesses myself, but when you do that it somehow feels less real.  You just hand in a few forms pay the fees and declare yourself President.  Having an accountant witness you declare yourself President somehow feels less like a scam.
  2. Provides external motivation – I told the accountant what I expect to be making and when I expect to launch.  I know he’ll see the numbers when tax time rolls around so there’s pressure to actually see it through and start generating some revenue.  Going back to the accountant with $0 in revenue to declare would be a huge embarrassment.
  3. If I had to figure out how to do everything it would have taken months of dragging my feet figuring out what forms go to whom and in what order.  The accountant got through everything in about 3 days.
  4. I now have an expert on my team to ask questions about how best to organize things.  He can quickly tell me how to organize my finances, and when is a good time to register holding companies, trusts, and how to issue additional shares.

Dealing now with the mental switch going into sales and marketing is tough.  The technical aspects of software development suits my personality but switching then to the creative aspects of creating a marketing plan, recording videos, and being persuasive requires a completely different set of skills.

Not many of the projects I have started made it to this stage.  Most die off much earlier.  But the few things that I have successfully managed to get a marketing plan for and get the product available for sale has taught me a few lessons.

Getting something for sale is THE major turning point.  I have met quite a few people trying to make money online and very few of them actually get to the point where they have something for sale.  The few that do have something for sale are in a much better position – they can test different marketing strategies, split test offers, find and partner with others and run customer surveys.  Once you have something for sale there’s lots you can do to grow the business.

For any business you simply can’t make money if you have nothing to sell.  Selling other peoples things can be done profitably but in my experience it’s difficult to compete against the army of people trying to do the same thing.

Finally, customer support will land on you whether or not you are prepared for it once you have sold something.  There are two methods for customer support.  The classical approach is to have people answer customer questions and concerns either through a call center or some other  support center.  The Google approach is to move most of the support to the community through the use of wiki’s and forums – customers can help themselves and help other customers directly.

These five categories of skills are the major distinct skills required in a small online business.  I’m sure that as I continue to learn and hit new stages of business growth new lessons will be learned and skills acquired.

With any software product there is a massive wishlist of features to implement and things to develop. It is a never ending process of thinking of ideas, evaluating them, and perhaps adding them into your software.

Nowhere is this more apparent, and more of a problem than in the first release.

I have been experiencing this lately.

You get near the end of the list of things needed to do, and somehow new things always get added and they seem crucial for the product. The release date slips and you go even longer without customers and revenue.

One of the great development philosophies in software development is “Release early. Release often. And listen to your customers.” It was popularized by Eric S. Raymond and was originally applied to Linux kernel development. It has since become more and more popular in many more projects including essentially everything that is developed at Google.

One of the most influential business books I have read recently Ready, Fire, Aim: Zero to 100 Million in No Time Flat(aff) shares an idea that meshes very well with the release early, release often development process.

From a business perspective the most important thing a new business has to do is get customers. In the processes of finding your first customers you learn the most valuable thing you need to succeed. Which is how to sell your product. The sales process can take years to really figure out – everything from identifying who the customers are, what language they use, where you can find them, and what their pain points typically are. It’s fair to say that many of your assumptions will be wrong in this area.

Under the assumption that you don’t really know what your customers want – releasing early is even more critical. Getting something out into the marketplace which can later be improved with feedback received in the sales process or from your first customers can give you a first mover advantage and reduce the missteps taken on developing features you thought would be important, but which are rarely used.

So as an entrepreneur and software developer how can you balance these concerns and draw a line to determine what are the minimum set of core features required for an initial release?

Here are some of my tips:

  1. Identifiy the core problem that you are trying to solve, make it something concrete and simple
  2. For every feature idea ask yourself “Can I say I have solution to the core problem without this feature”
  3. For everything that’s not truly required, defer it to a later phase of the project
  4. Keep in mind that it’s much easier to add new features than to modify poorly implemented ones (this is why many first movers in a market lose out to copycats)
  5. Start the sales process and marketing push before the product is actually ready

Following this framework should whittle the list of features down to something manageable and keep the pressure on to get it out.

Good luck.

As of yesterday.  HalOtis has become a registered Corporation in Calgary Alberta.

Doing things as a legitimate business requires more care in terms of the financing than I have been doing in the past.  It’s a sea change in terms of motivation to get things done and out there to a larger audience.

The benefits to me is that as the business gets larger and larger over the next few years I can do things by the book and above board.  It also gives me some legal protection which is important as my business ventures become more public and I get more customers.  It also allows me to get several tax breaks for buying things for the business including cell phones, computers, and a portion of my mortgage because of the home office.

Now that we are just heading into tax season it’s important to realize that any money you make online is a taxable income and should be reported and taxed according to local laws.  With that in mind having a corporation make the income is a great strategy for keeping more of your money.

How I set up my business

I decided to setup a corporation as opposed to a proprietorship for two reasons: to pay less tax, and to protect myself from potential lawsuits.  However having a corporation requires more work than a propretorship.  I need to be more diligent to ensure all the finances are separate that all invoices are tracked and filed and that business expenses are logged and receipts kept.  If the taxman comes I need to have everything in order.

I set up my business by finding an accountant to help with the paperwork.  After setting up a proprietorship several years ago DIY I’m glad this time to have used a professional’s help.  Besides registering the business and doing the name request, the accountant got me organized and filed the first official documents which issued shares, created a health care plan, and assigned me to be the director amongst other things.  Come tax time he’ll help me file the paperwork and find ways to pay less tax.

Managing the money

A separate business bank account and credit card is required.  Business accounts at banks have vastly different cost structures compared to personal accounts and can be vastly more expensive.  It’s important to compare prices and services to find a bank that works best for you.  But perhaps the most important thing is to have a good relationship with your bank account manager which will help you negotiate better terms and deal with any issues that come up.

Tracking income

I have not yet found an ideal way to account for all my various incomes and funnel it into the business bank account.  With money coming from a bunch of different places, for several different things, some regular payments, others irregular and rarely with any receipts.  The best way to track everything and balance the account is not that clear.  Right now I’m just using a spreadsheet to track all income and expenses.

Lately the number of concurrent projects on my plate have started building up to the point where I need more time in the day to get things done. there’s the pending launch of the Automatic Blog Machine, a couple of contract jobs, my regular 9-5 job, several active blogs, and now potentially a weekly video blog in the works and the prospect of writing a book.

It’s got me thinking of ways to get more done in the day and what I have arrived at is a number of things to focus on for that to happen.

  1. Increased single focused effort to improve productivity – by removing distractions.
  2. Trying to decrease my hours of sleep per day.  I currently get more than 8 hours/night
  3. Get more exercise

Richard Branson has said that the most important factor to success in business is physical exercise.  It keeps your mind and body sharp and alert.   I think there may be some truth to that so I’m going to be focused on getting at least some time every day for a workout.

My sleep patterns have been fairly undisiplined.  I intend to test reducing my core sleep to 7.5 hours/night and test a number of dietary ways to increase the quality of sleep.

It’s going to be a busy and interesting couple of weeks.  2011 is shaping up to be a stellar year.