When To Walk Through A Door

Not this door ...

An acquaintance recently approached me about a new business proposition. A venture in affiliate marketing - selling products, creating a network and collecting commissions. The marketing for this venture was slick, the presentation compelling and my acquaintance persistent. The message of financial freedom and personal success did resonate with me but ...

After listening to the pitch and reviewing the "system" I finally made the decision to decline. My friend was perplexed with my decision. After all, what I seek in life was being offered via this venture - so why the reluctance to move forward. Here is the reason why.

I never got excited about this idea. Selling something I don't believe in did not resonate with me. And when I don't believe in something - why should I persist with that idea. Money is important but for me it is not the prime objective. Having a fulfilling, interesting and happy life is my objective. In other words - the driver has to be passion.

Passion for what I do, passion for a cause and passion for my life.

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Can you sell it?

I got what you want ...

The more I pitch my services as a real estate agent the more I realize the importance and true nature of selling. This is not a new revelation. I have consistently stumbled upon this core requirement across all my recent endeavors. You can create the fanciest product or offer the best service but if you cannot market it – you are toast. Getting the word out is paramount.

I have been hustling trying to get the word out by advertising, meeting/greeting, networking and just being visible. And still no leads. You push yourself – out of your comfort zone, into unknown territory and you expect results. But results are fleeting and sporadic. It is disappointing and discouraging.

A saying in the real estate industry is “it is not about whom you know but who knows you”. This is a fundamental rule of selling. Do people remember your product or you when the time arises? Was your offering and pitch effective in leaving a lasting impression? Have you sold the prospective customer so when he decides to buy he will think of you? If people are not calling back – you have to revisit your offering, your pitch and your marketing strategy. Listen to the feedback and tweak your strategy to make it work.

We are probably hard-wired to think about our benefit before we give others consideration. You could say we are inherently selfish – seeking the best for ourselves. For a salesman this means thinking like the customer. The customer does not care about the agent’s issues – the customer wants … I usually have a win when I have something to offer that someone needs. When a customer has a need and I can support that need – there are possibilities. In other words – helping people achieve their objectives is what effective salespeople do.

I don’t want to forget a key life component – “The journey is the destination”. In our pursuit of the result we often forget that what matters eventually is the journey. We live the journey – the result if just the culmination of the journey.

When I get discouraged I remind myself that sticking with the plan is part of living the dream. I am pursuing what I enjoy and although challenging at times – that is what makes the journey worth it. If I stick with it - it will happen.

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US Auto - To Bailout or Not To Bailout?

If you make them - they will come!

"Detroit was far too dependent for profit on large cars and had not paid enough attention to safety or fuel-efficiency. The energy crisis, regulatory demands, and a cyclical downturn in the market were instrumental in pushing Chrysler, the weakest of the “Big Three” automobile manufacturers, to the edge."
US Auto Industry Crisis - 1979

That seems to be the question hounding the US government. Without government intervention bankruptcy seems imminent. So should the US government (taxpayer) foot the bill to save Detroit or let free market economics take its course?

The implications of this demise will be severe in terms of job losses and economic ripple affect of this collapse. If things were bad today they would be much worse in this scenario. US economic recovery will definitely be impacted.

On the other hand if the auto industry went under - in the long run we will still survive. Maybe a more nimble and stronger auto manufacturer will emerge out of this bankruptcy. Management's inability to restructure came too late. The writing has been on the wall for many years - maybe it is time to let this saga run its course.

A grey area somewhere in the middle may be what we will end up with. Some support from the US taxpayer and some drastic changes made by the US automakers to mitigate the risk of collapse. Probably a sticky situation, not unlike the current financial institution bailout where the treasury is flip-flopping on buying toxic assets and wondering how to put its $750 billion pile of cash to good use.

In my view - sometimes its better to let things fail. You gain experience by bad experience.

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Business Lessons From Srinu!

Srinu was my mentor in Grad school. He taught me, guided me and got me started on my journey. The dream in Grad school was to make it BIG in life. I met Srinu last week and we caught up on what has transpired in the last few years.

Srinu struggled out of college to get a job. This was the early 90’s, the economy has in a recession, his degree was not in demand and the stars were not aligned. Srinu took the challenges head-on. He changed cities, moved where the opportunities were, changed careers, learned new skills and focused on making it happen.

After years of hard work, persistence and some luck – Srinu made it big. A successful business, increasing revenues, expanding payrolls and the works. He shared some lessons learned –

Focus
Tenacity and hard work are absolutely necessary for success. At least in Srinu’s case there were no short cuts. His desire to succeed, persistence and lots of long hours led him to his objectives.

Trust
Be careful with trust. Partnerships are tricky and relationships can be fragile. Bad assumptions about role, responsibility, finances and strategy can lead to conflict and misses. Formalize, quantify and clarify to reduce your risk.

Money
Track your money. Maintain your books, be methodical in tracking your financials and always be on top of your cash flow. Being oblivious and trusting others to manage your money/finances can be detrimental to a small business.

Sales & Marketing
There will come a time when your 100% investment will be required to grow the business. You are the main growth driver for your business – and thereby you cannot afford to take the back seat. Giving up your 'billability' to grow the business is always the prudent choice.

The Team
This is an obvious best practice but takes some getting used to. Reach out and engage the best and brightest. The few dollars you will save with a mediocre attorney or insurance agent will cost you big in the end. Always go for quality and competency.

Srinu is on his way now to bigger and better opportunities. He is making connections, learning and expanding his business. Way to go!


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The Network is The Business

Who you know!

Professional networking is a well known corporate best practice. It is a proven concept where 'who you know' helps you in your current corporate environment and obviously when you explore opportunities beyond your cube walls. Most job openings are staffed by references and networking versus resumes flowing from internet sites.

The same concept – albeit hugely magnified is a key success component when you get into a small business environment. At least that had been my experience so far.

Bottomline – there are people in every walk of life who specialize or are the best in their line of work. Networking gets you connected with these folks. And if you are connected with the best – your chances of success increase dramatically.

Here is an example. I was working with my residential realtor for the last six months trying to line up a rental property. Great realtor but his area of expertise is residential properties whereas I am looking for investment properties. That is a mismatch and beyond limited success, also increases my risk since I am on my own. I need to evaluate all prospects, find funding, find investors, find attorneys and figure my way around.

I recently met a realtor who specializes in investment properties. He knows where the best investment properties are, he knows the investors, he knows the tricks of the trade and understands how the game is played. If I work with this realtor - my risk profile decreases substantially since I am partnering with an expert in the field.

You might have a great idea but execution of any idea requires competencies that far exceed your capabilities. Therein lies the key to success – leveraging other peoples competencies by making them part of your team. You get great advice, top-notch information, reduce your risk and increase your chances for success - what is not to like about this situation!

Reach out, ask, explore and connect with the right people. The network is the key to success.

(Photo courtesy Flickr/luc legay)

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Lessons from the Wild!

Going for the kill

Ever watch a cheetah chase down its dinner? It stalks, waits for the perfect opportunity and then it goes for the kill. There is no hesitation, there is no doubt – it is just 100% commitment to the chase. It is hardwired in a Cheetah because it is a question of life and death.

In humans it is a question of success or failure? A question of commitment versus vacillation? A question of giving it your 100% - everytime.

• Do you give it a 100% at work - everyday?
  
  
• Are you valuing and appreciating your family – every moment?
  
  
• Are you giving your customers a superior experience – everytime?
  
  
• Are you pursuing your dreams – with preparation and no hesitation?
  
  
• Are you living a full life or just living a life?
  

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Dipping My Toes in Rentals - The Lure of 25% Return

Seeking some tenants

I just put in a offer on a rental property. I have been analyzing properties and options for over six months now and with the weak housing market - bargains are starting to appear. The property I put an offer on is a 'short-sale' and offers some price discounts below the market price.

The Numbers
Here is how the magical 25% return number is derived. The propety is a 4-unit townhouse (2 bedroom, 1.5 bath) in a nice neighborhood.

• Sale price = $200,000K
  
  
• Down = $40,000K (my investment)
  
  
• Mortgage = $160,000 = $800/month @7% interest
  
  
• Tax & Insuance/month = $570/month
  
  
• Rental/unit = $600/month
  
  
• Positive cash flow = $830/month or $9,960/year
  
  
• ROI on the initial $40,000 = 25% ($9,960/$40,000)

The Headaches
The 25% ROI is generally not possible when you factor in other costs like maintenance, repairs, utilities, fees, taxes and vacancy. That is the expense side of the equation. Maybe favourable tax treatment (small business, expenses, amortization etc.) will reduce the cost strucutre but that is an unknown as yet.

Then there are the typical hassles of being a landlord. Fussy or difficult tenants, damage to the property, 24/7 'on-call' are some of the obvious pain points. There might be more in store - I guess I will find out.

The Rationale
To me this is diversification. I could put the $40,000 in the stock market or buy some bonds but if majority of my investment are in equity markets - am I diversified?

Another benefit of investing in real estate is - expereince. I am sure I will learn from this experience. This venture may open other doors or provide me with the insight to do different deals in real estate. I can speculate on how and what - but unless I do it - there is limited learning.

There are risks and cautions but as they say nothing ventured - nothing gained.

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Risk or Opportunity - What Do You See?

This or that?

Switching jobs: For some a new job portends growth and opportunity - whereas others stay put shying away from a risky move.

Buying a house: An opportunity to live the American dream, have your own pad and see your house equity grow. For some a risky venture that can end in financial nightmare.

Investing in the market: An opportunity to make your money work for you. Conversely a confusing and risky move where you entrust others with your life savings.

Travelling: An opportunity to broaden your horizons and learn about the rest of the world or a risk of infection, lost luggage and unnecessary headaches.

Starting a business: An opportunity to try, learn and succeed. A risky proposition to quit your benign but boring job, just to pursue a dream.

Personal adventure: Climb a mountain, sky dive, complete a triathlon - an opportunity for personal self discovery and accomplishment or risk of personal injury and public humiliation.

It is about perspective. It is about what you want from life. It is about choice. It is about convincing yourself - is it an opportunity or a risk?


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Help! I Am Stuck In The Comfort Zone

Happy Landing

Two MBAs, one MS, 50 years of combined experience in project/program management, resource management, financial management and client management. Skilled in communication, analysis, presentation and sales. Creative mindset, strong analytical skills and work ethic.

Wow! Sounds like a dream team. What is it that this set of individuals cannot accomplish?

The Challenge
Setup a brick/mortar business selling retail consumer food/durables. The target customer base is a fast growing ethnic group with specific food/cooking requirements that are not readily addressed by the major grocery chains. The premise is simple. Lease a location, acquire products from a wholesaler and sell to customers at a slight premium. This is not a new model - it is a proven concept. Success is contingent on location and customer service.

Stuck
After months of thinking, talking, reviewing, analyzing and heehawing about this venture the dream team is stuck. They don't know how to make this happen. So what gives? They are stuck analyzing numbers and risk factors. They want to retain their day jobs (security) and find a person (superstar shop manager!) to run the shop. Such a person is almost impossible to find. And on and on goes the rationalizing of what if ..., what about ..., should we ... - analysis paralysis or more aptly intentional procrastination.

In the Zone
Bottomline is - to break through you need guts. You have to be willing to give up your comfort zone. And that is not an easy transition. I have a job - it is not very stressful, people are nice, I have a small commute, no travel is involved and it is predictable. The money is reasonable. If I keep maxing out my 401(K), I should have a reasonable retirement fund in 20 years. Life is not throbbing with excitement but it ain't shabby either. That is the dichotomy of the being stuck in the middle.

A lot of success stories involve starting with nothing. The cliche - rags to riches model. When you have nothing, obviously there is no fear of losing anything. The only driver you have is to succeed. And a desire to succeed combined with desperation has to be a potent mix. Consider the different motivation levels in these two types of success-wanna-be's. One is halfheartedly trying something on the side, knowing full well that the cost of failure is - negligible. For the broke and financially stressed - failure is not an option. It is a matter of survival.

How to Break Free
Cajones! That is what you need to step out of what is known, easy and comfortable. You have to take a risk. You have to give up what is normal. You have to believe, yes truly believe that you want more. It is a very personal battle and everyone has different thresholds. You have to find your own transition point where the comfortable becomes unbearable and the unknown comforting. That is when you break free!

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Persistence, Tenacity or Self-Efficacy?

Rejected!

• Julie Andrews tells of taking a screen test for MGM studios when she was 12 years old. "They needed to gussy me up a bit because I was so exceedingly plain," she writes. "The final determination was 'She's not photogenic enough for film.'"
  
  
• J.K. Rowling's book about a boy wizard was rejected by 12 publishers before a small London house picked up "Harry Potter and the Philosopher's Stone."
  
  
• Decca Records turned down a contract with the Beatles, saying "We don't like their sound."
  
  
• Walt Disney was fired by a newspaper editor who said he "lacked imagination."
  
  
• Michael Jordan was cut from his high-school varsity basketball team sophomore year.

Melinda Beck poses the question in the WSJ - What makes some people rebound from defeats and go on to greatness while others throw in the towel? The answer is self-efficacy - the unshakable belief some people have that they have what it takes to succeed.

This trait is inherent in some but there are techniques to help acquire this mindset.

"You can develop a resilient mindset at any age," says Robert Brooks, a Harvard Medical School psychologist who has studied resilience for decades. One key, he says, is to avoid self-defeating assumptions. If you are fired or dumped by a girlfriend, don't magnify the rejection and assume you'll never get another job or another date.

And don't allow a rejection to derail your dreams. "One of the greatest impediments to life is the fear of humiliation," says Prof. Brooks, who says he's worked with people who have spent the last 30 years of their lives not taking any risks or challenges because they are afraid of making mistakes.

Finally - it is up to us to decide why, how, and when. You can try, you can fail, you can be humiliated or you can quit. As Henry Ford said - "Whether you think that you can or you can't, you're usually right."

Read the full article at the WSJ.

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When you hit the wall but decide to keep going!

Going nowhere!

The meeting was depressing. No good news, low morale and a dim future. This was the weekly meeting at Panera with my business partner to review the status of our business venture. After almost six months of going at it, the news is not good. Some reflections on what has transpired and what may happen.

Overconfidence
The business model sounded simple. Find IT staffing opportunities and staff the positions. Lots of folks are doing it, we have been in IT for ages now, we have the contacts and connections to make it happen - easy enough! But getting started has been anything but easy. Reality is - don't underestimate what it takes to succeed in a new business venture.

Every business has its nuances, rules/regulations, terminology, network, competencies and competition. If you have not done it, account for the learning curve. And the bigger lesson learned is - be clear about how you intent to penetrate the market? In a saturated market (like IT staffing) - unless you bring something new or unique to the table - you are wasting time.

Motivation
When the going gets tough, how do you persist? Passion and early success are two items that can provide that lifeline. If you are not passionate about this venture - your ability to persist is limited. Ever wonder why most diets fail! If you are not clear why you started on this road, think now. Believe me - I have been doing a lot of thinking lately and it is definitely an eye opener. How do you function in new situations, what are your strengths, what are your limitations - are some of the questions you come face to face with.

A key motivator is success. So plan for early successes. Before you get to your dream state, you will have to learn to walk. Be ambitious but also be realistic. Early success will help morale and keep you going. We made the mistake of setting very lofty goals which obviously were not achieved and thereby felt like a setback. Ideally, you want to plan for small victories, give yourself sufficient time to execute your plan and manage your expectations.

Expectations
Overconfidence can also lead to unrealistic expectations of growth and success. The larger your expectations and dreams, the more the risk that the bubble will burst and you may not be able to recover. Be realistic about what you can hope to accomplish in a new business venture.

Start small, achieve some success, review your strategy and start on the next phase. Increase expectations as you validate your strategy by actually succeeding in your business venture.

Change Direction
The last six months have been a learning exercise for me. And in the process we have brainstormed regularly to tweak our strategy. As you learn more about your business environment, you have to leverage that knowledge to change direction. Keep tweaking the model till you find the optimal balance. And sometimes - maybe the model cannot be tweaked and it may be time to seek a new venture. I have not reached that point as yet but it is an option to consider at some point in time.

"Persistence isn't using the same tactics over and over. That's just annoying.
Persistence is having the same goal over and over."
Seth Godin

It has been a learning experience but success still eludes us. I am going through a lot of soul searching and objective evaluation. Is it in me? Is this the right business? What is my passion? It is both frustrating and challenging but the saga continues. Will keep you updated!

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Rubber Band Creativity

Change the world

Do you think you are creative? Maybe even an inventor. You have great ideas, some even revolutionary. Or maybe that flash of creativity is yet to happen. The 'aha' moment has not arrived. If you have been dabbling in creativity here is a challenge for you - create something of value or of commercial use using rubber bands. Yes the lowly rubber band usually found in desk drawers.

Wall Street Journal columnist Lee Gomes wrote an intriguing article on what is a global event - brainstorming bees. His lessons learned from one such event at Stanford University are interesting and worth reflecting upon.

"If an idea comes to you quickly, for example, the odds are that it came quickly to others, too, and thus isn't likely to win, or even place, in the Miss Originality contest."

Possibly true but not reason enough to discard what may be the idea. A simple web search will validate the presence of competing solutions. Confirm before you discard but confirm soon and then move on if the idea has already been realized.

"The other insight one has by judging an innovation contest is that if you think of an obviously good idea, but no one has implemented it in the real world, there is probably a reason."

There is an idea and then there is reality. Although every idea may not be worth pursuing but some ideas need to be vetted to confirm their feasibility. Pursue your ideas but be realistic about what is possible, feasible and viable.

Finally what makes a difference is - "Basic technology much of the world needs"

In other words mass appeal and usage will win. Win by solving obvious problems that use basic technology that possibly will affect many and will eventually change the world.

So what can you create out of a tangled bunch of rubber bands? See what the entrants came up with at YouTube.

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What Does it Take to Succeed?

Hard work, persistence and passion. These attributes are definitely required but not sufficient. Not sufficient because the more I reflect on my corporate career, my investing life and my forays into small business/startups - the big question that keeps popping up is - what do I bring to the table? In other words - what is my edge?

An edge defines a tangible and obvious benefit. This benefit is what makes you stand out in the crowd. Hard work alone is not an edge, neither is persistence. These are great qualities to have but they do not set you apart from the rest.

To succeed in a career, you have to prove your value to your manager, your team and to your company. The value you provide (real or perceived) has to exceed what the rest of your peer group provides. What can you do to set youself apart from the rest? Is it contingent on the environment, your manager, the business context so there is no one answer but look around you. Why do some team members excel and some don't? They all work hard, have great credentials and work ethic but only a few move up. The edge the successful candidates have runs the gamut from political savvy, competency, commitment, luck, timing, intention...

To succeed in a business you obviously have to provide a product or service that has a perceived benefit above and beyond what is currently available. Wal-Mart's edge is price, Apple excels at innovation and IBM reinvented itself as a global IT player. What affects large business is the same story with a small business. If you compete is a congested market (bakery, motel, sandwich shop) - how are you different from the rest of the established players? If you compete in a new market (blog, social networking, web 2.0) - what benefit do you provide to the consumer? In business (big and small) - you have to define your edge to set yourself up for success.

In investing, the same concept holds. You can chase the next hot stock or investment idea but what are your chances of success? Limited. What everyone knows is common knowledge and common knowledge has no premium. So the question is how do you set yourself up for success? By having an edge - by knowing more than the other investor. And that involves truly knowing more about the business, the sector, the management, the company, the product, the market and the financials. In other words, you have to learn to evaluate the business and buy when you see appreciation potential. Warren Buffett does it very well but others have also figured it out and so can you. It takes education, hard work, persistence and passion, which gives you knowledge - the investor's edge.

When you get an edge, your success is almost guaranteed. That is, till the playing field is leveled and others catch up. Then the race starts again!


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Analysis Paralysis

Prudent advice is to "look before you leap". This is especially applicable when exploring investing options, new business opportunities and new ventures. When you jump in unprepared or make hasty decisions - the outcome may not be what you anticipated.

I agree that the overall emphasis on caution and thorough analysis is valid but the big question is - when is it enough? A typical conundrum would be entrepreneurs find themselves in analysis-paralysis. A self-sustaining and self-defeating situation where one continues to explore, prove and disprove theoretical scenarios. There is certain lethargy in being stuck in this recursive loop - you never get to the lets-do-it part.

To avoid analysis paralysis, is there a clear signal to watch out for?

I guess the one indicator that you might be stuck in analysis paralysis is history. If someone's projects or ideas never get beyond a theoretical extrapolation of numbers, risks and market limitations - one should wonder about their motives. Some people enjoy wondering about situations but have no intention of ever committing to one. So enjoy the daydreaming - at least its good mental exercise!

The other and more potent symptom of inaction is fear. Fear of failure, fear of the unknown and fear of change. To actually take a step, the first step, is much harder since it requires venturing into unknown territory. The fear of the unknown versus the comfort of the known (however unpleasant it may be) will hold you back. Elongating the review cycle can obviously prolong that tentative jump-off point.

If you are hesitating to make that commitment and seek solace in revising numbers and business plans - my suggestion would be review this snippet for breaking this cycle.

"Various ancient Greek commanders and the conquistador Hernando Cortes supposedly made a practice of burning their own armies' boats after landing on the coast of a hostile land. With no way to retreat, their armies had to succeed -- or die trying. Whether these stories are true or not, raising the cost of failure is a time-honored way of motivating oneself for success."
Fool.com

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The Potency of Idea and Execution

Turn on the tap

"Idea generation is an addiction... an engaging, brain-spinning indulgence that must be practiced in moderation."
Behance Research

Should one moderate their ability to generate ideas? In my mind the answer lies in the context of execution. An idea is but an idea, a thought, a figment of your imagination and if that is all it is then one wonders!

But if you realize your ideas, you act on them, you try them out, you give them life - then you create synergy between thought and action. A potent combination that can change the world. Everything starts with an idea and nothing is accomplished without action.

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Who Said It Was Easy!

The road to riches

Somewhere on this road to riches and financial freedom we start to assume that it is easy. You can learn "the secret" and visualize your dreams - and they happen! Or you quit drinking lattes and embark on your millionaire journey - sounds easy enough! Take action, live frugally, invest prudently, small steps ... the road to riches sounds easy.

Well it is not easy. Put another way - there are no short cuts in life, except for winning the lottery, being born rich or just getting lucky. For the vast majority - anything is possible but lets not delude ourselves into thinking that it is easy.

Any successful person will tell you that riches require brains, persistence and hard work. Somehow this lesson is lost in the din of get rich quick rich schemes that range from real estate investing to stock market investing to other dicey money-making schemes. The only easy money in these schemes is the money you pay to attend these seminars and sessions.

"The prospect of getting rich effortlessly has great allure, but the promoters are the ones making the easy money."
Get Rich Quick or Lose Money Quick?

If you have the passion, desire and the attitude to pursue success - you will surely achieve your dream. Plenty of examples are available to validate the financial success story. But most of these stories also showcase the conviction and persistence of these unique individuals. The ones who make it don't give up easily. They believe in their venture, they persist when others would be discouraged and they work their behinds off to make it happen.

The road to success can be hard, daunting and full of challenges. That is part of the journey. If you embark on this journey - enjoy the ride but remember - it is not easy.

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