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The Executive and the Admin

As you gain experience in business,  a lot of the sophistication and nuance you once saw in people will boil away.  People, you will realize, are not so complex and, for right or wrong, you will find yourself summing up and categorizing people fairly quickly after very compressed interactions.   It is something you need to learn to do:  as you succeed you will find yourself in contact with exponentially more people and situations, so you need to develop your own personal heuristics to quickly find the signal in the noise.   Never forget that, as a leader, your job is to extract action from complexity and to glean discrete knowledge from ambiguity.  

So, for me, I have developed two main categories within which I put the people who work with and for me.  They are either Executives or Admins.  I value Executives.  I do not value Admins.

Before I go on, it is very important to note that these are *not* job titles.  They are mindsets.  There can be business executives that are really Admins and admins that are Executives.   There can be a receptionist that is Executive, and a vice president who could be Admin; whether someone is an Executive or Admin has to do with attitude and perspective, not the title of the job they are doing.   Being an Executive or Admin is about a state of mind and approach to problems.  In the simplest terms, an Executive is able to prioritize their time efficiently, allocating the maximum time and energy around what they instinctively know is of the greatest strategic importance, often starving less important priorities in the process.  An admin, on the other hand, looks at each task individually and tends to weight them more or less equally at first and ultimately gives priority to things based on outside forces without involving their own judgment.  An Admin will prioritize based on what is due in the shortest time  and/or what is most able to be done based on resources presently available.   An Admin mindset is a dangerous mindset for reasons I will get into shortly.

Fortunately, as I’ve said, Executive and Admin is a mindset, not an attribute of the person.   So, if one realizes it, one can change.   Let me give you some examples of what I mean.

Some time ago we had the “enviable” problem of having far more work than our present recruitment strategies could supply new employees to service.   We had many open positions with our banking clients for whom we consult, I think twenty or so new positions.  We couldn’t fill it at the time.  Because we have a very high standard for our hires, we often can’t bring on more than 3-4 new people a month.  We get hundreds of resumes, but almost none make it through.   Some people say to me, “hey, that’s a great problem to have!”.   But the way I look at a situation like that,  is that every month we don’t fill those open positions, we lose $500,000 in revenue in addition to credibility on the part of our clients believing we can scale to fulfill their needs.   These clients came to us first to fill them, because they know we have top people.  But if we can’t fill them, they’ll go elsewhere and say things like, “well, Infusion has great people, but maybe they can’t really scale for really large things.”   I can’t have that.

So, I decided to get more directly involved in recruiting.  I went to see the HR Director.  We’ll call her Jean.   Jean was relatively new, had only been with us for a few months but had done well so far; while we didn’t have the size of pipeline of new hires we needed, she certainly was finding and hiring bright folks.  I wanted to see what more could be done to widen the pipeline.

Now, I don’t remember exactly what the situation was…I think that I went into her office and she wasn’t there or something.  It was mid-morning, unusual, but I thought, hey, maybe she had an off-site interview or something.   Certainly we were so desperate for bright new hires, she could have gone to a campus to interview.    I don’t remember exactly, so some of this scenario you can take as apocryphal.  Anyway, I think I asked the receptionist where she was and receptionist replied, “Oh, Jean went to return the grill.”  

Return the grill?  What grill? And even if there was a grill to return, why on earth was my HR director returning it when we were positively dying for resources to hire?   I wanted to get to the bottom of it.
So, when Jean gets back I sat down with her, and I asked her about “the grill”.

It turns out that the night before there was a roof-top BBQ for the staff of the Toronto office.  Ok, cool.   It was Jean’s idea, and Jean arranged it.  Great.  But, ultimately, since Jean arranged it and it was her initiative, she felt that it was her responsibility to return the grill.  And that is where I took issue.  Specifically, I asked her if spending part of the morning returning a grill was really the best use of her time given that we were “losing” 500k a month because of unfilled positions.   Wouldn’t the time better have been spent interviewing people in the hiring queue?  She agreed that, yes, it absolutely would have…but the grill needed to be returned and there didn’t seem to be anyone else who could have done it, and she didn’t want to presume to ask someone else to do a task like that.      

Ok, so right there you see an Admin perspective.  Let’s examine why:

The decision on how Jean allocated her time in this instance was based on
1)    An assumption: that no one else could do it
2)    Moralism: she probably felt on some level that she didn’t want to seem imperious and may have wanted to show that she was one the same level as everyone else by doing a task like that
3)    Low Priority Obligation that Achieves High Priority Attention:  the grill had to be returned by a specific date and time

So in this case, Jean achieved the following:

1)    She feels good about herself in that she didn’t ask anyone else to do it, and she completed a clear-cut goal: the grill was returned
2)    The grill gets returned (the grill vendor is happy) and the firm avoids a hefty  $15 in penalties
3)    The administrative staff appreciates Jean’s willingness to do any task, even though she is a manager
Note that none of the above furthered the company’s goals in any significant way.   In fact, a matter of hours is the difference between getting a hot candidate or losing them to a competing company when that candidate has multiple offers (as many of our candidates do).  So, for the sake of $15 and some esoteric considerations of the feelings of others, Jean may very well have risked and lost 250-300k of revenue for the year because  a candidate we didn’t get to in time just took an offer from a competing firm!   

Now an Executive mindset would have thought like this:

1)    I have a crisis, I am losing 500k a month in missed revenue.  All my time and focus must be spent there.
2)    There must be someone other than me who can perform the task of returning a grill.  There is nothing in that task that requires me in any way, ANYONE else could do it and it detracts from #1, which must be my priority.   If there is no one to delegate to, maybe I can hire a courier or messenger  to do it.  Perhaps I can call the rental company and pay them extra to pick it up.  Even if it costs $25, that is small compared to the risk of not getting offers out to some of the candidates in the queue.
3)    If the grill is late, the fee is very nominal.  This can not be a priority for me right now given #1.  I must either delegate it or just put it at lowest priority, bear the late fee,  and just address it when #1 is solved.
Some people might feel the attitude of the Executive is bourgeoisie.  Maybe it is.   But it is not important that you are liked, or perceived as a swell person, or beloved by your administrative staff.   What matters is that you take care of business and, hell or high water, you do not spend your time on low priority things.

I explained all this to Jean, and she understood completely.   So I asked her:
“Jean, which are you:  An Executive or an Admin?”
To which she answered:
“Executive.”
And from then on, she was.  Her performance has been stellar and over 1/3rd of my present staff came into the company through Jean.  She is awesome, and I never again found her returning grills.

Another story:

We arranged a major outing for our New York office.  Paintball!   So, we have about 30-40 guys, we rented a tour bus and drove up into the mountains of upstate New York and fired paint pellets at each other on a variety of fields and woodsy settings.   It was fantastic for team building, and everyone had a tremendous time.

So the plan was, after the paintball, the bus would come and we would all go to this place where there would be BBQ around a big fire.  There’d be steaks, ribs, vegetarian stuff, beer, a party to cap the day where we could recount our misadventures of the day and solidify the esprit d’corps.  Everyone was looking forward to it.  

Now the paintball fields were very busy that day, and at the end of the day we had to wait for a particular field to clear (other people were playing on it).   This was the best field: full of metal structures you could hide behind…it was what everyone had been waiting for the entire day.  This is where we’d have the final battle and decide trophy winners for the day. But right about the time we were going to go onto the field, “Mary” our office manager comes over to me and says we really should leave now, that we might not be able to do the final field.  I told her that everyone was looking forward to this, all our gear was already readied and unpacked, and that we should do it.   So why was she insisting we go?

The answer was that the bus driver we’d hired for the day had been told to pick us up at 530pm, and it was almost that time now.  I then asked her why we couldn’t just call the driver and tell him we’d be half an hour later and she seemed a little agitated.   She said we had a contract with him, and we told him it would be 530 and she just seemed very concerned about keeping our commitment to the driver.

Now, Mary booked and arranged for the entire event and really did a tremendous job, she is an Executive almost all the time.  But she, like of all of us, can have Admin moments.   

Mary knew that we were paying somewhere in the neighborhood of  $20,000 for this outing.   Personally, after spending that much money, building all this enthusiasm, to burst everyone’s bubble and miss the final trophy game because the driver had been told 530 just didn’t seem like a great trade off.   We were 2.5 hours outside of new York city (where the bus would be taking everyone ultimately)…the driver was taking us first to dinner and then back to NYC.  He wouldn’t be home until 12am in the best of circumstances.  Did ½ hour really matter that much to him?   Relative to the cost of morale for ending the day prematurely and on a down note?     I didn’t think so, so I told Mary, “contact the driver and ask him what it would cost to get more time here.  How much does he want for another hour or so.   We are paying 20k for the day out here.   Another $ 100-$200 dollars in tip for the driver wouldn’t break the budget.”   

So, she offered it to the driver,  the driver accepted, and we were able to finish our final game.   And what a game it was.  I still have welts.

The point here is that you see another Admin perspective.  A non-important variable becomes somehow immutable (driver commitment)  and is given priority above what is actually much more important(team building).  So now the bigger goal contorts around the need to realize a much more minor goal.  It is the willingness to challenge assumptions and prioritize intuitively that is the hallmark of an Executive mindset.  

I have many more stories, of course.  Like the internal IT guy, “Tom” I once had who spent 4 days trying to figure out an issue with Microsoft Exchange.  When I asked him, “hey, man, why didn’t you just call the support line and open an issue?”  he said, “because that costs $199!”   But, of course, Tom had spent much more than that in salary and missed priorities figuring it out himself.

You get the point.

Again, I want to emphasize that Admin and Executive is a mindset, not a role.   You might have an administrative job.  But if you have an Executive mindset, you will be promoted into management (my one-time receptionist 5 years ago is now branch manager of my London, UK office we’ll be opening this year.)     On the other hand, if you have an administrative job and an Admin mindset, then you are not likely to ascend very high in an organization.  Ditto for the vice president with the Admin mindset; he won’t rise very high in business.

None of us are immune to bouts of Admin perspectives…so, when you are doing anything important that you need to success, add this query to your internal self-assessment kit and ask yourself:  the way I am performing right now, am I an Executive or an Admin?   You’ll find that in every case, it is clearly one or the other.


posted January 2, 2007 2:07 PM by Greg with 2 Comments

Depression, Shadenfreuder, and “Why didn’t I think of that.”: How youtube.com and Google Have Depressed a Generation of Entrepreneurs

I was on a phone a couple weeks back with another relatively young business owner.  Probably mid-thirties like me, doing well by almost any metric, starting a product company…early yet for him, but the market seems right for his company (big prospective clients are interested), he’s well funded (VC money), and very smart.  Hard worker…his parents are proud, his friends respectful (maybe a tad envious) of what he’s accomplished thus far.  His future is bright, he’ll make very large money one day.

 

I stepped outside of a party to make a call with him… I was in a Phoenix Arizona resort at a hoe-down, shin-dig, wild-west themed party thrown by Microsoft for its top partners in US State and Local Government (SLG).  Earlier in the day I’d gotten an award from the general manager of this Microsoft division (one of Microsoft’s largest) for outstanding work with top clients.  A partner-of-the-year “Innovation Award”  thing. Got called up to a big stage, was on large monitors getting the award…all that.  And earlier in the day I met with the Microsoft division heads talking about all the work we’d be doing together in the coming year in education, municipalities, even federal…pentagon, department of defense…other things.  Net net, a lot of work on the horizon for my 100+ consultants.

 

I should have been happy.  He should have been happy.  We had set a time to talk about how to partner, how I might be able to sell his product through my sales channels (that is, my existing clients). So I snuck off from the shin-dig, and camped out by a wagon wheel and dialed in while sitting on a bale of hay. “Cotton eyed Joe” played in the distance.

 

But something was off. Where we both would normally be very chirpy, excited by the potential, thrilled with what we were doing…it was just, off.  The conversation was perfunctory, no excitement.  At one point in the conversation we both lapsed into silence and, in one of those uncanny moments that hint of psychic phenomena, I had a strong sense of what was wrong.  I said:

 

“Are you, by any chance, thinking about Google buying youtube.com for 1.5 billion dollars?”

“Oh my god…yes.  How did you know that?” He laughed.

“I’m bummed about that too. Been thinking about it all day since I read the announcement this morning.” I said.

“S**t, I know!   I mean, Jesus Christ!   How can you read something like that an go off and function doing what you are doing?”

“I didn’t actually read the whole article.  I just didn’t want to find out that it is a twenty-something who did it for a year or something like that. I hope to God it is a bunch of rich old private equity guys that started this site.”

“Me too…but I have to know…hold on…” I heard him typing in the background, and then: “Mother F***er! The CEO is 29 years old and it says the site never made any money and is only a year old.”

 

And then he cursed.  It wasn’t cursing in jest all of a sudden…and it wasn’t very loud.  It sounded, sad, resigned and then angry…all in the space of like a second.  The guy was genuinely upset about this.   Then he said, almost sighingly:

 

“You know, you work your ass off for years, building a business, dealing with s**t, worried about someone else knocking you out before you get enough traction in a market…you cross 35 and start bumping up against ‘old guy’ territory, and you hope, you pray, at one point before you are too old to give a damn, that you’ll make some big money.  But you’d be giddy if you could pull 5 million out of an exit and then do this a couple of more times building on your success.  But then a kid lets people post videos on a website, and he’s…a f***ng…billionaire...Seriously, G*d damn it!”

 

I knew what he was saying.  I’d felt the same way.  For a fleeting moment as I read that news (on Google news of course) on my mobile phone that morning, I felt all my motivation and excitement about being where I was slip away.   I was in a top resort in Phoenix with waterfalls cascading into pools…but it suddenly appeared grey.  And then “the voice” piped in:

 

“What HAVE you accomplished, smart guy?   Oh, BIG DEAL you have over 100 people.  Give that man one white chip! There are thousands of companies doing what you do many, many times your size.   You know, the Forbes list of wealthiest Americans don’t even have millionaires on it anymore!  You have to be a billionaire to make it on that list!  So, you think you are doing well???  You aren’t even CLOSE!  Took you eight years to get here, but look what that kid did in two! Garden variety millionaires are the new middle-class at the very best, dude! ”

 

I don’t like “the voice”.  It likes to rob me of things.  I thought I was unusual in having a voice like that, but it turns out..I’m not.

 

Out of curiosity, I started asking other entrepreneurs I know to see if they felt Google-depression like I did.  They did!  And it was strikingly similar: everyone I spoke to was half-angry and half-sad.  One entrepreneur said he switched his default homepage from Google to ask.com, because, “I just can’t look at them anymore...Google is no longer officially cute. It is petty, small and meaningless, but at least I can do that much.”

 

Another friend who has an infrastructure consulting company said, “the mood of my whole company was depressed, I could sense it walking in.  It was really weird.   I guess because they all thought, ‘why not me? That could have been me but I’m doing this instead…’  And it got to me too because I work like 80 hours a week and travel so much every time I see my wife we have to remind each other who we are.   Then something like that youtube happens, and you question if you are really doing things the easiest and smartest way.   Instead of thinking about quality, building a business over years…the youtube thing kind of makes a mockery of that. So you start wondering about ways you might coral dummies and aggregate content on the internet, you think about the end goal, tons of money, and start trying to work backward into some kind of idea.  It is depressing.  I’m still getting over it.  And don’t even get me started on myspace and facebook…”

 

Another friend:

 

“Did you see how on the Google home page they added that diminutive little link, ‘Videos-new’ like it was just some little thing…you know, hey users, we’re nice little Google here, a little thing you might want to check out, awww-shucks!  Not like they went out and paid one-point-five BILLION dollars for thing!  You know, f**k them.  Seriously.  F***K them.” 

 

So, where does this leave us?

 

Well, “the voice” I have is afraid of one and only one thing.  It fears my wife.

 

After 8 years of marriage, I pretty much can run a lot of my wife’s algorithms without her even present to determine what she’ll say in a given context, but sometimes you need the face to face.  Before I tell you what she said, you must understand that my wife’s mother, Onriet, survived the holocaust.  When the Nazi’s invaded France she fled (she was three but remembers it she remembers, particularly, that she was not allowed to bring her doll)…they got as far as, I believe, Spain, she won’t talk about exactly what happened, but they were captured and put in prison there.  Then Onriet and her mother got separated.  Fortunately, the European war ended, and Onriet ended up in a Red Cross orphanage in Morocco where her mother eventually found her after searching for several months. Then they came to America.   And, to this day, Onriet’s house….filled with dolls.  I never understood that until my wife explained it to me…”my mother, she couldn’t bring her dolls when that night.”

 

I tell you this because my wife and what’s left of her family are pretty happy just to be alive.  They are not typically impressed by anyone.  Only the quality of the person matters to them and none of them could pick out a single celebrity or know who anyone in hollywood is.  They believe money, like life, countries, and even people you love are transitory, temporary.  The very worst in the world can and does happen.  And after it happens, you move, start over, and maybe you build a business for thirty years and make yourself rich.  And, at the same time, be humble because, in Onriet’s words (and you have to imagine a heavy French accent here as she smokes a cigarette) :“Money, my dear, is a state, and a temporary one at that…it is not an attribute of a person, as so many people seem to believe.”

 

So, when I whine to my wife about my own success inferiority complex, she is as likely as not to point to the wall of one hallway, on which is a typed document with the seal of the Nazi party.  It is an official typed  list of what her grandmother and her toddler daughter was allowed to take with her on one of the relocation trains which, fortunately, she did not take.  And then my wife might point to pictures my vivacious daughter and smiling infant son.

 

Ok, I get it.  I do have it all.  And I know… there is Darfur, 9/11, Rhawanda…no one has a right to complain about anything.  I should be happy…I KNOW that…I wish I was a better person.  But it still bothers me…

 

And then, sometimes, she’ll say something like this:

 

“Greg…that youtube thing is in the news because it is fantastically rare, unusual, unnatural…in other words, it IS news.   That kind of thing happens to one person in 6 billion.  You don’t get upset what some dope wins the 200 million dollar lottery Powerball, but youtube upsets you?  So this kid posted videos.  Maybe it was even a good idea. But the lottery winner bought a ticket with his Ring Dings, a good move on his part also.  If you want to, go, go and do that…join the hundred-million wannabees who believe in the overnight and never make it…like your idiot-friend Jim [I will blog about Jim one day] who produces gorgeous brochures and raises endless money for idiotic ideas that he, himself, doesn’t even believe in in the hopes that one will ‘hit it’.   Forget about what you read, how many people do YOU know, you know personally, that are doing better than you?   Aside from the more outrageous things you want to do like flying privately, what is there that you truly want that you don’t already have?   Listen: maybe there is a way to make money quickly, a super-duper idea that transmogrifies you into a billionaire and doesn’t take a lot of work…I know you like the VC stuff and have your friends in that world and they all talk about the big scores….if there is a knack for that, I don’t have it.  But I do know how to build a sustainable business on sound principals…I know from my family how to take advantage of good years and ride out the bad ones, and how to build significant wealth over years.  You bring in the sales, chart the direction, and I’ll make sure we hold onto it and the firm has the internal processes and access to capital to sustain that growth.    You may never make the paper, and maybe that all seems quite dull to you…but real power is quiet, and real wealth is built over time.”

 

My wife has a point…and it reminds me of something I read that Warren Buffet (whom I am not married to) had said about “super stars”…something that might be applicable in this context.  A billionaire himself many times over, he did it over many years and by investing in “unsexy” businesses, usually non-technological..for example, Dairy Queen was a business Buffet invested in.  In Warren’s own words:

 

"I would like you to imagine a national coin-flipping contest." Let's imagine all 268 million people in the United States are asked to wager one dollar on their ability to call the flip of a coin. "If they call correctly, they win a dollar from those who called wrong." After each flip the losers drop out, and on the subsequent flip the stakes multiply. Each person has a 50-50 chance of calling each flip and approximately half of the people will lose and drop out each round. After ten flips there would be approximately 260,000 people that had successfully called ten consecutive coin flips. After 20 flips, based purely on chance, there would be approximately 250 people that had called 20 consecutive coin flips - a seemingly miraculous feat.

 

The surviving callers would have over one million dollars each at that point. Press coverage and inquiries about their coin calling ability would increase with each successive flip. Several callers might even attempt to profit from their good fortune by writing books on coin calling, setting up 900 phone lines, or by sending mass mailings or spam Email solicitations offering to share their secrets with intrigued members of the public.

 

As with winners of the lottery, it’s obvious that those remaining would have been blessed with good luck. But what if a large percentage of remaining coin flippers had a common characteristic or trait. What if a disproportionate number had came from one town or had been educated by one "patriarch." Would this signify that more than luck was involved in calling coin flips?”

 

The Buffet comments are true of dotcom things as well.  The dollars in the youtube case are to dollars of the stock owners of Google who capitalized that company so fantastically, that it can now go out and buy that 1.5 billion dollar web site that made it where, no doubt, thousands of similar sites did not reach that critical mass.  


So, do I feel any better for all of this?  I dunno.  But I am, at least, comforted that I am not alone.  And while I fear the resurgence of the dotcom mentality, of people spending ridiculously, of instant millionaires and billionaires and renewed sense of I-should-be-able-to-retire-by-thirty entitlement in the twenty-somethings…my wife reminds me of one other thing…

 

This crazy spending, this excitement of tech and the internet…all this stuff…a hot tech sector is good for our business.   We can probably raise our rates J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

posted October 19, 2006 1:10 AM by Greg with 3 Comments

Should I Hire My First Employee?

This post comes from a former employee of mine, Joe.  He is from Europe and moved there about a year ago.  He started a small consultancy there, and we keep in touch. 

 

----------------------------

 

Hi Greg,

 

I hope all is well with you and Infusion.   I spoke with **** recently and he indicated that business was good which is great to hear.   I’m doing well and am enjoying running my own little business.  I have a question for you, and am hoping I still qualify for the ‘Ask Greg’ category.  Whether you want to answer this on your blog or not is up to you.

 I am in a position where I am getting many more work offers than I can handle and it’s starting to bug me.  I’m seriously thinking about hiring someone in the New Year and while it is still a few months off, I want to prepare as best as I can.  To that end, do you have any advice of things I need to look for and look out for?  I realize the legal matters are much different here in Europe, but I believe there is much more than legal issues when trying to go from a one man show to a multiple person company.  I remember your advice to start a product business but I have yet to stumble upon a good idea for that.  In the meantime I am doing consulting work and having a great time with it. 

 

Thanks for any advice and all the best to you and all the folks at Infusion.

 

Joe

 

 

 

Well, I think the first order of business is that you need to be very honest with yourself. Honest about a couple of things.  First, you aren’t running a business yet.  You are an individual sub-contractor.  And while you can do quite well this way for a time, there is an ultimate limit on your compensation (there is only so-high an hourly rate you can get, regardless of your skills), so you are well advised to be thinking of hiring other people.   Bringing on other people is an entirely new dimension.

 

The thing you have to be honest about when bringing on another employee into a services company, is whether or not you legitimately have something to offer them relative to other opportunities they can pursue.  And this goes to the heart of what kind of company you want to be.  As a services company, you need to make a choice up front: you are going to go commodity or high-end.   You cannot do both.  Choose now.

 

Commodity (sometimes known as “body shop”) is where you will compete with Indian, Chinese, and other vendors for on-site positions.  You are looking at lower-end development talent, not necessarily the brightest stars, but folks that have a demonstrated ability in a specific technical area that you clients ask for.  This is really a war of resumes and rates.  We at Infusion didn’t take that path (we chose to go high-end, but more on that in a moment) but that doesn’t mean you can’t make money at the lower end.  In fact, the market is much much larger for lower end talent than higher end.   The good part of commodity services is that it is relatively easy to hire a given skill set if that is all you are hiring for.  So your client says, “I need a VB.NET guy to do some winforms” and you go off and look for exactly that skillset.  He might not have good communications skills or have other deficits, but he meets the client-stated criteria.  You place this guy in the position, and make a cut of their billable.  They might even be subcontractors of yours as opposed to employees.   You will have to do a lot of volume to make any money and your turnover is high, but you grow to a significant size doing this.  And for wrong or right, there are many clients who are just looking to hire a “VB guy” or a “C#” guy or a “BizTalk guy”  and don’t know how to evaluate the person overall.

 

 

For a commodity (body shop) business:

 

Positives:

·         Easy to find and hire people, you can scale quickly

·         People are not expensive

·         Many clients are only focused on resume and skillset, so very large market for these type of resources.  Especially in government.

·         You can get quite large very quickly just filling open requisition.

Negatives:

·         You will not be known for quality or exceptional work, quality will always be a problem

·         Very high turnover, your people will be opportunistic and not have loyalty.  Your clients will convert your best people to full-time eventually.

·         Very low margin (you will have to do a lot of volume)

·         Not much fun, you won’t be working with the best and brightest

·         A *lot* of competition.  You will have to be very aggressive in selling clients and selling recruits

·         Impossible to distinguish yourself from thousands of other companies doing similar work

·         A down market will wipe our most your business.  You will only make money when the market is up.

·         Managing lower-end talent is difficult and draining, you will have to put out many fires as they leave, disappoint, or otherwise cause difficulties with your clients.

·         You need to be an *excellent* judge of character.  You will come across liars, cheats, dishonest, disingenuous, lazy, angry, disturbed people.  You will encounter the whole range of the human spectrum.  And some are dangerous to your business.  You need to make sure they don’t get in.

 

Personally, I got into IT to do solutions and change the way (for the better) business gets done.   So although there is money in the commodity model, I wasn’t interested in it.  We went high-end.

 

High-end is where you become more of a boutique.  Your people are of unusually high quality, and clients come to know you for exceptional service.  Here are the pros and cons

 

Positives:

·         You will establish very loyal customer base that will sustain you even during down markets

·         Easy to distinguish yourselves from competitors, very few quality shops out there that deliver as promised

·         Over time you will get more and more interesting strategic projects as your firm gains reputation and matures

·         Sales become progressively easier as you a build a network of satisfied clients

·         Good retention of your best people

·         Many new business opportunities for products, new services, etc. will open up for you as clients come to know, like and trust you. 

Negatives:

·         Very hard to hire people.  You will go through 100-300 resumes and almost that many interviews …and if you find one person of quality, you are doing quite well.   Quality is very, very tough to find.  Your size will always be constrained by your rate of hire.

·         Challenging to find growth paths for all your motivated people.  A “job” is not enough.  You will need to show career road-maps to people.

·         High maintenance.  Quality, high-end people often have egos or a slightly self-inflated sense of entitlement and accomplishment.  It can be difficult to navigate, so unless you are comfortable wearing “kid gloves” and spending a lot of time explaining your strategies to them, this is not the path for you. 

·         Very capital intensive, you have to provide higher-end salaries, bonuses, and additional incentives to keep your people happy.  Takes a lot of money to find, recruit, and keep high-end talent.   Often your talent will ask for salaries and bonuses that leave to margin.  So you need to offer compensation in other ways, such as percentage of revenue of the people they manage, etc.  Very difficult to set this up effectively.

·         Cash Flow Crunch: you must pay salaries regularly, but clients and work bring in revenues sporadically.  A client slow to pay can put you out of business.  You need a capital source behind you, a sizable one, to ride through delayed projects and late payments. You will be most stressed financially and most likely to go out of business when business is good!

 

Anyway, if you go body-shop, not much to tell you.  Put an add on monster, you’ll get 300 applicants from all over the world in 15 minutes. But you are best off finding the position first based on your own reputation and then hiring to fill it quickly.  You do not want to hire ahead of the position, or you’ll end up with this person on the bench, sucking all the resources out of your company.  You become like a trader, you’ll need to identify the opportunities quickly, find the resumes, get the resumes to the client asap, bill as low as you possibly can, and get the guy in there.  Then repeat.   And that’s all there is to body shop.

 

For high-end, like I said, it is tough.   The idea here is, you want to hire someone *better* than you.  Or at least as good.  But smart people will quickly look around and say, “hey, you are billing me at Y but only paying me X!” and you’d better have an answer for that, or they will simply leave you or take your client.   Which brings me back to what I said earlier: you have to have something compelling to offer them.  For Infusion , we offer a drastically ramped up skillset (we work with the latest techs), interesting resume enhancing clients, work in New York City, Boston or Toronto (or all three at different times) and have different paths to different forms of management.  Most recently, we added the opportunity for our folks to actually start their own businesses with us backing them through Infusion Angels.   But most significantly, while at Infusion, you’ll always be learning. 

 

For a one man shop, you don’t have all this yet.   Expect to go through a few different first hires before you find one that sticks.  Also, be prepared for every spur and dark thought you directed at any of your bosses to revisit you (now that YOU are the boss) one thousand-fold!   You will be astounded at the things you find out your employees believe about you, your company, the way you do business, you name it.

I would recommend you look to find a business partner or two to start the company with you.  That way, one partner can bill to pay the salaries of, say,  one employee and the other partner, who can then sell, recruit, etc. 

 

In conclusion, whatever path you take, the main skill you need to develop is the ability to gauge and motivate other people.  To divine their motivations, reliability, ability…and to be able to motivate them and align them with your vision.  That is, you need to become a leader.   In my experience, leadership has an innate component to it, you either have the seed or you don’t.  Some people are great executers but need to be directed.  Nothing wrong with that…executers/lieutenants are the ones that actually get things done.  First thing is to figure out whether you are a leader or not.  Don’t be sure you know.   See what success you have in managing other people and whether you are successful at it.  If you don’t enjoy it and/or are not able to make it work, you might be a “behind the scenes” person…which is fine, but if that’s the case you’d better be honest with yourself and find another, more outward-facing partner to supplement you.

 

But if you are a leader, understand also that a good deal of leadership is learned from experience; prepare to make a number of mistakes for a number of years.  It is also good to keep contact and seek the advice of people who you respect as leaders themselves.   And my final suggestion is to read, read every decently rated book on leadership and business that you can.  For most of my twenties, there was never a time I wasn’t actively reading a business book.  Everything ranging from biographies of companies, to business leaders, to history.  I could fill a small library with the number of titles I read.  And I still have a few and reread from time to time.  

 

So, I recommend that you *do* hire.  But understand that this first employee will teach you far more than you will teach him or her.  Good luck.

 

 

 

 

 

 

 

 

 

posted August 13, 2006 12:11 PM by Greg with 1 Comments

From The Horse's Mouth

Well, the last person who emailed me a question (NOTE: anyone is welcome to do so just by emailing me, , with the subject line "ASK GREG." I will blog the answer) did, in fact, call my bluff.  I said if she wanted me to write some of  the basic details a student should know about corporate structure in a startup a company, then I would if she asked.  Sigh.  She asked. 

So, I did what all good business people do.  I delegated.

My core business algorithms were actually developed and licensed to me by my father, Herb.  Herb is a lawyer, corporate counserler, SEC compliance mole, car nut, former car dealership czar (trust me, don't get him started on cars...either antique or domestic,) defense attorney, entrepreneur...and now, retired lecturer.   He's been teaching me business since I was 4.   I don't know how football or baseball works, I know hockey involves ice, I can't really catch a ball...but, I did learn that it was critical to make sure I couldn't be dilluted via capital call by the time I was 10.  Kids at school beat me up...at least until I started reinvesting my bully's protection money.

Worked out in the end, I guess.  Anyway, I gave my father the opportunity to give y'all the lecture he's been giving me for some 4 decades.  In his own words...take it away dad...

(NOTE: always remember, his advice is based on US law.  Now, you may already know a good deal of this, but there are some elements in here that will likely be new to you.  First and foremost, pay particular attention to the "capital call/dilution" section.  That is where most newbies in business get in trouble.  You can save yourself a hard lesson.  Also, Herb likes to be the professor...so I advice you to ask him questions and take advantage of free legal advice.  He can be reached at .  If he proves popular enough, I dunno...maybe I'll set him up with his own blog.  Not that he knows what a blog is... ;)  )

---------------------------------------------------------------

 

Dear “name removed”,

 

Greg has asked me to respond to your questions concerning the business/legal/personal relationship between you and your colleagues.  My background as an attorney/businessman is in corporate and business law, having been general counsel to a public company and two banks.

 

While I lived and worked in Montreal, Quebec for five years (actually had Landed Immigrant status and secured a license to sell real estate), I am not versed in the particulars of Canadian Law. Canadian corporate law is similar, but my comments are based primarily on US law. If you decide to incorporate in Canada, I strongly advise you to also incorporate in the US.  You will find VC firms will be more comfortable dealing with a US company, according to US law.  There are tax considerations, so what ever you do consult a tax lawyer before you act.

 

To begin, you are asking many of the right questions, but they come very late in the process. The decisions as to how to handle the end work product of your senior year MUST be determined BEFORE you begin, not after.

 

First, some basic concepts as what a corporation is and how it functions. Corporations are created by the state and are deemed to be “persons”. As a “person” it has the ability to act in its own name, to sue or be sued in any court of law, to have checking accounts, to borrow and lend money in its name, to pay taxes etc.  In essence, everything a person can do, except vote.  It can even reproduce. That is to say, it can create other corporations as subsidiaries (a family of corporations-now isn’t that cute).  Its life is perpetual, provided it files the various reports required by the state(s) in which it is incorporated and pays its taxes.   Of course, it can be dissolved by the voluntary action of the shareholders or by the state if it fails to file the requisite reports and pay taxes...

 

But how does it function?  Obviously, a real person(s) has to act on its behalf on an ongoing basis. That person(s) is the Board of Directors, NOT the shareholders.  The shareholders elect the Board, but it is the Board who are charged with acting in a fiduciary capacity (that means in trust for the benefit of others—the stockholders) in running the business of the corporation.  The Board elects the officers of the corporation, and sets their compensation.  Boards of Directors make policy. Officers run the day to day business of the company, with oversight by the Board.  Contrary to what you may think, stockholders of a small. closely held company, MAY be employed by the corporation, but are NOT  ENTITLED to at job at the company (you own shares of GE, entitled to a job?).  

 

Permit me a personal observation based on many years as a corporate attorney and in building businesses. You and your colleagues are NOT PARTNERS. Firstly, the word partner is a legal term with express meaning as it is applied to a different form of common ownership. It does not apply to the legal relationship among shareholders of a

corporation.  If you think of your associate(s) as your “partner” (friend-buddy) on a personal level, you are apt to find it very difficult to make the necessary business decisions as you begin your quest for the magical IPO,. It is the same (only more so) when times become difficult. You are at the beginning stages of running a business. Be open, be friendly, communicate and appreciate what everyone is doing to enhance your enterprise.  But, never forget you and your associates are building a business! 

 

 Shareholders of a non public corporation are bound by a contract, commonly called a shareholders agreement. Drafting a shareholders agreement was for me, often the most difficult part of setting up a corporation for a “start up” company. Why?  Because, everyone is forced to accept the fact that while a corporation has perpetual life, the shareholders do not. It makes every member of the group, all of whom expect to own some number of shares of stock and have a voice in the management of the company, realize that someone, regardless of how they feel about each other on a personal level (see above), has to be in charge.  So what happened to the mantra “are we are all friends?”  No, you are not.  You are shareholders in a business that has to function as a business.  That means decisions have to be made on a daily basis and a committee cannot be making them.  Designated individuals have to be given the authority to make those decisions.  You must face the reality that while a corporation’s life is perpetual (as long as it pays its taxes), the lives of the shareholders are subject a variety of situations that life will impose on them.

 

Drafting a shareholders agreement will force you to face many situations that are not theoretical.  They will happen.  That is why it is always best to anticipate them before the proverbial first dollar hits the table.  One myth I need to dispel is that shareholders of a closely held corporation are ENTITLED to a share of the yearly “profits”.  Absolutely NOT.  A shareholders agreement is how you settle most of the questions of corporate governance before you begin.  That is precisely why it must be signed before you finalize the operating structure of the corporation.  So, just what is in this document.  Each shareholders agreement is unique and crafted for the particular situation.  But, there is a common thread that runs through all of them.  Let me mention just a few of the questions to be considered:

 

  1. How many shares will be authorized (authorized but un-issued shares are held by the corporation for future issue). Who gets what percentage? Is this going to be a problem?  You bet it is.
  2. How will the voting rights of each share be determined i.e. one share, one vote?  Does not have to be that way.  Different classes of stocks can be created, each with different voting rights (some more than others).
  3. How many directors? Always pick an odd number. Who are they? A number of directors can be non employees or shareholders of the corporation.  Usually, VC or other equity lenders will demand a seat(s) on the Board.  Remember, a shareholder is not ENTITLED to be on the Board, but can be, if elected by the shareholders.
  4. Who will the Board elect as officers?
  5. What will each officer receive as salary?
  6. What restrictions, if any, on the resale of shares.  Can a shareholder sell his shares to an outsider? Can one shareholder buy the shares of another shareholder, thus gaining a greater percentage of the total shares issued? Or, must they be first offered to the corporation.  Should they be offered to the other shareholders prorate? If so at what price and within what time limits? Interesting questions, yes!
  7. Will you adopt a formula for determining the value of the company, such as gross profit, a multiple of earnings (EBITA-earnings before interest, taxes and amortization), or have an independent appraisal? Why do this.? Keep reading.

 

Are you thoroughly confused now?  Don’t be. Just as you when you start to design a computer program you build a basic structure. A structure that will support all of the various additions you know will be needed, as well as providing (hopefully) for those totally unexpected situations. Stuff happens.  Often times the “stuff’ turns out to be a great opportunity.  Well, that’s what you are doing in creating a corporation.  Building a structure around which you can run a business.  A business that will go in directions you will not always be able to anticipate.

 

There are other items to be considered in drafting a shareholders agreement, but you get a gist of what is required.  That is the easy part.  Now comes the hard part.  The “what if” game.

 

The “what if game” consists of a series of questions (no set number) concerning situations that will occur that and will effect the legal control of the corporation, as well as the direction in which it will grow-or fail.  Some typical “what if” questions

 

What if:

 

A.     One of the shareholders gets divorced and his shares are subject to be taken by his/her spouse?  If that happens, you now have a different person to deal with (your buddy is now selling cars in Denver), whose needs and desires may be completely different than your original shareholders.

B.     What if a shareholder dies?  Same as above, especially if it goes to a minor child! Who gets his/her shares? Is that person(s) bound by the shareholders agreement?

C.     What if a shareholder files for personal bankruptcy. Can the trustee in bankruptcy sell the shares? If so to whom? What if another shareholder buys the shares and now becomes a majority shareholder.  Stuff happens.

D.     Will a “capital call” be permitted (example follows).  This is absolutely critical, It will mean the difference between loosing control of the corporation, being retained as an employee or being stuck with stock in a non public company that is illiquid.

 

Let me give you a real life situation.

 

When you first start out you need capital so you can do R & D.  In your case, you have the deal of a life time.  A school that will provide you with whatever you need (I assume within reason) to see if your idea has real world value.  At this time you do not have to deal with VC’s, or individual investors.  But, if your ideas become valuable, then the financial game changes dramatically. 

 

One of the most used (abused?) ploys that will guarantee the originators of the company will loose control, occurs when working capital is provided from a source (not a lending institution) that takes an equity position. The investor will put X dollars into the company in exchange for a percentage of the total shares of the corporation.  Naturally, this means a corresponding dilution of the existing shareholders percentage.  Remember, it is not the number of shares an individual holds, it is the percentage of the shares issued that counts.

 

The real problem comes, not when business is bad, but, on the contrary, when business is good and the corporation is beginning to have some real value.  When this occurs (and don’t you really wish to happen as quickly as possible so you can cash in) be cautious.  Be very cautious!

 

Suppose in the scenario above, you bring in an outside shareholder, who, for a modest investment secures a small percentage of the shares.  No problem, you say.  You and your “buddies” hold the majority of shares, you say.  OK, what if you need capital to survive or to cover the costs of finishing your product, which is over budget and running longer than anticipated, or simply to expand on your product line (all of which will occur)?  Well, without a detailed set of preconditions in the by laws (the rules that you agreed to use to govern the corporation) or a specific restriction in the shareholders agreement, any shareholder can ask for a “capital call”.  For example, if the corporation needs $1 million dollars to continue, a capital call requires each shareholder to provide an amount equal to his prorate share, based on the percentage of issued shares held.  So, if you own 25% of the company you are required to provide $250,000 of new capital.  Can’t do it? Well guess what?  The investor with a small percentage of the stock is able too (surprise!) and will.  If he/she does, then the shares of those shareholders who cannot ante up are diluted and the small investor now commands a majority of the shares. The company is now his/hers.  With the possible exception of Steve Jobs, no single individual is irreplaceable!

 

Another real world scenario.

 

In order to get working capital, the corporation is asked to issue more shares. 

 

Another word of caution is needed here.  As an unregistered corporation (with other state securities regulators or the federal SEC), can you simply just advertise or approach as many potential investors as you need, until you secure enough commitments to buy stock. Absolutely Not. Virtually all states have a numerical limit on how many investors you can actually approach. That’s right.  You can only approach a specific number of potential investors.  Approach more than permitted and get caught? Trouble, my friend, trouble and that starts with a T and (well you get the point).  In addition, there are strict regulations as to what information you must provide and even the format you must use.

 

Like poker, the player who can control a majority of the shares, either through his own holdings OR IN COMBINATION WITH ANOTHER SHAREHOLDER(S) (your buddies) wins.  That is to say, he/she can now name the Board of Directors and thus hire/fire any officer or other employees.  Acting through the Board, the majority shareholders can determine the direction of the entire company.  If, as a founding member and shareholder (now in the minority) of the corporation you do not like the direction the Board of Directors is taking the company, well that’s just too bad.  See, stuff does happen.

 

I am very surprised (pleasantly) that Waterloo has a student-friendly policy in terms granting students equity in their work product.  I know of few institutions or corporation that will provide all of the tools to develop a product and just give it to the developer(s) with no financial strings.

 

With that as a given, I strongly recommend you speak to whomever has the authority to make that decision and get them to “sign off” on your project and any and all devices, concepts of whatever may develop (you need an attorney to draft the sign off document to ensure it is complete).  This will ensure you will avoid a great deal of difficulty if an outside investor wants to be an “angel.” While this might be somewhat delicate, I would not be surprised if Waterloo has faced this situation many times and is prepared to address your concerns. It is just good business/legal practice for all parties involved.

 

OK, so what next.  First, a brief summary of  US corporate law.  Unlike Canada, there is no federal corporate law.  All corporate formation is governed by each of the 50 individual states.  While there are some technical differences, the laws of the various states are fundamentally the same. The legal/state fees are universally modest for a start up corporation (US $750-$2,500 ).  Your attorney will file the necessary papers and incorporate in his/her name (or the name of his paralegal). The process can be accomplished usually within one or two days. The attorney will buy a standard “minuet book,” and sign over the corporation to the clients. The minuet book is universally a black loose leaf binder, which will contain a basic outline of the corporate structure called by laws.  By laws are particular to each state (some modification can be tailored to the particular situation). The book contains the physical shares that should be removed from the book and given to each individual investor.

 

Regardless of the state in which you choose to incorporate, you are free to do business in all 50 states. Don’t listen to the ads that tout Nevada as a tax free state, or similar promotions. If you incorporate in Nevada but your business is in New York or other states. you are still subject to state taxes and of course always to federal taxes. Depending on the nature of your business you may still have to REGISTER your corporation in another state.  Registration simply requires filing a notice with the Secretary of State of the particular state and paying a fee.  You do not have to reincorporate. You MUST secure tax advice BEFORE you act.  All of this is pretty routine stuff, so don’t panic.

 

When you incorporate, use a lawyer.  DO NOT use one of these self registration companies’ forms that you buy at a stationary store or over the internet. You will need a lawyer to draft the shareholders agreement and a good lawyer (they are out there) is an essential part of your team.  The team you need, from the beginning consists of lawyer, an accountant and a banker.

 

Ok, so now you have a corporation, a shareholders agreement and you and your associates are ready to…to do what? Having a patent grated is a real achievement, but in reality unless you are prepared to defend and exploit your patent, it becomes just a nice part of your resume. Greg has very succinctly outlined the issues concerning the holding, selling or licensing patents, as well as directing you to various sources if you decide to actually build something.  But to really “cash in” on your idea you must actually start and operate a real business.  This requires an entirely different set of skills then those that enabled you to create the next “Google.”

 

Creating and actually operating a real business requires you become familiar with terms such as: a business plan, cash flow, balance sheet, profit and loss statements (P &L), gross profit, net profit, pay roll, withholding, corporate tax returns, dividends and many, many more. Oh, and did I mention cash flow?  Of course I did, because that (and your business plan) is by far, the single most important accounting report you must create and be able to understand.

 

SOMEONE MUST HAVE THE ABILITY AND THE INTEREST TO MASTER THE REQUIRMENTS OF ACTUAL OPERATING A FOR PROFIT BUSINESS.

 

If you decide to develop a business, the first order of business is to write a business plan.  What, how and why is for another time.  Suffice it to say, you must have one to attract initial investors. Without it, your chances of getting serious money (by that I mean a commitment for on going financing if you reach designates benchmarks) from serious money people is slim and none  With out an investor(s) you will be reduced to getting money from your credit card, a second mortgage on your and/or your “partners” house, or what lawyers call FF&I sources. FF&I stand for Friends, Family and Fools! ‘nuff said!

 

Is there a market for very small start up companies?  You bet there is, today.  Maybe not tomorrow, but today for sure.  Please look up the “Market Place” section b1 of the June 1 addition of the Wall Street Journal.  The lead story is headlined “Pick of the Crop.”  Let me just quote a few lines:

 

“Giants are on the prowl in Silicon Valley.  Microsoft and IBM, each aiming to forge ties with-and sometimes acquire…promising companies that make software and other products for big business…Microsoft has acquired 22 companies and IBM made 16 acquisitions….The buying spree is music to the ears of venture-capital investors, who make money only when the business they in which they invest go public or are bought by another company”

 

NOTICE.  All of the small companies that IBM and Microsoft sought out are IN BUSINESS NOW.  They maybe small but they have attracted VC money and are ready to grow or be acquired.  In other words, they are operational.  They have a business.

What did they have to do to get started and attract VC money.  SEE ABOVE.

 

Look, I could go on and on and make this blog a 400 page text book.  I just hope you get the basic idea of what you are about to undertake.  Put a good team of professionals together and GO FOR IT!.

Any questions?

 

 

   

 

 

 

posted June 4, 2006 9:49 PM by Greg with 2 Comments

Commercializing a University Engineering Project

 

From a student at UofW.  She's interested in knowning how she and her team can best patent and commercialize a device they intend to build as part of their 4th year engineering design project.   She asks some very good questions, the answers to which hold true for any kind of business endeavor.  Her email to me is below:

 

-------------------- 

 

Hi Greg,

 

I have a question for you about how students can make the most of their 4th-year projects.

 

At the University of Waterloo, where I am a student, every engineering student has to participate in a 4th-year project course.  Typically, each project has a team of four students.  There is usually a prototype of some kind that is created by the team, and sometimes a patentable invention.  The university's intellectual property policy says that the students own their own work.

 

Typically, after the project is over, the team disbands, and the project goes no further.  It seems to me that there is something of value that is being created, and then it just evaporates.  My question for you is how can students in such teams best protect and benefit from the value that they are creating?

 

I have the feeling you're going to say "It depends", but upon what does it depend?  What considerations would you take into account?  What possible configurations could work?  Perhaps you could outline several scenarios and say "in such and such a situation, this would tend to be your best bet."

 

To give you an idea of what I want to know, here's an example. 

 

Let's say that a team of four people has invented something that is patentable.  They have done a patent search.  They have done market research and believe that there is a large market for their invention.  They have a prototype which they have demonstrated to some members of the target market, who have given positive feedback and indicated that it would fit their needs better than anything currently available.  However, the student team does not have the resources to manufacture a finished product.

 

What happens next?

 

Should the team members apply for a patent?  In what circumstances would it make sense not to?

 

Assuming they do apply for a patent, should they put all of their names on the patent as individuals?  Or would it make sense to incorporate a company, assign shares to the team members depending on some combination of how much they contributed to the creation of the intellectual property and how much money they put in, and have the patent assigned to the corporation?  What kinds of issues come up when choosing the configuration of who has how many shares, and the process of incorporating?  What can be done with such a company, assuming it is created?  Is there a better way to structure things?  How much would lawyers need to be involved?  Would there be a need for capital beyond the amount needed to pay for getting the patent?

 

What if all of the team members do not wish to run a business, and would rather move on to other things?  Is there still a way that they can get some money for their invention?  What if one or more team members wishes to attend grad school, but might want to start a business after finishing grad school.  Does it make sense to get the patent and hold on to it for a few years?  Or would it make sense to get the patent and sell it immediately to a large company that does have the resources to do manufacturing?  How much money could they expect to sell it for?  Would it be substantially more than the fees needed to get the patent?  What else could they do with the patent?

 

If some or all of the team members do want to turn the project into a startup company, what would be their next steps?  Are there things they should be aware of and do in the early stages of the project?  At the end of the project, would they be at a stage where they would be attractive to angel investors, or would they need to do some other things first?

 

Provided the team has a good grasp of how their prototype works, how hard is it to make the leap to manufacturing a finished product?  Is it easy to outsource the manufacturing?  Is this a question that is industry-specific and invention-specific, or are there some general rules of thumb?

 

Is there anything else that you think it would be helpful for a team of students to know, with regard to such projects?  I'd appreciate your perspective on such matters.

 

Thanks,

 

<name removed>

 

 

 

 

There’s a lot to answer here, but they are great questions.  I think you are wise to be thinking of commercializing your 4th year project…you and your colleagues will seldom in life have the opportunity to invest all your time and passion into an invention while being fully supported by a major institution (in this case, UofW). Even if you can’t commercialize it, you’ll at least have learned some excellent lessons in business alongside the technical ones in doing that project.

 

Ok, so before I get into it, keep in mind that I am not an attorney, so the advice I give you here is based on my experience, most of which is in the US (laws can be slightly different in Canada).  So it is important you vet what I say with attorneys in Canada before you take any specific action (I can help you there by putting you in touch with some)…but I do believe what I’m about to tell you is generally applicable.

 

First thing, let’s talk about patents.

 

PATENTS AND INVENTORS

 

The first thing to realize is that having your name on a patent doesn’t mean or imply anything monetarily or ownership-wise.  Your name can be on the patent as the discoverer, but that does not mean you own it.  In most cases in industry, when a researcher in a company discovers something patentable, it is established practice that the company they work for will put the researcher’s name on the patent.  However, the company actually owns the patent and does not have any responsibility to compensate the discoverer in any way.  It is in the agreement the inventor signs when he/she works for the company.  Basically, the company is providing the infrastructure, support (and salary) for the researcher so that they can make these discoveries and, in exchange, the researcher gives the patent to its employer.  Of course, the inventor’s name is on the patent, so if/when the inventor looks for other work, tries to get a faculty position at a university, etc, they are acknowledged as the inventor and it is, of course, a real asset for them to have that…but again, that doesn’t mean they received a dime from the discovery.

 

What I’ve described is true no matter how many people are on the patent.  You are fortunate you are at UofW.  UofW is much more generous with regards to granting IP ownership to its students (even though it is providing all the infrastructure).  But one thing you should do is make sure you understand, explicitly, is how IP ownership works in the event a student invents something in the context of their education.  What, if anything does UofW retain? In many universities, the university retains some or all ownership of IP created by its students and faculty.  I do know UofW is especially generous in this regard, but it behooves you to check out exactly what the terms would be.

 

Anyway, in terms of patents by all means: put everyone on the team on the patent as discoverers. It costs nothing to do, is great prestige for all involved, but does not, in the end, say anything about profits or ownership resulting from successful implementation and marketing of the invention.

 

And I do think it makes sense to try for a patent.  I can’t think of any  down-side to it accept for the cost of filing and, possibly, iterating back and forth with the patent office as they may challenge all or parts of your claim.  But it is worth it. A VC will definitely prefer it if you have a patent.

 

You should also know, though, that even if you can’t get a patent because someone else beat you to the punch, there is absolutely nothing wrong about contacting the owner of an existing patent and licensing it from them.  Typically, if they haven’t succeeded with it in any big way, they may only ask for some royalty amount in the event you succeed. It can cost less than you think.  Microsoft Research, for example, makes their patents available for licensing very inexpensively.   Remember, you can patent a device that uses one of many patented inventions so long as your device does something fundamentally novel.

 

PATENTS AND HOLDING COMPANIES

 

So, let’s assume you get this patent.  What is most common to do is, as you have suggested, create a separate company to which the patent owners license their IP for some period of time. Now, you can license exclusively or non-exclusively to that company. If you non-exclusively license it, then can have your cake and eat it too:  your company can try to realize a marketable product around your IP (by IP, I am referring to the Intellectual Property, i.e., the patent) at the same time as you license it to bigger players to do the same.  Of course, the bigger players may want exclusivity, so you’ll need to cross that bridge when you come to it.  But, the choice is yours since you own the IP, and that is a good place to be in.

 

At any rate, let’s assume you exclusively license the IP to a company you create with your partners (this is what I would recommend.)  Once you do that, you can now decide share ownership and terms for the different people involved.  If someone wants to go off to grad school and won’t really be involved, all parties may agree that a minority stake with limited rights is the best way to go for him/her.  That way, they go to grad school with a name on a patent as an inventor, they have upside if the patent results in a big, money making invention, but they don’t have to be involved in the day-to-day of running this company (and they can’t come back later and make trouble either!)  You’ll need an attorney to help you craft this company…it is critical that you structure things such that shareholders can’t sell their stock to outside parties,  that it doesn’t transfer to their families on event of their incapacitation/death, that they CAN be diluted if you bring in investors/raise capital later…all important things I won’t get into here…at least not in this blog post (it would really take a blog of its own.)  If you like, I can do another post that goes through some of the basics of how you set up a corporation.

 

For the partners that will be involved day to day in the company, you will arrange it such that they will sit on the board of that company and have the legal authority to run it, guide it, raise capital and, of course, they will have most of the shares.  It is very important that people who are not going to work full-time for this company in productizing the invention, understand that they give up their say.  You can’t have your cake and eat it to…opportunities are timely things, and the folks that are running the day to day will need to be able to make decisions without consulting the entire cabal for consensus.  Net net, if one of the discoverers goes off and does something else, they can (and should) get some royalty or payout…but that person should *not* expect to have say in the operations and the people running the day to day should not allow for this.  When people are too “nice” and they to create a democracy such that everyone has say at all times, they strangle the company later and end up destroying their personal relationships.  For example, a minority shareholder can block the sale or licensing of a product and, in essence, kill the company.  One of the first things a VC will ask you is how your company is structured.  What they are really looking for is situations where their investment can be capsized by some rogue equity holder.   They like to see a clean, simple, structure that they can gain control of.

 

It is also important for everyone to realize that unless you have cured cancer or figured out large-scale quantum computing,  the patent and invention is often only a small part of the effort.  Getting the product to market and making money can be most the effort. So inventors who do not participate in business side of things need to understand this.

 

So, it is not normally at the patent stage where you decide who gets what, it is only when you create a company, and license the patent to that company that you decide roles, responsibilities, and who will get what if/when good things happen.

 

Note that even if you decide you want to license your invention to bigger players and you don’t want to develop any product yourself, you may *still* want to create a separate company and license the IP to it.  That company, then, is your shell, and it is that company which will license the IP to other companies and will take in royalties and THEN distribute it according to the rules you set up for that company.    Of course, if you would like to go to the dark side and create nothing, you don’t even need to license your IP to anyone in order to make money:  you can become a “Patent Troll” like NTP, waiting for big player like a RIM or Microsoft to “violate” your patent, and then your shell company can sue them.  Or you can sell/license your patent to a patent troll, let them do the work, and collect money if they score.   But please don’t do that…I beg you.  Create something, advance the world…don’t be a troll.   

 

 MANUFACTURING

 

In most cases, manufacturing is actually pretty simple…it is only a matter of capital.  Without knowing the invention, it is tough to say for sure.  If your invention is biological, or involves something like quantum computing or nanotech, then manufacturing can be a complex and expensive affair.  However, if you are manufacturing something that is based on commercially available technologies (like consumer electronics,  plastics, a design using small-scale electromagnetic devices without especially fine tolerances, what have you) manufacturing is generally inexpensive and easy to do.  There are plenty of brokers who can take your design and outsource manufacturing to China and handle all the importing issues.  The trick is really finding a good broker. 

 

It isn’t that expensive to do, factories in China exist to do nothing but this kind of work. I looked at outsourcing an invention, I think it came in around  $3-$5 per device and that was high, because I was producing only low quantities.  The Ukraine is also a place I’ve had electronics work done. They have a lot of cold-war era medium-tech factories that are hungry for work.   If what you have involves a printed circuit board, it is typically pretty cheap.  Of course, if your design relies on parts from other manufactures (say you use an ATMEL microcontroller) you have to buy the parts obviously.

 

I’d like to give you an estimate, but I think I need to know more.   The real cost in outsourcing manufacturing is not the actual production, it is the gearing up of factories (or “tooling”) to produce what you want.  The more complex and unusual your device, the more expensive this tooling will be and the more devices you’ll need to commit to having made to make the tooling up economical.    Towards this end, a device utilizing changeable firmware and/or FPGA technology is often better than hard-coding things in circuitry…the more flexible the device, the more likely you’ll be able to fix and add features to it later without changing your manufacturing.  Along those lines, if you can make do with a mold or case that is already mass produced, you’d be better off than creating a custom mold.   Anyway, a good outsourcing broker can advise you here.  They take a percentage, but it is still a good way to go for folks new to manufacturing.

 

One final note on outsourcing:  Government in Canada at a province and federal level is pretty bullish on creating tech companies and manufacturing.  So, depending on your device, there might be incentives to use someone who manufactures locally. You might be able to get a grant/tax credits, etc. to do some of your own manufacturing locally, but you probably aren’t ready for that just yet.  But do keep this in the back of your mind.

 

 

HOW TO GET STARTED

 

I do think you are very much in friends&family and/or angel investment territory.  You aren’t ready for a VC (they normally want to see revenues and working device.) You have a concept, but not yet a prototype.  Once you create that prototype you need help setting up a corporate structure, protecting the IP, finding a market and manufacturing.   If your invention is solid and there is no “prior art” (i.e., existing, patented inventions similar to yours) all of these things are straightforward provided you know the right people to go to.  You simply can’t afford bad advice on IP or corporate structure.

 

An angel or early stage investor would normally take care of all this for its investments. We’re no different…So as a next step, if you like, you can contact our CTO, Sheldon Fernandez (). He’s usually at the Accelerator Center, just a few minutes’ walk from campus. Talk to him about what you are looking to do technically.  Even if it isn’t something that fits what we’re looking for, he’ll nonetheless be happy to direct you to legal counsel for IP and corporate structure that we’ve used before. 

 

Personally, I’ve always been interested in the 4th year design projects from the prospective of spinning them off into companies upon graduation of the team.  We’re working with UofW on getting more involved in engineering projects of all kinds, but the trick is not to, in any way, subjugate the potential learning experience for commercial considerations.  The first priority of those design projects is to learn the science/technology…you are, after all, in school to learn.  Commercial considerations must come second.  However, where commercial consideration demands cutting edge and especially challenging technology, I think it is a great idea to patent the concept and look for commercial outlets from the start.

 

posted May 22, 2006 10:41 AM by Greg with 0 Comments

Networking Tips for the Social Neophyte

NOTE: the following is an upcoming article for the Impact online magazine.  It is a column I am now doing for an entrepreneurship magazine targeted towards Univeristy of Waterloo students.  These UofW students are also members of the Impact organization (www.impactconference.ca), a student run enterprise which provides resources to help encourage and foster entrepreneurship.  I thought it might be useful to other folks, so I am posting the article here. 

As you read this, keep in mind this is mainly targetted to students who are interested in becoming entrepreneurs.

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Networking Tips for the Social Neophyte

As an entrepreneur, you’ll regularly find yourself in an awkward position;  you’ll need something from someone who doesn’t know you.  You may need a technical opinion, introduction to someone else, funding, business advice…maybe there is someone you respect and just want to meet.  Of course, these people might be wealthy, powerful, brilliant, intimidating…possibly, they may be all of those.  

And then there’s you.  Young, technically knowledgeable, full of great ideas and energy, but let’s face it: the only networking you know how to do probably involves Ethernet.

So how do you do approach someone you don’t know but need to know?  Assume you’ve just heard someone speak at a seminar, and you want to talk to them afterwards. You will probably be relieved to hear that the ability to smooth talk doesn’t figure into it much.  You don’t need to be slick, you need to just remember (and adhere to) the following rules of engagement:

a)      Know what you want from a person *before* you approach them.

b)      Introduce yourself with a polite greeting. 

c)      Get to “a” quickly

d)      Listen to what they say

e)      Secure follow-up action

f)        Disengage

 Call this the IPNP, the Inter-Personal-Networking-Protocol.  I won't hold my breath for IEEE endorsement, but following these rules will help you develop meet, talk to, and develop initial relationships with people you encounter in social situations.  Let’s go through them.

 A: Successful people have limited time.  So, when they meet you, they subconsciously try to do one of two things within the first few seconds: 1) disregard and dismiss you as quickly as possible or  2) if you seems credible, determine what you want of them and whether they are interested in helping.  No matter how friendly they may be, this internal process is probably underway after “hello.”  Therefore, know what you want of the person and be prepared to communicate that clearly very early on.  Consider it like the thesis statement of an essay (remember writing those in high school?).  If you know what you want, that will come across.  It will keep them from disregarding you.  If you are not clear on what you want in your own mind, you will appear ambling and will be shown the door.

 B: There’s nothing wrong with being formal.  When you are young, and you try to be slick it will come across a bit garish to the more worldly.  Be polite, friendly and a little formal.  It shows respect and sets you apart.  When a more established, older person, sees a young, well-dressed, polite young professional…it will impress them right from the start.  Seems old school and silly, it felt that way even to me when I was younger.  But as I’ve gotten older and busier, I need to “thin slice” and size up people quickly.  Polite professional demeanor is something I look for.  Lack of it sets off an immediate flag.

 C: Make it clear what you want from the person.  Don’t try to engage them in small talk.  You are not good at that and your counterpart doesn’t have the time and interest nor, probably, do you have enough shared experience in life.  So, bring up very early on what you want of the person.   You might think it is rude but actually, brevity is much appreciated by true business people.  Business is nothing but the exchange of wants. What you want is the very language and structure of business.  That is, what you want balanced by what they want.  The venn between these two wants is opportunity, the proverbial “win win.” So get to the point already!

 D: If you do A-C correctly, your contact will start talking now.  He/she will respond to you and what you want.  LISTEN.  Shut up.  Resist the urge to speak. If you have your contact talking, you have succeeded in a big way.  Listen to what they say and look for the follow up action (E).

 E: D should turn into a dialog between the two of you.  If you are lucky, your contact will suggest a follow up.  That might be “call me later and we can talk more” or “ok, I’ll introduce you to so and so” or “try what I suggest and let me know how it goes.”  All these are good. They are follow-ups. Congratulations, you’ve succeeded.  Now don’t screw it up.  Move quickly to F.  If the contact does not suggest a follow up, you might not have done C correctly.  Correct if you can.  If there is still nothing, then, you need to suggest the follow up item.  If contact doesn’t seem to agree, hey…that’s life.  You tried.  Move to F.  If your goal was just to meet the person and/or get a quick opinion on something, you don’t need a follow up item.  Move to F.

 F: Disengage.  Make your exit.  There is some traditional advice given to new salesman, “know when to stop selling.” A variant of this advice is, “Don’t sell when their signing.” There comes a point where you have “made the sale”.  There is also a reason a TV commerical is 15 or 30 seconds and not an hour and a half.  If you keep on jabbering, all you can do is un-sell what you just sold.  So, if you have your follow-up item and/or you’ve communicated to this person what you needed to and D went well, then it is time for you to go.  Relationships are built from repeated small touches in different circumstances, and NOT from long, deep encounters.  Do not cling, hang around, or, as evanglists at Microsoft joke about, don’t “dock.” (they are referring to that particular breed of seminar attendee that ambles up to the presenter after the seminar and won’t leave.  What you in Canada might call “keeners.”)  Rest assured, if you hang around too long, you’ll wear out your welcome and you’ll force your contact to invent reasons to remove themselves from your presence.  If that happens, you’ve undone the good work in A-E.  So, better you remove yourself rather than have the contact start giving you hints like looking at his/her watch or saying, “I have a call I have to be on.”  End the encounter like you started it, follow the rules of B.  Thank the person for their time, quickly reiterate the follow-up item, and excuse yourself.  When you excuse yourself you are actually asserting power.  Your contact will be impressed at some subconscious level, and he/she may actually extend the conversation and keep you there (subconsciously they are trying to take the power back.)  The psychology of all this may be the subject of a future article, for now, if you excuse yourself and they keep you around, congratulations!  You’ve really impressed your contact. 

 Well, I’m well beyond my word count for this column.  So, I’ll conclude with this offer:  next time I speak at UofW, try these out on me. Or, for those of you interested in starting a venture with Infusion Angels and giving us a pitch, try these techniques out on any of my staff…I just bet you’ll find them and, perhaps, most successful people to be IPNP compliant!

 

posted May 8, 2006 3:05 PM by Greg with 15 Comments

I Am No Walt Disney, But I Have a Mouse
So, You Want to be a Venture Capitalist?

I was at Disneyworld a few weeks ago.  Just me and my four-year-old daughter, Jaycee.  I wanted to go there as much as she did…To tell the truth, I was getting kind of down about myself in a business context …things were and are good with Infusion Development, but I don’t run the day to day anymore, and I just didn’t feel I was doing enough as CEO to push the envelope...

So, I knew my daughter would cheer me up.  Also, I really like Disney…more than an adult normally would.  It isn’t for the rides or the nostalgia, rather,  the environment at Disney prompts me to think somehow, it motivates me.  I think it because I really admire the business behind Disney, and I am a kind of business groupie who draws inspiration from businesses that do things right.  When I’m there, I think that for all the excitement over massively online games like Everquest, Ultima or what have you, here is an alternative reality for real…something you really can walk through that’s been here since the 60s and keeps growing.   I love how clockwork it all is, how the fantasy is perfectly preserved at all levels.  Everyone from the ticket-takers (they always call little girls, “princess”) to the hotel clerks to the sanitation, to performers, to ride people… all completely working together in the context of that vision. And what a vision, from videos, to films (TouchStone/Buena Vista), music,  Disney Stores in every mall, media (Disney Radio), TV (ABC), to live-action parks, rides, even real estate (you can live in a real Disney town, for real!  Disney creates “nostalgia towns” complete with “Main Streets” that people can really buy houses in, take a look at “Celebration”, http://www.americansc.org.uk/Online/Celebration.htm)

This is really the most impressive thing to me…a company that can span many different business lines, BUT effectively relate them, make them work seamlessly together as a “Gestalt,” cohesive entity.  Think of how a Disney film spurs visits to the park, or how the park spurs sales of movie tickets, DVDs, clothes and toy sales.   And while you are at the park, listen to the music played in the square of Downtown Disney, your kids will be buying those CDs.  Love “Main Street USA?”  Well, you can live in a town like that for real, just talk the Disney “Celebration” realtors to see some houses.   And now, with Pixar being acquired, Jobs becomes a big investor in Disney, so now add Apple, iTunes and all that to the mix.
 
My daughter and I both get something out of our Disney trips: we both inhabit our dream worlds for a few days and walk among our respective castles…I think she and I are impressed by the same things but for different reasons.   And, as I said, I was a bit down, so I thought this trip would recharge me a little.

The Next Big Thing…

Now, in any objective evaluation, I have nothing to be “down” about and deserve no sympathy. Infusion grows 20-30% a year, I have an ever growing team of very, very talented people that I genuinely enjoy spending time with, our client base continues to deepen and expand…if you asked the 25-year-old me what he wanted, it would be everything I now have and then some…

But that’s the thing with getting what you want: you start looking at the next thing.  

And more the point, how do you pursue “two in the bush” without hurting the “one in your hand?”  You only have so much time and attention at the end of the day…and I’ve watched a lot of other companies, some run by people I knew, destroy themselves by “reinventing” what they did, all at a time when what they were doing was actually working well for them…maybe they were a services company doing fine, but they decide to become a product company because they liked the multiples and revenues better,  or maybe opening some tremendously taxing new line of business that they didn’t know a lot about.   In the end, they kind of implode.  Lose your focus and you die, of this I am certain.  

And that is why I was a bit down.  It just seemed to me that for the tremendous number and quality of our contacts, our reputation, the cash we can generate from consulting revenues which we can re-invest, and the almost ridiculously high quality of people we have, something was still missing.  Infusion was great, but just not as great as it could be.  We should be able to grow exponentially, not just linearly.   [Note: the mathematically inclined reader may point out that a 20-30% growth per year is a form of exponential compounding growth, but you know what I am saying.]

I’ve read some about Walt Disney and a lot more about Disney the company.  I wonder if Walt, in the very early days, thought, “man, all I have this cartoon mouse.  It’s great and all, I could stop here…but I just have to do something more.  Use the mouse as leverage to get somewhere else, but still keep it at the center somehow.”  

I was thinking about this, walking with Jaycee,  when the crowd started to thicken and music came from the distance. A Parade.  We found a spot, and waited.

Turned out to be a tribute to Walt Disney.  First float was just Walt, drawing a mouse on a canvas.  After that, we see Cinderella, then Snow White…the floats progressed through Disney history, we see the classics followed by newer things like Lilo and Stitch, Little Mermaid, Aladdin, newer, popular stuff.  The gist was, “look at the humble origins, and look where Disney went from there!”  

As I was watching the parade unfold, I was thinking of what I’d read.  Disney was in the doldrums in the early 80s, ripe for take over.  Latest films were tanking at the box office (remember, Disney’s “Black Cauldron?”)   Walt himself was in deep freeze (he was cryogenically preserved,) his brother Roy was running the show…but the guy who many think revived it was CEO Eisner’s guy, Jeffrey Katzenberg (one of the big wigs of Pixar today.)  Little Mermaid, Lion King, Aladdin, Pixar, all that was him…meanwhile, Eisner and his crew put out all the Disney movies for sale on VHS/DVD with great resistance from the Disney board.  [My own family even benefited directly from this “buck the orthodoxy” trend at Disney.  My brother wrote a script in the early 90s called “The Mighty Ducks.”  His timing was great: Disney had decided at that time that it actually wanted to be a live-action studio (not just an animation one) so when they got Steve’s (Steve is my brother) script, they decided to make the film. That was my brother’s big break.  From there, Disney went on to buy a hockey team and name them, of course, “The Anaheim Mighty Ducks.”]

They expanded the park and put it on good financial footing…up until then parking was only $1 and park fees were similarly low. They saw that that low price was artificial and unnecessary and that people would pay more…so they upgraded everything and charged much more…and people did pay.  

They unlocked all the “lazy assets” Disney had, for example, they started to sell “classic” movies as DVDs (seems obvious, but to the Disney orthodox management, it was sacrilege: if people owned the film, they felt it would devalue it. Why would they come to the theaters?  The magic would lost…Snow White should be ephemeral, not something on Mr. Average America’s shelf)  Also, why not merchandise more? Lines of clothing…not just bought at Disney on a park visit, but why not in a mall? They created the Disney Store.  The list goes on.  Today, Disney today is a vastly different enterprise than Walt would have envisioned.  Or maybe not. He created an environment that others who worked with him (and came after him) could keep building…yet the mouse remained at the heart of it all.  

I am no Walt Disney.  But, I do have a mouse.   Infusion Development.

Time To Start A Venture Fund

So after the parade it occurred to me. I knew we needed to leverage Infusion, but still be able to invest in closely related businesses without damaging our core.  In essence, what we needed to do was add an incubator and an “angel” venture capital fund as another tier, one parallel to Infusion.  Our venture fund would be called “Infusion Angels” or IA.  

While many successful companies have started angel funds (angel funds, for those who don’t know, invest at the earliest stages of company, before there is even a prototype.  A lot more risk, but smaller investment amounts than non-angel VCs.) we are uniquely in a position to do it.  For one thing, Microsoft is constantly giving us opportunities to create products in any number of different verticals.  They are always coming to us saying, “Guys, if you had a product that did X, we’d push it in 500 accounts and bring you in if you had this.”  And we know the tools and business well to put together these products in very, very short time frames.  But the problem is, Infusion isn’t a product company…and every time we chase a product%2 C we kill our consulting practice a little: we lose revenue, consulting resources become unavailable due to the product, and we gain debt.  The lost consulting opportunities of pursuing product are huge, not to mention the loss of focus.  So we’d only be able to chase maybe one product opp a year, and even that would be at a great cost.  We’ve also “been there/done that”;  we’ve had a couple products earlier in our history, one called the “Infusion Antenna,” another called the “Tibco Bridge” and CodeNotes could be considered a product.  More on these in another blog, but Infusion hasn’t been successful as a product company…we were told very early on, by Larry Smith actually (economics professor at University of Waterloo and kind of mentor to us) that if you want to be successful in products, you have to have people that are dedicated solely to the product…thinking about it every day, every waking hour.  Nothing less than total dedication will make a product successful, you can’t have people multiplexing between two businesses.  But Infusion development couldn’t afford to take its’ best and brightest people and pursue products…if we did that, we’d just end up hurting the golden goose for the pursuit of something uncertain.

BUT…Infusion Angels could take those leads, fund them, Infusion could manage and staff them with talent that takes
equity in the product venture (a separate company from Infusion with its own staff) for relatively low salary.  And where do we get those people?  University of Waterloo, where we have a great rep, know everyone from the dean down, and are well known as a desired employer for coops and full timers.  And where do we house them?  Infusion Development.  And who markets our products?  Microsoft through their salesforce..they are desperate for good products that are based on and pull through sales for their PG3 (Product Group 3) line (that includes BizTalk, SQL Server, SharePoint, things like that).  Also, we have 80 very large, active clients who like us very much and are always happy to hear what we (or more precisely, our portfolio companies) might have to offer product-wise.  Lastly, we have larger VCs as clients of Infusion…so if we can just get our portfolio companies to positive revenues and a couple clients, we can sell our equity out to the larger VCs (and hold on to a little in case of an IPO or something).  Then, there will be opportunities to develop and simply sell raw intellectual property we develop.  There are just so many ways to make money…

So we have ready access to inexpensive yet local top talent,  we have a marketing force through Microsoft (and a sales channel with our existing clients), we have an incubator, we have accounting, legal, a big “in” with UofW, technical expertise, marketing staff, big later-stage VCs who are friends AND, perhaps most importantly, we can open this up to Infusion employees.   Infusion Angels gives an end game to folks in my organization that have earned it.  Here’s more on that:

Of Stock Options and Big Dreams

I think almost anyone who works at (or has worked for Infusion) will agree that this company gives you more exposure to interesting, career advancing opportunities than you can get most anywhere else.  Within a couple years you can work with a couple of the world’s largest investment banks in the heart of architecting a new trading system.  With that experience in hand, some of our folks have gone on to be accepted at the world’s top MBA programs, others have moved into levels of serious management years before they would be able to anywhere else. You also get a better quality of peers…that is what most people say, “I’ve never worked anywhere where *most* people were as good or better than me.”

Our salary is at or most often above market, the people are top, management will always listen and take changes on new ideas…it’s a great gig, no doubt.  But the thing I wrestle with is: how do you keep providing new challenges and new levels for your increasingly senior resources to advance to?  After a number of years, the consulting experience can start plateauing a bit.  What can we offer then?  And even for those who remain happy in consulting, working with new technologies, how can I give them an opportunity to make a life-changing amount of money at some point?   Stock options at Infusion Development are only worth something if we sell, which I don’t intend to do for a long while.  And, as with all services companies, you’d have to be really huge when you sell for anyone to make significant money since sales multiples for services companies aren’t that high (See https://infusionblogs.com/admin/blogs/posteditor.aspx?App=gbrill&PostID=225). So what can we do?  Well, here again Infusion Angels can help.

Even though we don’t need the cash, I think it makes sense to open up the fund to Infusion employees (after a period of time with the firm in good standing.)   The ability to invest and participate in a venture capital fund is not something most people ever get to do in their professional lives.  It normally takes a very high net worth and high-level business relationships to get into any fund that is well managed and connected.  Most investment vehicles for most folks will be the dull IRA, mutual fund, what-have you.  Good for retirement 40 years from now, but no chance of any spectacular returns.   However, participation in a venture fund is a rare opp I can actually give to Infusion people that have earned it…something that would otherwise be decades away for them, where they can mix (through our clients and VC relationships) with the real elite of the industry.  All that said, they will need to buy into it, it is not a freebee or a worthless option, I’m really going let them become bonified Venture Capital partners in the fund.  While the amount to buy into this fund would ordinarily be very high, I’ll make the price accessible.  I expect I may also have to lend money to some folks, but that is ok also…if an Infusion person qualifies to become a partner in the fund, it goes without saying that they’re “good for it.” 

Anyway, once in they can offer advice, elect a board member, see what’s going on with the portfolio of funded companies and even offer advice/help out (I think it will be good experience for them to help create and manage small portfolio businesses…even if they don’t succeed, that is like a mini MBA in terms of business experience.)

Infusion Development can finance/lend them the amount if need be, but they will need to buy in…I feel strongly about that.  Infusion Angels is a separate LLC (Limited Liability Corporation) that they will be partners in, called “limited” partners (“limited” simply means they are not legally liable for anything, the most they can lose is what they invest.  The general partnership or GP assumes legal risk).   This way, if  (and I say IF, this is no sure thing) we hit it big in any of our ventures, the partners (including participating Infusion employees) can make tremendous returns.   

Also, IA can serve as a place Infusion folks can go when they want to try to develop a product of their own, something they can have equity ownership in.  If the venture doesn’t work out, no problem, they come back to Infusion Development with a great deal of new experience, learn more in the consulting practice, then try a venture again later.  They won’t have to give up everything to take a shot at something.  And folks who come into our world directly into IA from UofW..well, if their venture doesn’t work out, they flip over to Infusion Development with the intent of trying another venture later.  There can be a revolver between the two companies, so that people in the Infusion universe have a lot of different career paths and opportunities, all within the organization.

Along those lines, the fund isn’t even limited to software, we’ll be looking at a lot of different technology areas: bioinformatics, wireless, pretty much anything UofW has a program for, we’ll be looking at.  We will be listening to ideas from UofW entrepreneurs as well as pitching ideas to them in the hopes they will pick up the banner (as would be the case if Microsoft asked us to develop something, we’d solicit involvement from the UofW talent pool.)

The upshot is, if I can give everyone a chance to take a “moon shot” at the same time as providing a great, core job, I think that will really influens our retention of seniors, already pretty good, even more.  Should also help us recruit more recent “hot shot” graduates, because where else can they have a cool job working with emerging technologies and also be an actual partner in a venture capital company?  Where else can you be an actual VC “angel” before you are 30?  Even if you didn’t make a dollar at it, the people you’ll meet and the experience alone…

So Where Are We With All This?

I’ve put together the core structure of IA.  I also have 3 FAQs that are pretty detailed: General (about the fund generally), Financial (how the fund is structured/how it pays out), and Infusion Development (questions specific to Infusion Development employees.)   What remains is to work out specific details with our attorneys, accountants and to set up the fund, its board, and so forth.  Fortunately, a close friend of mine who is a venture capitalist at Fidelity is working closely with me to help architect this venture.   It is modeled and structured same as the “big guys”.  We’re even using the same attorneys/advisors.  It is helpful to know the right people…

Once the attorneys finish looking over it, tell me where I am wrong and what to change, I’ll put all information up a site at infusionangels.com.   Then we’ll formally start our UofW programs to solicit from and sell ideas to that community, and we’ll be off to the races.   I am hoping to launch in about 7-8 weeks, the summer.  

And then the music starts in the distance, the crowd gathers, and the parade of ventures will begin…

posted March 1, 2006 5:07 PM by Greg with 1 Comments

Why are product companies valued in the market higher than services companies?

A question from a student who attended my "entreprenuership" lecture:

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Mr. Brill, I was very impressed by your talk here at Cornell last Wednesday. You mentioned something about the market value of a service company being 1:1 and somehow the market value of a product company being higher. I didn't get too many details but I'm very interested in finding out more details about this. The reason is that I will be going to work at a company that is sort of like your own, a small consulting company, after graduation. Exception I'm not being hired as a consultant, they are trying to automate some of the consulting services they provide with knowledge management software and turn themselves into a more product oriented company. I'm being hired to lead one of these software projects, which means I will have a fair amount of responsibility in the profitability of the company. My chief question is in your experience what kind of product, or product development strategy tend to maximize the value of the company?

I'm completely new to the business world and I was hoping that you wouldn't mind giving me some advice about this sort of thing from time to time. Maybe my question doesn't even make sense, please tell me if that is the case. I really want to do well at this job. But it will be a challenge and I'm being given more responsibility than most of my peers straight out of school. So I will need to learn as much as possible as soon as possible.

Thanks for your time

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J,

 

A company with a product is valued more in the market (8 to 10 "multiple" of revenue) than a services company (.8 to 1.5 multiple or revenue)because once you create a product, you can resell again and again without additional cost.  A consulting company's product, however, is people...and that makes it more difficult to scale. 

 

If I write a software product, and 100 companies want to buy it, I have no problem.  I print 100 copies, sell them.  Same with 1000 and 1 million.  So your revenues can, potentially scale rapidly while your fixed costs don't necessarily need to change much.  That's the ideal business: fixed cost, unlimited revenue. Conversely, with a services company, if 100 companies suddenly wanted to use you, you couldn't hire enough people quickly enough to fill the demand.  And even if you could, the "product" would be variable (different kinds of people, some better than others) and your fixed costs (salaries) grow linearly with the number of people you hire.  So, the result is it costs a lot of money to scale a services company, where it takes very little comparatively to scale a product company.  You have a revenue that rises lock-step with costs.   So that is why product companies are valued much higher.

 

Because of this, many business owners of services companies are "self hating consultants" and will try to turn their company from a services company into a product company, so they can sell at a higher valuation down the line.  Almost all will fail: a product company is a radically different organization than a services one, and most companies that try this conversion will sink their existing consulting business while they pursue the "bird in the bush" and take their best people out of consulting and put them into product development. Their consulting clients don’t appreciate the lack of attention and quality of resources, and internally, the company splits down the middle and each side tries to steal people and resources from the other (the consulting group wants product guys to help with engagements where the product team wants the best consultants to help out on the product.)  Then, if their product doesn't get the adoption they need in the time they need, they are in trouble.  I have seen this happen a number of times, including companies I have worked for before I started Infusion.

 

Basically, the product space is fierce and competitive.  The same factors that keep consulting firm valuations low are, ironically, the same ones that make it easier to succeed with a consulting/services firm if you are a good business person: it is hard to hire and scale wi th good people, but if you can pull it off you have very little competition compared to product companies.  Plus, as a services company, you have a much larger market to sell to since *everyone* needs IT consulting at one time or another. 

 

With products, however, *anyone* can write a product in your space and enter your space at any time.  Microsoft regularly comes out with a new product and knocks out small vendors. Same with IBM, or BEA, and many others.  If you are successful in a market, you can be *certain* that a big player will move into that market quickly.  Your hope as a business owner is that you get bought by that big player, but that will only happen if you have established a sizable client list with good revenue.  If not, they will buy you for next to nothing or simply compete with you.  With products, you are subject to variables that are far outside our control, and there is a much greater element of luck and timing with products than with consulting.

  

The net net, is that when you are a product company, you face much greater danger of competition, harder, longer sales cycles, more outside variables (you can get blown over when Microsoft, IBM or a well funded entity enters your space) and you will almost always face stiff competition from larger vendors in any profitable space you enter.   But...if you have an amazing idea, and are the first to do something like salesforce.com, or peoplesoft, you can reap enormous rewards.

 

Now, your chief question had to do with product strategies that would be "most effective."  As I have not yet spun off a large product company, I am not the most qualified person to tell you.  I have, however, seen this done a number of times (well and not well).  In terms of methodology of creating and managing a product, I can't advise you...I do, however, have on staff some folks that have done this successfully at other firms and I'll ask them to post their opinions as comments.  From a business perspective, I can tell you that the product group and the consulting group must be entirely separate entities.  One company can't do both.  If you are responsable for product, you need to be buffered completely from the consulting side of things.  This doesn't mean you can see clients or learn what your consultants are doing (you need to, this is how you know what your product should do).  But it does mean that you must *not* have situation where your developers are sometimes consultants and the consultants are sometimes product people.  Make sure your group and your company realizes that products and consulting are two different entities and always treats them as separate companies. 

 

Personally, my approach is to keep Infusion a services firm (it is what we are great at) but I will “spin-off” product ideas as completely separate companies.  This is an “incubator” model and allows me the best of both worlds: a stable, cash generating practice and the chance of big valuations with a product idea.  What is key, though, is that I recognize these are two completely different companies.  When I start a product company, it is a separate entity with its own staff, management, and so on.  If the division isn’t clean, it can kill both companies.

 

 

 

 

posted November 20, 2005 10:38 AM by Greg with 0 Comments

Comment on Category 5

I got a comment on my last post, so I am taking that comment, posting it, and am going to add some thoughts here.

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re: “Deathmarch” or “Category 5” Project @ October 18, 2005 8:44 PM
I believe I was involved in this project for a short period of time. I've since left Infusion [starving student went to pursue an MBA at a top school on full scholarship, Infusion management was among those who provided references during his application process], so I think I'm in a position to give honest feedback and I'd like to post my thoughts.

First, I agree completely with taking on these projects. Working on this project at the end of my time at Infusion reminded me of why I got into software consulting and Infusion in particular – and upon reflection, I think it was the lack of projects like this that was a leading part of the frustrations that I felt at various times. I’d say of my last 9 months working at Infusion, this project was probably my most enjoyable/rewarding. As ambitious employees, and traditionally Infusion has been staffed with ambitious employees, these projects are your opportunities for growth. From almost everyone that I’ve admired, either from afar, or up close, I have always received “overdelivery” as a key piece of advice. Most recently, Jack Welch, former CEO of GE, spoke at my school last week and said essentially the same thing. In fact, if I remember correctly, in his last book, Winning, he has a chapter on how he did that when he first started on at GE. Someone once told me - doing what is expected doesn't help you advance - it just allows you to keep your job.

I think this is key.  There is no shortage of people who can happily accomodate a calm, clear situation and only want to put in only as much energy as specifically required to solve a well defined problem.  However, the people who advance rapidly in life are those who take on and can manage complex, difficult circumstances...those are the people management comes to rely on and who, ultimately, rise to the top of management themselves.

Regarding the handling of the project ... overall, I liked the way that Infusion handled things during this time. I think putting Steve on the project definitely showed how important the project was. Also, the pure dedication that Steve put into the project showed an even higher commitment level (it’s one thing to be there, it’s an entirely different thing to work 100+ hour weeks for months straight). Finally, and this is characteristic of the employees and the management on the project, no one balked at the limitations that were put in place by the situation at the client. There were many opportunities to just give up and pack it in, but everyone always looked for ways around these limitations.

However, there are some things that I think could have been improved. First, while I’d like to think that I helped out in my limited time on the project, I don’t think putting me on the team was a good statement to the existing members. Everyone at that time knew that I was leaving the company shortly, and I think putting me on gave the impression that the project wasn’t important and the only people being put on the project were people the company could do without.

I had never thought of that.  It is interesting how perceptions can be.  We put starving student on the project because we needed someone extremely competetent who had been involved in difficult situations before and handled them well.  And the fact he was going to grad school made it such that he was also one of the only senior resources who was available on short notice. Also, his leaving for school correspondended with the end of project X.  There was really nothing more to it than that.  I hadn't thought it made a statement other then, "here is another senior resource to lesson the load" but we'll have to communicate better when we do this kind of thing. 

Second, during my time on the proejct, the team seemed to be left out of the loop on a lot of the efforts that were taking place behind the scenes. This may be a function of the short time that I was there, but I never had a meeting, absent the client, with anyone above me in the hierarchy to explain how things were going or what direction the project/negotiations were going. I think weekly/bi-weekly meetings with just the Infusion staff to go over the issues that Infusion management was facing would have done a lot to encourage the rest of the team and make them feel that management was with them. These wouldn’t have had to have been extensive meetings – 20 mins at Starbucks every Monday morning, or lunch on Fridays would have sufficed. I don’t think the onus for this is entirely on management (I certainly never asked to know what was going on), but I do think someone should have done something.

Now that is 100% dead on true.  When we had a managerial debrief on this, we came to this conclusion as well.  I think the on-site management thought we were doing the team a favor by keeping them out of all the political sillyness.  The thought being, "they have enough to worry about, they don't need to add political nonsense to their worries or hear the minutes of our meetings...just let them code."   But I can appreciate how the silence can be perceived. If the team had known what Steve E and others were doing to beat back features, get more resources, etc. then that would have been *motivating* not demotivating.  That is something we learned on that one...every person on the team needs to know *everything* that is going on around the project.  That makes them partners in the process.  

posted October 29, 2005 8:26 PM by Greg with 0 Comments

“Deathmarch” or “Category 5” Project

 

Ok, so you all know about “Project X”  That big project we just did that you hear was super tough, crazy hours, impossible client, and so on.  Some have even called it…a “deathmarch.”   I think that term is overly dramatic.  A real “dealthmarch” is what happened in Bataan in 1942.  So I think it is kind of unfortunate that this phrase gets used.  I don’t know if it is any more politically correct, but given current events, maybe we should rate projects like hurricanes….Category 3,4,5 etc.

 

I think the hurricane rating system is more apropos than calling a project a “deathmarch” because that makes it seem like “deathmarch” is some up-front attribute of the project like the cost or start-date, ie, it is a project is simply a deathmarch or it isnt.  Ergo, we should not take on “deathmarch” projects.  In fact, someone asked me that, “what would we do if we were offered another ‘deathmarch’ project”.   Well, we’d say no of course.  But, again, no project starts out that way any more than a hurricane jumps into existence as a Category 5.  Projects evolve one way or another and, sometimes, as with hurricanes, the factors that drive a project for better or worse are out of your control.  The best you can do sometimes is ride it out with an understanding that if you live on the beach (work with new technologies, get interesting projects, have strategically important clients and relationships) you’ll have to ride these out time to time.  Or, of course, you can decide you like calmer waters and take a different, quanter job using older, more established technologies inland.

 

So X was a tough project, plane and simple.  But, we released X recently, the sponsor and client now love us, and it did as we hoped it would do…opened a spigot of new work on all fronts and gave us credibility to demand more and change the situation.  This project was not an isolated “bad project” it was an initial fiery hoop we had to jump to on the other side of which was a massive opportunity.   It is part of a continuum, a step to the “real” projects that will now come (and no, the new work will *not* be under similar terms as this last project. )  

 

I’d like to make it clear that we never would have taken on this project for its own sake.  So if any among you harbor illusions about anyone in Infusion management sitting in a darkened chamber, rubbing their hands together like James Bond villains saying, “yesssss, yessss, the developers burn but loooooook at all the profitssssssss” you’ll need to rethink that.  Infusion management rolled up its sleeve and went to work on the ground with the team in the form of Steve Ellis.   We also worked behind the scenes to push politically, got some traction, but not as much as we wanted.  We freaked out as well…the client and sponsor put the whole thing on us and didn’t (or couldn’t) come through with what we needed.  And if the project didn’t launch, that would be the end of our reputation.  Not a happy place to be.

 

Because of the sheer burn of this project, we had to compensate with heavy bonuses for all team members and rent very upscale accommodations (condo with view of Boston harbor.  We don’t begrudge the team members, they were certainly entitled.  But we also took a *huge* hit in having to put Steve E on the coding team…Steve is responsible for our sales pipeline, and his time away from that created a sales gap of two months…when we have to make 1-1.2 million in sales every month, the loss of your top sales resource for two months is going to hurt.  And, of course, I am now writing this blog to address fears, rumors, what have you about the project.  So there are morale costs as well.

 

Anyway, this is the last I’ll say in this post about about why we took it on or what we gain from it…I already wrote to this in a previous blog posted on Nay 17th, 2005 as an answer to one of 5 questions sent to me a couple months back from a X team member.  So, I’ll refer you to that.

 

What I would like to do is tell you what we “knew” up-front when taking on this project and what actually happened as the project progressed.

 

So what did we know about X up front?

 

  1. We knew it would be hard given the deadline, and might even suck. We could do it, but would be taxing.  In fact, Joe C and Steve E  went to a meeting before the project started.  Steve told Joe half seriously, “this is going to suck, I hope we don’t get it.”  So we and the team knew it would be tough.  No one was “spun.”  We were put in a tough position by our “sponser”.  
  2. We would get more resources from sponser and client if we ran in trouble
  3. Client would actively project manage all aspects
  4. Proper equipment would be provided
  5. Some of our guys would not have all the skillsets that project specifically required and thus had to be learned “in flight”.

 

 

So how did it turn out? (point by point of above)

 

  1. For reasons which follow, it become extremely hard and taxing.  Using the hurricane project rating system I m entioned earlier, X started at category 3 but moved to 4 and 5, the project evolved into something very hard, it didn’t start out where it ended up.  And we fought all along the way to keep the hurricane from gathering strength. More on that in a bit.
  2. We did *not* get the resources promised.  What we did get were client resources so poorly equipped for the task technically and in attitude that our team was first incredulous, and then ultimately invested their efforts in keeping the client resources away from any relevant aspects of the project.  It reached the point where client developers were used solely for testing and not allowed by our team to write any production code.  Most became active detractors from the effort as opposed to the “help” promised.  Sponsor tried to get additional staff on our side (bring on more infusion people), but client refused and the sponsor had no more money to pay out of pocket.  We tried repeatedly and aggressively to change this situation, in the end, I think we were able to get only one additional resource.  And even that was delayed. 
  3. [Because this blog is pubic, Alim's suggested I not include the content that was originally here.  But it had to do with client-side project managment.  I'll set up an internal blog which has this section included.  Menawhile, if you want to know about #3 just email me and I'll send you this one.]
  4. Terrible equipment was provided by client and there wasn’t even outgoing internet access!  Late at night, team had to go on equipment hunts through the office.  There were all kinds of deprecated monitors and old servers lining the hallways (I guess on their way to being thrown out).  Our team actually had to scrounge enough equipment to get the job done.  When I went over to visit the team, I remember one monitor had the faint ghost of the NT 4.0 logon box burned into its phospher. Outraged?  Me too! 
  5. This one hurt. While not the biggest factor/stress, one large stress was that some team members had to develop/hone fundamentally new skills/experience on the job.   This meant that at the days end, there would often need to be “refactoring’ sessions where someone senior like Steve E would go through code with the team and help them refactor, show them different approaches, etc. 

 

Here is what we did and what we tried to do to address above: 

 

1.      We bonused the staff, secured luxury housing with view of Bay in Boston.  Offered flights home and back every weekend and agreed that staff could exit project after delivery and move into the area they were most interested in. In fact, in spite of good billable, this project was not ultimately that profitable due to T&E, bonuses, let alone managerial stress of having to put Steve E into the project and the burn everyone felt.  We lost sales opps for 2 months due to Steve being incapacitated.

2.      lobbied, yelled, cajoled, screamed, visited client/sponsor in person, went to southern US to talk to them personally.  Said our guys are “burning,” this is nuts, you haven’t delivered your end, etc.…answer: yes, yes, we’re sorry…but this is the best we can do.  The fate of the project still rides with you guys.  At the very least, we said,  the feature set needs to be reduced.  Ultimately we with the team were able to get the feature set reduced..   Tried very hard to get additional staff, even at “cost” (essentially, we were willing to take infusion resources off profitable projects and pass through to help for just their salary) but we could not get even get them onsite.

3.      Mentioned repeatedly to sponser that PM was a big problem.  But the PM was someones “guy” on the client side…like a political opponent…he had to be appeased, but all real work was done around him.  Very frustrating!

4.      Machines must be standard and secure for client, we could not give machines outside of developers’ own laptops to team.  But the client would not let those laptops access the network.  So we asked client/sponser repeatedly for equipment, always, “yes, yes, we understand” but in the end, it didn’t arrive. When I found out late in the project that there was no internet (except for a trick one of our developers discovered could be done with a VPC) I was furious and I asked the team to buy a wireless EVDO card so that their group could bridge connections and connect to the outside world.

5.      We put Steve E onsite so that he’d be there to guide and mentor.  A very tough call for us to make because Steve has vital technical sales responsibility for Infusion overall.  But that was an investment we had to make…both in the project, and the people. Note that the upside here for the team members is that I’d say the team working on this condensed over a year of experience in the technology area into a few months.  They will come out way ahead skill-set, professionally and managerially for having done it.  You ascend fastest when you prove yourself under fire…so in that regard, at least, a situation like this can be an opportunity. And for those that really stepped up, we have high estimation of them;  I look at these guys differently, listen to them differently…, these guys have now “made their bones” to use a mafia term, and they can now move into the areas they’d most like.

 

To conclude, all I’ve written is the tip of the iceberg.  But in the end what we wanted and what the client needed balanced…the result being, we launched a project with a reduced feature set that was politically acceptable and gave us the win we needed.

 

What should you do when a good project turns bad?

 

Would I do something like this again?  Yes.  And on that note, does that mean that you might sometime end up on a project that moves while you are on it into Category 5?  To be honest, at some point, probably.  It will be a rare event (that kind of event hurts management as much as the dev team on the ground) but therin lies the opportunity…remember that if you are burning on something then Infusion is burning on it also, and that means we have to actively manage the situation.  If you step in rise to that situation such that management feels you are “on it”, our stress goes down and our estimation of you goes way, way up.  We’ll give you the resources you need, guide you and let you, in effect, manage us wrt. your project.  When you step up it means we are free to spend more time growing new business instead of managing existing business…and towards that end you become an indispensable part of the firm. 

 

Listen, if you really and truly want to avoid situations when they turn for the worst, I understand.  And you can.  We can and will always get you out and me, Alim, Steve, Cortez, or someone can step in at the cost of other things we’d otherwise be focusing on.  But you can also see situations like this as huge opportunities for fast advancement…hear me out. 

 

When I was in my mid twenties, I put myself into a ridiculous professional situation…one of the top 5 banks wanted to take a group of green new hires just out of college, have them write a little project in four weeks, and then demonstrate it to the CIO and his top execs to show them what training was doing.  I said a “little project” won’t be compelling, I didn’t want to get in front of the CIO and show them “hello world” in Java Swing.   So I said, let’s do something real, a full-blown trading system.  That had never been done successfully (other trainers had tried similar things), and it was politically contentious (“new hires can’t do that”, and “the business groups won’t devote enough time to be useful”).  But they said, basically, “your funeral if you want to try it” and were somewhat puzzled as to why I’d want to take on that degree of risk for an uncertain return.  But, I took it on.  I immediately regretted it.   I worked/lived in Jersey City for the duration of the project, had a hotel room at the double-tree in Jersey City that I often wouldn’t make it to.  We worked until 3-4am every night and every weekend.  I had folks from India, Tokyo, UK and US, and they all yelled at each other in the hall in different dialects, before our presentation, some of my students threw up because they were so anxious, it was hard.  I didn’t see my girlfriend-turned-fiancee at all during this time (you guys know her as our CFO).  It was ridiculous…these students barely had the grasp of a programming language, and here we were trying to get business requirements from busy business people who were tough to get a hold of, fuzzy on specs and we had a date with CIO in 4 weeks.

 

But, we did it. We launched. We presented.  The CIO said: “good”.   Then we collapsed, exhausted.   Not a lot was said, to be truthful…I’ve found pat on the backs rare in business.  But they saw me differently after that, as someone who could “get it done.” And then one SVP (now an MD) took me under his wing and said, “I was really impressed with what you accomplished in so short a time.  Have you given any thought to doing some consulting for the firm?”  That MD became a friend and guided me in getting additional business with the client (first with his group, then with others), and ultimately in laying the groundwork for what later became Infusion Development Corporation.  Oh, end the training program I did 6 years ago as an experiment, is now a standard engagement we do at least once (sometimes twice) a year for the same client.  It’s all formal now, with proper business sponsors, a buffet breakfast when we present in the “big room”…you wouldn’t guess at its humble roots.

 

And of the students I had, the ones that really stepped up during that project ended up in managerial roles at the client or in charge of new business directions…I still see them in the halls today (sometimes in the halls of different clients they now work at too).  One or two have even ended up managing our people and, in effect, becoming my boss…kind of weird for me!   Of the ones that didn’t rise to it…I won’t say anything bad happened to them.  Actually, not a lot happened to them at all.  They have jobs, they do their thing.  But I don’t think they really ended up at the same level of their more ambitious colleagues. 

 

Listen, everyone is biased by their own experience…they tend to promote what has been successful strategy for them.  I am no different.   That doesn’t make my view the only one.  But if I know anything, I can tell that there is at least one thing you can do if you want to be extremely successful professionally.  It worked for me.

 

Seek out a tough/impossible situation.  Own it.  Turn it Around.

 

Even if you fail, you’ll win because you tried.  People who take on tough situations without complaint, who make their preferences secondary and instead trust that the benefits of experience and earned respect will more than compensate for the short term burn are the rarest creatures in the word.  A company, be it Infusion, Lehman, Microsoft, IBM, will do *whatever* it takes to keep people like that…because those people *are* the company.

 

What would you do?

 

If you were me, would you take on the project now knowing what you do?  If no, how would you have positioned it to the client and sponsor? 

 

There are so many moving parts to this.  I bet you have a million questions and, probably, many of them begin with, “well, why didn’t you just….”.  So let’s do this.  I’d like to see those questions as comments on this blog.  I’ll address them.

 

 

 

posted October 17, 2005 10:03 AM by Greg with 1 Comments

Infusion Values and Culture

If your interested in really growing at Infusion (or, really, at any good firm) and moving into a critical, strategic role, there’s a pretty straightforward way to do it.  It’s a kind of self replicating/self referencing ruleset that guides how we think and operate at Infusion.  Here it is:  

 

Infusion Values

 

  1. Do Right By The Client:  always.  It is never about the job we have now, it is about the future jobs we will get based on good work involving the job we have now.  The client must *always* be satisfied with what we deliver.  Once we take on the work, we take on the responsibility to make sure, no matter what, that the client  will be satisfied with that work.  If things go astray, it doesn’t matter how much it costs, how much profit/time we have to sacrifice, we fix that situation. 
  2. Empower Yourself:  if there is an opportunity to seize, or an ambition you have to change/better things, demand the power to do that thing or to make those changes.  Then use that power. 
  3. Grow Your People: when you find yourself in management (which you will if you want to and follow 1 and 2), you need to make sure that 1 is always accomplished, and that, just as important, you create an environment for your people such that they feel comfortable pursuing 2. And the cycle repeats.

 

If we, as a firm, and as individuals, follow these three rules, we’ll keep growing like we have been.    You need #1 to make sure new business keeps coming in the door.  About 95% of our business is referral.  And referral comes solely from doing a good job and having a great reputation.  It isn’t smooth talking or me giving a funny speech.  It is simply that someone heard you did a good job, somewhere else, doing something they need.  #2 is critical, because if people demand the power they need to improve situations, then you have grown your capacity as a company to expand and take on new business and your corporate infrastructure will improve organically (which is the only real kind of growth).  Lastly, we need #3 to make sure we can keep scaling; we need to *constantly* be looking for the next tier of directors and managers and groom them for larger responsibilities.  Without them, we can get the work, but we won’t be able to ensure that #1 is followed.

 

So, specifically?  What do these things mean in a practical day to day way?  Let’s go into them:

 

1. Do Right By The Client

 

 

There is absolutely, unequivocally, no excuse for an unhappy client.  It doesn’t matter what happened, who is right, who said what, who promised what…our rule is that when we take on work, we take on an implicit and inalienable responsibility to make sure that work is executed well.  I posted previously in one of my answers to the 5 questions regarding, “we should learn to say no” about situations where it is sometimes hard to accomplish #1.  That can happen.  But, for the most part, we are in a position to make #1 happen, we just have to be absolutely committed, even fanatical, about making sure it always does.

 

I said this in an earlier post.  A great person really has no choice.  A great person is incapable of operating in any other way.  You have to have a personal pride in what you do, no matter what.  And if the situation is such that in spite of your best efforts, you don’t feel you can do it, then you must immediately invoke #2.  Let’s talk about that next.

 

 

2. Empower Yourself

 

 

If you want things in life, you have to ask for them, maybe even more than once.   You might even have to ask more than one person. Is that fair?  Probably not.  But one soon learns that one’s professional life isn’t like any of the pre-job institutions we grow up in (school, camp) where someone has a mandate to be “nurturing” and “warm,” where its someone’s job to make sure that the quiet kids standing in the corner are brought into the play circle.  In the real world, you need to speak up and at Infusion the people that have spoken up and have stepped up are the ones that end up shaping the direction of the company.

 

In one of my first jobs out of grad school I had a boss who sat everyone down after they were hired.  He’d say, “Listen, I have one big rule.  If you have a problem, and you tell me about it, then it becomes my problem.  But if you don’t tell me about it, it is your problem. And no one gives a damn about your problems.  Do you understand what I’m telling you?”  I remember having to think about that for a second, but I got it.  He also had this thing he called “the bummer rack”.  He’d point at the coat rack by the door and say, “that’s the bummer rack.  When you come into the office, whatever hangups/issues you have outside of work, you put them on the bummer rack and you don’t bring them into the office.  You are welcome to pick them up one the way out and wear them home, but I don’t want you to ever bring them in here.  Got it?”   I also got that one.     My boss had a lot of sayings, he read a lot of business books…not sure he followed all of them himself and he was kind of an odd guy (he owned a monitor lizard), but some of his ideas I did think were good.

 

I think that another part of empowering yourself, is to make sure you always have maximum knowledge about a situation before you let yourself make judgments on it and/or decide definitively how it should be changed.  It is an old saying, “knowledge is power.”  The converse is true as well: If you don’t have knowledge, you have no power.  What you have instead is the most dangerous, scary,  toxic, noxious, horrific, terrifying, notorious, nefarious and cancerous creature in the known universe….you have an assumption. An assumption is the antithesis of knowledge…it is what carbon-monoxide is to oxygen…something that pretends to be breathable, looks like oxygen, but suffocates your brain slowly until you’re brain dead.  So, how does one defend against assumptions and empower themselves with knowledge?  You delay your judgment/action about a situation until you fully investigate it; could there be another perspective you are not aware of?  Could there be a context you don’t know about?  Did you ask? Until you definitively answer the first two questions by asking, you have an assumption, not knowledge.

 

So what happens when you start asking?  You start learning.  You are brought into the realities of the business.  A relationship of trust and communications opens up with management, and you will begin to grow professionally and gain maturity…you’ll encounter different perspectives that you may or may not agree with but nonetheless respect as valid as your own.  You’ll become far more than a good technical person, you’ll become a bona fide professional.

 

So speak up, but then be prepared to listen.

 

 

3. Grow Your People

 

Everyone in the organization has to know that 2 (Empowering oneself) is always possible and that 1 (do right by the client) must always happen, bar nothing.  Easy to say, but an organization also has a responsibility to mentor and teach its people the skills they need and give them the room/responsibility they need to make sure the client is always happy and they know how to go about asking for and leveraging power.  Again, sounds easy, but it isn’t something you can just pay lip service to.

 

Net net, is that it is a manager’s job first and foremost to listen.  If you are a manager and someone comes to talk to you, but you are doing email, appearing busy, and not giving total attention to that person…you are failing at that moment as a manager.   You can’t expect people to take #2 seriously when they don’t feel they are being heard.  You also have to keep in mind how hard it is for some folks to be able to talk to you as a manager in the first place.  When someone is talking to you about anything other than the task at hand, you need to seriously listen. 

 

So when someone comes to talk to you, turn your monitor off, turn radio off on your blackberry, turn around in your chair to face that person and give that person your total attention and really listen to what they are saying.  Do that, and you are succeeding at that moment as a manager. 

 

The next step is to make sure your people understand the situations they are in, even when things are going just fine.  This is for two reasons:.  First is that knowledge will quell assumptions.  Second is that the more people know about a situation, the more ideas/thoughts they’ll bring to the table in terms of how improve it even more (or fix it if something has gone wrong).   You have to go out of your way to check in with people, walk around, chat with everyone…you can’t simply rely on status reports.  People have to feel comfortable around you.

 

The final responsibility and, maybe, the most important, is to make sure your people are always learning and growing in their career.  Good people need to improve their skills constantly…either they need to be getting solid, bankable experience with a skill set they have, learning a technical skill set they don’t yet have, or learning about the business itself.  Your people always need to understand their own career path. 

posted August 29, 2005 12:15 PM by Greg with 0 Comments

Inside Turnover

Hi Greg, something I’ve been wondering about:

 

It seems that Infusion is experiencing a large turnover rate.  Doing some rough numbers brought it into the 20% - 25% range quite quickly.   Is this the case, and if so, is it something Infusion is / should be concerned with?

 

 

 

The short answer is no, we’re not especially concerned about the turnover rate. That said, as a management team we examine each employee departure and we are extremely introspective about the reasons behind each departure.  The reason why we’re not especially worried is that when you look deeper into our “turnover” each employee departure falls into one of four distinct categories and the vast majority of our turnover falls into categories which we consider acceptable and sometimes even desireable.  The four categories are:

 

1)      Turnover of people that surprises the employer (i.e., someone resigns and the employer is surprised/upset about it/didn’t see it coming).  For example, someone is doing a good job, but then gives notice one day, and then the employer has to replace that person/position.  And then, say, the person goes to another company similar to the one they left.  This is the bad kind of turnover.

2)      Turnover of people where it is either at the company’s behest (the company felt it best for a person to move on, but works it out with the person such that it is a gentle, friendly transition…for example employer might allow resource to actually look for other jobs/do interviews while still employed by the company, etc. ) 

3)      Turnover of people due to life/direction change.  For example, someone decides technology/software isn’t for them and wants to go back to school to learn medicine, law, business and/or their spouse gets a job in some remote location and they want to relocate.  Or they want to be a writer, musician, etc. (you’d be surprised how many artistically gifted people we have).

4)      Conversion to full-time at the client per client request:  very rarely, a consultant might be at a client in one specific position for more than a year and/or start being given responsibilities that are greater than what a consultant normally has (for example, the consultant might be managing a number of full-time client staff and/or have responsibility for a P&L on behalf of the client.)  In those cases, per our contract with the consultant and the client, the client says, “listen, its been a long time and we’d really be in trouble if we lose this guy.  We really want to bring this guy on full time.   We’ll give you an opportunity to replace the consulting spot with someone else, but we want to take this guy on, that ok? ”    If the consultant dealt honestly with us about it, wants to make that transition, and the client is in good standing with us we usually broker this.

 

In Infusion’s case, except for maybe a handful of people in our entire history, all of our turnover is due to 2 and 3.  In the few cases where turnover has occurred due to reason 1, we are extremely self-critical and we spend a lot of time examining what we could have done to better communicate with the employee and improving ourselves to eliminate bad turnover.  2 is by far the biggest reason for turnover.   I can’t, for obvious reasons, give particular names or intimate details, but at a high level, I think it might be useful for you to know some of the reasons behind #2.

 

A change of direction

 

Here’s one reason you might be seeing a lot of the second category turnover (although you understandably wouldn’t recognize it as #2 turnover) happening at the moment:  About one to one and a half years ago, Infusion made a business bet to offer a lower-margin, “near shoring” option to our clients that would trade margins for  higher volumes.   We were competing against Indian outsourcers and trying, basically, to build an outsourcing practice ourselves both in Canada and, before that, in India (read my blog post about our Indian office).  Over the past 6 months the number of new lower margin fixed price type of projects which fuelled much of our growth last year has slowed and our strategic focus has shifted back towards higher margin on-site, shorter term, extremely client strategic projects in cutting edge technologies which requires exceptional client-facing, more technically sophisticated people. 

 

However, the legacy of the “fixed-price” era was a significant number of staff we hired at the time didn’t fit our normal hiring profile.  This is *not* to say that that staff was in any way deficient, they weren’t.  They were honest with us from the start about what they wanted to do/what they were capable of.  But they were, for the most part, a different kind of resource for us.   These included people that had at least one (sometimes more) of the following attributes:

 

1)      identified themselves with one particular skillset but may not have the willingness/interest to learn others.  For example, you’d have some people that said, “I do J2EE, I am not really interested in learning .NET, I want to concentrate on deepening my J2EE expertise” or “I am only interested in QA, that is what I was hired to do, if there is no QA work because you are not doing many fixed-price off-shore projects now, I don’t really want to learn development skills.”  These are entirely legitimate attitudes, there is nothing wrong with saying “I want to be the best at X, so I don’t want to get into Y”, but for our business model, we need to keep abreast of new developments and move quickly to master them.  We simply don’t have multi-year maintenance projects nor do we have a Java-based product that just needs enhancements version to version.  Unfortunately, many, if not most, the projects we do are new, relatively short duration, and often deal with a new technology or one we may not know at the start of the project.

2)      might not be client-facing/might not want to client-face.  We rationalized at the time, incorrectly, that it didn’t matter if they could interface well with the business since they would be in Toronto working heads-down all the time.  Ultimately, we found that you *always* need a client-facing ability and a professional demeanor, no matter what you job.  Client-facing ability proved important (and its absence evident) even over the phone or in email.

3)      worked very set hours.  They might have young children, a long commute to work, and/or have already reached a point professionally where they more or less wanted to earn a comfortable base salary, and have a more predictable and non-eventful job.

4)      wouldn’t/couldn’t travel

 

The “net net” of all this is that, when “near shoring” work slowed down, we went to these folks and said, more or less, “we don’t have this kind of business any more. Would you like to retrain for something else?”  Some said, “yes” and are with us still, but more than a few others, at different times said, “this really isn’t for me.”  For example, because overruns were such a danger when we offered the lower-margin projects a couple years ago, we hired a QA team of, I think, seven full-time people at one time.   We needed them, and they did great.  But, when that kind of project work slowed, we no longer needed a full-time QA team that large.  But they did great work, and we wanted to keep them.  So we told them we’d have to contract QA on a per-need basis going forward, but that we’d be happy to retrain them in something else…maybe infrastructure, development, etc.   Most that group said, “thanks, but I’m interested in QA.  It’s what I like to do.”  And we agreed to part ways as friends.  In some cases we targeted a specifc resignation date giving the person time to find a new position;  in one case unbeknownst to the person we even worked to arrange for the person to get a job offer from another firm.. 

 

It is the nature of Infusion’s business that the offerings that we focus on will change again and again over time and it is our ability to adapt and change to meet our clients needs that will define our success.  It is very possible that a year from now our focus may shift back to fixed price projects.  Our goal is always to hire bright, motivated and client facing lieutenants who are driven to grow our business, are passionate about solving our clients problems and who will adapt and grow as our business does.  But there are times when we hire to meet a very specific project need or when the new opportunities that come up do not match an employees interests and in those cases we will mutually decide to part ways and at the end of the day that kind of turnover is ok.

 

 

We’ve never had a layoff/We don’t like to fire people

 

One things to keep in mind when you look at turnover in our case, is that we have never had a layoff even when the economy was down (we’ve just never been in dire financial circumstances) and, except for maybe a few times I can think of, we’ve never had to actually fire anyone.  We think it is best that, when things don’t work out, as long as someone has delt honestly with us and not done anything aggregious (stolen, did something terrible for a client, etc.) you give the person the opportunity to resign/move on on their own.  This preserves dignity, avoids a resume scar for the candidate and, in the end, allows everyone to part friends.   That’s the upside.  The downside is that, we might ask someone to leave, but when they resign, it looks like they are leaving us and it looks like we weren’t expecting it…in other words, like turnover. 

 

Now, you also have to realize that when this situation occurs and someone resigns, no one is going to say in their outgoing email, “Hey, great working with you guys.  Management disagrees with the job I am doing, we can’t come to terms, and has said it was ok for me to look for another position, and I’ve now found one!”   Nor should they.  That’s all private.  But, again, most our turnover is just not a surprise.  In almost every case, its part of something orchestrated between us and the individual. 

 

Sometimes, when I hear people say in whispered tones, “did you hear, so and so left!” Alim and I kind of grit our teeth…I’d like to say, “yeah, but did you know that so-and-so’s client asked that so-and-so not be on the project anymore” or “did you know so-and-so used to put lines in his status report like, ‘this is an absolute waste of my time!’ and complain about everything non-stop no matter how many conversations we had with them or how many things we changed for them?”   But I can’t (and shouldn’t do that)…and, to be fair, in the case of most people who leave, there usually isn’t anything that dramatic…mostly it is just a poor fit that is no-one’s fault, and their departure is the outcome of calm, friendly discussions we had with the person where they agree to finish up what they are in the middle of, but where there really weren’t workable ways to fix the fit beyond that.

 

 

More on #3, “Change of Life”

 

Another kind of turnover you have is the change of life I mention in #3.  I don’t, however, think of that as turnover. That is a “graduation” and an excellent thing.   We have, for example, two extremely well-regarded individuals that are leaving to pursue an MBA at the TOP schools in the world!  We’re talking Dartmouth and Chicago, top programs.

 

It is certainly easy for me to say, “we’re so proud of so and so for taking this step and wish them the best” but you might still think these folks are leaving the company and, while they might not be joining another consulting firm, we are still surprised and sorry to see them go.

 

Truth is, in the case of both individuals, (let’s call them Mr. A and Mr.B)  who are going to pursue MBAs, Alim and I actually worked with them on their applications almost a year ago.  Alim worked for two solid days to write recommendations for Mr. A, and both Alim and I worked with Mr. B on his MBA application.  We were actively involved in doing everything we could to make sure our guys got into the best schools.

 

In the case of Mr. B, he worked for Infusion and did great stuff for us for 5 years! A few years back he said he might be interested in medical school.  We said, “great”, but ultimately, about a year ago, he decided business school, MBA was right for him, so I worked on his application with him. 

 

In Mr. A’s case, he was also with us for a couple of years and reached a level of management where he felt he needed/wanted to go full-bore into the business side of things.  We first worked with him and the client to see if some other position/responsibility might enable him to do this, but it ultimately seemed like the MBA was really the best option for him….for where he was professionally, age, experience, it was a once and a lifetime opportunity at a top school in a special program where he’d get to be mentored by big-time CEOs…it was just the right thing for him.

 

So, Mr.A and B got into the world’s best MBA programs.  We are thrilled…and I am proud, frankly, that the experience they got in their first full-time job out of college, Infusion, helped qualify them to get into the world’s best programs.    Both of these guys are going to be business stars, I have no doubt…and I am looking forward to working with them, helping them where I can, and keeping the relationship with these guys for the next 30 years. 

 

 

Turnover Tally

 

To give you a sense of the reasons behind the resignation of folks in the last year/year and a half, here’s a quick overview with anything personal removed. Please note that these are just the ones I happen to remember, if I remember more, I’ll edit this post

 

Each number below represents one specific individual

 

#3: Change of Life

 

1)      wanted to become a quantitative analyst (build financial models)

2)      girlfriend/wife got job in Nova Scotia, moved

3)      wanted to go to Vancouver and concentrate on writing and marketing

4)      MBA

5)      MBA

6)      Moved to a remote part of Canada for family

7)      Family illness (needed to take care of family member, needed special work schedule)

8)      Wants to travel first and foremost: ability to work for period of time, then travel for long-period of time (multi-week vacations) multiple times each year. 

 

 

#2: Not Ideal Fit (cooperative resignation or “soft” firing)

 

1)      Had pattern of accepting higher levels of responsability/management, get into indispensable positions, and making unreasonable salary demands right after.  This happened twice.  On third time, decided to part ways.  Had a negative attitude.  Very upbeat, friendly and optimistic when talking to management, but different for negative tone when talking to fellow developers.

2)      Great deal of negativity, used to rant in status reports and emails, client and management both felt individual was skilled, but very negative and prone to complaints.  Had concerns about morale around this individual.

3)      Consistently poor architectural choices, deployed system failed at client

4)      Unrealizable salary goals paired with travel restrictions.  We could not meet salary requirements without ability of resource to go to New York for projects.

5)      Didn’t want to change core skillset/learn alternate skillset/travel

6)      Didn’t want to change core skillset/learn alternate skillset/travel

7)      Didn’t want to change core skillset/learn alternate skillset/travel

 

 

#1:  We were surprised by departure, would rehire if we could

 

1)      Went to Seattle to try living in different place, works for dotCom

2)      J2EE resource felt that we, as a firm, were moving to .NET entirely (not true, but we did not communicate effectively) and there would be no place for J2EE, went to completely J2EE-oriented firm

 

 

#1a: We were surprised, but would not rehire

 

 

1)      Made many assumptions, architected on less than ideal platforms when other, better options existed.   Surprised by departure but we may have been a little harder on resource than was probably needed and *may* have spurred departure.

2)      J2EE-centric resource, so-so client facing.  Went to work for non-client investment bank as full-time Java programmer.  Never spoke to us, simply jumped.

 

#4:  Works as full-time employee for client

 

1)      Worked at client-site for 3 years, did fantastic work, kept us abreast of events.  Became indispensable to client. Client asked to hire resource, consultant was interested, so we brokered arrangement.

2)      Manager became seriously (potentially life-threating) ill (this was a couple years back).  Client asked that consultant be put to full-time to cover for and help stand in for  absent manager.  Extreme circumstance, but right thing to do in this case.

3)      Worked at client for 6 months.  Junior guy, violated our contract, solicited client directly. A real weasel-move (this has never happened to us before).  We would ordinarily go after person legally (and have in past ) per their non-compete except, in this case, the resource was hired specifically and only for client position (something we rarely do), not as an Infusion generalist.  We had spoke to the client originally and had agreed with him about placing said resource but that after 6 months when client funding would run out. The client apologized profusely for approaching the consultant directly (said he was unaware of the correct protocol) and agreed to honor the full 6 month contract and hire after as originally planned.  So, in this case the problem was not that the consultant made the move, but how he made it.  

 

 

Conclusion

 

So, there you have it…a glimpse inside our “turnover”.   We work to minimize category #1, and have, we think, largely succeeded.  In terms of 2-4, these are inevitable.  One unofficial litmus Alim and I use a lot to evaluate how we are doing relative to turnover, is we look at people that are no longer with them firm, and we ask ourselves periodically, "Who among these folks would we hire back if they were available right now."  The simple fact is that it would only be a very, very small handful of people...maybe three or four.  We wouldn't change or undo the majority even if we could.   This is not to say the majority of people in this list were in any way deficient...in most cases they did excellent work and will be great additions to a different kind of company, but, for reasons I've outlined in this other posts, the fit wasn't a long term one for us. 

 

 

posted June 24, 2005 12:00 AM by Greg with 3 Comments

How To Sell

This blog’s “Ask Greg” is…

 

You’ve said often that one key growth path to larger compensation and higher responsibilities at Infusion (and elsewhere) has a “sales” component and responsibility to it.   I am willing to learn this skill, but how does someone technical, who is moving from full-time development to more of a role as team/lead management learn to sell?  What should I be doing?  What, specifically, do I need to learn how to do?

 

-------------------------

 

This is a great question.   It is my opinion born of experience that if you want to succeed in a really large way financially and professionally, there are only two ways to do it.  The first is that you are absolutely, amazing at something…a rock star.   You do whatever you do so well that you are among the top people in your industry.  For me, personally, I learned early on, that I was exceptionally good at technology, but I wasn’t among the absolute best even though I aspired to be. That actually bothered me quite a bit when I was in my twenties!   I did write books, consult, and my clients loved me…I solved problems and delivered results. But there was always another person with more years experience, deeper knowledge, better selling books, you name it.  People liked my COM book, but they liked Don Box’s book better.  I was interested in technology, but some of these other guys were *fanatical* about it…heated arguments on slashdot.com and such…I cared about technology, but mostly as it applied to solving business problems.  And that, sadly, meant that I probably would never be passionate enough about every little detail to be one of the “rock stars”.   Now,  if you can’t be rock star, then you can still be a great technologist, and always make a decent living at it.  But the problem there is that you will always be wedged under the market rate for your skillset.  No matter where you go, you can never make more salary than a client will pay for your time.   And, over time, every skill becomes commoditized, and you start having offshore vendors offering your skillset for a 1/8th  your cost.  That means you need to always be learning and moving onto the next skill.  Certainly, not a bad life…For many (maybe most), a good salary and interesting work with new technologies to master is enough.  But, for me personally, that wasn’t and isn’t enough.  So that brought me (and brings me know) the second way to  succeed in a really large way: sales.

 

However, before you are creeped out by the notion of “sales”,  I think the first thing we need to do is really define what “sales” truly is…or, better yet, what sales isn’t.  

 

1) “Sales” does not imply a “Salesman”

 

“Sales” is an extremely broad based term (kind of like “Technology” or “Science”) that encompasses a tremendous amount of activities.  But the net net of sales is simply (and solely) that, regardless of methods used, a revenue generating opportunity that is 1) discovered and 2) realized.  Sales is not about the methods, it is about the results: finding an opportunity and servicing it.

 

The very last thing I want to do is put a technical person in a cheap suit jacket and fish tie, give them a briefcase, and have them wander around the client site, knocking on doors and giving a pitches to different managers.  Funny though that image might be, I think a lot of technical people see sales and salesmen as somewhat “slimy” occupations.  That, somehow, “selling” means you should “spin”, puff, speak in marketing-ease, manipulate…even lie  to “get the deal”.   I always cringe when I read a consultant’s email to client where they feel they have to “sell” the client by saying things like, “Infusion has many value-added services including training, consulting,…”   Anytime I see an email like that, I tell the consultant to cut that all out.  That isn’t selling, that is marketing and email is not an appropriate place for that. 

 

On that note, I think a lot of people confuse “marketing” with “sales”…but they are two very different things.  Marketing tends to be more of what people think of as a little slimy…it includes direct sales, pushy salesmen, cold calls, advertisements, that kind of thing.  But sales is really something very different.  Marketing is based on grabbing someone by the collar (figuratively), and shouting in their face …it is a special skill, and in large companies there is usually a VP of Marketing and a VP of Sales…they are different things.

 

True sales isn’t like that at all.  If you find yourself pushing a product in an obnoxious, unnatural, puffy or slimy manner (or if you see anyone else doing it) what is really happening is “un-selling”.  No one likes a salesman…no one likes to be spun, manipulated, and almost everyone worth having as a client is immune (and even hostile) to that kind of sale.  

 

The only real kind of sale is simply where you identify a legitimate, honest problem someone is having, and you propose a solution to that problem, and attach a price to that solution.  Which brings us to our next section:

 

2) True sales is just an apt solution to a problem

 

Imagine that a knee injury you got in high school is acting up and causing you a lot of pain now that you are an “old” man or woman in your mid 20s.  Whenever you walk, it sometimes hurts, so you walk stiffly at times.  You can still get around, sometimes it hurts less acutely and you can even forget about it, but at other times the pain becomes acute and you don’t feel up to running after your nieces or your young son or daughter.  All in all, it has become something you’ve learned to live with, but never quite happily.

 

So, suppose you go to your physician on an unrelated matter.  This is a physician you see regularly (I know that is tougher in this day and age, but go with me on this!)  and have a trust relationship with.   So imagine you are seeing this trusted health adviser as part of a simple checkup.  Generally you’re ok, but the doctor notices you walked a little stiffly when you entered the examination room.  The doctor says, “hey, I noticed your walking a little stiffly there. Why is that?”

 

You explain to the doctor the nature of the injury and your pain.  He/she asks more questions, generally interested.  You tell the doctor more.  You are happy to talk about it because you start to realize that maybe, although you didn’t bring it up, this Dr. might have a solution for you.  You actually enjoy talking about it.  You start imagining, “wow…what if I DIDN’T have to live with this pain.  Maybe this general practitioner can help me by doing something more than simple check-ups.

 

Ultimately, the Doctor says, “ok, I’ve heard what you’ve told me.  You have a sports injury there, probably a reticular collagen degeneration (I am making stuff up, btw).  There is a technique to fix that, I don’t do it, but I have an associate who can help.  It isn’t covered under insurance because its deemed a “non-essential” procedure, so you’d need to pay out of pocket for the treatment, but it isn’t a tremendous amount. The Doctor asks you,

“Would you like to have that looked at and, if my associate feels he can get rid of the pain, he can give you a quote on the procedure. Then you decide if you want to go forward or not with it.  Sound good?”

 

Ok.  Now, how would you feel about this exchange.  Was it slimy?  Do you feel you were “sold”?  Was the Dr. “selling”?   Probably, you’d walk out of that exchange happy…you had a problem, the Dr. asked you about it, and proposed a solution.  It costs something, but you expect that…you are probably even happy to pay it.

 

This doctor analogy is the way we, at Infusion, sell for the most part.  We look a little outside our present situation and see if we can spot any pain-points for the customer.  If we spot them, we just ask about them.  That is how I personally, sell.  I just find pain points (or potential pain points) and ask about them in an open ended way (maybe I’ll put some example “openers” in a subsequent post).  Then I listen.  If you ask/listen the right way, the client will actually ask you explicitly, “hey, can you guys do such and such?”

 

 

 

 

 

3) It is all about relationships and credibility

 

The key to this kind of “soft sell” is to have a firm relationship with the people you are “selling” to.  That relationship is built on credibility, and that credibility comes only from delivering quality results to your client.  Many people think it’s the personality or smoothness of the salesperson…it really isn’t, that’s a misconception.   Relationships are built on delivering good work consistently.  It isn’t sexy, but that is reality and that is the way most sales are done.  In fact, most clients are uncomfortable with “smooth” salespeople and give them only lip service.  They’ll only take advice or talk honestly with people that have actually delivered something for them and have proven that they know something about their world.  So, once you have one or two high-quality deliverables that your client is happy with, you will find you can talk to your client about almost anything.  And this is the time to ask them what other pain-points they might have.  On the other hand, if you do not yet have credibility with the client, you are not in a position to sell anything to them.  They are likely to say, “Yeah, I have other problems, but let’s see how you do on your present task before we talk about them.”

 

This may surprise you, but you can even be totally honest and open to your client and say, “Listen, one of responsibilities at Infusion is to look around and see what else we might be able to take on.  Any thoughts as to other places we can help?”

 

4) Be aware of the political reality of your client

 

So, once you have credibility, a good technique to get your client talking to you (i.e., to start selling) is to understand the political reality of your client.  Who do they work for?  Who is their bosses boss?  What are the deliverables your management is “on the hook” to produce?  If you find out the answers to these questions (and you can find out by just asking them casually or, better still, just ask your full-time counterparts what else is on their plate or their bosses plate) you can then ask your client about the specifics of these deliverables…they will probably share with you their plans to create said deliverables or will admit they don’t know how they will get these things done…but that they need to get done.  That’s an opportunity.

 

5) You only have to take it so far

 

Different people have different comfort levels for sales.  Some folks love the sale, love to sell, and are what are called, “closers”.  A closer is someone who “closes” the deal, i.e., gets the signed contract.  These folks are normally full-time salespeople.  A technical person may be comfortable finding a need, but only be comfortable taking it up until a point.  And that’s fine.  Once you find a need, simply let your Infusion-side manager know what you’ve found.  He/She will let Kevin, myself or Alim know, and we’ll take it from there.   

 

If you are uncomfortable talking to you client at all (or your client is somewhat distant and/or not frequently available) you can help the sales effort by simply talking to your full-time counterparts at the client site.  Ask them what’s on their plate going forward, what their feelings about the current project are, what the political realities of their boss is.  You’ll be surprised how much folks will tell you.  That’s all valuable information, and it can lead you to an opportunity that you can then hand off to a salesperson.

 

You know, I was thinking of giving sales seminars in person. Selling is something you really can learn how to do.  If you'd be interested in that, email me.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

posted June 20, 2005 7:29 PM by Greg with 1 Comments

What if your client-side manager won't let you be a star...

Some great questions in email today:

 

Question 1: My first point comes from your post on may 17 entitle “Key things a consultant should know”, specifically referring to point 2 when you say a consultant should be a Lieutenant to the client.  What you said sounds great however is this always the case?  I think the best way for me to explain my question is by using an example (my current project).  I initially approached my role as you have outlined, but since have been beaten down to just another developer on the team.  This may be specific to my situation, not sure if others have faced this before.  I have been trying to figure out where your theory on being a Lieutenant might be failing for me with my project, is it due to my project manager’s power struggle, or them having a controlling personality or just their lack of management experience, or maybe a little of all three.  Here is the example, I was asked to do a lot of research and complete a lot of tasks very early on in the project (spent a good portion of time on this).  So I did, I outlined (documented) the results I found, the potential solutions and made recommendations on a concrete plan of action so as to avoid last minute problems and rushed changes.  Basically my research was much more extensive and detailed than what was expected. As well I included some things that weren’t even thought of (an added bonus as per say).  We also discussed and I demonstrated some of the results.  However at the time it seemed to all be brushed under the carpet as it didn’t fall into our priority list (which by the way seems to change from day to day). In a nutshell the issues dealt mostly with performance and scalability of our app.  Now that we are a couple of weeks from release some of the things I outlined are surfacing as problems and our project manager wants to rush in changes which have caused a lot of grief and many long hours on the part of team members.  Not to mention all these changes are his ideas (the ones that were made way back when and he said were not feasible). There has never really been a project plan or any type of documentation set out to give the team direction.  Everything seems to be last minute.  Team members are at the point where they are really getting frustrated and starting to lose interest because the manager seems to follow their own secret agenda with out paying much attention to the advice of those actually doing the work.  I am finding that instead of being a lieutenant to the project I am being a point to vent to from my other team member.  More so a liason that is trying to keep the peace among the team and not letting frustrations show, making sure the project manager is kept happy, and we continue to meet our deadlines.  Now as a consultant, I would be curious to know what your thoughts might be on how to handle this situation where you try to be the Lieutenant you speak about, however you are unable to truly fulfill that role.  How do you go above and beyond in such a scenario? 

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First off, I think you’ve been doing great under the circumstances.  You’ve certainly adhered to the first rule: do right by the client.  The client doesn’t have to listen to you, but you are bringing things up to him/her and you are doing your best to keep a good attitude in the group.  Those are critical things, and they are the foundation to being a lieutenant…so you are already being a lieutenant…just your general may not be so hot!

 

So, a couple things.  The first thing to do is be very careful of sentiments like, “the manager seems to follow their own secret agenda with out paying much attention to the advice of those actually doing the work.”   Your manager is not from CIA or NSA, there is no “secret agenda”…once you start thinking like that, it becomes a slippery slope.  In my decade and a half of consulting, I can’t think of a single time where my client manager had a “secret” agenda.  If I didn’t understand their motivations it was always because 1) they didn’t understand it themselves or 2) they did not know how to communicate effectively, or hesitated to communicate because 1 was true and they don’t want to appear ignorant.  

 

Thus, you may very well be working for a manager who is unsure of himself, inexperienced, might be under unrealistic pressure from his manager (so he is putting it on you), or he/she might be a “sweep it under the carpet” kind of person.  That will happen, and there are certain people that never let talent rise around them…these are poor managers.  They are out there, and you might get stuck with one.

 

So what do you do?

The answer is staggeringly simple.  You come  to us; to me, to Alim.  You explain the situation.  You have to be careful not to labor under assumptions.  The assumption that you may have is that your entire universe is your client side team.  That is just not so.  You can reach outside that to me or Alim or your immediate manager; what you may not realize is that we tend to have very good relationships, often friendships, with our clients at the higher level.  So, it just might be that I regularly have a friendly lunch with your manager’s bosses boss (that is how we got the gig in the first place! J  That and having talented people like yourself of course…).   So here is what happens.  You say, “Greg, I am not being used properly.  I can do X and Y but I am being held back.  Can you help?”   You and I have a couple lunches, I listen mostly, then I give you some things to say/try. (I’ve been around the block a few times and have some advice on how to handle different personalities.  You know, my dad told me something once that stuck with me when I started my first business at 20 years old…he said “the people around the table you are dealing with now will never change throughout your business life. It will always be the same people sitting around the table.  Only the number of zeros will change.  There’s a set number of personalities in the world, learn to deal with them and you’ll succeed”  That’s kind of my motto)

 

Ok, now you try what we’ve discussed…we see if there is any change.  Most times, it will work.  It is often a question of approaching your client manager with what you need, but in a positive way, with the right spin such that it ends with him/her getting something concrete from you in exchange for changing your situation.  By this I mean, you do not complain to your manager, “I am not happy, things need to change or I won’t stick around” but rather you say, “there’s so much more I can do…here are some ideas that, if implemented, will help me give you Z in *addition* to X and Y”.  Rare is the manager who will not take more from a person for the same price.  Even rarer is the manager that won’t delegate to trustworthy people that are offering to share the load with them.  We at Infusion will help you to deliver Z if you need it…we can take someone offsite and augment you with an additional resource to help you break through some deliverable or prove a point to your manager that you can only prove by showing something.

 

Now, if that fails, the client is unmoved and still not listening to you, then I talk with him personally.  This is, really, what Alim and I do at Infusion…relationships.  Every firm has a few guys like us in it.  We are salesmen, yes…but sales is not the slick, spinning, slimy kind of thing a lot of people think it is…at least not as we do it (which is why we survived the dotcoms)…*real* sales is about having a good enough relationship with enough trust built up over time such that you can to change a situation to get a problem solved.  I don’t spin, I tell the truth…I tell the manager, “listen, you have a great guy here, he wants to do more, take on more, learn more.  We both want to keep him, and we both know that if he isn’t challenged and he doesn’t see growth, he isn’t going to stay with either of us.  So what can we do to fix this?”  You might be surprised, but this works 99% of the time.  We’ve done it on a number of occasions, and it works great: the consultant, with time, breaks out of his/her role and into something higher, and more interesting. They also learn a ton professionally in the process, and they come to realize that, in most cases, the client had *no* idea he/she was underutilizing the resource or that the resource had negative feelings.

 

*Always keep in mind: there are very few dark plots or hidden agendas in life…most of it is just poor communication*

 

All this said…I should also say, however, that once in a long while you might get a manager who doesn’t want more from the consultant…he/she has a budget for the person to do X, and that is all the person is needed for and there just aren’t any opportunities for growing in the role.  Normally we try to hire or put someone in this kind of role who, say, might want a higher salary and very regular work hours in exchange for doing something some other folks might consider less interesting but they might very well like.  But, occasionally, the wrong consultant gets put in the wrong role or the role turns into something different than how it was represented.  Generally, Infusion tries *very* hard to make sure the right people are in the right roles…there’s no point getting just anyone into a slot…because then you have turnover and no one wins.

 

So, if it turns out that someone who wants to can’t grow in a role, then we all try to grin and bear it and ride out the contract.  The consultant finishes the term on good terms with the client and we don’t simply don’t renew the contract when it is over.   In rare circumstances involving very long contracts…if the consultant has a great rep with the client, we can often swap a more junior person into the role for a lower billable provided the original consultant guarantees the transition.  That is tricky to do, and a little disruptive to the client, but we’ve done it successfully on a few of occasions.   If the consultant really can’t take it any more and there is nothing we can do to change their role with the client, we’ll look to do something like this.

 

Also, keep in mind: the better your attitude, the more the client likes you, the better your skill set the more easily it is to move to different gigs both within the client, and to other clients.  Everyone loves a winner, and everyone fights like hell to keep their lieutenants.

 

 

 

 

Question 2: When you mentioned the Business Strategy Consulting, it raised and eyebrow.  I know you said it is currently a little premature but at some point I would be interested in hearing more about it and what the vision of it might be as it might be an area I am interested in.  

 

 

It is early still.  We need to solidify out existing offerings a little more…we need some more client diversification, we need to get our average project duration/price up there a little and increase our sales volume (need to be at about 15-20 million, we estimate) and number of people (150)…all this will take, we hope, about 1.5-2 years.  At that point we should have the financial base to finance a move into new territory.  Specifically, we would like to build additional professional services groups that concentrate on pure business consulting.  For example, having a team of folks that know capital markets *extremely* well and can consult on things like compliance, trade settlement (T-1), project management…this is the kind of thing firms like Delloitte and Accenture do.  There’s huge margin there and work in this area drives sales in IT (you will need new systems of course).  

 

Management can’t concentrate on this as much as we would like, we have to take care of the items I list at the beginning of this section.  In the meantime, if someone wanted to do some research into an area like compliance in the interest of starting/managing a team or division, we’d support that effort…tricky to do because we can’t afford to take them out of billable situations (at least not right away), but if the passion and interest was there (you’d need both, these areas are complex), we could set that person up with experts we know (we have access to and friendships with some of the most knowledgeable people on Wall St.), arrange some dinners to chat with the head quant of a major bank (friend of mine), pay for some night classes, buy books, materials…maybe have a business coop look into it under the management of that person…if that person is willing to take ownership and burn the midnight oil, we’ll pay for some oil and see what happens.  I am kind of hoping the next big idea will come to me from within Infusion…someone with passion who says to management, “guys…been reading the Wall street journal…we GOT to get into consulting for X.  I’ve done some research, and figured out how we can do it and make a lot of money in the process”. We’ll certainly listen…and if that guy is right, that’s the guy running that division and sharing in its profits.

 

 

posted May 24, 2005 9:30 PM by Greg with 0 Comments

About Indian Outsourcers

 

Hi Greg,

 

I was enjoying your blog until I came across the following comments on Indian outsourcing:

 

"If we don’t move from straight-technical on-site/long term into becoming more business-specific technical consultants, then we end up in a rate-war with Indian outsourcers because a “J2EE guy” or a “.NET Guy” becomes a commodity.  And once that happens, a North American company can not win. …our quality will always be better, but Indian outsourcing rates are always so compelling to upper management, that you can’t compete…we simply can’t give the client a “senior” .NET expert available for $20-$40 and hour and keep a straight face.   Indian outsourcers can’t really provide this guy either, it takes their experts 8 hours to do what we can do in 1 hour…so you can pay us 1hr * $150 or then 8hr*40 ($320) to get the same job done…but it takes upper management of a client many failed projects and a long, long time to realize it."

 

 

To be honest,  I felt that the comments above were a slap in the face to all of Infusion's employees who are of Indian descent.  My interpretation is that Indian programmers work at 1/8th the productivity and with greater programming defects than a North American programmer simply by virtue of being Indian.

 

[sentenced removed because of public view] However, Infusion consultants are smart people and eager to learn so they are able to quickly become productive with new and existing technologies.  There is nothing inherently North American about that ability to learn that prevents an Indian company from doing the same.

 

The industry bashing of Indian outsourcing companies is a small pet peeve of mine, perhaps because of my own nationality.  Through my assignments with [client X], I have worked with some of the Indian outsourcers and I found that the only thing that separates them from the typical [X} employee in New York is the time zone.  My former [X] manager, Krish [Y], recently went on a trip to India to evaluate a number of outsourcing companies.  I was able to sit in on one of the meetings where he gave a summary of his findings and the summary of his trip was that he was impressed with the level of organization, quality, and hiring process at a number of the Indian outsourcers.

 

My take on the issues with Indian outsourcing is that the defect rates and lack of productivity are a result of the growing pains of outsourcing programming projects to a company in a different country that speaks a different language.  Since Infusion has direct experience with trying to start up an outsourcing branch in India, I would be interested in reading your thoughts and getting more history on the Indian outsourcing attempt.

 

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I think I see what is bothering you.  I think it is the line: “it takes their experts 8 hours to do what we can do in 1 hour”  Let me clarify:

 

The reason the outsourcers produce a guy who takes 8 times longer isn’t because their people are Indian, that, obviously, has nothing to do with it… it is because most outsourcers (particuarly the large ones) are not honest about the level of experience and do not ultimately deliver what they promise.  As I will point out later in this post, a truly “senior” Indian resource is not inexpensive…they are close in salary to the same level of resource in Canada. Neither we nor they can provide these guys for $20 an hour.  So, the Indian outsourcers instead take junior people, bill them as “senior” and/or have someone other than the senior person they show to their client actually working on the project…hence, that and other failings in their business model results in them taking 8 times longer.

 

With that said, let’s make a CLEAR distinction between Indian outsourcing companies like Wipro and TaTa  and people of Indian descent.   You can be critical of the business practices of one without implying anything about the other…the two are unrelated.  I don’t like Halliburton or the behavior of big US oil/energy companies, but that doesn’t mean I am anti-American or slapping North Americans in the face.  In fact, the large Indian outsourcers have locations now in Canada, Ukraine, China, Pakistan and other places.  So, if I feel (and I do, *strongly*) that Indian outsourcers are not good value (for many kinds of projects)  no matter *where* in the world they outsource, I am not slighting people from Canada, or people of Indian, Ukrainian, Chinese, Pakistan or other descent.  

 

You also mention Infusion’s experience in starting its own Indian office (which we did a few years back).  I’ll go into that effort at the end of this post, but the reason we went directly to India ourselves and invested in starting our own Indian subsidiary instead of partnering with an outsourcer was *precisely* because we believed Indian talent to be on-par with anywhere else.  We believed their efficiencies where obstructed because of the big outsourcer/middleman in the middle and that if we went to India ourselves, we’d be able realize substantial advantages by doing it ourselves.  What we found out is that, yes, the talent is on-par with everywhere else, the people are as ambitious, educated and driven…but the business model of leveraging Indian outsourcers as a huge cost savings alternative  is a myth. 

 

Lastly, let us also remember that Infusion, itself, is run day to day by someone of Indian descent, Alim. You can and should talk to Alim about his experience with the Infusion Indian office…maybe I can Alim to do a post. But the fact that we have Moslem’s, Jews, Catholics, Indians, Russians, Korean, French, Chinese…people from every part of the world and every orientation at Infusion…that is one of my biggest sources of pride and precisely what makes us strong.  So, not to be tough but, your phrase, “My interpretation is that Indian programmers work at 1/8th the productivity and with greater programming defects than a North American programmer simply by virtue of being Indian.” is, as you say,  your interpretation.  I recommend that you not "interpret", but separate the sensitivities that you genuinely have from what I have *explicitly* said.   

 

So, to summarize: it is Indian *outsourcers* that have 1/8th the productivity of Infusion, not people of Indian or any other descent.  Here are some reasons why this is so and note that  NONE of these reasons have anything to do with one’s nationality or heritage, it is solely a business/organizational matter.  Consider the following:

 

1)      The Indian economy is hot: good resources jump CONSTANTLY between different outsourcing companies.  There is nothing more disruptive to a client than losing key people familiar with their environment and having to ramp up others. It is a *major* source of irritation for clients and results in frequent delays.   Outsourcers try to make up for this with extra process, but net net, is that nothing is a substitute for good people who know your business.  This is one of the things that make up that 1/8th productivity hit.

2)      One of our largest clients is ramping down their top Indian outsourcing relationships, and they are not alone.  If Indian outsourcing works so well, why would this be so?

a.       One reason is that the client decided to create their own, wholly owned Indian subsidiary, which is *fine*.  That might very well work great.  I never said Indian development didn’t work, I said Indian outsourcing companies don’t work.

b.      Another reason is that they were not able to handle complicated specifications very well.  Migration projects, great.  Projects with clear scope, great.  A trading system, hit and miss.  I appreciate that your manager has had good experiences, but I got these sentiments from the very top of the organization.  No one want to be buried under the specs, processes, checks, counterchecks, etc. of trying to communicate complicated ever changing specifications to an outside, distant company.  You are just better off doing it yourself in India or wherever else makes economic sense.

c.       A business process typically employed by Indian outsourcers is to offer extremely low rates to start, but then increase them substantially once a dependency is established.  I have seen this happen multiple times at the very highest levels of different clients.

d.      Massive concerns about intellectual property: people jump, IP laws (while being worked on) are not yet in a state that major Financial firms would like.

e.       Much like Krish said, any analysis or onsite visit of a large Indian Outsourcer is impressive.  No doubt.  But these firms are ALL about impression.  They say all the right things (we are CMM certified, we have great processes,etc.) they are the best salespeople around.  That is why your client singed up with them in the first place for HUGE contracts.  Yet now they are ramping down. The proof is in the performance, and the performance is hit and miss.  Maintenance/migration/administration work great…but sophisticated projects rarely succeed (or, if they succeed, they don’t do so with the savings promised).  If the Indian Outsourcers were so terrific how, after 30 years of Indian Outsourcing companies being around is not everyone using them exclusively?  IBM was using them in the 70s, they were the first.  Their growing pains are quite old…they have been around as long as IT development has been around.  The trend in Wall St. is relatively new.  It had its peak a few years ago, now it is settling somewhat.  The trend now seems to be where firms have their own, captive Indian site (and sometimes an Asian site or site elsewhere as well).  That, I think, will work *much* better for them.  No middleman, and the ability to freely move company resources back and forth instead of relying on a vendor’s middleman.

3)      We exist.  How could we exist and continue to grow when for every single service we offer, bar none, there are outsourcing companies that can offer lower rates than ours?   We are growing deeper into large financial firms, every one of which have huge, Indian outsourcer arrangements.  Why are we still getting projects?

4)      The distance and change of time zone is a subtle but very real problem, whether people are willing to agree or not.  It is exhausting for a  North American based manager to be on the phone every day discussing deep technical details at 7pm or later at night with the outsourcer.  These folks have families, and are not in their best mental state after a solid day of work in NY.  You can say the same for the folks at work in at the Indian outsourcer: they have families too and don’t want to be awake at night and sleep during the day.  So, someone is always exhausted when you talk. Specs get fuzzy, details get lost.  Face-to-face and voice communication is *critical*.  For all the electronic forms of communications in the world, when you are trying to figure out what an angry trader wants on his new trading system, you’d better be talking…often.  And you both better be very sharp.  Placing a day between a conversation and an action slows things down…hence, another part of the 1/8th.    None of this is to say that the time zone can’t work in your favor, for support, it works great.  At the end of the day, you give the outsourcer your changes, go home, go to sleep, come in the next day and there are your changes.  But this is not complex project work, this is support/modification of existing systems.

5)      Software is no longer as much “spec driven” but more “iterative”.  By the time you have a trading system or some other complicated piece of software fully spec’d out so that you can ship it to a remote destination and feel comfortable that they will be able to write it, you no longer need to ship it.  Technology is no longer difficult, with tools like .NET or Java/Eclipse, nothing is really that hard to put together these days.  But nothing we do is really difficult technologically provided EVERY detail is nailed down before you write a line of code. But  *specifications* are difficult.  If you look at the kinds of projects Infusion takes on, we take on things where the specs are fluid:  our skill is being able to adapt, to work iteratively, to be able to make our own decisions in places where a spec is fuzzy.  If we tried to simply say to our clients, “this spec is incomplete, please be precisely clear on A,B,C and D” we would not be useful to them.  The business, whom we all serve, does not read specs.  The human reality of getting complicated projects done is that you have people close at hand, who understand the political realities as well as the technical.  Sometimes you need a detail about the business no one knows…and no one knows who knows…you have to find the person, take them to lunch, chase down the trader (dodge a phone hurled at you if he/she is in a bad mood) and figure out that detail…THAT is what it is all about.  I appreciate that not everyone may work on that kind of project, but this is the reality we live in. We don’t live in a nice, discrete, process-driven reality…we work in the supremely fluid, irrational, tumultuous world of capital markets where the first people into a new line of business with the right technology makes a killing.   Try to spec that.  Also note:

a.       A typical technique Indian Outsourcing firms like TaTa and Wipro use when they miss deadlines or are not fulfilling spec is to trade time.  They say, “no problem, sorry…we’ll fix that, no charge.”  This is because their internal development costs are extremely low, so time isn’t really a problem for them.  But there is a very real cost to a business when a project is delayed.  I have seen this time and time again in many firms.  

b.      Many bright professionals in India are trained deeply in CMM and these kinds of process paradigms.  Unfortunately, for the kinds of projects we take on, that education doesn’t always fit.  We don’t have hyper-evolved specifications from clients that allow for these kinds of folks.  And, frankly, folks deeply rooted and trained in very specific positions don’t always enjoy more the fluid environments we are forced to live in.

 

 

Now, you asked about our experience when we started our own office in  India a few years back. We saw all 5 above and many other things.  We basically lived as in a microcosm of what large firms experience when Indian outsourcing.  That is one of the reasons I hold my opinion so strongly…I was there, I did it, I spent the money, built the business, tried to make it work, fought the battles and, ultimately, closed it down.  One of the things we found out while there, was that in spite of Indian Outsourcing companies claims that “senior” people could be had for low salaries (<20k) we found that it simply wasn't true: when we got to Bangalore ourselves and opened an office, we found that while you can get junior, less experienced talent for this…top Indian talent has comparable salaries to Canada.  You also have to deal with the fact that the top-experienced people in India can come to the US or go anywhere else in the world they like through the outsourcer…so they are priced for these markets not the Indian market.  Good people are not a bargain no matter where you go.  Thus, if you want “top” person who understands the business, has solid experience in code, is a great communicator, etc., their salaries are very close to the comparable salary of that person in Canada.  So, you have two identical people: one very distant in a different time zone, and one 1hr away from all our clients.  Who do you pick?

 

So, in the end…our experience with our own Indian division was that the talent was there, but by the time you paid what the market rate for our quality of resource, added all the other expenses (monetary and administrative) of dealing with and managing a remote entity and of moving complex projects back and forth, our analysis showed that India was, in fact,  a better price point than North America…but that Canada could do the same work for actually less (all expenses and administrative items considered.)  Thus, Infusion today has the bulk of its resources and development staged out of Canada.  That is why we became a “near-shorer” instead of an “Indian out sourcer”.  And, if you look at the trends, note that many of the Indian outsourcers are now offering near-shoring in Canada, just like us, in order to assuage the concerns of financial services firms.  Why are they doing that? (Check the Globe & Mail newspaper in Canada…they have  a bunch of articles on the India Outsourcing in Canada trend).

 

posted May 18, 2005 6:07 PM by Greg with 5 Comments

Key Points Consultants Should Know

Got an email from one of our folks in Canada.  Here it is with my comments:

Hey Greg,

I have another question that popped into my mind while reading your blog. What are some key points that Infusion consultants should know and should be practicing about maintaining and enhancing the relationships with their client?

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 Thing One: Solve the Problem, Don't Write Code

The first thing to keep in mind is that anytime a consultant is brought in, there is a crisis.  No one ever brings a consultant in because things are going great, they bring a consultant in because they have come to the conclusion that their own staff is unable to complete something critical in the period of time they have.  This may be due to any number of factors.  Maybe they don't have the full-time staff allowance (they are not allowed to hire full-timers because, perhaps, the company is public and they don't want to dilute their revenue-per-employee numbers to keep their stock up).  It may also be that there is a lot of disorganization in their firm or that their staff doesn't have the right attitude, skillsets, or both.  It can even be that the client himself/herself is just not a very skilled manager and may be confusing their difficulty managing/prioritizing with not having enough (or the right) staff.   Whatever the reason, a consultant enters a hostile world. So, the first thing to keep in mind is, "my job exists because there is chaos in the worls" and  to keep an optimistic, "can-do" attitude.  Look carefully at your situation, criticize *nothing* and don't let yourself be irritated by disorganization, lack of direction, etc.  Remember that you are there *precisely* because these problems exist.  The technical stuff the client brought you in for (J2EE, .NET, SharePoint, whatever) is only one component of what your job truly is.  Your job is to solve problems, not to write code.  Never forget that.  

I remember one consultant about 4 or 5 years ago started with a bank.  So he gets there and they don't have a PC for him.  He waits a day, still no PC.  He has a laptop, but no connection to the bank's network, so he is kind of vamping. His manager/client  is trying to get the bureaucracy to move, but sometimes things take awhile.  Anyway, the consultant starts complaining: to us, to the client, he sends emails like, "how am I supposed to get any work done without a PC, this is ridiculous!" and he more or less complains about the bank, how disorganized it is, etc..   Well, the client picked up on that and sent the consultant back.  He felt that if the consultant was going to have that attitude and could not handle things professionally when the technical path was temporarily blocked (after all, he could have gathered requirements, done research, surely there was *something* the consultant could have done while waiting for the PC) then the consultant just wouldn't be a good fit.

On the flip side, we've also had situations where a consultant has gone in and, once they really understood what the client wanted them to do, the consultant said, "whoa!  you shouldn't be writing that."  And the consultant didn't end up doing what they were hired to do, instead they worked the problem and, in some cases, it ends up purely being architectural advising or the client ends up buying a product on the consultant's suggestion instead of writing the code.  And that's fine.  You can shorten the duration of your assignment, you can change the nature of your day to day, a consultant can do *anything* they want to do just as long as they are solving the problem for the customer.  

Thing Two: Be A Lieutenant to your Client

What your client really wants, no matter what they tell you, is for you to read their mind and be able to do everything they could possibly need without them explaining, showing, or having to support you.  It isn't realistic, of course, but it is good to understand what your client truly wants of you: to be self managing.  A client wants to give you an open-ended task, and have you figure out everything autonomously and come back to them NOT with options, but with potential SOLUTIONS.   Managers work best iteratively, they need to see concrete things to be able to say yes/no and add this/take away that.   People are terrible at "envisioning" solutions with conversations and whiteboards.  So it is ironic and sad that most planning happens around whiteboards and with never-ending conversations...which also explains why so little actually gets done.  So here is the thing: if the client says they want X, don't go on the web, research X, and give them a bunch of links talking about different options and say, "so what do you want me to explore next."  The client could have done that themselves...they don't want an admin or a coder, they really want a lieutenant, someone will internalize, assess, and deeply understand the problem and all the options.  They want you to come back with complete frameworks for solutions where they can point out problems or suggest additions.  They want you to drop a solution at their feet...and it is ok if the solution idea isn't correct, at least they can see something complete, thought out, and they can refine your efforts by explaining why it doesn't quite mesh with what they need. 

In the end, the client doesn't *know*.  And they won't admit that.  So when you get fuzziness from a client, or the environment is fuzzy, remember what I said about consultants only being brought in in a crisis.  Fuzziness means, you need to become a leader, and de-fuzz the environment yourself.  Take a direction, plow forward, take the lead, take ownership...it is easier to ask for forgiveness than permission (as the old saying goes).  If you just sit there and think, "its fuzzy, someone better specifically clarify my direction so I know exactly what I need to do" then you will ultimately be competing professionally against folks in India, China, and elsewhere for whom a 10-20k a year salary is a fortune.  Sad fact is that once a situation is entirely clear, no one needs a consultant anymore, they can happily use an outsource resource.

So, you need to be a co-manager, a lieutenant to your client.  You need to understand what your client truly wants politically and day to day.  And you need to be a king-maker, do whatever it takes to make sure your client succeeds in his environment and ascends.  That might be code you are given, but it may also mean learning some aspect of the business itself that is important and your client needs to know but hasn't had time to look into.   In short, your job is to make sure your client is successful.

Thing Three: Good Attitude, Always

The days of temperamental, "artiste" and "wacky-scientist" technical people is over.  Client's will simply not tolerate bad attitudes or anything juvenile.  You need to be a "pro".  The client has to look at you, the way you conduct yourself, handle yourself in meetings, etc. and think, "I'm glad this person is on my team."   And they also need to feel that you are zealously on their side.  If, for example, you come across "*** clusters" at a client site, i.e., pockets of people that complain about the bank, or the managers, etc.  It is best to avoid them like the plague.  People don't realize it, but pockets of bad morale are known, and tracked like wild caribou.  Managers always know who bad apples are, and the fact they are still there and still complaining is often due to how hard it is for clients to fire people...not just because they may be doing critical work, but also because their HR forces and endless serious of warnings, write-ups, etc. before you can actually fire someone.   A consultant, however, has no such protection.  So, if you hang around with the wrong crowd, you'll get marked and that's pretty much it for you with that manager.   Given that you probably don't want to be in the situation where you are reporting on the poor attitudes of your full-time colleagues to your client manager, it is simply best to avoid those "complaint circles".  If you find yourself in one, try to redirect it to positive things like, "hmm...I see that is a problem.  Well, what could we do to change that if so-and-so would let us" and you might get an opportunity to actually fix a problem for the manager. 

Generally, though...keep a good attitude.  Know that *any* situation can always be changed.  If you don't feel that the manager is really using all your talents, don't labor under the assumption that because they said, "Do X" that you just have to die inside and "Do X" for the year.  If X could be done by a less expensive/sk illed resource than yourself, maybe you should *not* be doing X at all!  Talk to the manager or talk to us and say, "I don't think you are getting your money's worth by me doing X...I could be doing Y and managing Z, which is much more important."  It all goes back to thing 2, understand what your client truly needs and make that happen. 

But, no matter what, keep a good attitude.  If you are doing the technical equivalent of peeling onions, than smile as you peel onions and realize that you can always change your situation: a good attitude and history of performance is the GOLDEN CURRENCY you can cash in.  We've had people in clients the clients loved, but were having do things that weren't realizing the talents of the consultant.  But because the consultant had a good attitude, and history, the client didn't want to lose them, so they allowed the consultant to change their day to day to something more interesting.  So, attitude is key!  If you do a good job, but have a bad attitude, it almost doesn't matter.  But if you have a positive spin and you do a good job, you are one of the rarest and most revered professional there is...and a client will do *anything* to keep you.

 Thing Four: Do The Right Thing

Always do what is best for the manager.  If you are put in a position for 3 months, but you can get everything done in 1 week, do it.  It is *never* about the engagement we have, its about the engagements we want to get in the future.  We will always sacrifice short-term profit for long-term wins.  Reputation is more important that short-term dollars.  Do what is right for the client, always.  If we know technology X, but you learn that Y is better, we need to learn Y or we need to tell the client they should pursue Y and not X.  Our job is to solve problems and be the best value for the dollar, our just is *not* to push our own agenda or try to make the client work they way we want them to work. 

Now, if the "right thing" involves something that is potentially shocking, disruptive, involves your manager's boss (your client manager may be in error, and you may feel you need to go above him), talk to your manager on the Infusion side first, and we'll work with you/guide you on how to go about it.

But your thought process should always be, "how do I do the best thing for my client" and everything else good flows from that.

 

 

posted May 17, 2005 8:24 PM by Greg with 1 Comments

A Response to Five Points

For this post, I received an email from someone who brought up some good points, and some good comments I’d like to address.  We’re still quasi-public on this blog, so I obscured some names with X and Y and the like.  Anyway, here it is, in Q&A form:

 

From an on-site Infusion person: their comments then my answers in the left margin:

 

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Five things I would like to see at Infusion

 

  1. Learn to say “No”:  Although it may be tough, I think it’s necessary to say No to certain clients or projects.  It seems that we accept any project without consideration of what the costs and benefits may be.  The project I am currently on comes to mind.  We knew up front it was going to be a mess and yet we agreed to do it.  We had more than enough other work to do, so it’s hard to see the reasoning behind that decision.  

 

We also think saying “no” is important, and we say it very frequently.  But since no one ever works on a project we say “no” to, it may not be apparent how often we say it, or how much thought we do give to projects we “yes” on.  Generally, an enormous amount of resource planning goes into any project before we agree to take it.  In fact, we pay something like $50,000 a year for software that helps us plan and forecast resources for upcoming projects.  So, it really isn’t the case that we accept any project “without consideration of what the costs and benefits may be” it is entirely the opposite: we often take on projects that are inconvenient, tough, demanding *precisely* because the benefits hugely outweigh the costs.  In one ongoing project right now in Boston, you have client [X].  Microsoft comes to us and says, we really need someone to go above and beyond on this, we hear you guys are the best: it is important to us because it will be a turning point for us in getting our technologies on the back-end of this major, major client, and if you guys help us, this will lead to the largest, most interesting cutting edge projects you’ve ever taken on. 

 

FACT: Did you know that the work we did on one of our tougher projects was shown to Bill Gates and Steve Ballmer?  I think that’s a real benefit!

 

But the reverse is true also, if we don’t take it on, they go to another partner who will.  For some gigs, that’s fine…some things are not worth the burn, but some are critical, seminal moments for a company: do you take this on, risk and all, and go to the next level, or do you let it pass.  On the project I believe the writer may be referring to, had we let it pass, here is what would have happened:  the rep would have stopped using us. Period.  Life is tough, but that’s the way it is.  He would have brought in another partner (they had one lined up), and that partner would have done it.  Not has good as us, but they’d have muddled through.  And from then on, we would have been steadily edged out of the account as the other partner gains credibility and size in the account.  Over time, our contracts would wind down but, without the MSFT sponsorship, we would not be able to easily get other work to replace it (MSFT brought us in and owns the relationship at the moment, it will take us time to develop our own) and we would, ultimately, have to move to another account and/or have bench.

 

What you also don’t see (and we have to communicate this better) are the almost *daily* calls to the client/MSFT where we say, “Our guys are burning, this is unsustainable.  We will lose people if we keep this yup, you *must* get the client to approve more resources on this contract to lighten the load.”  You never see those battles and you probably don’t know we just won one such a battle as of end of next week to lighten the load (we got another resource).  Opportunity is sometimes a cycle of abuse: the client gives MSFT an insane responsibility, they can’t do it alone, they reach out to a can-do partner, and together we burn, but when we win, it isn’t just a project: the whole company jumps up a notch in terms of its credibility and ability to get more reasonable, larger projects where folks won’t need to burn.

 

Sad truth, is that we are in competition with Indian outsourcers.  We have to do more, we have to take on more to keep growing.  If we only take on what is convenient, simple, or where the specs are very clear…you’ll be fighting people who have “experts” for $20 per hour.  You can’t win that battle.  The only way in this day and age to get those kinds of projects is to first establish yourself as a get-it-done company that is able to pull a few rabbits out of that hat.  You do that once or twice for a client, they remember that.  And when it comes time for those low-burn projects, you *will* get those projects because you have a history and a trust with the client.

 

The last points, “we have more than enough other work to do/why would we take on a project we knew would be a mess”.  All I can say is, it is very often the case that  the biggest opportunities are not so much about taking on a “mess” but rather turning a “mess” into something that isn’t a mess.  That’s how reputations are made, both personally and on a corporate level.  You have to be half turn-around artist to make it on Wall Street.

 

Lastly, the point “we have enough other work” …it may not always be clear, but almost all of our work is closely inter-related with other work.  For example, the project in Boston I mentioned earlier is interwoven through about 4-5 other, major off-site projects and about 8 on-site people in NYC!   So, if we don’t sometimes take on some risk and help out our clients, all the other work can collapse in the wink of an eye!  It’s tough, but that’s business.

 

  1. Treat ‘sold’ clients with more respect.  I didn’t understand why we treated [company X] like a second rate client.  We pulled resources in and out of there like crazy, giving the impression that the client wasn’t important.

 

Here again, there is a hidden dimension that is often not seen.  I can appreciate that if you are a developer on the account, you see the resources get moved around because we get busy and, you yourself, get “pulled.”  If that was the whole story it really would be a disservice to the account.  But in the case of [X], the boss there is actually a friend of mine (I have personal relationships with many of our clients).  We were VERY concerned about him feeling this way, so I had lunch with him and I told him we were in a resource crunch, and asked if we could postpone things. I also said, if it’s a problem, we won’t do it.  He said yes, I trust you.  This is usually what happens, even if you don’t see it.  That is not to say, on occasion, we might make an error where a resource gets allocated before I have a chance to talk to the client, but in the end, we are always straightforward, and Alim and I go *personally* to visit the client whenever resource changes happen just to make sure they don’t feel they are not important.   That was what we did with X…I just had lunch with him last Weds where we talked about this.  And, going forward, I told him that I am *personally* going to be there alongside with the new resource for the first few days to make sure things go smoothly and his deadlines are met.  X was very appreciative of that, and he has, in fact, offered us other projects to do.

 

You have to realize that we are *paranoid* about our firm’s reputation and the perception our clients have of us.  Whenever we feel even the slightest bit worried, Alim and I, if anything, tend to overreact…we call, we visit, we move mountains to make sure the client will not experience any burn or, if they do, we’ll offer free services (like training) to make up for it.   Often times we give consulting hours for free.

 

Now, when we were a younger company, we did, in fact, lose a couple small clients (<10k of work) because we kept saying we wanted to work with them, but we didn’t have the staff at the time.  Well, we learned our lesson, and now we either say “no” or we make sure that they always get what they need. 

 

I would say that 95% of all our growth is based on increasing opportunities from existing clients, or from referrals from our clients to other companies.   Think about it: we don’t advertise, we don’t send out newsletters, we don’t cold call…we grow *entirely* on reputation because, at the end of the day, it is all about trust.  So that, more than anything, says we are doing right by clients.

 

 

  1. Communicate with the people ‘on the front lines’.  There are too many people that I know who are unhappy with the need-to-know basis that is all too common at this company.   I know everyone is busy and it’s hard to get information across sometimes, but we demand excellence from our people and they need to know why.  As soon as the guys doing the work are not well informed, they lose any sense of involvement in the project and have no personal interest in seeing things done as best as possible.

 

Well, this is the sort of thing that puzzles me a little.  We have never had a “need to know” philosophy.  The only philosophy I would say is, in effect, “need to ask.”  Simple fact is, folks just have to ask.  If someone is laboring under on assumption that they don’t know something they should, but they have not, specifically, explicitly asked their manager (or me or Alim) what they want to know…then this is a place where  I become concerned about the attitude of that person: it is never wise to reach conclusions without taking it upon oneself to explicitly determine the facts of a situation.  I hope I don’t sound preachy, but to complain or resign oneself to something is to say, “I have no power” and to just give up.  Now, if, however, someone does ask a manager, and doesn’t get the answer they need…then that is demotivating and a real problem and we need to work on it asap. 

 

The overall thing about Infusion is that it is “pull” not “push”.  We don’t (and maybe we should) but we don’t regularly push all the facts onto everyone, we’ve just gotten to a certain size now and everyone’s world is so varied it is just difficult to do.  So we put our efforts in supporting, “pull”.  So a consultant wants to know something, they should ask (pull).  A consultant wants to know what else is available to him in the company (maybe he wants to get a different skillset, go to a different job within the company) then ask (pull).   But the very worst thing someone can do is labor under assumptions that they have not fully researched, and start down a negative road.  That is to give up.

 

The last point, “no personal interest in seeing things done as best as possible.”  Here I am going to be little tough.  I am a believer that everyone is in charge of their own destiny.  If I, personally, am in an situation, it doesn’t matter how bad the situation is or even how I got into it…I choose to *own* that situation, and that is what I try to teach others to do.  You are *never* powerless.  A simple phone call, email, IM…the problem is either resolved or, if not, one may always choose (and should choose) to change one’s situation when their present scenario ends.  But I would never take the attitude where the way something is done wouldn’t matter to me because I don’t feel involved/knowledgeable, etc.  Similarly, I don’t think  that “we demand excellence from our people and they need to know why” is really true for many (if any) people at Infusion.  Excellence isn’t something we demand, you can’t demand it…it is either in you or it isn’t.  Someone who is truly excellent is incapable of being any other way, you don’t turn it on and off depending on the situation…there’s personal pride there.  The only thing an excellent person can do in an adverse situation is…excellent work.  And if the situation doesn’t change after they constructively discuss their feelings with their employer (attitude and the willingness to believe another perspective may exist, is part of excellence), than that employer will lose that excellent person to another company who will listen.  So, we listen. 

 

 

  1. Reward according to performance.   The current reward structure doesn’t promote excellence.  In fact, most people have realized that extra effort comes out of their own pocket.  This is not to say that Infusion doesn’t pay well.  It’s to say that putting in that extra effort isn’t properly rewarded.  It’s not a matter of money, it’s a matter of motivation.  People end up thinking “Why should I work harder when these guys don’t appreciate it.”

 

We have and do reward performance.  Here are just a few people that 1 and 2 years ago (in one case, 3 years) were all front-line, on-site developers:  Alim, Cortez, Steve, Bill Baldasti, Sheldon Fernandez, Maurice.  Talk to any of these guys, just IM or email them.  All these guys are directors and/or managers of multi-million dollar accounts, and all participate in profit incentives.   And it isn’t like they have to die for someone to get these roles…we want to double in size in the next 1-1.5 years, triple in 2-3 years.  We will need 2-3 or more times this amount of managers and directors…and we are going to look within our ranks first and foremost.

 

In the short term, there are bonuses, salary reviews and the like.  These are usually good for the first couple years, but then you hit a limit for any consultant, or any developer because the client can only be billed so much (you bump up against market rates).  So you need to start managing other people, get deep business expertise,  participate in sales potentially, and generally move more into the management of the firm.  This isn’t just true of Infusion, this is really true at every firm. So  people who go “above and beyond” end up running groups and being an integral part of Infusion, and share in the revenue growth they are now managing.  That said, I should point out that it is not enough to just work hard and deliver technically, “above and beyond” has to do with *attitude* every bit as much as work.  If someone works hard, but is angry and negative as they do it,  it is sad and ironic, but these folks get on the “morale problem radar” instead of the “let’s groom this person for big things, he/she is great” radar. 

 

My philosophy is either do something wholeheartedly or don’t do it.  Don’t do it in the middle.  That is a waste for all involved.  If there is something external that is preventing you from feeling like you can/want to focus on something, then ATTACK that thing, FIND OUT the answer.  Don’t “assume”, or “feel”…choose to know!  You will be surprised by what you find out: 99% of the time, it isnt what you thought.    The worst that can happen is that, you might find that a bonus can’t be as big as you’d like once you look at all the numbers of the project or you really aren’t interested in management, or getting a different or deeper skillset, etc….so at that point, you may very well think it isn’t worth it.  And, if that’s the case, if it is truly the case that we can’t offer what someone needs as an upside for the amount of effort one is willing to give, then we can all walk away friends…no hard feelings.  But I can tell you, that has almost never happened.  Those people who have come to us, shared their feelings, listened honestly to what the situation was…in almost every case, everything works out fine.

 

  1. Actively encourage more lateral communication within the company.  Most of the folks at Infusion are pretty good at trying to get help from their peers when they need it, but we could certainly leverage each other’s expertise a lot more.  We need a better method than word of mouth for people to communicate internally.  It would be really neat to have each team showcase what they are working on at regular intervals.  Half the battle is being aware that colleagues might be able to help. 

 

Yes, totally agree.  We are trying very hard to put this kind of thing in place.  That is what tech-nights were intended to be.  We are also now creating team sites on our portal to do collaboration. This will take time as, unfortunately, most conversation happens out of band in email…that’s something we have to try to reign in so we create a corporate memory.

 

The sad/hard fact is that we are growing and people don’t always have the time even though everyone wants this. With everyone all over the map, we had to make our weekly staff meetings bi weekly, then monthly.  It is a real challenge, and we’re trying to put some peer review, tech nights, business lectures in place.  One of the frustrating things for me is, as you say, that there we have deep expertise in every major tech, but it is kind of spread out in different people at Infusion.  That is why I just hired a fellow who’s sole job it is to gather that knowledge from different folks, condense it, document it, and build VPC images demonstrating each technology.   He will do demonstrations inside the company (and out) and will be available at set times to answer questions/find answers. It is also my hope that he can do the same for business knowledge in addition to tech knowledge.   Ultimately, if his role works out well (and we can monetize it by creating additional sales), it will be the beginning of a new department.

 

So look for some dramatic changes in this regard very soon.

 

  1. Slow down to look around once in a while.  We move at breakneck speeds which is a good thing most of the time.  There are times however when we would benefit from doing things we currently write off as not having time for.  Specifically I would love to see post mortem discussion about projects, especially ones that don’t go well.  It seems like we just rush off to the next one without really having a chance to figure out what we could have learned from the previous one.  Perhaps management does this, but it needs to happen on a team level as well.

 

I agree here.  Management spends a lot of time doing this.  All our new lines of business (see previous post) are a result of conscious efforts and specific investments.  Keep in mind we started as a pure development shop, but now we are deep into SharePoint, BizTalk, CMS, infrastructure and the like…those were conscious efforts. We specifically hired people to groom in that skillset and set a few months aside for them to ramp up.  And it’s worked out great, a huge amount of new growth is along these lines.

 

It isn’t really the case that we “dash off” to other things without figuring out where we could do better.  We have evolved enormously over the last 2 years, from a relatively flat organization, to one with dedicated, non-billable management, departments and automated systems.  We have added automated accounting (to prevent overruns on projects), forecasting software (to resource plan better), added additional administrative staff (full-time event coordinator) a sales admin, all these things in the last year or so.  And, as a result, we very rarely overrun projects now, and we are able to staff things and manage opportunities we otherwise could not have.  Granted, there is more to do, but learning from experience is the key role of our admins and management, and it is something we take very seriously.  Our directors and managers regularly meet, email, call, and send regular status reports to which we regularly adjust. So, it is happening.

 

But you are correct, it needs to happen more at the team level.  Actually, towards that end, I am visiting the team in traveling this week for just that purpose (and we try to visit every team).   There is no set agenda, it is really to see how things are going, and to listen.

 

Note that big-picture stuff does happen a lot at the individual level at Infusion.  I regularly meet with, probably, 5-10 people that approached me at one time or another in the past, and said, “I have an idea.”  My reaction or Alim’s reaction is usually, “cool” and we talk it out with them and, if it holds up, we give them resources to see it through.  In fact one person had an idea for a new product involving risk assessment.  I told him, do it…I’d fund the development of it, and if it turns into anything I can spin it off into a new entity and he can run it.   Another person, believe it or not, took it upon himself to see if my dream of a private plane to shuttle folks between NYC and Toronto could be made a viable, separate business.  And the list goes on. 

 

But I guess the main thing is, we do our best and are always trying to improve.  But remember what I said in point 3, we are “pull” not “push”.    We always try to hire entrepreneurs, and we try to be a place where, if someone is passionate about something and willing to take ownership (and a responsibility to find revenue down the line) then we will take care of those people…there is nothing we won’t listen to, and few things we won’t try.   

 

posted May 16, 2005 10:17 PM by Greg with 2 Comments

'Where do you see Infusion's Growth..'

Here’s the question I’ll answer this post….note that I replaced company names with X and Y (this blog is public which I don’t think is a bad thing) so if you want clarification email me and/or wait until we get a private version of this site online and I’ll go into client-specific details.

 

Now I warn you…this question takes some time to address.  I promised brevity but…there’s a lot to say here!  So grab a coffee or something…

 

Ok…now the question:

 

“Where do you see the company's growth in the future?  Being on-site, I get a biased view of the company - it seems that the majority of our current staff is on long-term on-site projects like [company X] and [company Y] with an equal portion also working on shorter-term engagements such as the work we do for the gov't.  On a significantly smaller scale, we have training and off-site project work.  Is this an accurate assessment of the breakdown and is this the way the company is expected to evolve or are training and internal projects expected to grow to catch up to the on-site work?”

 

Well, it only makes sense that one would see the company from the vantage of where one spends most his professional time.  But, in actuality, only about 13 people of our present 70 or so resources are doing long-term/on-site work.  So more than 4/5 of our revenues come from things other than on-site, long-term.   

 

Now, while we do have a lot of folks on site, most our on-site work is not long term at most clients.  Usually on-site work falls in one of the following categories:

 

1.        Per Project Fixed Price: they are on-site completing one particular project.  Often these are fixed price engagements and they tend to go from statement of work (SOW) to statement of work and/or they leave when there is nothing left to do with the project.  Typical durations are 1-3 months.

2.        POC Project: we work very closely with Microsoft and make it a point to invest in learning new technologies before they come mainstream (we were one of the first companies on Wall St. to learn and evangelize dotNet…this is one of the ways we grew to our present size).  As such, Microsoft will often fund proof of concepts (POCs) where they ask us to build something for the client to “prove” Microsoft technologies will work in their environment.  This is one of our key sales strategies.  Generally the Microsoft POC funds don’t cover all our cost in proving the technology to the client, so we have to invest as well (and sometimes there is some very real stress of the crew working on the POC, case in point, Steve’s Ellis’ crew in Boston).  But, in the end, when the POC goes well (and all of ours have), Infusion gets the services work and, of course, Microsoft is able to sell its products.  And then we tend to get to (1) above.

3.        Mentoring: we are often asked to put people on-site for the purpose of mentoring an existing company’s staff.  So, our mentors will work onsite on a task or tasks but with the explicit directive of teaching full-time members of the staff along the way. This often leads to (1).

4.        Architecture Design Review Sessions (ADS): we are often contracted by Microsoft to perform 2 day, on-site, architectural design seminars. This leads to (3) and/or (2) which often leads to (1)

 

 

 

 

 

 

So, you are correct in that most our work is on-site, but in actuality, most our on-site work is project to project, and we tend to be hopping relatively quickly between client-sites.

 

In terms of future growth, long-term/on-site purely technical consulting (what we do now), while very valuable from a cash flow perspective, is not our  only goal as a firm.  It is one tier of a multi-tier strategy.  And, with this tier, there are some challenges and difficulties.  Specifically, the difficulty with long-term, on-site is that, from Infusion’s perspective, cost inevitably goes up (as resources gain experience, salaries increase) but you can never raise the rate on a client.  So you end up with an ever increasing seniority of resource (along with salary) but you are still only able to bill the client for what the resource had when they first came on-site.  Although it may be difficult to believe, our margins on long-term/on-site never exceed 15% as an absolute best (usually it is somewhere within -5% to 10%.)  So, at absolute best, Infusion only profits 15 cents on the dollar (I’ll break down how that is a little later, for now, take my word for it!  I know there seems like between salary and billable there should be a wide margin, but when you factor all the costs of doing business, there really isn’t.  My next post will deal with that and I’ll walk you through it.) 

 

So, while we always want to offer long term, on-site services…our bigger plan for these kinds of services it to make sure long-term folks get an even larger degree of business knowledge.  In this way they will have higher billable capability and get more involved in the actual business analysis and management of projects for the client.  In short, we must be able to do what Delloitte,  Accenture can do and reach a point where we can compete with them for large, strategic projects instead of just tactical ones.   I would like for our on-site people to be more like management consultants…getting involved in the business itself as well as the technology, to be seen as trusted advisors to the firm, not just great technical executers.  You’ve all heard me and Alim harp about getting more “business knowledge” in the firm, bringing in speakers (like we did with Alvin in Toronto) and licensing the internal series 7 training materials…this is the reason we are doing those things.  And we will/need to do a LOT more of this.   If we don’t move from straight-technical on-site/long term into becoming more business-specific technical consultants, then we end up in a rate-war with Indian outsourcers because a “J2EE guy” or a “.NET Guy” becomes a commodity.  And once that happens, a North American company can not win. …our quality will always be better, but Indian outsourcing rates are always so compelling to upper management, that you can’t compete…we simply can’t give the client a “senior” .NET expert available for $20-$40 and hour and keep a straight face.   Indian outsourcers can’t really provide this guy either, it takes their experts 8 hours to do what we can do in 1 hour…so you can pay us 1hr * $150 or then 8hr*40 ($320) to get the same job done…but it takes upper management of a client many failed projects and a long, long time to realize it.   (At some future post called, “The Emperor Has No Clothes”, I’ll walk you through the myths as I see it of outsourcing.)

 

For now, our on-site/long term survives now because we have a reputation for “outstanding” consultants (which is true) so clients do pay more (and expect more) for and from us.  But to keep that perception, we’ll need to have our on-site/long term folks take the next leap and not only be outstanding technologists who know the business a good deal, to folks that are outstanding technologists and expert at the business (certified wherever possible) and trained in professional interpersonal skills as well.   We also want to see our people grow into accounts, take on more responsibilities and ultimately span more than the project they are initially brought in to help with.   We do that now, but we need to formalize host we do this a lot more.

 

Other major areas of growth (not in order of priority) we are pursuing are:

 

  • Create  higher-margin “first-in” consulting/project opportunities: we do this by being “first in” on new technologies (a big push for us presently, we invest a lot in ramping up on new things before other firms.)  Those who have been with us for awhile will remember that we were one of the first firms on Wall St. to be dotNet experts…that is what really helped us grow.  But now, .net and j2ee are becoming more commoditized, rates are becoming lower all the time…so we are now investing time/money into products/technologies like Share Point, SQL Reporting Services, BizTalk, Content Management Server, Call Center Framework, Business Intelligence Portal, Live Communications Server, Exchange, Microsoft Office Information Bridge Framework, Mobility SDK for mobile devices, .NET 2.0. , and quite a bit more.  These technologies are so new and so compelling but there is not yet the expertise in the industry to meet demand…so, supply and demand yield better market prices.
  • Large scale architectural consulting: high-performance market data back-end consulting.  This is a newer area for us, but we have done so much back-end, high-performance, mission critical systems at this point with banks and hedge funds that we now offer this as a bonafide type of consulting.
  • Expand training back up:  we used to do a lot more training than we do today.   Training is higher-margin, and a great way to generate sales opportunities.  We need to either hire more trainers of promote folks from within who want to give this a try.  We are a Microsoft ATEC (hard certification to get) and we should really be using this more.  We can also teach BEA, Web Sphere and many other technologies.
  • Off-site project development: take projects to Canada for “near-shoring”.  Not as cheap as India in terms of hourly rates, but *much* better value for the customer in terms of what they get for the money.  This is an area we continue to try and grow.
  • Infrastructure: Traditionally, we have always done infrastructure work, things related to Active Directory, Exchange, network migrations, Microsoft Project installations, Security audits…but we have not officially created an infrastructure group.  In the next year, we will create a bonafide infrastructure group that we will hire people into which will most likely have its own director.  It makes sense for us to get into this: infrastructure and development are merging anyway: you can’t really deploy a Portal without writing additional code to customize it. 
  • Pure Business Strategy Consulting: This is the dream.  To be able to consult Wall St. companies on the actual business (FI, Equities, Derivatives, etc.).  We are not there yet and it is not our #1 priority, but we are looking to create this group in the next 1.5 to 2 years.  We now, for the first time, have dedicated Business Analysts on staff.   These will be the seeds for this new group.  We are looking to hire more.  Also, developers can turn themselves into business analysts if the business begins to appeal more than the technology.
  • Government Expansion: We presently service two verticals, State and Local Government (SLG) in the US and Financial Services.  At this point, we use the same pool of consultants for both tasks.  Ultimately, we probably need to split these into different groups, and we need to grow government a great deal.  Unlike the private sector, it takes many years to develop the relationships you need to do well in government (and you also have to get on state contracts and such)…but once you have them, the growth can be phenomenal.  Government is absolutely *starved* for good talent, and they are regularly abused by poor software companies.  We’ve been working government for about 2 years now, and it is starting to pay off.
  • Acquisition: There is only so fast a company can grow organically.  So we are always looking to buy smaller firms that might have a great relationship with maybe one big client.   
  • Spin-off Product:  This is probably further out, and not our key priority right now…But we are always looking for potential product ideas.  If we find an opportunity for a product, we would spin it off in its own company.  We have actually done this once before.  Take a look at Axisgraphics.tv.  At this point, there are a few folks at Infusion who have come to me with ideas that I have liked.  I have offered to give them resources to realize a proof of concept and help them sell it to one or more of our accounts.  The thought is, if an Infusion person thinks of something, realizes a POC and can, with our help, get some clients to buy into it, then the potential is there to create another company that the Infusion person can join.  From there we can get venture or fund it ourselves.

 

This is certainly turning into a long post! So let me end it here with one comment.  Many of you who are reading this, might detect that a lot of the new-growth areas are related to Microsoft technologies.    And you are correct.  While we do and will continue to do a lot of J2EE work with BEA and IBM Websphere and the like, Microsoft is the only big software company out there who truly has a partner model.  In other words, instead of trying to sell both product and services as all the other vendors do, Microsoft almost always gives services/integration work to a good, certified Partner who helps them with a client.  So they create a very real market-place for service providers, a technical meritocracy that we tend to excel at. Microsoft has been *terrific* for us, and we’ve been good to them by helping them sell products on our own efforts (we bring them in sometimes, they bring us in).  So that partnership in addition to the fact that the new generation of Microsoft technologies are, in my opinion, groundbreaking, means that Microsoft is a huge source of growth for us.  

 

If you have a J2EE skillset, you should not be concerned.  We have always felt that a technological expertise is just a tool in the tool belt.  If you define your self as a “Java guy”, or a “.NET guy”, that is dangerously narrowing.  You are a professional developer who should aspire to understand as much out there as possible, and always pick the best technology for the job…not just the technology you may know at the time.  If you know J2EE, you will have *no* trouble learning .NET (and we’ll make a point to help you with that transition is your project ends and that is a jump you want to make.  If not, that’s fine too.  There’s room for all.  And always keep in mind that one of the biggest sells as a firm have is that we can say with a straight face, we know both J2EE and Microsoft sides of the house.    

 

Ok, that’s it for this post.  Add comments/questions.  There is a lot here and a ton more to say, but I’ll do that in subsequent posts so that this one doesn’t reach a Dickens-like length.

 

posted May 15, 2005 10:21 PM by Greg with 1 Comments

How You Are Perceived: Some Rules of Communications

My first topic may surprise some...it isn't deeply introspective or anything, but rather something I felt strongly when I was reading some emails I was CC'd on.  So this post (which you can read after the rambling preamble you are now working through) is about...emails.  

Some of you may know this, but I was originally an English/Theater major at the University of Rochester.  I don't think I was an especially talented English major...I found out that acting in plays on campus ended up counting as course credit and so the English major was chosen for my by the UofR mainframe when the deadline elapsed, and I hadn't picked a major. So...voila...English major.

But I did have a career as a copywriter for a very small advertising agency in Rochester New York.  I wrote a lot of ads for local radio.  Here are some:

  • “Please Father…”, GVAC Auto Financing: wrote an ad where a guy with bad credit goes to a confessional and asks the priest to absolve him of bad credit.  The priest says he can’t do it, there is only one force that can…GVAC.  When we taped it for radio, we brought in some coral singers from Eastman School of Music to sing in hymnal style, “G….V…A….C” at the end.  The Roman Catholic Diocese of Rochester called and complained…had to take that one off the air.
  • “The Fat Came Back”, Diet Workshop: This was a series of ads where a woman, Marge (this was pre-“Simpson’s”, btw) fled from city to city and around the world, constantly being pursued by her fat which she could never lose.  
  • And others I am too embarrassed to recount.

I think I still have my old demo tapes somewhere…if anyone prods me, I’ll try to dig them up.

At night I did Murder Mystery Dinner Theater…too much to explain right now, but gist was, a bunch of actors mingle with a real corporate dinner party.  Someone dies (one of the actors) and the rest of the evening the other actors act out a kind of detective drama for the dinner guests.  There is a script, but there is a lot of improvising in this kind of theater.  When I started with the troupe, I was the guy who died in the beginning.  Kind of like Kevin Costner in “The Big Chill”…he started out as a dead guy too.   Actually, dying was the best acting position…you finished in 15 minutes and went upstairs to the hotel room (we always had a hotel room as a dressing room), got a dinner via room service, and waited while the other actors filtered in throughout the night after they die off (generally, as the play goes on, almost everyone is poisoned, shot, electrocuted…basically, everyone dies.)  As the lead dead guy, you got like $65, but the rest of the actors only got $80-$100…

But, at any rate, all this stuff, dinner theater, ads, you name it…it’s all about sales and selling and communications...it’s about how you present yourself and how you are perceived,  And a lot of the lessons of perception that I learned in my early twenties (roughly the time we hire most y’all) I put into direct practice at Infusion.  These “lessons,” will come up many times in the course of my blog, so we don’t need to get into them all now. For now, let’s get to the topic at hand…communications. 

So, back to what started this tour down Memory blvd…

I was CC’d on some emails that made me cringe a little when was reading them on the blackberry (and I often read my bberry while I am driving, so bad emails that make me cringe might end up killing me at some point).

Basically, there are some things that should simply not be done in email.  And so, I put a list of these things together…feel free to comment.

 

RULES OF EMAIL ACCORDING TO GREG

 

While most of these points deal with Infusion-specific email, I think you'll find that these rules are really good things to follow for any kind of email.

 

  1. Do not use marketing phrases or use “sales” language in email.  For example, avoid phrases like
    1. “we look forward to pursuing strategic opportunities with you”
    2. “at Infusion, we provide quality services to…”
    3. do not cut and paste marketing text into emails, no exception. It is ok to send a link to our web site or a section of our web site that has marketing information, but never include this in the email.
  2. Do not cut and paste marketing material or any other previously written material (including project descriptions, references, etc.) unless you explicitly note in your email that you have done this.  If you need to communicate something to a client, every client is different and deserves descriptions written especially for them.  Cut and pasted material sounds plastic, likely makes the email too long, and generally turns off the reader.
  3. Do not use email for “qualitative” or emotional communication. If you ever find yourself angy and writing things like, “I really don’t understand why…” or “I think this is a waste of my time…”  or “please explain to me why..” rest assured that you will absolutely infuriate whoever recieves your email.  Tone conveys much more harshly in email than the same phrase when spoken.  What’s more, even if you resolve the issue with that client or coworker, that email will hang around forever…and an angry or emotional email is never something you want to have a permanent record of.  So, if you have genuine sentiments you want to get across, it is time for a phone call or an personal meeting, you should not write that email. Basically, if you are angry, frustrated, or experiencing any other negative emotion involving the recipient of the email DO NOT WRITE THAT EMAIL.  Walk away.  And as a general rule, try not to write emails that ask “why,” which is a very qualitative question, and can be percieved as accusing.  What, when, how, these are valid things for an email to query, but “why” is best done on a telephone call.
  4. Do not mention that you are/we are busy, overbooked, or otherwise indicate a lack of capacity.  This sends the message to the client that other things we are involved with are more important than he/she is.  The only thing a client/contact will walk away from an email like that is, "These guys can't scale" and they will start thinking about someone else to work with.  It is ok to say you can't do something until such and such a date, but don't credit the reason as "we're really busy." 
  5. Do not assume that people who are CCd on your message will have read your message. CCing someone does not mean you have warned, informed, or obtained implicit consent of anything.  You should always assume that people only read email specifically addressed to them.  If it is critical that someone on a CC list read your email, then they should be on the TO list or explicitly be sent an email directly to them which says something to the effect of, “Listen, Bob, I CCd you on an email I sent to Sam, but I want to make sure you read it because it concerns such and such”.  Otherwise CC should simply be considered a low priorty FYI.  
  6. If there are a lot of details, specifications, revisions etc. moving back and forth, it probably shouldn't be email at all.  Have Infusion Infrastructure set up an extranet SharePoint Team Site for your project, complete with document repository, discussion boards, event notification, etc. Ask all members of the team to use it, both at Infusion and at the clients.  The clients will love it (they see it as a value-added service from Infusion), and it will be much easier to have all the communications and requirement in-band and in one definitive source.
  7. If you are requesting and action or an answer, it is probably best to have no more than one person on your TO list.  If you have more than one person on the TO list, it becomes unclear who is supposed to answer or respond and each person on the TO list will assume someone else on the TO list will do so.  The net result is that you will not get your answer or action.
  8. Always write your emails assuming they will be read on a blackberry.  Almost all of our customers have blackberrys.  Thus, emails as short and to the point as possible.   If the client can’t get the gist of what the sender wants within one blackberry screen, your email will likely not be read.  This is because, on the client’s PC, your email will get marked as “read” because they glanced at it on a blackberry.  So the end result is, the client will not have read your email, but will not see it as “unread” and so he/she will likely forget about your email. 
  9. Try to have your email begin with a clear thesis in its first sentence so that busy clients can scan the first sentence and know what the email is about.
  10. Do not use custom fonts or colors.  The more unusual your email formatting the less professional it will appear and the more likely it is to get trapped in the client’s SPAM filter.
  11. Tone does not convey in email.  A phrase that might sound innocent if you said it in person, sound harsh or accusing in email.  For example, a phrase such as “I don’t understand why such and such happened” might by a genuine question if someone heard your tone, but in email it sounds like you are challenging or accusing them.
  12. Don’t write emails that ask the client to answer multiple or multi-part questions. If you have more than one or two bits of information you want as a response to your email, then, in most cases, it should be a phone call and not email.
  13. Do not “reply” without first examining the entire email thread.  Make sure you are not unthinkingly including a thread from previous emails burried deep that the recipient was not meant to see.
  14. Try never to write any email that is especially negative, says anything bad about anyone else, etc. 
  15. Do not “dash off” emails to clients.  It may often be that you have not contacted a client and time is passed, and you feel the urge to send them something but you haven't fully thought out what you want to say. Unfortunately, if a client or contact hasn't heard from you in awhile, the worst thing you can do is send an email where you don't have anything definitive/resolving to say.
  16. Don't say more than you need to.  Don't give out details that the recipient doesn't need to know.   When writing email, we all have the urge to spell out the reasons for things and give a lot details.   For example, you can say, "Gary, right now we are in the middle of prepping a project for delivery for XYZ and we're having some issues with that, so I'd like to postpone our meeting until next..." or you can say, "Gary, would it be possible to reschedule our meeting for next..." 
  17. If you are in doubt about an email you wrote and whether it is appropriate, sounds smart, etc...just forward it to Alim or myself and we will be happy to edit it for you and work with you on it.  We've done this *many* times for people and it is never a problem.  It is a good investment to make, because in our business, your email persona is a critical component in people's over all conception of you. 

 

AND ALWAYS REMEMBER

 

YOU CAN SPEND 1 HOUR DRAFTING AN EMAIL OR JUST CALL THE PERSON AND BE DONE IN 5 MINUTES.

 

 

posted May 7, 2005 10:26 PM by Greg with 3 Comments

All About Business - Welcome to the blog

I've been procrastinating about blogging...something I know I should do, so...now I've done it.  This is Greg's blog, and I'm going to treat it as a kind of Infusion corporate diary.  As things happen, good and bad, or as I reflect on things that have happened, I'm going to put it all down here.  This will, I hope, have the effect of creating a kind of referenceable, corporate memory but, more importantly, should add a large degree of transparency to how Infusion actually works and what the factors in managements decisions are.  This blog will ultimately contain all my thoughts about business, professionalism, technology...and, for folks working with Infusion, I hope you can use this to better understand what opportunities/pains, challenges/ successes (and, on occasion) even the mistakes we may be working through now and have dealt with in the past.  And, of course, I'll lay out the really substantial opportunities that we have on the table and that I see coming down the pike in the very near future.

Simple fact is we’re getting bigger…fast.  While we have never in our history been in better economic shape than we are now (we have a great reputation on the street, great client and skillset diversity and many, many sales opportunities), we’re also experiencing growing pains…there are just too many folks in too many geographically disperse areas for me to visit with everyone like I used to.  While anyone can email, IM () or call me at any time (those that have tried, know this is true! )  I can’t just drop by like I used to when we were only 15 people in Hoboken NJ.  So, I am hoping that this blog can also serve as an additional, more personal communications channel so that the direction and mission of the firm (and how we are going to get there) is clear and, most importantly, up for comment from the Infusion community.  So, the reverse of this, is that I hope people will actively engage me on these blogs…I’ll answer absolutely any question to the best of my abilities and HR appropriateness!

There's a good saying, Jon Beyman (CIO Lehman Brothers) said it to me when I was interviewing him at Lehman Studios (we were doing a training video for Lehman's "Best Practices" initiative...their response to compliance regulations).  It is Lou Gerstner's quote I think, but it went like this, "people don't respect what you expect, they respect what they inspect."  So here’s to transparency…

Let’s get started…

 

posted May 7, 2005 10:04 PM by Greg with 49 Comments

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