Thursday, December 15, 2011

Entrepreneurial Mistakes #2: Only the very best talent

I've rethought that Friday afternoon so many times.  I had been asked by a trusted customer--a partner, really, to come visit them on a Friday afternoon.  Alone.  He had something he wanted to talk with me about.  Let's call him Scott, after my wife's grandfather.

Scott was about the same age as my father, and after working with him for a couple years, I'm sure he thought of me fondly and wished the best for me as I did him, even as he knew that his company wasn't the best customer for our product.  They did development, worked with our terrible early product to make fabric, taught us was was wrong so we could improve it.  To this day, I don't think they've sold any.

"It's just this simple," he told me.  "If you work with him, we won't work with you."

"Him," in this case, was an employee I was considering hiring, who had been working with us as a consultant.  Let's call him Allen.

Allen had quite the resume.  He had worked for a customer, running a business that, depending on when you asked him, was either $60 million, or $260 million.  Whatever.  In any case, he was without a job, and knew the industry quite well.  Players took his call.  He could get meetings set up.  Open doors.

I have on many cases given the advice not to hire Rolodexes, but rather hire people with integrity and talent. 

In any case, I didn't listen to Scott.  For over an hour I asked the nitty-gritty questions.  Did he sleep with the help?  No.  Hand in the cookie jar?  No.  Cheat?  No.  Lie?  No.  Then why?  He was competitive.  I like competitive.  Silence.

There were two of them in the room--one was a vice president I didn't know.  I'm very straightforward, and don't like to read between the lines.  But they were not going to lay it out straight.  "You need to listen, Brian.  I'm not going to say anything more than this:  If you work with Allen, we won't work with you."

I'm still friends with Scott.  I did hire Allen, and they stopped working with us.

Just so you know I had more than one data point, I'll relay a story that Allen had told me prior to me hiring him.  They had a big customer that had been putting price pressure on them for a couple years, and forced several concessions.  Then the market tightened up.  Allen invited his customer to a nice dinner--several people eating filets over dim lighting.  He pulled out a bag with boxes wrapped in thick paper and ornate bows, and walked around the table handing one to each customer.  They opened the gifts to find inside a nice new tube of KY Jelly.  "Gentlemen, you're going to need this when you hear your new pricing," he said.

My only defense is that, coming from Hendersonville, North Carolina, that was so far outside of my experience realm that I had no idea how to take it.  I had no reference point.  I still don't...and don't want one.  And he bragged about it.

Two other people who had worked with him in the past came to me and told me, in no uncertain terms, that if I made them work with him they would quit.  I told them he would be completely customer focused, and they wouldn't have to deal with him.  I was true to my word, but hired him anyway.

Here's how it worked out.

Within weeks, I heard back from a trade show that he had screamed at the CEO of one of our larger customers on the trade show floor.  Two people called me, and two others confirmed it

Two weeks later, he set up a high level meeting with a customer.  They were presenting to us--sharing their market data and their feelings on the size and position of an opportunity of one of our products.  In the meeting, Allen didn't let them get more than a few slides into the presentation before he had stood up and was making the presentation for them.  At one point, I interrupted Allen and asked the customer a direct question, "What do you think?"  Allen walked over behind him, put his hands on his shoulders, and said, "I've got this one," then proceded to answer.  This, in front of the CEO of the customer's company.  The customer, who should have been presenting this to us and his CEO, sat there, red faced and tight lipped. The conversation digressed onto a side point, and we decided to reconvene at another time after we'd come to a conclusion on that point.  The customer never finished his presentation.

I said not another word during the meeting, but decided to try to coach Allen on the ride home.  How to let customers speak, to ask pointed questions, learn from them, let them look good in front of their bosses.  He didn't take it so well, to say the least.  I don't lose my temper, but I know what it looks like.

I asked the customer to send me the presentation.  The last slide was, basically, "Your new fiber rocks, is exactly what we have been looking for, has huge market potential, and we are the perfect partner."  They never got there.

By that time, Allen had flown to Europe to be introduced to our partners there.  I shared the presentation with another of our salespeople, then left the office around 5pm.  About five minutes later, my phone rings, and it's Allen, screaming at me. I let him go on for several minutes, then when he paused, asked quietly, "Have you been drinking?"  He admitted it, then lept onto second semester of Scream University.  When he came up for breath, I suggested that he go to bed and call me in the morning, and hung up while he was still yelling.  I called a board member, and, taking his advice, decided I had to fire him.

The story doesn't end there, but that's where I'll stop.  Hiring is never simple, but there is no excuse for hiring anyone about whom there is any question, or even a hint of a question.  Hire only terrific people, and pass on anyone who even possibly could be anything less than perfect.  You cannot be too picky, and unsolicited negative recommendations absolutely cannot be overlooked.

I will end with this:  among a few terrible hiring decisions, I've made some very, very good ones, and will be forever grateful for the sacrifices that these folks made and the loyalty they showed.  I wish I hadn't made a few of the decisions that I did, because if I could take back just a few key ones, these folks would have achieved the success they deserved.

Postscript:  I wrote this last night, and it's so hard to think about.  Innegrity was a technical success, a market success, but a financial failure.  There are a lot of structural problems with how thing happened--we spent too much too soon, took too long to figure things out and make things happen in both production and the market, took too long to learn where our pricing needed to be.  But at the end of the day, the biggest mistakes, the ones that couldn't be undone, were people mistakes.  I was blessed with a terrific team that worked well together and was very capable, but there were a few participants that I invited in (so it's my fault, my responsibility at the end of the day) who were like a cancer eating at the company from the inside.

I wanted to be able to have them get along, to work with the team, but a couple seemed so bent on conflict, on redirecting things to suit themselves...it is tough to think about, and difficult for me to understand.  But it does underscore the point of this post, which is that in a start-up environment, you are not seeking the top 10%, but the top 0.1%--the very best of the best, the ones who will for absolute certainty put all their energy into pulling on the same rope.  And if you are not certain that this candidate is in that top 0.1%, you have to pass and wait for the next one.

Wednesday, November 23, 2011

Entrepreneurial Mistakes #1: Minimize Overhead, Take One.

At lunch last week, friend and fellow seriel entrepreneur said, "Nothing can replace learning from experience."  He followed it with, "The great thing about being a lawyer was that I could learn from experience, but it was other peoples' experiences, so I got to learn while my clients took the lumps." 

True, and valuable.  I thought I'd share some of my mistakes from my first few ventures.

Mistake #1: Minimize Overhead, Take One

I can remember distinctly the morning I realized that I had to build a special machine to manufacture Innegra fiber.  I had been up all night watching a few thin lines of fiber crawl through a good friend's fiber machine, breaking out every time the HVAC kicked on, every time the water evaporated, every time the oven blinked...every time it felt like it.  We ran for 24 hours and ended up with about 30 lbs of scraggly, lumpy fiber that I was later barely able to weave into a few dozen yards of seatbelt-like fabric.

I should mention here that the scrappy seatbelt fabric tested fantastic, like nothing else in the world.  But it was miserable to make.

That morning, tired and frustrated after only three hours of sleep in the local no-tell motel, I talked through the economics of my friend producing the fiber.  IF we could get to 50 lbs/hr, (50 times our effective output on our 24 hour run) and IF we could basically eliminate scrap and IF we spent $40,000 to upgrade the machine--then he might be able to make it for us for about $0.25/lb more than what I was hoping our selling price would be.  Somehow in this frustration, I decided that Innegrity needed to build a pilot machine ourselves, and set about designing it, purely from my imagination.  I still knew almost nothing about the process and what it would require at scale.

As it turns out, my good friend may have been willing to invest the $40,000 and we could have run a few dozen trials on his line for minimal cost, then paid him to make the fiber and sold it at cost until we reached some volume.  It would have been a zero overhead business, and we could have spent $200,000 to generate my first $200,000 of sales and started almost immediately.  Doesn't sound like much of a business, until I describe what I did instead.  Here goes:

I chose to build a pilot machine.  This required a year to build the machine, took another year to get it going right, and cost us $400,000 in hardware plus that much more in people, rent, and soft charges like power, utilities, internet connections, etc.  Raising that kind of money early on was a major distraction, and major time sink.  I asked my best friend in the world to leave his cushy job at IBM, take a big pay cut and move to Greenville SC, where it is very difficult to be single in your late thirties and maintain a 90 hour work week.  He built the pilot machine and made it work, for which I will be forever grateful.  But he was miserable and left two years later and our friendship barely survived.  The decision in early 2005 to build rather than continue wrestling with outsourcing resulted in a pilot scale product launch two years later which was received with "This is great, but your quality stinks, and we need 10 times as much as you can make."

I'll tell you what we did after that next time.  This story only gets better.

Had I made the other choice, to partner with a trusted friend as a manufacturing partner, we could have paid as we went, and after maybe $50 - $100,000 and maximum six months, had enough fiber to test the market, and found out that the selling price needed to be 3-5 times what I thought it should be, because the value was so much more than I anticipated.  But, alas, I believe pricing and value is another mistake to describe.  This series may take a while...

Sunday, October 9, 2011

Always Improve

1. Be a gentleman and a professional at all times.
2. Be the person who deserves the things you want.
3. Never complain or explain.
4. Take credit and responsibility.
5. Everyone is special.
6. Always improve.

Okay--last one in this series, and perhaps the most difficult, because it involves motivations as much as actions.

I can remember when I was younger and played on the Hendersonville High School football team the coach hung big posterboards in the weight room that had bar charts at each weight station showing who had "maxed out" at what weight.  It was a huge motivation for me--I wanted to be the best, lift the most, be the strongest. The coach made a big deal when someone improved their max, getting a red marker and drawing a rectangle on the end of the black bar that marked our original max.  The improvement was in red--very visible.  As I worked out, I had dreams of growing my red bars, but also of playing college and professional football, of being wealthy, of retiring in my thirties.

Just writing that is difficult now, because it involves such a different worldview.  I saw my value through other people's eyes, through fame, through wealth.  The coach put up a chart saying what he valued, and the rest of the team adopted that value--strength.  We grunted and sweated and pushed and pulled, and when we weren't in the weight room, we talked about it.  It became our value system, which is embarrassing now because it is sooooooo shallow.

(For those of you who don't know me well, I am much more interested now in how I can contribute than in what I can get out of it; in the reality rather than other peoples' perceptions, and I rely on God for my sustenance, rather than having a goal of accumulating wealth.  I can't imagine going back to the insecurities of my younger, less mature value system.)

When I put these guidelines together, I thought about many ways to write this one--"lifelong learning," "keep growing," and even including specific goals such as love, wealth, security, intelligence.  In the end, I chose something that would endure many seasons of life.  What I valued as a high school football player is not what I value now.  What I value now is not what I will value when my kids leave the house, when I retire, when I'm on my fifth company, rather than my second.  However, wherever I am, whatever values are current in my life, there will always be opportunity for improvement, and thus the simple phrase, "Always improve."

Dreamweaver International

I have now started my second company.  Dreamweaver International will use nanofibers to improve energy storage in rechargeable batteries--think cell phones, laptops and electric and hybrid vehicles. 

In running Dreamweaver, I want to improve on what we did at Innegrity.  Some improvements are simple, such as choosing a technology without large capital requirements, choosing an industry with direct access to customers, choosing an industry with faster growth dynamics and a higher innovation rate, choosing to minimize overhead by leveraging external resources, choosing an industry with early exit opportunities.  These are structural, are a direct result of learnings from running Innegrity and can be built directly into the business plan.  As I think back, I find it amazing that Innegrity ran for so long and accomplished so much even in adverse conditions and with structural flaws in the business plan.  It can only be attributed to the people on the team and their energy, their drive, and frankly their ability to believe that we could do it despite all the headwinds we faced.

That leads us to the people, and a few mistakes that turned out to be absolutely critical.  Most of the people in the company were good employees--very talented, reasonably hard working, and motivated by both personal gain as well as being a part of something that was going to do good in the world.  The material, after all, was going to stop bullets, and it's difficult not to think through the ramifications--lives saved, families kept unified--especially when it was front-and-center with the whole team, every day.  They made sacrifices every day for the greater good.  For this and their dedication, I was and will remain very, very grateful.

Along the way, however, we accumulated a few employees who never let go of that high school worldview, and it brings us to the question of personal motivations and how important they can be.

A Difficult Decision

Recently, I was faced with a difficult hiring decision.  One candidate, "Terri," was terrific.  She had graduated cum laude from USC, had a great personality, and...well...we connected.  I asked her what her passion was, and she said, "helping people, and being a positive influence in their lives."  I asked for her to describe a time in her life when she had faced adversity, and how she dealt with it.  She said, "I was a black female baptist in Utah," and described how she had kept a positive attitude and kept doing the things that she needed to despite all the attitudes and preconceptions she faced.  I don't cry much, but as we talked through all of this I had tears wetting the corners of my eyes.

All of her examples, though, were around her real passion in life, which is to act.  How she got a part in her third grade play.  How she wanted to use her acting to be a positive influence, and how she chose parts that allowed her to do this.  How acting had helped her stay centered in difficult racial and religious environments.

I ended up with another candidate I really liked, and so a difficult decision.  I talked to people I trust--the recruiter, my management team, and my wife.  They unanimously chose the other candidate, who had started two companies of her own and had a much broader and more relevant skill set--accounting, advertising, marketing, customer service--rather than basic office skills.

The advice was right, but I still nearly cut across the grain and hired "Terri," even acknowledging that the other candidate would get started faster.  In the end, it came down to doing what was best for them.  The candidate we hired is an entrepreneur--she and her husband started a company he is still running which is their main source of income; she has started another company but needs to refine the product and business plan before it will be successful--and she is more creative and will start other companies in the future, hopefully selling them and being very successful.  Working at Dreamweaver will be front and center for her, and the skills she learns will be applied immediately and directly to her passion in life, which is to start and build companies.

For "Terri," her passion would always be elsewhere, and work would be work.  She has the heart and charisma and talent to do the job, but, after praying about it, I knew that God has greater things in store for her, that Dreamweaver would be a distraction, a resting place while she waited for her dreams to come true elsewhere.

And so, while I didn't choose the name "Dreamweaver," weaving dreams is perhaps the most difficult, seductively subtle task we will do--bringing together people who have different goals, different aspirations, different dreams, and weaving them together into one company where we all cherish our position in the greater whole and are grateful for the rest of the "fabric," for the others around us.

A company can perish for a lot of reasons, one of which is failing at this: because individual threads can tug in different directions, and pursuing their different goals, aspirations and dreams can destroy the fabric, eventually destroying the company.

Always Improve

"Improvements" can take many forms--some are spiritual, some are structural, and some are personal.  But for this guideline, the direction is clear--always improve, whether through good times or bad.  Every success is an opportunity to improve, as is every failure.  (Honestly, the failures may be easier.)

Wednesday, August 3, 2011

Everyone is special

1. Be a gentleman and a professional at all times.
2. Be the person who deserves the things you want.
3. Never complain or explain.
4. Take credit and responsibility.
5. Everyone is special.
6. Always improve.

This one may be my favorite, though also the most difficult because it requires the most sacrifice and the most humility to execute.

Special:  Christians easily understand that God gave His only begotten son to die for us.  To die for me, actually.  He was on the cross, pierced and bleeding, for me.  It puts me on the same level as God, in a way.  Oh, I'll deny it, but deep down...?  And honestly, am I the only one?  It proves we are special, special in the eyes of God.  It was an amazing act of humility, of love, of sacrifice.  I can get a little humble myself and use words like "broken" and "sinner" because He made a sacrifice for me, and I am grateful--grateful to be that special to Him.  Sometimes we can even get teary eyed in church thinking of Jesus on the cross, suffering for us--for me!  I am special!

I did this for effect.  Keep reading.

Everyone:  Turn it around:  that guy at work who just got your promotion, who is always kissing up and kicking down.  Jesus died for him.  Your neighbor's kid, who walks his dog in your yard and leaves the leavings--he is special.  Your mother-in-law, without whom your relationship with your wife would be perfect--Jesus carried her sins to the cross, and they are forgiven. If not by you, then at least by Him.

Go farther:  that presidential candidate that you didn't vote for and who is ruining our country--Jesus died for him. Our governor--yes, Jesus' sacrifice can even cover that!  Go to WWII, to the SS, the concentration camp workers--Jesus was on the cross loving them, hoping and wishing beyond belief that they will repent and come to Him. Some did, I'm sure.  Their sin is not greater than His sacrifice.

Our attitude toward other people should be that the Lord that we love and submit to came down to die for them, and so how can we do any less than offer ourselves, our life, as a sacrifice to others?  To all others.  There are two kinds of people: Christians and potential Christians.  That's it, and they all deserve our love.  Like the old t-shirt--God gets to "sort them out."  We do not.

How this plays out

Charlie:  I worked at a camp for underprivileged kids while in high school and college.  The camp had very high staff turnover, so eventually I got promoted to Head Counselor.  As such, I was the first to wake and the last to sleep, and I took the worst jobs on camp:  I cleaned and unstopped all the toilets.  I washed the peepee sheets.  I comforted the homesick kids.  And I was the last resort for any behavioral problems.

Charlie was my first, and still my favorite.  He had few friends.  At the opening ceremony, he would sit by himself and heckle.  When reprimanded, you could almost see the satisfaction wash his pimply face--he had gotten our attention, drawn us away from what we were doing, made himself the center of attention.  At lights out, he would throw things at the other campers.  Never anything creative--no traps or tricks--just garden variety rebellion. For my counseling staff, he had the power, through a look, a comment, a hesitation, to destroy their attitude.  Their frustration was palpable, and in a different environment I would have feared for Charlie.  That's why, when their frustration got beyond their willingness to tolerate it, they had the privilege of bringing him to me.  You better believe they enjoyed that!

We weren't allowed to use physical punishment.  We could take privileges, but to Charlie that was victory.  For him and others like him, we used exercise, and I did it alongside them.  I took Charlie to the gym and ran suicides until he stumbled.  We jumped, we pushed, we climbed.  Often, he and I each held a broom out in front of us, arms ruler straight and parallel to the floor.  After 30 seconds, his arms burned.  After a minute, the pain was like a million knives running through his deltoids.  The beauty was, only a little repetition of this exercise would give me enough endurance so there was no pain.  I was immune, but to prove himself, Charlie had to endure it.

Over the years, I had several dozen sessions with Charlie.  We became friends.  I asked him why he did it, why he refused to make friends, to join in, to enjoy, why he chose to be disruptive.  He was a smart kid--he knew what he could do, and he was definitely in control.  He chose his path. 

Eventually, he told me.  He told me about his brothers and sisters, about his mother.  He told me about his father, his neighborhood.  I understood, and our friendship grew--perhaps I was his only friend at camp, maybe his only friend anywhere.  Eventually we made a deal that he could just skip the cutting up and come see me.  As a favor to me he would behave and bring himself to me to be "punished," and we'd sneak off to grab a Coke and some cookies.  It was our little joke.  The other counselors knew, and let him.  And he did.  It was a unconventional, but Charlie was special.

Help:  I once made a sales trip with a senior, seasoned executive who had built a company and sold it for a few tens of millions of dollars.  He brought me to a couple old contacts who he was going to sell on investing in my company--and take a piece for himself, of course.  He bragged how he knew each secretary, their names and how to chat them up, how to use them to get what he wanted.  This one was a gardener, another a single mom. He was imparting this great technique to me, his protoge.

Ack. I could see thier eye rolling as soon as he turned.  He would have been shocked.

I've always thought that a true test of character was how you treated those who could not help you, who you likely would never see again.  Can you be a light for someone's day, knowing there is nothing to gain, no angle to maneuver?  The checkout lady in another town, the person you bumped into, your daughter's ex-boyfriend?

I've been the recipient of this on a number of occasions, and so this is the standard to which I strive: to somehow help each person I contact--to tell them a light story, to give a smile, a squeeze of the shoulder--some measure of support, of love, with no expectation of anything in return--just a gift. Sometimes it is small or quite brief; sometimes it takes dozens of "sessions."

This is it:  "Everyone is special," means just that.  It means that everyone we encounter, every day, no matter how big or small, how important or insignificant, how lasting or brief--Jesus died for every one of them, and I should approach each encounter with the attitude and the goal of making their life a little better, a little brighter, to nudge them a little closer to God--to give them a little something, a little help, a little smile, and to expect nothing in return, because I've already gotten it.


Post Script:  This weekend, a friend of mine died in a mountain biking accident.  He was a fellow CEO of a startup in Greenville, almost exactly my age, and we walked in a few of the same circles.  I didn't know him well, and never spoke with him about his walk with God.  If I were to give myself a grade, based on the above criteria, it would hover between a D and an F.  As I reminisce, it pains me to think of the opportunities that I lost.  This week, I learned that he had been through something recently in which he needed friends, and I was not there--I had not built up the relationship to even be included in those who knew.  It is difficult not to be disappointed--to set such high goals and then fall so short of them.  I am grateful to those of you who have read all the way to this P.S., because going through these guidelines with you has helped to renew them in me, to make them more current, more today and real.  I hope I don't pass up too many of these opportunities going forward.

Sunday, July 24, 2011

Never explain or complain.

Continuing the series on my behavior guidelines...here's the list:

1. Be a gentleman and a professional at all times.
2. Be the person who deserves the things you want.
3. Never complain or explain.
4. Take credit and responsibility.
5. Everyone is special.
6. Always improve.

I won't try to separate #3 from #4.  Together, they are my defense against some of the easiest and most socially acceptable ways to compromise your integrity. 

The first guideline brings to mind the old quote:

"It is better to remain silent and appear a fool, than to open your mouth and remove all doubt."

Also Proverbs 17:28:

 28 Even fools are thought wise when they keep silent;
      with their mouths shut, they seem intelligent.


Picture this explanation, given over a spilled drink:

"Giles was running and he threw the ball, and Ryan jumped to grap it and hit Julie in the chin and she started crying and I dropped my drink when I went to hug her!"

Wouldn't silence, or "I spilled my drink," have been a more honest answer?  The adult version goes something like this:

"We've been using oil to heat this plant for twenty five years, and every time there was a leak near the heating manifold the smoke and smell were so bad we shut down, cleaned up and fixed the leak before anything happened.  This time, the fire came first."

There are any number of others in our adult world. 

"In that situation, no man could resist..."
"How can I be expected to ... when he speaks to me that way?"
"This economy is making everyone pull back--we just did what we had to."
"Of course, it makes sense when that much money is at stake."
"You have to deal with them on their own level..."
"He was waiting behind the hill and just wanted to pull a red sports car..."
"That's the only discipline that works..."
"I did it for her own good..."

Enough.  While actions and results can speak for themselves, we use the accompanying verbiage to deflect attention, but it has the reverse effect of exposing our insecurity, our lack of control and our lack of judgement.  It shows cowardice on behalf of the speaker, and reveals a self-hate and a self-deception that will leave you extraordinarily sad if you dwell on it for even a moment.

It also works with respect to good things.  Consider common responses to "You look beautiful."

"It's the dim lighting," or "It's the dress," or even, "No I don't."

The only proper response to a well-intentioned compliment is "Thank you," and a smile.  Anything else shines a spotlight on our own lack of self-worth.

Complaints cut the same way: 

"He's so domineering." 
"Can you believe they put up with ... behavior?" 
"There isn't a good leader in the whole company." 
"The government is too big/small, and they just won't cut/increase taxes enough!" 
"There's no business out there." 
"I can't take 8 hours of ..."
"Can you believe they dress like that?"
"I hate when they talk about me!"

The inference, in each of these, is that somehow we are above or better than what we are describing, and if only <that> were fixed, then our lives would be so much improved.  There is a reason that the first step to curing alcoholism is to admit that you are an alcoholic--you first have to take responsibility. 

4.  Take credit and responsibility 

I miss my old management team.  We met over lunch every Monday and talked about what had happened, what our plan was and what we were going to do to stay on or get back on track.  When we communicated to the Board, we did so in the form of "Accomplishments" and "Disappointments."

For the accomplishments, we stated the things we had achieved, the parts of the plan that were on or ahead of schedule, the things of which we were proud.  These orders were made and shipped, those patents were issued, this customer made this prototype, this quality level achieved...  We shared credit without deflecting it. When we could, we celebrated what had gone particularly well, especially the individuals that led the effort, all within the context of a team accomplishment.

For the disappointments, it was the same.  What had not gone according to plan, was behind schedule or below target?  We talked about them and how we were going to adapt, what needed to be adjusted.  The heading said it all:  "Here are the things we have not done as well as we would have liked.  It is our responsibility and we accept it."  I tried to make the lists of equal length, though it varied from month to month.  The system framed the conversation and kept the focus on helping the team to do the best that could be done.

I once had a board member who complained, "You never give us any bad news."  I laughed, "I give you a whole page of disappointments at every month!"  In his complaint he was likely describing his own agenda more than our lack of communication.

Lately, since leaving Innegrity, I am often asked what happened, why it is failing.  I don't mind telling the story, but always frame it with, "I was the CEO and was responsible for everything that happened in the company, good and bad."  I then can tell the story in it's entirety, without dodging responsibility, celebrating the accomplishments while giving the disappointments their full air time.  I can talk about what I learned, what I don't yet understand and how I have grown.  People take the story in different ways, and I let the facts speak for themselves.

In the end, my confidence comes because I do not measure my self-worth from financial success, prestige, peoples' opinions of me or other worldly measures.  I stand on much firmer ground, and get my confidence from someone who gave His life for me before I was born because He knew I wouldn't be good enough by any of those measures.  I sometimes see in people's response as I tell this story that they don't understand, that they are bewildered at my ability to speak so frankly, so candidly.  They are amazed that I am so self-confident, so resilient, so determined, so poised.  They think it is something about me, and they couldn't be more wrong. 

It makes me sad to know that they in their own adversity might fall apart or cry, blaming others or outside circumstances and asking the world why it isn't fair, why it had to happen to them, why others had to do this to them, why there is no justice--or in other ways complain, explain or dodge both credit and responsibility.  Were I who I would like to be, I would in those moments be able to explain it to them, be able to help them understand and see from where they should get their strength.  I'm afraid most of the time I fail, and that is quite a disappointment.

Saturday, June 18, 2011

Be the person who deserves the things you want.

Recently, we've had a big spate of storms down here in Greenville.  Trees are down, stoplights out.  On the scale of summer storms, its a big mess.  I can remember how my Dad would react when we were kids.  He would go in to work or church and ask who had trees down, then would offer to clean them up if he could have the wood.  My brothers and I would be carted off with chainsaw, sledge, wedge, wheelbarrow and a few Chek sodas and we'd cut, chop, split and lug wood all day, building up firewood for next winter.  I was one of those wierd souls who could practice geometry proofs, pine for a young girl, and split a cord of wood all at the same time.  Now that's multitasking!

This guideline reminds me of my Dad, because he had no patience for self-pity.  I know people who will land their duffs on a couch, unbuckle thier belt, put one hand in their pocket and orate endlessly about what they don't have, what others have, what they want, what others have done to them, what they can't believe isn't provided free for everyone...it's exhausting. 

Here's how Dad would see it:

If you want friends: be friendly, be kind, love people, offer to help people who are down, take time to listen to people who want to talk, be who they need and don't ask for anything in return.  Friends will flock to you!  Nobody has enough friends, and really good friends are a treasure.  Make sacrifices for others.  Be loyal.  Be a really good friend to those that you have.

If you want to be rich:  work hard, stop buying stuff you can't afford, save your money and put it in sound, good returning investments.  Have patience.  Pay cash.  Take a second job.  Know which gas stations have the cheapest gas.  Invest in a wood stove and put your three sons to work.  Help other people make money so you can learn how they do it.  Don't let the sun go down on your idleness.

If you want a lover:  be tender, be kind, be loveable, be trustworthy.  Be the kind of person to whom someone can give their heart to and know, without doubt, that it is protected by the Fort Knox of your integrity.  Love.  Make sacrifices for others without casting the eye to see if they saw you.  Express yourself.  Be vulnerable.

If you want a beautiful body:  Stop eating crap, exercise, play energetic games with all our new friends, take a second job splitting wood for your neighbors, help other people with their yardwork, shovel their driveways when it snows, rake their leaves in the fall, chop their trees when it storms.

If you want to be healthy and have a long life:  Stay active, ride your bike every day, eat lots of salads filled with vegetables, watch your weight, love your family, never pass up the opportunity to help someone. Read about the things that kill people and don't do them, consume them, or hang out among them.

If you want a job:  Work hard.  Never complain.  Do things to help people who make lots of money make even more.  Use your noggin.  Don't put up with lazy, self-pitying people who are all take-take-take.  Never compromise your integrity.  Surround yourself with people who do all this, too.

If you want your sons to love you:  Show them a work ethic, and don't listen to any of their self pitying crap.  Love them.  Do stuff for them their whole lives without ever casting a glance to see if they were looking.  Make them work. When they complain, make them work harder.  Let them see you install a wood stove, record your mileage, watch your weight, exercise, make salads, be romantic with your wife, do stuff for your friends and for people you've never met.  Be a shining example of the husband that you want them to be for their wives.  Love your daughter's-in-law.  Love your grandchildren.

For many people, seeing things through my father's eyes would be the equivalent of turning the binoculars around the right way and finally getting a bird's eye view of the rest of the world, instead of spending all their energy microanalysing their own pitiful selves.  We all are pitiful selves--the difference is only in how much time we spend dwelling on it versus pouring it into other people anyway.

Happy Father's Day, Dad.  I love you and would live a very fine life if I could half live up to the legacy you've left me.

Monday, June 13, 2011

A gentleman and a professional at all times.

Many moons ago, after reading 7 Habits of Highly Effective People, I developed six overarching principles to guide my business and personal life.  These are mine; I have no ambition that others should adopt them, nor do I imply a moral right.  In fact, the first principle has an implicit respect and tolerance for others' differing principles. 

I edited them carefully over the course of many months, and each word has specific meaning.  As I read them now, I marvel at--once reduced to the marrow--how true they are to me, as if hard-wired into my being.  I have carried them in my wallet and in my heart for a couple decades.   In my office, I have a bulletin board of quotes to which I turn when I am facing a dilemma or decision that requires perspective, and this list is in the center.  Here they are, and in the next few posts, I'll discuss each one individually:

1. Be a gentleman and a professional at all times.
2. Be the person who deserves the things you want.
3. Never complain or explain.
4. Take credit and responsibility.
5. Everyone is special.
6. Always improve.

1. Be a gentleman and a professional at all times.
This sets a standard of excellence for both work product and for behavior.  Like the rest, it is a statement of goals, not minimum performance.  

A gentleman--or "gentle man"--puts others first.  There are no tempers, no foul language, no dishonesty or unnecessary secrets, no egotims or inuendoes--no bending the world to accommodate his person.  We may choose to raise our prices, or not to give in on a certain deal point, but we will do so politely and with full respect for the (differing) position of the other party.  A gentleman does not let anger or alcohol inhibit his behavior.  A gentleman will not lie to assuage the feelings of others, but rather tells the truth with care and concern for the listener.  He does the unpleasant tasks without comment or complaint (coming later).  His weariness, his hunger, his embarrassment, his cowardice and his bladder are simply not things to be accommodated.

A professional maintains a certain standard of excellence--whatever he has chosen to be, he will be the very best.  This is not the best "he can be;" a professional does not merit qualifiers.  Simply the best.  If this level of performance cannot be attained, he will work harder or choose something else, something more suited.  As an inventor, I will be the most creative, create the most value.  As a leader, I will hold the highest standards of integrity and excellence, communication and vision.  As a father, I will be the most compassionate and nurturing, without neglecting discipline and teaching.  What is done, is done deliberately and thoughtfully, with a high degree of proficiency.  Professionals make few mistakes, be they doctors or football players.  Mistakes may happen, but they must be recognized, acknowledged and learned from.

Lastly, "at all times."  This is a set of standards that must be saught at every moment.  It does not rest or take a vacation--it cannot be turned off.  One weekend of folly can ruin a marriage; one bad relationship can ruin a company; one poorly timed slap or scream can cast fear into the eyes of a son, daughter or spouse.

Rereading this, I am faced with the same anxiety I felt each time I stood next to the bar while competing in the high jump in high school.  The bar was first raised to the level of my shoulders, then my chin, then my eyes and eventually over my head.  The highest I jumped was 6'4", and I am only 5'11".  I can remember looking up thinking, "there is no way I can get over this," and yet with the proper approach, a strong step, and a well-timed kick, I got over them one by one, until I didn't, and then I got up and tried again.

Saturday, April 9, 2011

Business for the Glory of God

Two wise advisors recommended this week that I remove a small section from the business plan for my new business.  Here it is:

Business Philosophy:  We want to do good in the world.  On a technical level, we hope to improve individual experiences and the environment in which they live, work and play.  On a personal level, we want to build lasting relationships with customers, suppliers, employees and stakeholders and play a meaningful role in their lives as they help us address significant global problems.
I agreed, not because we will change anything we will do, but because of the old addage from writing "Show.  Don't tell."  Also, "Actions speak louder than words."  So, I took it out of the written business plan, but it remains central to the business plan. I'm a firm believer that we can use business to do good.  I also believe in a God who will reward us for doing good, and so doing well is a natural consequence of doing good. 
I recently read a book that articulated much of this belief wonderfully, "Business for the Glory of God: The Bible's Teaching on the Moral Goodness of Business."  In it, Wayne Grudem, a professor at the Phoenix Seminary, explains why things such as ownership, employment, profit, money, competition, borrowing and lending are all morally good, though they can also be temptations to sin. He does a terrific job in a little 83 page book that can be read in one sitting.
Here's the Cliff's Notes:
Basic Premise:  Most facets of business are morally good, but can be perverted to evil. Examples are in each chapter.
Ownership:  "I believe the reason God gave the command, "You shall not steal," is that ownership of possessions is a fundamental way that we imitate God's sovereignty over the universe by our exercising "sovereignty" over a tiny portion of the universe, the things we own."  We become stewards of our possessions, and can use them for good, to care and love for others, for our own enjoyment and the enjoyment of others; we can give them away, we can save them for another time when they may be needed more.  All of this is fundamentally good.  Of course, possessions can also make us prideful, covetous, and greedy, and these are necessarily bad.
Productivity:  Producing goods and services is fundamentally good, a way to care for and serve others who willingly purchase those goods and services, giving them things they cannot make for themselves, at least not as efficiently, and doing things for them better and more efficiently than they would do themselves.  Work in itself is fundamentally good in that it benefits others and so is a way for us to express our love for them.  However, it can be a temptation if we focus on the material things themselves, or allow the money we receive in return for work to become our dominant purpose.
Employment:  Hiring people or being employed is fundamentally good, allowing them to contribute to others. As employers, we give our employees an opportunity for a greater contribution, and also provide for their families and their future, and hopefully also give them the means to be generous to others.  Of course, employment can also lead to greed, to jealousy and covetousness, and to conflict, none of which glorify God.
Commercial Transactions:  Buying and selling are fundamentally good--we are exchanging something we need less for something we need more.  Voluntary commercial transactions benefit both parties.  We must practice honesty, fairness, and faithfulness to our committments.  If we don't we are giving in to the temptation to sin.  Also, globally, a network of business transactions has a stabilizing effect on society, because we are reliant on each other and there is a mutual cost for conflict that interrupts the flow of transactions. 
Profit:  Earning a profit is fundamentally good, and concrete evidence that we are creating value and providing it to others--that what we are doing is worth more to them than it is to us and because of that they will willingly pay more than it cost us to produce. Also, profit forces efficiency, which means that those who create the most benefit the most efficiently will thrive, while those who are less efficient will have to find another way to serve. However, someone with a monopoly who takes advantage of others, depleting their wealth and forcing inefficiencies elsewhere in the system, or who lie or cheat to obtain a profit--these are sinful and not to God's glory. 
Money:  Money is fundamentally good, allowing us to exchange our goods and services for unlike goods and services, with people who have something we need but who don't necessarily need what we can provide.  It also allows us to save the value we create, and to give it generously to people who don't need what we deliver.  Of course, the root of all evil is the love of money, and we cannot serve two masters, so we must take care to make sure that money is our servant and not we its servant.
Inequality of Possessions:  Just as in heaven there will be inequality of stewardship (Luke 19), so too here on earth.  Many people are not able to bear under the temptations and responsibilities that come with stewarding large amount of resources, and they will be happier and enjoy a better life in heaven with less of a resource burden here on earth.  Others can bear this responsibility, and we should be grateful that they do.  People with larger stewardship can be more generous and give a larger share of their possessions to the poor  (think John Rockefeller financing polio vaccines in the South).  However, we can come to rely on our riches, to become greedy, the let the love of money force us to compromise our integrity and our other values. These do not glorify God.
Competition:  Competition is fundamentally good, allowing us to assign jobs to those who will perform them best.  (Think:  would it glorify God to have someone who got D's in math designing airplanes?)  It also allows us as consumers to assign profit to those companies who deliver the most value to us.  As individuals it helps us to find a place in society where we can contribute the most.  (I imagine John Grisham was a moderately successful lawyer, but after the success of "The Firm," contributed to the enjoyment of many millions of people and changed his profession.)  However, competition can be perverted for evil and people can cheat, lie and slander others in an effort to get ahead.
Borrowing and Lending:  Borrowing and lending multiply the usefulness of the resources of society, but must be done with propriety and generosity, and everything that is owed must be paid when it is owed.  (A debt is not owed--the payments are owed and must be paid when promised.  Similarly, there is no need to pay our taxes five years in advance, though they will be owed.)  So money, or a book or my car may be used by another when I do not need them, and returned to be used later by me, sometimes with a fee or interest. 
Effect on World Poverty:  All of this will have the effect of forcing efficiency and allowing the equitable distribution of wealth, and so reduce poverty across the globe.

Personal note:  When I finished the book the first time, I smiled and thought to myself, "Now he gets it.  Why would anyone start or get into a business other than to effect all of this good in the world--create wealth, give people contexts within which to thrive, generate transactions that are more valuable to each party, provide for others families, give greater stewardship opportunities to those who can handle them--what other reasons are there?  I also was struck with what a terrific task it is to do well, and how many, many pitfalls there are along the way, and also how our society pulls us like gravity into those pitfalls. 
So, yes, I've removed it from the written business plan, but it is central and core to the business.


Sunday, March 20, 2011

Black Market Entrepreneurship

NCSSM
It's difficult to explain, but the North Carolina School of Science and Math changed me.  Yes, I learned some physics and chemistry and even history and economics while I was there.  Yes, I made good friends, who remain some of my best friends today.  Yes, I had fun and grew up a little bit, though some debate the last point. But none of that is what I mean.

The best explanation  may be that it raised the bar.  I've joked that, if there is a ladder leaning against a wall on the NCSSM campus, then the students know who can climb the ladder the fastest, the best, with one hand, using liquid nitrogen and while holding his breath.  We knew who the best programmers were, the best bridge players, the best mathematicians, the best writers, the best athletes, and yes even the best dancers and kissers.  The atmosphere when you take 400 (now 650) intensely competitive, intensely smart, intensely adolescent students, and put them on one campus at one time is, well, intense.  And that might win this year's NCSSM award for the Understatement of the Year.  If it doesn't win--well, let's just say the NCSSM students will know where it placed.

It has continued after I left.  My best friends are my NCSSM friends and, in a friendly, extremely supportive way, we have continued to be aware of the success of our classmates, and we desperately want to fit in with this elite group.  (The amazing thing is that fitting in is automatic.  There is no hurdle to overcome other than the shared experience.)

My First (Entrepreneurial) Experience
My first experience in entrepreneurship came at NCSSM.  One of my best friends and I had figured out how to get 16 oz glass bottles of Coke (for him) and Pepsi (for me) to the exact temperature in our dormatory refrigerators such that, when you popped the top, the soda froze into a perfect icee.  (We all know that the pressure-volume freezing curve for water is inverted, right?  Ice floats.)  Well, after a hot couple hours of frisbee football, good ole' Wyche dorm could empty two dorm fridges in a few attoseconds (that's a joke--water takes longer than that to freeze) and leave my bank account empty.  Not to mention the long walk down Broad Street with two broomsticks laden with 128 16 oz bottles of Pepsi and Coke, carried like a stretcher between two poor and tired high school students.  You do the math--it was HEAVY!

So, we began charging 50 cents each, and our friends gladly paid it, because the 12 oz cans that didn't freeze were 55 cents from the vending machine. We did it on the honor system, put up a sign and left our dorm rooms unlocked.  It became quite a business, and kept me in pizzas and money for the movies and the arcade.  Trey and I sometimes had to make the trip up Broad twice a week, so we got a bit buff, as well.  Not only that, but our dorm mates loved us because we were improving their lives--self freezing Pepsis after a hot wrestling workout rather than barely tepid cans with 4 oz less that cost a nickel more.

Then the hammer hit.

I think we called him Bloodsucker.  His name may have been Youngblood.  He had some important position at the School, like Chancelor, or President, or maybe Dictator.  (In hindsight, I'm sure he was good and cared for us and was just doing his job--but that's not how we saw it at the time.)

Let's just say that after many very serious conversations in which it was explained that the School had exclusive contracts with vending companies and as students, we were forbidden to have jobs, and couldn't let our enterprises get in the way of our schoolwork...after many of these conversations it was determined that I could stay at NCSSM, but only if I promised never to sell another Pepsi. 

And that is how my self-freezing 16 oz Pepsi business hit the black market.  Picture people coming to my dorm room after curfew, locking the door, and then leaving with a Pepsi wrapped in a bundle of gym clothes.  No really, it's true!

I now serve on the NCSSM Foundation Board.  While on the Board, I've learned that alumni of the School are about 50% as likely as a normal NC high school graduate to start their own business.  This, while some very successful companies have been formed around the grey matter of NCSSM alumni (Red Had, WebTV, Motricity), and a bunch that are still maturing (including one I founded which, while small, has won a few world championships including Formula 1 and Olympic hockey--see http://www.innegrity.com/).

So, how to solve this very important problem?  Dunno.  But in a couple weeks, we'll be launching a contest which, if we are lucky, will help us find a good, scrappy young entrepreneur at the School, and I and a few other alumni will help build a company around him or her.  And then we'll hold another contest, and another, and another.  And we'll all know who won, if a company was formed, and how well they've done, and we'll all support them, love them for what they are doing and be very proud to be included in the same group of folks.