The Rules for Entrepreneurs

Venture Files founder and former curator, Steven Fisher, wrote a series last year that remains one of the best of its time. Even though he has moved on and is working with Network Solutions, I think it’s as important now (if not more so) than it was last year at this time. This is a consolidated (and updated) version of that series.

Pay Yourself First

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and got nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cashflow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and let you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

- Have six months of payroll for that person in the bank on top of your salary

- Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Roadmap to Victory at Washington Post

thewashingtonpost

Early last month, after the Tribune Company announced that it would enter bankruptcy protection, the conversation surrounding the demise of newspapers and the newspaper industry heated back up. Of course, we suggested that there should be an opportunity for new media to emerge in the newsrooms.

Today, the news comes from the New York Times that Phillip Bennett, the number two man at the Washington Post is stepping down joining the former WashingtonPost.com executive editor, Jim Brady, who also resigned recently.

thewashingtonpostThe Washington Post was one of the early newspapers who tinkered with social media tools in their online offering by utilizing a widget to display links to blogs that wrote about their stories. However, since then, they have not innovated all that much. Sure, they have blogs, but what major newspapers doesn’t? And really, does a blog matter if it isn’t compelling?

If I were on the inside of the Washington Post, I’d offer the following roadmap to a viable business entity.

  1. Combine resources of online and print media. No story should be exclusive to one or the other.
  2. Recognize that the business future does not lie in print and print subscriptions, but in online. Change business model to reflect a more traditional online content network. This is a wide swing from a subscription paper model.
  3. Develop content sharing partnerships with other newspapers. Washington Post has already done this with the Baltimore Sun. Suggest the The Times of London, Sydney Morning Herald or the San Francisco Chronicle to round out other-coastly or international perspective. Not sure how this would be mutually beneficial, but each publication will have its own interests that would need to be examined.
  4. Replace the Op-Ed section with blogs but use syndicated content from external blogs. Eliminate home grown blogs altogether.
  5. Develop online video channel on YouTube and bring into the online WaPo offering.
  6. In a related sense, develop a rich media network of content including podcasts – maybe primarily podcasts, due to the lack of exclusive attention required.
  7. Hire internally, or bring someone in from outside, to help the online business adapt to the new and changing landscape involving the internet and social media. The Toronto Globe & Mail did this with Mat Ingram.

I’d like to throw out one self-serving offer, since I know that there are increasingly a number of newspapers who are watching, reading or otherwise paying attention to our content here – I’m happy to discuss opportunities where I can step in and help. Sometimes that outside set of eyes is what is needed. Drop me a line at aaron@technosailor.com or call me at (410) 608-6620.

Welcome to a Top 100 Marketing Blog Which is Not a Marketing Blog

Welcome to the many marketing and communications professionals who are visiting this site today. I was pleasantly surprised to find out that Invesp.com listed me as the #40 most influential marketing blogger of 2008.

To be clear, while I appreciate the designation, this blog is not about marketing. That said, the internet is a space where communications are changing radically. Folks like me are at the forefront of the digital revolution, and so what we do is in many ways the marketing of tomorrow (and in some cases, the marketing of today).

If the point of marketing is to disseminate a message, it is arguable that I am in fact a marketing blogger. However, I would take it a step farther to redefine marketing as the effective, and increasingly online mode of connecting people with people, businesses with businesses and people with businesses. It is less marketing and more community. It is less message, and more trust. It is less organizational, and more grassroots.

Welcome to Technosailor.com. I hope you’ll stick around and learn. Hopefully I will learn from you as well, so feel free to comment and contribute. If I can make you think and you can make me think, then our jobs are done. And of course, I am willing to bring consulting power to your online communications as well. Drop me a note.