Monthly Archives: November 2009

Scammers, Spammers & Spivs

I got emailed yesterday by a journalist who wanted to know about scams and dodgy websites.  Basically the questions was “is there a resource you used to understand whether something was right, wrong or just a scam?”.   Well there wasn’t any particular website, but if there was it would be likely to be instantly out of date because you simply can’t keep up with the Nigerian’s Romanians and Russian’s, let alone your local Wide Boys.

But having a think about it, I came up with a number of ideas that I’d thought I’d share.

Common Sense
The old saying goes “if something looks to good to be true it probably is”.  I tend to trust my nose.  Eg. If an Ebay reseller has 900 recommendations that are all positive, one line long and made roughly 6 seconds apart – Things probably aren’t squeaky clean.

Emotional Google Searches
I like to do a google search with an emotional term next to the  piece of software I want to research. eg “Jomsocial crap” brings up discussions in web based forums where real users let loose – rather than someone paid to do a review. The weight of public opinion is useful.

The Australian Communications & Media Authority  – ACMA
ACMA   has some nice stuff on Current Scams – Spam & e–Security here.  Obviously its Australian centric and will always lag behind what’s actually happening so common sense should also apply rather using this as a definitive resource.

The Australian Competition & Consumer Commission – ACCC
The ACCC has a speciality website called Scamwatch that’s here .  Although useful, like the ACMA site, it will always lag behind real life, so see point 1 – Apply Common Sense

The Australian Securities & Investment Commission – ASIC
ASIC also has a speciality web site, known as FIDO.    This site tends to focus on dodgy investment opportunties, such as computerised horse race betting schemes etc.  Its a great site but again – don’t forget to apply common sense.

All this brings me to two other questions, both around when is information dodgy or a scam, or is it simply just a bit of spin.

Question 1. What if the dodgy information came from a “trusted source” like the government?
The answer is that the Australian section of Wikileaks is a fantastic resource for getting another perspective on Government Announcements.  That is of course unless it gets blocked on us downstream.

Question 2. Does a high Google ranking = More authoritative content?
The short answer is No.  Consider this – Say I write a blog on a brand new topic. If you write  an article on the same topic and link to me because you want some external validation – I now rank higher than you on Google. Because I
am now the number one ranked person on Google for that topic, others are much more likely to link to me because I am on top – further increasing my  lead. I  become an authority on the topic, not because I am right,  but because I wrote on it first and a computer algorithm liked that.

So lots of good stuff around, but never let it get in the way of common sense – no matter how good the Nigerian Investment opportunity looks :)

Upgrading to MindX

I had coffee with Dan Dobos last week who’s been busy launching his new business, in Australia, which is a wonderful web based marketing engine that combines offline and online seamlessly – eg a an enquiry from your website automatically generates a printed card that gets sent out.   As an aside – It appears from the relationship I have with baristas in a variety of locations, that I spend half my life drinking coffee with people.

Anyway, Dan and I were discussing open source tools, and if you’ve read any of my articles before, you will know I am a bid advocate.  But one area where I hadn’t done much research was mind-mapping tools. Mostly because I didn’t feel the need for them up until I started the Churchill Club and had to deal with emergent topics on a day to day basis. Traditionally I had used a product called free mind, which which was java based so it pretty much ran on any operating system plus it was open source, free of cost and it could be downloaded easily.  Dan however was using a product called XMind which he strongly recommend.

I liked Freemind and had previously written about it here, but was willing to give the new product a go (hey its free so why not).   So when I got back to the office, I downloaded a copy.  To my surprise was almost instantly converted. Here’s why:

  • Its Open Source – which means you can download and use it for free or even mess with the code if that’s your thing.
  • It has a web based viewer – do you can plunk your mind maps up on your blog.
  • You can embed mind maps with mind maps.
  • You can also use it to draw Org Charts other special purpose maps.
  • It has inbuilt a nice project management tool.
  • You can import Freemind, Mind Manager and other common mind map formats.
  • You can export your map as HTML (a web page), text, image or other MindMapping formats.

None of which (other than the import and export) Freemind can do.

And as a bonus to make me the consummate connected professional, It turns out to that if I give $6.99 to Simplemind I can also get access to the mindmaps I have whipped up on my iPhone using SimpleMindX whilst waiting for meetings.

Sweat Equity & the Bee Sting

Bee StingI staked out my spot in the shade at the skateboard park. Got out my book, biscuits and water bottle and prepared for a relaxing hour while the kids went completely berserk. It seemed like only 2 minutes later when all of a sudden there was that screaming that signifies pain, as compared to the scream where the sibling has done an injustice. Poor old Ben (7 yr old) had got stung by a bee.  And it didn’t muck about – he got his first ever bee sting right between the eyes.  All the adults winced – and he screamed like there was no tomorrow. Clearly he was in pain as he cried for 20 minutes solid. The problem was though that he didn’t get a swelling – not even that little white centre where the venom went in – which made it hard to appreciate his pain after his initial scream.

Which brings me, strangely,  to the topic of Sweat Equity.  Sweat Equity is real and painful and all consuming to the entrepreneur – but when an investor or new partner arrives there is little to see, little evidence to prove its real, and its in their interest to play down what may be there. So what to do?

Having bootstrapped 6 businesses in 23 years, I’ve found my involvement before profitability normally includes four things that actually matter (as compared to the venture idea), which make up my Sweat Equity:

  1. Equipment – I’ve never started a business where I didn’t supply the initial furniture and IT, or loaned in the funds to buy it.
  2. Office Infrastructure – The business own by myself and/or partners has normally started either inside my home or inside another venue I have rented for a different business, and normally using my telephone and internet.
  3. Reduced or Missing Salary – I reckon that never in the history of commerce has anyone ever got paid what they believe they could earn elsewhere.
  4. Favours and other intangibles – Almost every business I have started has cashed in favours I was owed or accessed my network for customers.

The problem with all of this though is that except in one occasion I have always had partners, either on day one or downstream that simply didn’t recognise that contribution.  I’ve had investors come in downstream who have said to me “sweat equity, your f*cking kidding me”.   Despite the fact that they were buying into a profitable business that was profitable because of what I’d previously forgone.

So after a number of years of alternatively ignoring the problem, or simply being frustrated and feeling like an idiot, I finally had the insight that solved my problem. You see when bootstrapping, I jumped in boots and all and didn’t think clearly about the roles I was playing. Not only was I the initial employee (or contractor) but I was also the initial investor – investing in kind.   This thinking was the key to the solution.

Now when I start something I new, I recognise that the business and its partners is separate from myself and my other interests.  My personal company invoices the new entity rental for:

  • Any equipment that I loan in,
  • Accommodation & infrastructure that I cover,
  • Fees for any salary I forgo, and a
  • Management fee to cover the rest.

And if the new venture can’t afford it, any assets I might need to buy are purchased my my personal company and rented in, rather than purchased by the new venture using funds I have loaned in.

The terms for this are normally interest free with extended repayment.  And although I’m still at risk if the venture fails  – I could still lose funds owed – I can at least recover the tangible assets which is a small mercy.

My sweat equity is now fairly recorded and gone from being an intangible to something that’s perfectly reasonable there is solid evidence for.   And the bonus is that this method allows me real insight into the profitability of the new venture, without being camouflaged by favours.

Since I have started accounting for my activities in this way (the last two ventures) I haven’t had a single potential investor question the value of my sweat equity.   Its now like a big throbbing bee sting there for the world to see, rather than just me crying about it.

Innovation by walking through mud

Over the Melbourne Cup long weekend (yes, I know it wasn’t a real long weekend)  I took my family and another family over to Lakes Entrance for four days of fun and frivolity.  One of the activities we organised was a bush walk/navigation exercise through the Lake Tyers area.  Although I had planned the route to be a track because the average age of the kids was 7 and 1/2, it turned out that the track didn’t actually exist (nor did the bridge shown the map!) and we spent the majority of our time walking along a slightly swampy shoreline.  The highlight of my day was watching  the surprise then horror cross the face of 9 year old Riley, when his shortcut across a particularly muddy patch sucked the shoes right off his feet.

You can tell kids not to walk though mud a million times,  but really, they have to learn it for themselves.  Or you could say it requires experiential learning, not academic.

In a world of universities extorting us to  “Dream Large” and “Go Boldly” experiential learning is generally overlooked.  But learning by doing, is the source of most innovation in the world.  For Designers like Charles & Ray Eames, Architects like Frank Lloyd Wright and  inventors such as James Dyson it was & is their competitive advantage.

Its not all bad for Academic learning though.  Clearly its much more efficient way of disseminating knowledge and accelerates understanding.  You couldn’t (nor would you want to) learn medicine experimentally rather than 6 years at Uni.  Contrast that to experiential learning which is slow and expensive, fraught with failure, unstructured and difficult to share.

But time and time again inventors have proven that the ROI is there for experimenters.  So how do you take advantage of this in your business?  In my experience:

Conversation – Conversation is a great way of sharing learnings.  It pools together the bits and pieces on a topic that everyone has learnt as experiential learning tends to be contained in stories rather than reports.  I’ve found that formal and informal round table discussions are fabuoulus tools in the workplaces for gaining insight.

Unstructured Information ToolsWiki‘s and Blogs are fantastic tools for trapping learnings.  Blogs give a timeline of dicovery and Wiki’s allow you to evolve an understanding.

Networking – So experiential learning by yourself or just with your team is no fun.  Open Innovation truely means sharing, so get out and network.  In almost every environment their are people ready to share their learnings.  Consider the Hackerspace movement that gets together and explores manufacturing, electronics, software and chemistry.  It now has groups all over the world, getting together and figuring things out.

Tinkering -There is no point conversing, recording or sharing learnings if you don’t have something to share. So let your people explore and tinker with your products and systems.  Play is just tinkering with a smile on your face, and in case you didn’t know it, there is plenty or resources to help you gain understanding in emerging areas or traditional areas being de constructed, such as Make magazine.

So try walking through the mud, it maybe stupid, stinky and cost you a shoe – but you may also learn something that nobody has ever known before.