Live Life With No Regrets!

I talked to a friend of mine who did her university project research on prostitution in South East Asia.

A lot of prostitutes go into prostitution because of economic hardship. Sad to say, some families sell their daughters because of economic hardship.

When money is hard to come by, crime does abound. Not just prostitution, gangs, robbery, burglary. If people have nothing to do, they may vent their frustration in whatever methods necessary. Idle hands do make the devil's tools.

So I think that doing honest business, seeking to bless others economically, to prosper abundantly is good and even necessary.

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There is no way around it. There are endeavours which require more than a single person to accomplish. This means teamwork.

But there are two ways we can view it, one that we use people. The other is that people want to serve us.

The first method means extracting out of people their time and energy, probably compensating them with money, and perhaps using fear and guilt.

The second means being a person with such integrity, charisma, clarity of vision, that people are compelled inwardly to work for you.

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I've heard friends, colleagues and acquaintances complain that going to courses are useless, they will give anecdotal evidence about observing a colleague who attended a course in XXX and it didn't change anything.

I would agree to such an observation, but my response to that is this: Many people go to church and read the Bible, but they don't change either. That doesn't mean that going to church and what the Bible teaches is useless.

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I think that we can learn from the way zookeepers handle animals in a zoo. Good zookeepers understand that animals have needs and that they need to be handled differently, each with a different environment suited for them, feeding times, diet, etc.

Some animals are social and kept in groups, some are territorial and need to be separated. Some will get bored without any activity, some get stressed if there is too much distraction. There are signs outside an aquarium that say "Please don't tap the glass. It stresses the fish".

The same goes for humans. They get stressed too. They need social interaction too. They get bored. They are territorial.

I think we must strive that humans, no matter what we expect them to do (like "exceed expectations" on their performance review) are still animals too.

Humans are humans, not superhuman. In the wild concrete jungle, we've seemed to forgotten that. We see other humans as things, robots, resources to serve our own needs. Perhaps that is one aspect of the human animal, they tend to become selfish and egocentric.

I am starting to think if we view each person more than just a self-directed moral being, but also having the nature of a creature, an animal in the sense of needs, territory, interaction, etc, we can learn to treat each other better.

If only humans could have signs outside their cubicles that said "Don't overload with work. It stresses them out." Or "Please feed with encouragement and praise."

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I've been seeing a certain theme in 3 different areas of what I'm reading.

It's that we are dependent on one another.

The first, a book on "Power, Influence and Persuasion" by Harvard Business Review says that we are all dependent on everyone. Even kings are dependent on their advisors for wisdom and insight, knights for protection, earls to provide resources and manage lands.

Another book I read "Project Planning, Scheduling and Control" by James Lewis. A Project Manager doesn't just tell people what to do. In fact, he merely facilitates, because the people he works with know better than him on what to do. He is dependent on them to do the actual work, to provide insight, because they are on the ground and know what is happening.

Thirdly, "12 Christian 'Beliefs' That Can Drive You Crazy" by Henry Cloud talks of relational dependence. We need people to talk to, to ask for help. The Pharisees were hypocrites because they thought they were self-sufficient in their righteousness. That they had "got it" and didn't need God to rescue them. When we realize that we are interdependent, it is a step in humility.

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I Will Survive
Originally uploaded by nicodemus_chan.

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I always get the feeling that what I'm doing is meaningless, echoing the words of Ecclesiastes.

And its true. No matter what I do, it can be very well meaningless.

The only thing that keeps me going is that Ecclesiastes 9:10 "Whatever your hand finds to do, do it with all your might, for in the grave, where you are going, there is neither working nor planning nor knowledge nor wisdom." and Col 3:23-24 paraphrases it and adds"Whatever you do, work at it with all your heart, as working for the Lord, not for men."

The other thing is that the greater purpose in it may be hidden from us until maybe decades later. Just think of what Joshua did in prison, unjustly jailed in a foreign country, with no one knowing of his existence. Yet he made do with whatever his hands found to do, being the best servant in Potiphar's household and again in the prisons of Egypt.

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You can't run away from hard work. It will catch up with you, sooner or later.

If you live an easy life now, you'll have to work harder later in life. So it is hopefully better to work hard in starting a business now and hopefully it will make life easier for you later down the years.

It's another paradox, our goal is for an easier life, yet we must embrace hard work and taste some bitterness for now.

And if we don't pay for it now, we will pay for it later.

So therefore, better sooner than later, because it isn't a payment but an investment for our future.

Another reason is because of competition, if something is too easy, then everybody will do it, and then you wouldn't be unique and the law of supply and demand comes to play. Too much supply and your unique value proposition goes down.

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What Facebook, Flickr, YouTube, Blogger.com really is, is that you are creating a presence for yourself, an extension of you that people can access online.

Marshall McLuhan's seminal book, "Understanding Media: The Extensions of Man" puts forth that mans inventions are extensions of himself.

The phone is an extension of the ear and mouth.

The car is an extension of the feet.

The TV is an extension of the eyes.

Using this metaphor, we can generate an infinite flow of ideas on how we can create services and ideas for internet business startups. (Though success may not necessarily follow.)

Facebook is an extension of our need to express our current feelings, our emotional moods and state which we need to express to our fellow man.

Flickr is like this virtual photo album which we would like show the whole world.

Just go through your day, and jot down the things you do, everything from waking up to talking to people. Which of these activities do you think would be made more efficient or better by web-enabling it?

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I think that for any endeavour, whether it's business, career, sports, love, college, we should not look at the chronological age or the number of years a person has spent in it but whether the person is ready.

A young 27 year old could be ready to be CEO, a 14 year old could be ready to go to University. It's not the age.

Moses needed to be prepared for 40 years till he was 80 before he was ready to lead the Israelites out of Egypt.

That is not to say that we can adequately prepare fully for everything, there are no such things as perfect conditions, but we can remove conditions we know that will definitely cause us to fail to reach our goals.

As we plan long term, we must think, are we ready? If we want to get married, we must prepare beforehand to be ready for it. Or for business, are we ready to handle the burden, do we have the financial, social and psychological resources? Or at least have access to help?

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The current wave in startups is now to develop another social networking application, to see who can build the bigger network. Hi-5, Friendster, Facebook, MySpace, etc.

This reminds me of the portal wars, back in the first Internet wave, the mentality then was to see who could build the biggest and best portal (which was won by Yahoo! and MSN). Then Google sneaked up on everyone and just built a better search engine.

The herd mentality is now into social networking, I think that that is a signal not to follow the crowd. There will be a clear winner, but I think that the winner is already in the market, and its just a battle of attrition now.

I think the next big thing would be something simple and overlooked that no one will expect it.

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.Com of the the late 90's is now renamed as Web 2.0.

Remember history is repeated by those who never learn from it.

If you want to learn from people's mistakes, go to TechCrunch's Deadpool.

This is a tagged section of their website which lists companies that have gone belly up. Companies that owe million$ in debt or just couldn't get enough traction.

Everything from Second Life wannabes, MySpace wannabes, Facebook wannabes, Friendster wannabes, some with series A through C level of funding ranging from $1M to $300M all folding.

Take your pick, trawl through them and learn the lessons well.

Perhaps it may be me, but I find it a bit humiliating to sell your company on eBay. It's like stripping a carcass of edible parts to feed the vultures before finally dumping it. It's not dignified. But then again, if you do have vultures circling you, you may as well throw them something to keep them off your back.

There's nothing wrong with failure mind you. It's part and parcel of life. Consolidation happens. And you should give everything in life a try. That's life. Based on success rates of startups, a rational person would be foolish to start one. It's actually safer to invest in some strong blue chips.

It's a lot of money to a poor man, but to a rich man, they don't mind having a go. They might hit the big one with you. Doing a startup means giving it a go. If you really believe in yourself, and feedback from others tell you its good, do it. It's not the destination, the journey in life is important too.

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The Pareto Principle is a useful principle, often called the 80/20 principle. It can be used in quality control, 80% of faults are caused by 20% of the types of causes, sales (80% of your sales comes from 20% of your customers.)

It's roots lie in economics. Vilfredo Pareto studied the wealth of nations from the ancient Egyptians to modern day (at that time) Italy. He found that 80% of the wealth of a country is controlled by 20% of the population.

Looking at the Forbes list of 40 richest in Singapore, the breakdown of wealth even among the top 40 follows the Pareto Principle too. List of richest here.

The top 20% control 68% of the wealth, with the bottom 80% control 32%. (The principle is not exact, but it shows that asymmetry occurs.)

What are the other applications? I think equal wealth may not be a practical goal. Equilibrium is reached in asymmetric proportions. The New Economic Policy of Malaysia may be flawed to some degree. (The goal is for the Malays to control at least 30% of the wealth of the country.)

However, in the end, what happens is that there are very rich Malays and very poor Malays. There will be a top 20% of Malays who own 80% of the Malay wealth.

That being the case, the result will be that the top 20% of Malays will control 24% of the wealth of country. While the remaining 80% of Malays will control 6% of the wealth of the country.

It's an intuitive leap of logic, but I think that is why one of the observations as to why there are not more Malays being even more prosperous. The NEP benefits an asymmetric slice of the population.

Even worse, the average Malay voter on the street believes that the policy will actually benefit them. It only benefits the rich. Instead if the NEP is truly in the spirit of alleviating poverty, its benefits should be doled out based on economic boundaries rather than racial boundaries.

The key then, is not to hope for general external factors to push you into the top 20% but for you yourself to vault yourself there.

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The one thing that I took away from this book was the word propriety. That there is a right thing to do at the right time, the proper thing to do. It's something we must all learn.

PDF of my summary in this link.

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No, I came to this conclusion, because I thought of it mathematically.

There is no way out of that. Even if I had the power to automagically give everyone on earth $10,000,000 each, the economic classes will still remain roughly the same. Property prices will just sky rocket based on each people's bids. There will be a certain percentage of people who will fritter away their money, COE's will skyrocket. (Pareto Principle will emerge.)

In business you may be one of the first movers in a new market, but there will be people who will see your success and start copying your product.

Because life is competitive, being agile, and stronger in business is a necessity. In an industry, consolidation occurs, and only 2-3 winners to emerge. One big winner, a second smaller one, and perhaps a third minority. The virtuous cycle is tapped on by these winners. The successful ones beget even more success. They tap into the economies of scale. It is a pattern that repeats itself over and over in industries. Car manufacturers, Airplane makers, Internet search engines, etc. In mathematical terms, clustering happens. Customers will start clustering around the best providers.

That is the reason why working hard is a feature of life. But working hard shouldn't be the target of work. It is a side-effect. I've seen too many bosses and workers pursue working hard as a goal. It is not a goal. It is the side-effect of pursuing a goal. Just like happiness and joy shouldn't be the goal, but rather the side effect of serving others. Commanding someone to work hard is, in a sense, the same as commanding someone to be happy.

I think the reason why people pursue the side effects is because they don't have clear cut goals in life and in business. A couple automatically works hard because they want their child to be well-fed, and provided for. They don't make it a goal to stay up late at night and lose sleep for the sake of losing sleep. But I see that in some offices. Peer pressure, expectations from the boss. "If I don't stay late in the office, people/my boss will think that I'm a slacker."

These thoughts remind me of a scene from "The Pursuit of Happyness" starring Will Smith. In that film, he played a man who worked hard because he had the goal of providing for his family. He worked hard because he had a clear cut goal of completing his tasks before 5pm. (It was not an option, he had to leave by 5pm so that he could queue up at the homeless shelter.) He then cut the goals into smaller sub-goals like shaving 8 seconds of each cold call by not hanging up with the phone but by pressing the hook with his fingers.

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Is that it is invisible.

Imagine that only 3 out of 10 building projects succeed. 3 out of 10 building projects are abandoned. And the 4 that are delivered late are of poor quality, rundown and not what the customers wanted. Within 2 years, another project to replace these buildings will be in place.

Hardly what we see in the building and construction industry.

Unfortunately, that is the norm in the software industry. A lot of software is bad quality, badly maintained. The reason for that I believe is that software is invisible. A customer can only see the effects of software, he can't inspect with his eyes each line of code. What we can see of software is the draping of a cloth over an invisible structure. We can see the shape the structure makes, but we don't know how well the construction is.

Humans being sensory creatures find it hard to understand software. Software is an abstraction. Perhaps with more tools like unit testing, integration testing and continuous builds software construction could be made better.

I'm not sure how this problem can be solved outright. Education could be one thing, but some people don't want the secret out. Software consultancy is like the tailors trade in "The Emperor's Clothes".

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The book was banned by the Catholic church because it expoused worldly principles of deceit and manipulation.

I've read it. Why?

Because Jesus said to be as innocent as doves yet as wise as serpents.

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Do you see a man skilled in his work? He will serve before kings; he will not serve before obscure men. (Proverbs 22:29)

The first impression of this proverb says that if you are skilled you are automatically rise up.

But another look at this proverb makes me think differently. When we are skilled we should look for "kings" (the best firms) to serve. We should in fact, ignore obscure companies.

Look for the best companies that will appreciate your work. Don't work for low quality companies, or companies that will not succeed. This doesn't mean we are stuck up or think we are too good for them. Rather, we choose people that will appreciate our work the best.

In today's global job market, we have to sell ourselves. Know the level of skill that you are at and find the best company for you. Don't short sell yourself. "He will not serve before obscure men."

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If you're serious about something, you will be thinking about that subject almost all the time. You will find every spare time to do what you need to achieve that objective.

If something is important to you, you will do it IMMEDIATELY. You will also find ways to do achieve it despite obstacles and rejections.

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I’ve seen it too many times. A company does short term work but forgets stuff that doesn’t bring results but is essential to long term health.

It’s just like exercise.

It’s essential, everyone knows it’s important but a lot of people don’t do it.

Why?

Because it seems to be a waste of time.

Because it’s painful and tiring.

Because they don’t have clear goals.

What happens in the end?

They run out of breath in the long run.

They struggle in the latter part of the race. Things slow down. Things don’t seem to work.

And then they wonder why they are out of breath. Why is it so difficult to climb the hill? Why is every step so excruciating?

And so then a company blames (valid reasons though in the right context) the market conditions were not right, wrong choice of platform, too much competition, etc.

The biggest lesson I’ve learnt from running a marathon is this: “You can’t train overnight for one.”

Starting a company needs preparation. It needs careful planning. It needs training. Study how other created their company, what did they do, how did they go about it. It will go a long way to increasing chances of success.

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Becoming the best bricklayer in town isn't the best way to become an architect.

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Wait till you get to the real world. Then you'll know.

That's the thing... I think the real world is the fake world.

The world is built on perception, images... lies.

Image is everything, an ad with Andrea Agassi said.

The stock market is buoyed by "confidence".

Managers don't really manage by objectives achieved, they manage by how good they will look in front of their boss.

The success of cosmetic plastic surgery goes to show the emphasis on appearances are in this world.

Spin doctors abound to protect the image of the clients.

But is there any good in it all? Perhaps. Makeup is to enhance beauty, just like fresh paint on a building. Advertising is to spread good news of some product or service that can help people.

The danger is when truth is compromised.

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A retired engineer was once asked to fix a problem at his former company. The machinery wasn't working and being the expert on it, was recalled to help solve the problem.

He quoted a consultancy price of $50,000.

When he arrived at the factory floor, he listened carefully to the humming of the machine, then took out a piece of chalk and marked an 'X' at one spot. "This is where your problem lies."

The factory engineers duly opened the machine and examined the mechanism where the retired engineer pointed out. And quite correctly, the machine functioned after being fixed.

The managers were however, a bit miffed for paying $50,000 for just a chalk mark and asked the retired engineer to give a detailed breakdown. His invoice was as follows:

1. Chalk mark                       $      1
2. Service from years of experience $ 49,999
                                    --------
                            TOTAL   $ 50,000
                                    ========

The lesson learnt is that value doesn't just come from tangible goods or service but from the intangible as well.

Another lesson is that you must always quote a price BEFORE you give consultation.

Which reminds me of another story:

The difference between the runner in a 100m race may only be 0.01s. But the prize money can be as different as $100,000 and $50,000

100% increase in value for only a 0.1% difference in output.

One lesson I think is that we shouldn't try to go for doubling our output to double our pay. We can't. I can't double my pay by doubling my lines of code per day. In fact the number of lines of code I create a day remains constant. It is the quality of code and the years of experience behind it that is important. There is a limit to the number of hours a day we have.

It is increasing our decision making abilities so that making right decisions more often is increased, and thereby our added value increases.

Posted by Nico at 2:50 PM | Permalink | Comments (0) | TrackBacks (0)

Guess not. What about Friendster, or Facebook or MySpace?

None whatsoever. Yet they are all successful.

If your product isn't good to be spread by mouth of word, it ain't good enough to be socially viral.

I think one of the key markers for a new-economy startup is that it must be so good that word-of-mouth recommendation is the one thing that will differentiate the winners from the losers.

If people don't want to recommend it, tweak and reinvent the product until it becomes so good that people will.

Impressing investors is good, and necessary to get initial funding. But the key indicator of your success is whether people like it.

I've been in a couple of startups and seen too much from the Internet bubble days seeing people spend millions of dollars on advertising down the drain.

The new economy's rules are different and so are the marketing methods.

Posted by Nico at 2:11 PM | Permalink | Comments (0) | TrackBacks (0)

You don't need to change the world like Bill Gates or Thomas Edison.

Sergey Brin and Larry Page didn't set out to make Google the super success that it was. If it had happened another way, they could have just been a division of Excite.

Bill Gates wanted to have a business advantage but he too never imagined Microsoft to be as large as it is now.

There is success and there is huge success. I think that huge success is more a matter of the right circumstances and decisions turning your way. But reasonable success, I believe, is about good stewardship. If you have reasonable success, then you will be ready when huge success comes to you.

The point is, you can't aim to be a Google or a Microsoft. You have to aim to be faithful in serving customers profitably and coming up with a great product or service. You can aim big, you can aim to be a global leader. But success still comes from the Lord. That's because we don't know what's around the corner.

If only Apple knew that the key to success was actually licensing it's OS, then 95% of us may be using Apple computers today. If only failed search engines knew that the key wasn't going the portal way, but in better search and in directed ads, we may not calling Internet Search "Googling" but maybe "Excite-ing" or "Infosearch". These are the random decisions that could have shaped the landscape tremendously.

The day that Google IPO'ed was just another day for Larry and Sergey. They walked into the same office, and they're overnight billionaires. So what? That wasn't their goal. They were already doing what they liked doing.

I think that a reasonable business goal for a startup is perhaps a 1 to 5 million dollars (by today's standards. That's like selling $200 products to 5000 to 25,000 customers). For hugely wild success, a lot depends on circumstances and taking advantage of opportunities. Do what you like to do most of all.

Aiming high is good but overreaching your ability is also unwise. Take each day as it comes, yet plan for tomorrow and the years to come.

Posted by Nico at 2:19 AM | Permalink | Comments (0) | TrackBacks (0)

You should read this website http://gettingreal.37signals.com/. I suggest everyone who is doing any software product to read this and think carefully what he/she wants to create.

A shoutout goes to Wee Shen for suggesting this website a couple of years back. I come back to it once in a while to think over my business ideas.

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You are the CEO of your own company. You have a staff size of 1. What is your company direction? What are your orders?

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You should do only fun things in life...

If you find what you are doing isn't fun there are 2 things you can do:
1. Make it fun.
2. Stop doing it and find something that is fun.

If you find that you're not having fun doing it and you can't make it fun, then you should stop doing it and start doing something else that is fun.

Posted by Nico at 3:09 PM | Permalink | Comments (0) | TrackBacks (0)

An interesting article from Fast Company. The following is a meat and potatoes excerpt.

Sure, you're working long, but "long" and "hard" are now two different things. In the old days, we could measure how much grain someone harvested or how many pieces of steel he made. Hard work meant more work. But the past doesn't lead to the future. The future is not about time at all. The future is about work that's really and truly hard, not time-consuming. It's about the kind of work that requires us to push ourselves, not just punch the clock. Hard work is where our job security, our financial profit, and our future joy lie.

It's hard work to make difficult emotional decisions, such as quitting a job and setting out on your own. It's hard work to invent a new system, service, or process that's remarkable. It's hard work to tell your boss that he's being intellectually and emotionally lazy. It's easier to stand by and watch the company fade into oblivion. It's hard work to tell senior management to abandon something that it has been doing for a long time in favor of a new and apparently risky alternative. It's hard work to make good decisions with less than all of the data.

Today, working hard is about taking apparent risk. Not a crazy risk like betting the entire company on an untested product. No, an apparent risk: something that the competition (and your coworkers) believe is unsafe but that you realize is far more conservative than sticking with the status quo.

Richard Branson doesn't work more hours than you do. Neither does Steve Ballmer or Carly Fiorina. Robyn Waters, the woman who revolutionized what Target sells -- and helped the company trounce Kmart -- probably worked fewer hours than you do in an average week.

None of the people who are racking up amazing success stories and creating cool stuff are doing it just by working more hours than you are. And I hate to say it, but they're not smarter than you either. They're succeeding by doing hard work.

Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.

Based on this article, I don't think I take enough risk in life. I've always thought that I was a risk-taker. And rightly so, but I don't face up to enough tough decisions to face up to fear. Hard work isn't about working long hours. It isn't about working till 9pm at night. It's about making tough decisions and making these tough decisions perhaps everyday and every moment. Hard work in the modern world is about making sacrifices. Not sometimes social life for your career, but it can also mean sacrificing your "career" for success. Being a success and having a career are not the same thing.

Posted by Nico at 9:35 AM | Permalink | Comments (0) | TrackBacks (0)

In software development, there can be a lot of crunch time, i.e. late nights spent working on code and getting the software working.

Having crunch time at times is necessary in work at times, but in most cases 80%, it is unnecessary. It can be a sign of dedication and passion but I think in most times it is a sign of bad time management.

To take an analogy of from school. Most of the students that are working furiously the night before a deadline are not motivated because they are passionate and dedicated. It's because they left it till the last minute to do their assignments! 80% of these students are doing it because they didn't pay attention during tutorials or lectures, didn't do their homework, didn't set sub goals and smaller milestones.

A lot of last minute crunch time is because people took their time in preproduction and planning, working out their "perfect plan", "gathering requirements". A lot of this planning is sometimes indecision or vacillation or delayed because of foot-dragging on other people's part. Why? Because there's "plenty of time".

This is not to say that you shouldn't do crunch time. To continue with the student analogy. A good student always does his homework and stays on the ball. However during exam time, there is also a time to brush up on and stay fresh on topics and to forgo some TV.

Crunch time could be maybe 1-2 days before launch to polish things up. In the end, it's about leadership. Troops morale fall. As Sun Tzu said in "Art of War", a long prolonged battle is a sign of bad leadership.

To relate to another fact, 300,000 surgical deaths happen yearly in the United States are actually preventable! A lot of crunch time is actually preventable.

Continue reading "Crunch Time" »

Posted by Nico at 10:14 PM | Permalink | Comments (0) | TrackBacks (0)

If I had a dollar for every time a person came to me and told me he had a great "opportunity"... well you know what I mean.

I'm too tired of hearing people with some great business idea or opportunity to palm off on me. Whether it's some MLM idea or unthought out startup idea.

If some bloody idea is really that great a money maker, why the heck are you sharing it with me? Shouldn't you just hire some people and run with it?

Ridiculous claims like "unlimited income". Dude, even light has speed limits. MLM recruitment talks basically make you into a salesman not an entrepreneur.

And I hate the way the word entrepreneur is abused. Sure there are entrepreneurs like Bill Gates, but the mom and pop grocery store, the barber round the corner, the ice-cream vendor on the street are also entrepreneurs.

Philosophical Question: Is it the pattern of the world to use each other? Perhaps that is too negative a view. Instead of seeing businessman as parasites, perhaps business is a form of symbiosis.

A more integrated view is to see it as a dynamic ecosystem of human life and economy. Yes there are parasites, there are piranhas, but there are also lions and tigers.

Posted by Nico at 12:06 PM | Permalink | Comments (0) | TrackBacks (0)

Perhaps one of the antogonistic values in entrepreneurship is creating art versus making a profit.

The artist is more concerned about creating art but may starve because no one buys his/her work. While the profiteer tries to palm off as much as he can to unsuspecting customers.

The answer in solving this dillemma is to create value and to educate people on value.

Value is subjective. Much like the adage, if a tree falls down in the forest does it make a noise?

A piece of art may double or triple in value the next day just because the artist died of a pulmonary heart attack. The molecules in the piece of art didn't change, the world's climate didn't change. It is merely the perception of value.

Value only exists in the mind of the beholder. It is abstract, unreal in the sense of not being physical. And people pay for value. People pay for an abstraction.

Even a car would be valueless in a nation of blind and deaf men. It is only if the buyer believes that anything he pays for has value would he pay for it.

Therefore, in order to be entrepreneurial we create value. We find or create some product of service that in the mind of the buyer is of value, that is the seller moves towards the buyer. Secondly, we can market and advertise or sell the product, i.e. bring the buyer towards the seller by creating more value in his mind about our product.

In the first, we know of Google and Microsoft. In the second, we know of Pet Rocks, and Insurance.

The artist creates art for himself and his own satisfaction, and that is fine if all he wants is to do it for himself. But to sell it involves a second party which is the buyer, and it is in the buyer's mind whether he believes that that piece of art is of value.

As a buyer we must beware of profiteering. That is when there are so many alternatives of the same value available. Caveat emptor is the key word as a seller can label anything with a price, but we as the buyer are the ones who chooses to place value and who ultimately forks over our hard earned dollar. Does Nike profiteer versus an alternative unbranded shoe, or is it selling value? We pay more for better quality. But a bad buy is when the are cheaper alternatives of better quality and of lower price or in reality does not really satisfy our needs.

The profiteer is one who preys on weak and unsuspecting customers and hides information, uses pressure and psychological tactics to sell rather than to create value in the mind of the customer.

I believe it all comes down to serving the customer. Choosing exorbitant prices may work in the short term but it will hit the seller back in the long run unless he/she serves the customer. Walmart is an example of serving the customer by finding ways to source for the cheapest products for the customer.

The entrepreneur serves by creating value for the customer.

Posted by Nico at 8:02 AM | Permalink | Comments (0) | TrackBacks (0)

The interesting things to gather from this book is that:

1. Larry & Sergey (the founders) managed to pit Sequioa Capital & Kleiner Perkins, two of the biggest VC's in Silicon Valley against one another so that they could retain majority ownership.
2. They share characteristics like other Silicon Valley entrepreneurs, Jobs and Gates:
   • They're smart... really smart.
   • They are brash in their opinions and would argue with other people.
   • They're excellent businessmen and know how to cut a deal or sense a business opportunity or partnership.
3. No one sets out to be rich in a startup. Though they do know that you need to survive, the vision was to provide value and a great product, something better than what the market offered.

Sergey's father used to work for the USSR and would come up with "statistics" to show that life in the Soviet Union was better than the United States. This reminds me of the current debacle in Malaysia of the Malaysian government insisting that their survey results are superior than ASLI's independent analysis.

It's an easy read and can be read in one week.

Posted by Nico at 11:42 PM | Permalink | Comments (0) | TrackBacks (0)

In one of my previous posts, I wrote that you should let people make mistakes.

The reason for that comes back to God's gift to mankind, which is freewill.

I am in a situation where I have the knowledge, skill and expertise to solve a big mess. Unfortunately, the people in charge will not listen to me and insist on doing things their own way.

There is a time for patience, and even obedience and then there are issues of boundaries--I am not in charge of your life. You are in charge of your own life and you must face the consequences of your actions. That is the inevitable result of free will.

I actually understand more of how God feels so frustrated with his children. Sometimes they just go their own way, and yet God cannot do anything... and they must experience the consequences of their own actions.

I am sorely tempted as the words of proverbs say: "I will laugh when disaster befalls you."

Yet, in all circumstances give thanks. Learn from it.

I must learn in which areas do I consistently experience negative consequences. What wisdom do I not have? Who would have the wisdom to guide me correctly? Or do I have the wisdom but am not obeying it correctly?

Posted by Nico at 11:25 AM | Permalink | Comments (0) | TrackBacks (0)

How many Indian footballers can David Beckham's salary hire?

Why doesn't Real Madrid outsource their footballers to India?

Ridiculous, but the thing is a lot of managers believe that outsourcing is the key to lowering their costs.

But from my experience and observation hiring cheaper programmers doesn't necessarily mean the project is cheaper or better in fact, it could lead to failure.

If your programmers are cheap but of low quality there is no sense in hiring them. Because software engineering is not a manufacturing process, it is a design process, it is a talent based activity.

A lot of managers don't understand that, but they should. The reason to hire from India or China is not because of cost but because your local talent pool is limited.

You cannot outsource design, creative genius or intellectual prowess. It must be in ONE person. Two persons with the IQ of 100 do not equal one person with an IQ of 200.

Posted by Nico at 12:42 PM | Permalink | Comments (0) | TrackBacks (0)

The final part of Mohamad Rafi's book on pricing tells us to consider the final integration of pricing into the big picture.

Pricing is not just about value,

Reasons to push the price up: it is also about the marketer's message to the consumer, this Rolling Stones concert ticket is worth $XXX or this Ferrari is worth $XXX.

Reasons that pushes prices down:

1. to create marketing publicity, to create "sold out" consumer frenzy and keep hype and interest up, to be #1 on sales charts and thereby creating even more interest.
2. to keep your core fans interested. E.g. sports tickets. Man Utd fans are the lower wage earners, not the plush VIPs.
3. the market perception. E.g. a book above US$30 is considered "technical" and may not be bought by your target audience.
4. to break psychological barriers: E.g. the US$1000 computer price.
5. to maintain competitiveness: E.g. casinos offering freebies to whales, if you don't do it, they will move elsewhere.

What about fairness? When there is a shortage of water or fuel, do you engage in price gouging just because of economic forces?

Customer types and perceptions. Movie tickets hardly vary, even for blockbuster must-see films. Because the majority movie audience is accustomed to unvarying prices. However, prices for broadway show varies considerably because the musical and stage play audience has the capacity to handle large variations.

Consider the long-term ramifications, what about the damage to your reputation? Consider your relationships with your customers.

If you are offering discounts that are too transparent, those not getting discounts can be angered for not getting it.

1. 9 and 0 effect. $xx.99 denotes value. $x00.00 denotes quality.
2. Payment structure affects behaviour. People who pay upfront may use a lot initially but in the end taper out.
3. Prestige. Ferraris, Porsches price themselves to provide prestige.
4. Anchor Pricing. If you don't have brand, the rule of thumb is to price yourselves 15% below a branded one. Anything lower, and people perceive it to be of low quality and not a bargain.
5. Quantity and Phrasing of Prices. Buy 1 and get the next 1 at 50% off sounds better than get 1 at 13% off. Phrasing in terms of quantity sounds better and raises volume.
6. Mention the value of the instalment rather than the lump sum, it sounds better.
7. Bundle, and say you're throwing in lots of things free. E.g. Those sellavision late night commercials.
8. Everyone loves a bargain. This attracts people.

Create a profit culture in your company, provide information to your sales staff on which is the most profitable, review your pricing policies, are the right customers getting the right prices, are there any holes in your promotions that enable people to tap loopholes, create a multi-price mindset, does the price reflect the value? consider strategic objectives, psychological tactics and the like.

Posted by Nico at 6:28 PM | Permalink | Comments (0) | TrackBacks (0)

Mohamad Rafi in this book provides an easy to read book about pricing strategies. There aren't complicated economic demand and supply curves here, just basic principles on what factors affect pricing and tactics on how to maximize your profit.

In the book, he often refers "hidden profit", ways in which you can get more bang for your product/service.

He gives an example from Lloynd Hansen's of Ford who calculated that an additional of 1% of net profit margin increased Ford's net income by 33% and cash flow by 45%.

• Some customers but not everyone can get a price that is below average price.
• But to stay in business, your average price needs to be greater than your average cost.
• Prices should not drop below the production.
• Price cuts should be targeted and discrete.
• Make sure that discounted sales do not block purchases from those willing to pay full price.

Continue reading "The Art of Pricing" »

Posted by Nico at 4:25 PM | Permalink | Comments (0) | TrackBacks (0)

I hate email.

It's too insensitive, it doesn't convey enough tone, emotion or nuances.

Email is also slow. That person may or may not read that message in time. He or she may not want to reply immediately, or put it in his KIV folder and forget about it.

You don't get instant feedback. You don't see the persons expression upon reading his email.

It's impersonal, and a joke may be mis-interpreted as an afront, an order as a suggestion, a trivial matter as important and so on.

You don't know what is important or what is not. It's all just text in a sea of messages.

Don't forsake face-to-face communication for email. Even the phone is better than email.

I only check my email about 3 times a day. If someone wants something really urgent from me, just walk over to my cubicle and talk to me, or call me.

Talk to people. It builds rapport far better than email.

Posted by Nico at 11:03 AM | Permalink | Comments (0) | TrackBacks (0)

If you feel you're doing the work of two people, tell your boss who they are and see to it he fires one of them.

Your job as a manager is to prepare your people under you so that you can delegate to them.

The only way to develop responsibility in people is to give them responsibility.

Indispensible managers can be harmful, not valuable, especially when they impede the work of others.

Individuals who think they are irreplaceable because they are indispensable tend to get replaced because of the harm they cause. Moreover, higher management cannot risk promoting people who are indispensable in their current jobs because they have not trained a successor.

Learning time-management, taking seminars only solve the symptoms of a problem not the root cause.

The problem is: monkeys.

A monkey is the next move.

Continue reading "The One Minute Manager Meets The Monkey" »

Posted by Nico at 12:25 AM | Permalink | Comments (0) | TrackBacks (0)