Entrepreneurship

Flying, Rocks and Entrepreneurs

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A new friend of mine, Todd Ordal, sent me the story below.  He doesn’t have an RSS feed yet, so he’s given me permission to publish it here.  Check out his website at www.appliedstrategy.info for more.

Todd knows that I’m an aviation enthusiast, and while I’m not current, one day I’ll get back up in the air.  Until then I log a fair amount of hours on Flight Simulator.  Todd’s story is a great one, and it applies to being an entrepreneur.  He makes the point that "You need to assess the situation, use what tools you have, calm yourself and those around you—or in my case, feign confidence—and take action."

I can relate to that!  Unfortunately, I’ve done my share of losing my cool and making my passengers nervous if not down right scared.  (I’m talking about my life as an entrepreneur – only a handful of brave souls ever flew with me, and I only scared one or two that I know of.)  As a leader, I sometimes have to remind myself to stay cool.  Lately business has been great, but during the tough times I know I looked more scared than I would have liked.  I also know I took it out on people who were looking to me for leadership – not cool.  Not only is it not cool, it doesn’t help! 

I guess it made me feel better, for a moment, but acting like a jackass doesn’t motivate people.  I used to say, "My head is going to explode!"  I would physically hold my head too, just to make the point to the person who I was trying to get to help me, or worse, who I hoped would give me sympathy.  (Usually it was the Person Who Prefers Not To Be Blogged About, but occasionally it was my co-founder, my assistant or someone who just  happened to be in the room.)  I’m embarrassed right now to think about the times when I didn’t keep my cool.

Read Todd’s story below, and then next time one of us is about to lose our cool, we’ll think about using our best airline captain voice and calming the hell down!  If you talk like you’re calm, you’ll actually start to feel calm, and at the very least the people around you won’t think you’ve lost your mind.

Ice, Rocks and Airplanes

I had a conversation with someone last week about the value of being prepared and was reminded of something that happened to me a few years ago. I used to travel every week and also was a pilot so flew many business trips myself. I was headed to Montana with a colleague and our first stop was to be Missoula. We had a clear day in Colorado and most of Wyoming and had a great view of the Grand Tetons as we approached Jackson Hole. While my colleague admired the view on the east side of the mountains, I was focused on the wall of clouds to the west and north, where we were headed.

One of the significant problems with winter flying is picking up ice in the clouds. The plane I was flying was certified to fly in known-ice conditions, but trust me you don’t want to spend much time there. Ice can bring down even large aircraft when enough accumulates.

As we chugged along in the clouds and picked up a bit of ice, I noticed that the radio had been particularly quite, so I tried a radio check with air traffic control with no results. “Center, Baron 2059Papa, radio check”… No response. In my best airline captain voice, I tried again. Nothing. This is not terribly unusual in mountainous terrain so I went back to my conversation with my companion. After about 15 minutes, I tried again, “Hello Center, Baron 2059Papa, radio check”. No response. This was heading downhill rather rapidly as we had continued to encounter ice and now turbulence.

However, as we got closer to Missoula, the radios seemed to kick back in and I was told by the controller to turn off course as there was a United jet departing ahead. Now I need to explain what the approach into Missoula looks like. The airport has mountains all around it. We would be landing to the west but there were mountains to the north and south. When the controller turned me off course, he had me fly south and start to descend for the approach. The altitude that he asked me to descend to was below the peaks of the mountains to the south and we were in the clouds, but he would vector me back on course quickly. After about 30 seconds, I had this awful thought and tried a radio check. No response. Now I was descending towards a mountain I couldn’t see, I was still picking up ice and I had a very nervous guy sitting next to me—not to mention the guy in my seat! My best airline captain voice now sounded more like Pee Wee Herman!

As I don’t have a ghost writer, I was obviously able to find my way to the runway without hitting anything hard. Without some situational awareness and a backup plan, we’d probably be impaled into the side of a peak in Montana right now. It is not much different in a tough business situation. You need to assess the situation, use what tools you have, calm yourself and those around you—or in my case, feign confidence—and take action.

Please feel free to pass this newsletter along to others. A sign up form is below. If you do not wish to receive this publication, please use the link at the bottom of the page to unsubscribe. Previous issues are available at www.appliedstrategy.info.

Todd Ordal helps CEOs and senior leaders connect the dots between current reality and a compelling vision of the future. He consults on strategy and serves as a thought partner for CEOs because he understands from his days as a CEO that it is lonely at the top. You can contact Todd at todd@appliedstrategy.info or call 303-527-0417.

The Auditors are here!

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It’s that time of year again – the Auditors are here! If you aren’t involved with a public company, or a private company that produces audited financial statements, you probably think auditors are people who come from the IRS randomly to make sure you are paying your fair share of keeping the country running. Different kind of auditor. The kind I’m talking about work for big and little accounting companies and they are generally either people just getting into the world of accounting or they are career auditors.  Company’s like mine pay them to come in and review the books.

Most companies don’t get their financials audited unless they have to, but many years ago I decided that my company would "act like the company we want to become" so we paid to have our financials audited. A misconception is that the auditors are going through the financials with a fine-toothed comb looking for fraud. You’d think that, but no, they are really there just to see if a company is keeping its books in accordance with GAAP (Generally Accepted Accounting Principles) and an ever-increasing library of regulations, guidelines and opinion letters.

I’ve got probably ten years of experience now with audited financials, and every year I look forward to the "Reps and Warrants" letter to see what new surprises have been tossed in. Given what we pay for this service, you’d think they would be "Representing" and "Warranting" to me, but again no, this is a letter that I’m given to sign by the auditors on behalf of my company. In the early days, it was one or two pages and basically said, "I’ve given you access to everything you asked for, and as far as I know, we’re all doing the best we can to accurately record and report financial transactions, and I’m not aware of anyone trying to steal from the company or cook the books." Ultimately I understood it to mean, "if anything is wrong here, I’m the guy that’s ultimately responsible." Clearly not all CEOs see it the same way given some of the bad behavior we’ve seen, and as a result of these crook’s bad behavior, the accounting profession has reacted by creating more, and more, and more rules and regulations.

The problem is, this avalanche of rules and regulations just gives the bad guys more cover to hide behind and makes it even harder for an investor to wade through the volume of reports (I’m talking about public companies now) to figure out what is really going on with their money. I recently read, "The Death of Common Sense: How Law is Suffocating America" written by Philip K. Howard, and except for the frustration I felt, I really got a lot out of the book. To sum it up – more laws and more rules will not make the world or your business a better place. Bad people will always find a way around the bureaucracy and good people will just be frustrated by it and less productive.

My latest Reps and Warrants letter is eight pages long and contains some really interesting paragraphs. I’ve picked three, just so you get a feel for the tone of the letter. The auditors ask me to warrant that:

All derivative instruments and any embedded derivative instruments that require bifurcation, in accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities . . .
 
and that . . .

Significant estimates and material concentrations known to management that are required to be disclosed in accordance with the AICPA’s Statement of Position 94­6, Disclosure of Certain Significant Risks and Uncertainties.
 
And let’s not forget . . .

Violations or possible violations of laws or regulations (including the failure to file reports required by regulatory bodies (e.g., EPA, OCC, FDIC, DOL, Medicare, U.S. Customs Service, HIPAA, IRS, Dept. of Commerce, state and municipal taxing authorities) when the effects of failing to file could be material to the financial statements) whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency.
 
I don’t know what a derivative instrument is, except that I think some people got in trouble with them. I wouldn’t know where to begin to bifurcate a derivative. While I’m not positive about the AICPA’s Statement of Position 946, I also have admit to not being familiar with their positions 1 through 945, and if I would have to guess, there are probably a few more after Position 946 that I may need to review.

The last paragraph that I’ve submitted for your review is really the catch-all. I think I’m being asked to warrant that any violations, or possible violations of all laws and regulations, including but not limited to those of the EPA, OCC, FDIC, DOL, Medicare, U.S. Customs Service, HIPAA, IRS, Department of Commerce and state municipal taxing authorities, will not effect our financials in a material way. If I read it right, they don’t care if there have been violations, they just want to know if the violations will effect our financials in a material way. (For the record, the answer is No.)

I’m not picking on my auditors, or any auditors for that matter because they aren’t the ones making up all the new regulations. At their heart, I think they are trying to do a good thing by holding people accountable to a high standard, it’s just that I’m not convinced (and neither are they) that much of this is really making companies more transparent. It’s really just making it harder for the good people to comply and easier for the bad people to claim they actually did comply or that they misunderstood the rules.

In the end, nothing has really changed for me. If something is wrong, I should have known about it and I’m going to be held accountable for it.  What can we do to keep the world from becoming a quagmire of ineffective laws, regulations and rules?  Don’t assume that a new regulation will fix a problem.  Work to fix the problem.  Don’t enact a new rule and say, "there, problem solved" because you only get credit if the problem is actually solved.  Focus energy on good people who will do their damnedest to make the right decision, because it is the right decision, and don’t tie their hands with bureaucracy that the bad people will just walk right through without a second thought.

TechStars taking applications

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If you are an entrepreneur and you read my blog, but not Brad Feld’s blog – please go subscribe to his blog right now.  Wait – before you go – you should also check out the TechStars website too as time is running out to apply for this year.

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Here’s the deal with TechStars.  You have a great idea, and maybe even the business is up and running, but you don’t really have the connections to people who can help you get to the next step.  Whether that’s raising money, hiring people, negotiating deals – TechStars knows somebody who can and will help you.  According to Brad’s latest blog about TechStars, eight of the ten TechStar companies from last year are either profitable or have received funding beyond TechStar’s initial investment.

While TechStars is a for-profit venture, the mentors are volunteers.  You can’t buy the kind of talent that is available to help you get going.  If you are an entrepreneur looking for a little bit of seed money and a lot of experienced help, check out www.techstars.org.

Colorado Weather

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You’ve got to love Colorado – it’s sunny and 65 degrees (18c) outside now, and it feels even warmer.  The weather service just issued a snow advisory for the area tonight for blowing snow and accumulations of 3 to 7 inches by tomorrow afternoon, with winds of 30 mph and gusting higher still.

Help Wanted and getting things done

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This post on "getting things done" is brought to you by Gold Systems, a Unified Communications software company in Boulder, Colorado.  If you are a Unified Communications Specialist, a Telecom Engineer, a sales professional or a software Engineer and you think you just might want to consider a career change, check out the job postings at http://www.goldsys.com/index.php?load=content&page_id=28  Doesn’t matter too much where you live – you’d be welcome to join us in sunny Boulder, Colorado, but we have people all over the U.S. if you happen to like where you currently live.

Now back to the blog – I’ve had a task on my task list to write the three sentences above for about a week.  Once I sat down to do it, it took me about five minutes.   And that reminds me of a blog post I’ve been meaning to write.

A few years ago Jeff Bezos, the founder of Amazon.com, came to CU Boulder to talk about his experience as an entrepreneur.  It was a great thrill to hear him speak and to talk to him for a minute after his presentation.  One story he told was how in the very early days of Amazon.com they (him included) would box up books to ship out to customers. The orders started pouring in and they found they were spending a lot of time on their knees on a hard concrete floor boxing up books.

Jeff said that he’d finally had enough, and he told someone that he was going to the local home improvement store to buy knee pads like the kind carpenters often wear.  The other person said, "Jeff, why don’t we just buy tables instead?"  He told the story I think to illustrate how easy it is to get so busy that you get so focused on the task at hand that you can’t think about the real problem and the best way to solve it.

I see this all the time, and it is an easy trap to fall into.  A good entrepreneur friend of mine doesn’t have time to investigate buying a high-quality spam filter, so he spends time every day or two going through the spam to make sure nothing important is getting trapped by his low-quality spam filter.  It’s like buying kneepads instead of a table.

I figured out a long time ago that as an entrepreneur, there would always be more for me to do than there was time to do it.  The first five years or so I stressed out about it all the time, thinking that I needed to work longer hours to get everything done.  I needed to get everything done, I thought.  I tended to work on the least important, most urgent tasks but then my friend Jim Lejeal pointed out that the CEO’s job is to work on the most important tasks that only the CEO can do, and that the really important tasks are usually not perceived as urgent at all.  It’s normal to have more than we can do, and I think it’s good because if I have a lot of options for how to spend my time, I can try to choose the very best use of my time.  (It’s a goal – I don’t always spend my time on the most important thing – I’m human and I still spend time on silly stuff at times.  It helps keep me sane.)

I created a category on my task list as "The ONE Most Important Thing" just to remind me to think about the one really important thing each day that I can do to move the company forward.

So here’s the tie-in back to my original help wanted post.  I was so busy, I didn’t take five minutes to do something that will ultimately make me and other people at my company less busy.   Now I’ve done it and I can check it off my task list.  What have you not taken time to do, that if you’d just do it, would ultimately save you a lot of time and make your business or your life better?

graduatetutor.com

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Whenever someone leaves a thoughtful comment on my blog, I usually check out their company if they disclose it.  Since I get a lot of comments and emails from other entrepreneurs, I’ve seen many interesting companies that I wouldn’t have heard about if not for my blog.

The most recent is graduatetutor.com.  When I was in college, tutors were other students who wanted to make a few bucks and they advertised by word of mouth or by putting handmade signs up on the bulletin board.  Now there’s graduatetutor.com.  They connect tutors to students over the web, using voice over IP and application sharing, or an electronic white board as they call it. 

I like graduatetutor.com because they have a business that generates real revenue with each transaction, and they can draw from tutors around the world, and serve students around the world.  Right now they seem to be focused on just a couple of schools, but it looks like the business has the potential to scale.

Cool OneNote Features

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Flying home Sunday night I decided to organize my notes in Microsoft OneNote. OneNote, if you haven’t played with it yet, is a pretty simple application for taking notes (duh) but I found it has a lot of interesting features. With OneNote, you don’t think so much about files, but rather about Notebooks, sections and pages. I’ve noticed that people seem to either be fanatics about using OneNote, or they’ve never tried it.

I’m writing this right now in OneNote, and when I get home I’ll just copy the next into typepad and post it into my blog. (OneNote has a "Blog This" command, so when I get back on I’ll see if it supports TypePad – maybe I’ll discover another interesting feature. Update – it does support TypePad.  OneNote exports it to Word, which does the publishing.)

When you open up OneNote 2007 (Part of Office 2007) there is a page titled "More Cool Features." Here are some of the features that either already use or that I just discovered tonight.

  • OneNote will allow you to capture audio and video directly into a OneNote Page. What surprised me though was when I did it for the first time, OneNote popped up and asked if I wanted to enable Audio Search. This is really cool and I can’t wait to test it out. If you record an audio or video note, when your computer is idle, OneNote combined with the Vista Speech Recognition Engine will search and index the audio so it can be searched later using text. This is so cool! As you can see in the image below, it supports Chinese (Traditional and Simplified), English, French, German, Italian, Japanese, Korean and Spanish. I’ve written before about how well the Vista Speech Recognition Engine works, so I expect this to work very well. When is someone going to make a little recording device that will integrate with OneNote for audio notes? OR . . . Maybe they already have?!? With OneNote Mobile you can record audio notes on your Windows Mobile device, so I wonder if those notes get imported and indexed? I’ll report back if they do! 

Video recording started: 8:02 PM Sunday, January 13, 2008

 

   

  • Sometimes while looking at a web page, I’ll want to save the page. "Save As . . ." Doesn’t always work if the page is dynamic, such as a page of flight information. In Internet Explorer (if you have OneNote) there is a new button "Send to OneNote" that when you press it will send the page to OneNote. Even if the airline changes the page five minutes later, you’ll still have it captured, complete with working links.
  • Something that I just discovered tonight is really cool. If you copy an image into OneNote 2007, and then right click and select, "Copy Text from Picture", then "Paste," OneNote will magically extract the text from the image using Optical Character Recognition. I tried it on half a dozen images on my computer and except for one it captured the text perfectly. The OneNote documentation says that you can photograph business cards with your Windows Mobile Device from within OneNote Mobile, sync them to the computer and then extract the text into your notes. I’ll try that later when I can turn my phone back on. It turns out that whether you extract the text or not, OneNote automatically makes any text it finds in an image searchable. Neat! 

 

 

  GOLD SYSTEMS

  • Let’s say I’m taking notes and need to do some quick math. I just type the equation, like 394 / 9 = 43.7778 and as soon as I type the Equals sign and hit the space bar, OneNote fills in the answer.
  • Suppose someone sends me a PowerPoint, a Word Doc or even a PDF. I can insert the document into OneNote as a printout. When OneNote was installed on my computer, I magically got a new printer called "Send to OneNote 2007" Now anything that can be printed can be sent to OneNote as an image and then edited, drawn on or noted. I took a PDF that someone sent it to me and from within Adobe Acrobat I clicked File/Print/Send to OneNote 2007. It was a big PDF, so it took a minute, but then it appeared in OneNote. This brings me to the next trick . . . 
  • I took the PDF that was converted to OneNote, and then from within OneNote I clicked File/Print/Send to Microsoft Office Word. Now I had the PDF, converted back to an editable Word Document, which it turns out was about a 40% smaller file than the original PDF. 

   

The last thing I’ll mention really isn’t a OneNote feature, but I used to do this post. I wanted to snip a piece of the screen showing the Audio Search Dialog box, so I used a neat little tool that comes with Vista called Snipping Tool. I use it so much that it has a permanent place on my taskbar. You start the little app, and then using the mouse to select a box around anything on your screen. You can then save it as an image, print it, or copy it to the clipboard for pasting into some other Windows application. I use it all the time.

   

It took me awhile to get in the habit of using OneNote, but now it’s becoming one of my most used applications. Give it a try if you haven’t discovered it yourself.

Tom Keller is blogging

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My friend Tom Keller is blogging, and I know this because he asked if I was responsible for a quote that he wanted to use in his most recent post.  Years ago I said something like "building a business is a marathon, not a sprint."  Now I realize it is a series of marathons, and that perspective has helped me stay in the race.  Lots of entrepreneurs that I’ve met over the years, especially during the dot com bubble, quit after a year or two because they just couldn’t keep sprinting.  I still sprint when I need to, but you can’t sprint the whole marathon and expect to finish.  Check out Tom’s post on keeping your work life balanced.

Tom wrote another post on "The Significance of Voluntary Transactions."  I love thinking about economics and how they make the world go ’round.  Tom takes on "Fair Trade Coffee" and "Sweat Shop Labor" and explains the economic view of them very well.  I hope Tom writes more along these lines and gives some ideas about how to make the world a better place, while working within the laws of economics.

FJ Cruiser Car Computer Status

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June 19th, 2007  – My Infil T3 Car Computer that I bought earlier this year has died.  It’s still under warrenty, but mp3car.com can’t get a replacement anytime soon, so they have agreed to replace it with a new Dual-Core machine with a separate touch screen.  Installation won’t be as easy, but it should be a better machine.

September, 2007 – I’ve received the computer, but the display is still on backorder.  I powered the computer up and it seems to work.  One thing I like already is that it can run on 12v or 120v, so I’ll be able to bring it inside for updates.

October, 2007 – Still waiting.  No idea when the display will ship.

November, 2007 – Still waiting.  Again, no eta on the display.  Powered up the computer again to make sure it still works.  Got to use the Microsoft automated product authorization phone line to reenable Vista.  It worked great!

December 10, 2007 – MP3Car.com says they are shipping the monitor!  UPS verifies that it is in route.

Angel Capital Summit

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Elizabeth Kudner emailed me to let me know about the Angel Capital Summit, hosted by the Rockies Venture Club, that is happening November 13th, 2007.  The Rockies Venture Club has been around for over twenty years, in fact it was one of the first non-profit organizations to help entrepreneurs launch and fund their businesses.

Acs20logo Rockies_logo

If you are an entrepreneur or Angel investor in the Rocky Mountain area, check it out!  We’re very lucky to live in a place that is so friendly to entreprenuers, has good sources of capital and is a nice place to live too.