sift everything

Yesterday was the first of three pieces on creating a tangible 60-second pitch. Today is the second. For this I’ve used two points made by Mel Perchesky (don’t know who this guy is but his advice is good).

Mel says:

60-second pitches “have two components: the first ten seconds and the remaining fifty. The objective of the first ten seconds is to have [whoever's getting pitched] want to listen to the next fifty seconds more intently than they would have otherwise.”

It’s like the first 5-pages rule for books or the first 5-minutes rule for stores — catching attention immediately is critical.

“The first ten seconds of the [60-second] statement also has two components. It should contain what you do or what your niche is. Secondly, it should also contain a reference that independently validates your value-proposition.”

And it should include your tag-line. In 10 seconds you should intrique, introduce, and inform.

Don’t try to cram too many details into your first 10 seconds. Your goal is to catch some attention and once captured you want to have them wanting to know more.

Forsaking the metaphysical (1,2,3), today we get into the tangibles of a 60-second pitch. For this I leaned heavily on the advice of Bill Joss and an article in Fast Company called Perfecting Your Pitch.

Here are 10 tips for outlining your pitch:

1. Be Concise:

Brevity requires effort — think hard about the essentials of your message and ruthlessly cut away the unnecessary details. An pitch is a clear, concise and well-practiced description of your company — about 150-225 words.

2. Put a tag on it:

Start with a tag line — a wordplay to pique interest in your pitch. A tag line must encapsulate your business’s core purpose or product, but, more important, it must grab your audience’s attention.

3. Solve a Problem:

Right after your tag line, launch into an explanation of the need you plan to meet.

4. Turn adversity into opportunity:

Every problem offers the opportunity for a solution. Once you’ve presented your prognosis, lay out your prescription. Boil down the unique elements of your approach into one or two sentences.

5. Tell Them What They Want to Hear:

Describe your product or service and its benefits succinctly. Depending on your audience, you may also have to:

- define and size the market
- explain how you’re going to make money
- tell who is behind the company and
- frame the competitive landscape and your advantage in it.

6. Speak in Plain English:

Talk in tangibles, not abstractions, throughout your pitch. Frame the problem, your unique solution, and the benefits your company will bring to the man on the street.

7. Tailor Your Pitch to Your Audience

8. Show your passion.

You have to act like a new parent showing off pictures of your newborn. If you can’t get excited about your plan, you’re done.

9. Conclude With a Call to Action:

Always end your pitch with a call to action, but recognize that different audiences prompt different requests.

10. Tell a Consistent Story:

Nothing sounds worse than fumbling, inaccurate or contradictory company descriptions.

Yesterday I laid out Brad Feld’s/Chris Wand’s 13 questions for entrepreneurs and said they would lay the groundwork for a ripping good pitch. Trouble is, once you do that work, all you really get is a ripping big pile of paper.

How do you put all that crap together? For help I turned to the most unlikely of places: Web Design. Over at 37 Signals Ryan Singer has a paper called An Introduction to Using Patterns in Web Design and using a mix of Betty Edwards and Christopher Alexander he’s put built a framework for imposing order on that great stack of stuff.

Like web design, you have a huge number of alternative ways to pitch yourself or your company. And like many web designers, its easy to fall on old habits. The risk is you end up with a pitch that looks like everyone else’s (just like those blogs everyone’s building off of templates).

To break the problem (and here’s where Betty Edwards meets Christopher Alexander) you need to fracture the problem into pieces so unfamiliar your old habits can’t take over. And to be cool like Christopher Alexander you need to build each chunk so perfectly that they flow together (as all natural patterns do).

So much for trendy architecture, what about that pile of crap?

Start by making a list of all the specific bits that eventually must fit together. Some bits to include: company info, current info, other users info, current business plan, date you started, potential clients - mine that pile for useful bits.

Once the bits are listed, put them into chunks based on whether they impact each other or not. Group up the pieces that are related and then prioritize them by functional importance - what matters most to the people you will be pitching.

Now design each chunk independently. Careful attention here will ensure (according to Christopher Alexandre) that the whole will fuse together.

That’s all fine and good, but in the end it’s rather metaphysical. So far we’ve seen an overview of the selling ideas, a set of questions that need answers and fairly cerebral construction of what order the piece might take - but what I need is something a lot more tangible. I still need a 60-second pitch. I’ll do it tomorrow.

While I’m busy fooling around with book lists, Dave Pollard’s dropping gems. He’s not only framed-up my initial idea but already started putting on the drywall. I guess that’s what you get for sharing ideas with bright guys.

I wasn’t going to write about it here, you know — manage the brand, rah-rah. But since it’s out there, might as well get busy.

Like Dave said, I was thinking about how to make blogging sustainable and how to leverage it’s potential. I mean attempting to focus all the brilliance of the blogging elite and their audiences on some really interesting questions. There’s a huge potential that’s largely untouched.

I know these words (sustainable, leveraging, productivity) scream capitalistic subversion. That’s not the intention. These sinister sounding words help describe what seems to be a very interesting opportunity to do great things.

We (humanity) face some fairly majestic problems and most bloggers (while being very funny or caustically critical) aren’t broaching solutions. They’re busy (and I’m right there too) ladling out great dollops of individual wisdom but these ideas are short-lived and lots of the value gets forgotten. I think we could do better.

So, now that Dave’s thrown it out there: What do you think? Between him and these guys the ball’s already in play. Might as well get the game started.

While counting my books I was surprised at how many of the ones I read were stories instead of business texts. I shouldn’t have been. Stories have taught me more about business than I ever learned in school.

Here’s a few that impacted the most and a tiny description of what they teach:

Enders Game by Orson Scott Card — Teaches the power and responsibility of rhetoric.

The Sword in the Stone by T.H. White — Teaches perspective and the importance of creativity in learning.

The Foundation Series by Issac Asimov — Reveals the subtle seduction of mystery.

Red Badge of Courage by Stephen Crane — Teaches the importance of translating across mediums. Crane took a few new principles of art and applied them deliberately to his writing.

The Adventures of Huckleberry Finn by Mark Twain — Be frank.

The Wind in the Willows by Kenneth Grahme — Sophisticated doesn’t mean better and simplicity is charming.

The Fountain Head by Ayn Rand — Teaches the value individuality.

Who Has Seen the Wind by W.O. Mitchel — Captures the senses by story — a great goal.

A few others are non-fiction but also non-business:

The Complete Book of Etiquette by Amy Vanderbilt (1967) — Manners are important. So is the timeless value of creative wit.

The Mavericks by Paul Grescoe — Learn to tell business stories.

Walden Pond by Henry David Thoreau — Highlights the rare capacity to look inside for understanding of what’s in front of us and to look outside to understand what is inside of us.

I love books. I just counted and I have 476 on my shelf (of which I’ve read about 200). Having so many and so little time, I’ve begun to get choosey when considering new purchasess. I’ve started the prize-winners rule for all “non-business” type books (i.e. Nobel Prize, Pulitzer Prize, Hugo) but for business books it’s hard to narrow the field.

For this I rely on the opinions of others and below I’ve posted the running list I’ve got on my blackberry. It’s the compilation of several lists I’ve seen around and some I’ve found myself. I’ve marked with a star the books I already have and two stars the books I’ve read. Please suggest others you think should be on the list.

If you don’t like this list, click the picture below. Each book is related in some way to the word entrepreneur. Click on any book to get its description. Order any book in the picture from Amazon.

Book list:

A New Brand World by Scott Bedbury and Stephen Fenichell

A Random Walk Down Wall Street by Burton G. Malkiel

A Short History of Nearly Everything by Bill Bryson

Crucial Confrontations by Patterson, Grenny, McMillan, Switzler

Die Broke by Stephen Pollan, Mark Levine

* Economics In One Lesson by Henry Hazlitt

Eloquence in an Electronic Age by Kathleen Hall Jamieson

Envisioning Information by Edward R. Tufte

Essentials of Accounting by by Robert Newton Anthony and Leslie K. Pearlman

First, Break All The Rules by Marcus Buckingham, Curt Coffman

Flawless Consulting by Peter Block

** Getting Things Done by David Allen

** Getting To Yes by Fisher, Ury, and Patton

Good to Great by Jim Collins

** How To Win Friends and Influence People by Dale Carnegie

Influence: The Psychology of Persuasion by Robert B. Cialdini

Intellectual Capital: The New Wealth of Organizations by Thomas Stewart.

Management Strategy by Alfred Marcus

Mass Affluence by Paul Nunes and Brian Johnson

Mastery by George Leonard

Never Eat Alone by Keith Ferrazzi

Now, Discover Your Strengths by Marcus Buckingham, Donald O. Clifton

On Competition by Michael Porter

On Intelligence by Jeff Hawkins

On Writing Well by William Zinsser

Product Development for the Lean Enterprise by Michael N. Kennedy

Seeing What’s Next by Clayton M. Christensen, Erik A. Roth, Scott D. Anthony

Smart Mobs by Howard Goldstein.

Statistics by David Freedman, Robert Pisani, Roger Purves

** The 7 Habits of Highly Effective People by Stephen Covey

The 80/20 Principle by Richard Koch

** The Art of the Start by Guy Kawasaki

** The Bootstrapper’s Bible by Seth Godin

** The Cluetrain Manifesto by Christopher Locke, et al

The Design of Everyday Things by Donald A. Norman

The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber

The Essays of Warren Buffett by Warren E. Buffett, Lawrence A. Cunningham

* The Essential Drucker by Peter Drucker

** The Fountainhead by Ayn Rand

The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt and Jeff Cox

** The Intelligent Investor by Benjamin Graham

The Little Red Book of Selling by Jeffrey Gitomer

The Medici Effect by Frans Johansson

The New, New Thing by Michael Lewis.

The Pyramid Principle: Logic in Writing and Thinking by Barbara Minto

The Seven Basic Plots: Why We Tell Stories by Christopher Booker

The Seven Day Weekend by Ricardo Semler

The Story Factor by Annette Simmons

The Substance of Style by Virginia Postrel

The Tipping Point by Malcolm Gladwell

The Visual Display of Quantitative Information by Edward R. Tufte

The Wisdom of Crowds by James Surioweicki

Trading Up by Michael Silverstein and Neil Fiske

Will & Vision: How Latecomers Grow to Dominate Markets by Gerard J. Tellis, Peter N. Golder, Clayton Christensen

Wisdom Tales From Around the World by Heather Forest

* Working With Emotional Intelligence by Daniel Goleman

I’m on the hunt for guidance on the all important, little exercised art of 60-second pitching. Yesterday’s initial landscape got me started but I still need to put the pitch together.

In June of last year Brad Feld scooped from Chris Wand a list of questions each entrepreneur should answer before making a pitch. The pitch they had in mind was one to VC’s but the questions are fairly generic and eminently suitable for all pitch drafters.

It seems to me that an answer each question would be valuable for many things other than pitching too. The answers will not only inform your presentation but having ready answers will help you imbue with confidence anybody that let’s you get past the opening play.

Questions to address in your pitch:

1) What is your vision?

- What problem are you solving and for whom?
- Where do you want to be in the future?

2) What and how big is your market opportunity?

- How big is the market opportunity you are pursuing and how fast is it growing?
- How established (or nascent) is the market?
- Do you have a credible claim on being one of the top two or three players in the market?

3) Describe your product or service

- What is your product/service?
- How does it solve your customer’s problem?
- What is unique about your product/service?

4) Who is your customer?

- Who are your existing customers?
- Who is your target customer?
- What defines an “ideal” customer prospect?
- Who actually writes you the check?
- Use specific customer examples where possible.

5) What is your value proposition?

- What is your value proposition to the customer?
- What kind of ROI can your customer expect by using buying your product/service?
- What pain are you eliminating?
- Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)

6) How are you selling?

- What does the sales process look like and how long is the sales cycle?
- How will you reach the target customer? What does it cost to “acquire” a customer?
- What is your sales, marketing and distribution strategy?
- What is the current sales pipeline?

7) How will you acquire customers?

- What is your cost to acquire a customer?
- How will this acquisition cost change over time and why?
- What is the lifetime value of a customer?

8) Who is your management team?

- Who is the management team?
- What is their experience?
- What pieces are missing and what is the plan for filling them?

9) What is your revenue model?

- How do you make money?
- What is your revenue model?
- What is required to become profitable?

10) What stage of development are you at?

- What is your stage of development? Technology/product? Team? Financial metrics/revenue?
- What has been the progress to date (make reality and future clear)?
- What are your future milestones?

11) Who is your competition?

- Who is your existing & likely competition?
- Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
- What are their strengths/weaknesses?
- Why are you different?

12) What partnerships do you have?

- Who are your key distribution and technology partners (current & future)?
- How dependent are you on these partners?

13) Other

- What assumptions are key to the success of the business?
- What “gotchas” could change the business overnight? New technologies, new market entrants, change in standards or regulations?
- What are your company’s weak links?

One of my friends is a teacher. He’s told me many times that the best way to learn something is to explain it to someone else. Well I want to learn to do a 60-second pitch, so here goes.

Over the next seven days I intend to write (or liberally copy other people) on the following topics:

1+7 Steps to pitching an idea

13+ questions for pitchers

Put the pitch together

60-second pitch: The 10 point outline

60-second pitch: The first 10 seconds

60-second pitch: The three biggest mistakes

Presenting the bigger small picture

The overview

Today: 1+7 steps to pitching an idea.

This is a summary of Scott Berkum’s essay “How to Pitch an Idea”.

So you’ve got a great idea, what are you up against when you want to make it happen? Start with the principles of physics and work from there.

Any real change must first address the force of inertia, the resistance an object has to a change in its state of motion. Objects (and people) at rest tend to stay at rest and getting them moving requires an astonishing amount energy.

Here’s Scott’s advice (and a bit of my own):

Step 0: Create and refine the idea

“The classic mistake of would be idea pitchers is to pitch the idea well before it’s ready. When most people find an interesting idea, they’re quickly seduced by their egos into doing silly and non productive things, like annoying the pants off of everyone they come into contact with by telling them how amazing their new idea is. The thrill of being clever is so strong that they forget the fact that there are 100 interesting ideas bouncing around for every single truly good idea. ”

To move from plebeian to highbrow requires some work. Especially important is sorting through how and when the work is done. You need to define how this idea can move from the abstract to the tangible.

Scott says to “Always remember that moving from an interesting but vague idea, to specific and actionable is the difficult part of creation and invention.”

Step 1: What is the scope of the idea?

“Big ideas require more change to take place on someone’s part, and all things being equal, this means the pitch must be more thorough (or your approach more bold & risky). The stakes are higher.”

Step 2: Who has the power to green light the idea?

“Make a list of the people that are potential recipients of your pitch. Base this list on two criteria: who has the power needed to implement the idea, and who you might have access to.”

One thing that never grows old is the miracle of networks. Jump onto some networking app like LinkedIn to see how easy it can be to reach people you’d have previously thought of as untouchable. It’s amazing to realize how easy it can be to leverage your network and reach people with the power you need.

Step 3: Start with their perspective

“Put your pitch aside. How do they think about the world? What kinds of things are they probably interested in? What is their typical day like? How many unsolicited pitches do they receive a day? Consider how the person you’re trying to pitch views the world, and keep it in mind while developing your pitch.”

Step 4: The structure of the pitch

Always formulate 3 levels of depth to pitching your idea: 5 seconds, 60 seconds, 5 minutes.

“The 5 second version is the most concise single sentence formulation of whatever your idea is. Refine your thinking until you can say something intelligent and interesting in a short sentence.”

If you can’t get this done, you’re not trying hard enough. It’s easy to be lazy here, but not near as easy as it is to summarize in one word the response you’ll get otherwise: No.

The 60 second and 5 minute versions are just extensions of the 5 second version. Add more detail and explain how you deliver on your 5 second pitch.

Step 5: Test the pitch

“Get out of your office / cubicle / apartment, and go find smart people you know to give you feedback. From your pitch tests, develop a list of questions you expect to be asked during the pitch, and be prepared to answer them.”

This is another spot where laziness is a huge temptation. It’s easy to mull it over in your head or to just stop with asking the person closest to you. But what you really need is the feedback of many people including some that don’t have a clue about your business.

Step 6: Deliver

“The best delivery advice I can offer is to make sure you spend some time preparing for a positive response. What happens if they say ‘That’s an interesting idea. What do you want from me?’ Do you want money? Other resources? A change in the project plan? A feature added to the feature list? Know what the sequence of steps are after they agree you have a good idea and be ready to ask for them.”

Step 7: What to do when the pitch fails

“When things don’t go well [you need to] harvest as much value from the attempt as possible. Always leave failed pitches with an understanding of what went wrong. Which points didn’t they agree with? Which of your assumptions did they refute? In many cases, you might learn there are criteria for green lighting ideas in your organization that you didn’t know about.”

I think this list is a great start. It’s an overview of all the pieces between brainwave and getting down to steel tacks. But it leaves unanswered the difficult question: How do I make the pitch I need to make?

Update: Dr. Ronald S. Burt from the University of Chicago backs up everything written here and adds his idea about “structural holes” — the notion that people can find opportunities for creative thinking where there is no social structure. My favorite line: Don’t worry about people preempting your ideas because “people are like sheep eating grass. They’re so focused on what’s right in front of them, they don’t look for the whole.”

In Guns, Germs, and Steel, Jared Diamond takes a look at the diffusion of language writing systems. He notes that in our past we have surprisingly few root languages. He suggests two major reasons for this. First, devising a writing system is an immensely challenging undertaking when done from scratch. Diamond found that the most effective way to get a writing system is to copy one. The second reason is that the greatest competitive advantages of writing systems come from having one where none existed, not from incremental improvements. Basically, just having one is good enough, there’s insufficient incentive thereafter to make your own. Nothing mind shattering here but I do think Diamond’s thesis has implications for the way we view innovation today. When we need solutions we should look out first, then in. And when we don’t have one, any one will do, and you can fix it up later if you need to. But, there’s some more lessons related to language we can learn from – in our search for solutions we seem to have this ingrained bias that causes us to ignore the innovations of other cultures.

Diamond points out that there are clear competitive advantages to having a writing system:

“Knowledge is power, hence writing brought power to modern societies by making it possible to transmit knowledge with far greater accuracy and far greater quantity of detail from a great distance.” Of communication from monarchs to merchants, usability of maps, and commands during war: “these types of information were transmitted by other means in pre-literate societies, but writing made it easier, more accurate, and more persuasive.”

Illiterate societies were living right beside literate ones. And when wars started, the literate societies won. How come one culture could read and write while their neighbours didn’t have a clue? It seems innovation is somewhat of a cultural phenomenon.

Diamond shows that attitudes to innovation vary enormously within societies, on the same continent. He compares tribes within New Guinea, North America, and Australia to show that side-by-side tribes often have opposite attitudes to innovation. And in nearly every case, the innovating tribe enjoys great advantage. Innovation also varies within societies over time. For example, Islamic societies today tend to lag technologically, but they were, at one time, leading the world in innovation. Islamic societies had the highest literacy rates and adopted technologies prodigiously: trigonometry, metallurgy, mechanical engineering, paper, and gunpowder. Only after 1500 AD did the flow of innovation flip to European nations.

So here’s what to do if your culture lacks innovation. First, find a sales guru. Second, copy someone else’s invention.

• Diamond thinks one of the conditions of innovation is having sales-savvy entrepreneurs. He suggests the old saying, “Necessity is the mother of invention”, may not be sufficient. He would have us add: Innovation is often in search of a salesman. Using examples like gasoline as a waste product, sand turned to glass in fireplaces, and even discarded tins cans put to use by New Guinea tribes – Diamond suggests that in many societies “an inventor he has to persuade society to adopt innovations. Merely having bigger, faster, more powerful devices is no guarantee of ready acceptance.” To be accepted the invention needs to be economically advantageous compared to existing technologies, offer social value and prestige, and these advantages must be easily observed. Basically, if it doesn’t bang you on the head with obvious, immediate advantages – it’s not going to sell itself.
• Having sales people isn’t enough. There’s got to be some inventions to sell. But where to get them? Somewhere else. Diamond observes that by setting innovation as a random variable, over a large enough area, at a particular time, a portion of every society is very innovative.

If half the challenge of innovation is communicating its value and someone else is always innovating, then building creative teams may not be nearly as efficient as building widely cast, open-minded sifting technologies to scour the universe for innovation hotspots and blueprinting those technologies for use at home. As Diamond says, complex innovations are best borrowed, not built. Because technology begets technology, the value of diffusion often exceeds the value of original invention. This is good. It’s exactly what I think sift is for – sifting for things that work and cross-walking those lessons into areas that aren’t.

So there you have it – sift is efficient, helps make sales easier, and is more likely to result in success than any R&D investment. Sounds good to me.

(graphic leached from www.ocean-park.org)

What’s with the wheelbarrow?

Related to metatags are memes.

Definition

From Wikipedia:

“Meme, (rhymes with “cream” and comes from Greek root with the meaning of memory and its derivative “mimeme”), is the term given to a unit of information that replicates from brains and inanimate stores of information, such as books and computers, to other brains or stores of information. The term meme was coined in 1976 by Richard Dawkins in his bestselling book, The Selfish Gene. Inanimate sources of information have been termed ‘retention systems’.”

Study of memes: memetics

History of the memetic approach

Example of a meme

“All your base are belong to us” story

Analysis of memes

Analysis of an artificial meme

Nova Spivak: Go meme and A Physics of Ideas

On the heels of my heartfelt yop - Frickin’ amazing vs. the long tail - as if guided by benevolent deities, I found “What really works.” With bemused resignation I note the publication date of July 2003 - if I am late, at least I’m earnest.

“What really works” by Nitin Nohria, Willian Joyce and Bruce Roberson (published by Harvard Business Review) lays out a “winning combination for business success”. This, of course, is exactly what we’re after.

The key is the 4+2 formula and its built on five years of research, the work of 50 academics and the stories of 160 companies. These are the basics (not the frickin’ amazings) that make for winners.

Every successful company must be all of the following: strategic, able to execute, frothing with culture, and simply structured. This company must also be any two of these four: plugged unto bursting with talent, innovative, lead as though by divinity (which is clearly one thing sift has going for it), and/or savvy in mergers and partnerships.

The successful company is clear on its strategy and clearly communicates that strategy to its customers, employees and shareholders. “It begins with a simple, focused value proposition that is rooted in deep, certain knowledge about your company’s target customers and a realistic appraisal of your own capacities.”

A clear strategy will help screen decisions. It will help determine which opportunities to pursue. It will line up action with the core business and prevent drift.

A steady winner is about twice as productive as the industry average and pays focused attention to execution. The successful company figures out where it really shines and focuses on making those processes as efficient and effective as possible.

The study made it clear that culture was important, but probably not in the way you imagine. I anticipated a riff on casual dress, open-concept networks and lots of hippy love but their work shows that promoting fun isn’t near as important as promoting champions. Every highly successful company glorifies high performance and ethical behaviour.

90% of winning companies linked the pay check to the score board. No bonuses, no stock options, and no rewards unless targets are met.

Every winning company ruthlessly purges every last vestige of vigour-sapping, innovation-cramping bureaucracy. Extra layers of management, unnecessary rules and silly processes where hacked out with the same veracity usually reserved for mosquitoes and other blood-sucking transgressors.

So there’s the four prerequisites to success. Where’s frickin’ amazing or for that matter innovation, first movers, and niche domination? We’re getting to that - well, one of them.

Sequestered in the “+2″ are four options. Pick two, any two.

A successful company either: hires and holds top talent; focuses on finding brand new products, ideas or technologies; is lead by a CEO focused on relationships and able to spot opportunities/problems early; or regularly (on a small scale) makes deals to leverage existing customer relationships or complement company strengths.

Interesting aspects to note include: top talent most often comes from inside the company, innovation barely ranked as one of the top four characteristics, and only 22% of winners used mergers and acquisitions successfully. This suggests top talent and great leadership were the key two of the last four.

So, what does this mean for the sift experiment - after all I focus almost exclusively on innovation (and insight). Well, first, they use innovation to mean brand new products or ideas. I don’t. I think innovation includes new ways to do old things. It also includes new clients for old products. Second, I focus on innovation as an end result of better sifted information - clearer strategy, better execution, and bureaucracy killing insights are also positive results.

So much for sift, what about you as entrepreneur? Laser-like focus is required and this is where many entrepreneurs fall down. You might need to bring in some help - hire an adviser on retainer. A good adviser can help you stick handle through the many distractions, propositions, and opportunities the lead either to strategic drift, crap execution, and the need for bureaucracy.

Another place many entrepreneurs fail is the breeding and rewarding of talent. Many bootstrappers hire cheap people and demand top performance - bad idea. Others hire great people but keep the performance based rewards to themselves - again, short-sighted decision. Two principles of economics play here. First, if it’s cheap that’s because nobody wants it - this includes people. Second, performance requires incentives - an extra dollar is hard to beat.

Philip Pullman, Common sense has much to learn from moonshine in the Guardian:

“It’s when we do this foolish, time-consuming, romantic, quixotic, childlike thing called play that we are most practical, most useful, and most firmly grounded in reality, because the world itself is the most unlikely of places, and it works in the oddest of ways, and we won’t make any sense of it by doing what everybody else has done before us. It’s when we fool about with the stuff the world is made of that we make the most valuable discoveries, we create the most lasting beauty, we discover the most profound truths. The youngest children can do it, and the greatest artists, the greatest scientists do it all the time. Everything else is proofreading.”

He’s writing about grammar and proofreading and their best place in the education of children learning to write. He is criticising educators for putting the two first instead of second in the creative process. And using an extensive research project as his foundation he suggests that writing is best taught “in a meaningful context: writing as a practical hands-on craft activity.”

I think the same applies to work. This is why the experiment is a brilliant context for learning business.

Pullman concludes:

“True education flowers at the point when delight falls in love with responsibility. If you love something, you want to look after it. Common sense has much to learn from moonshine.”

I keep a ongoing list of sift technologies: Little apps that are miraculous, instantaneous information sorters.

Andrew Grumet has made several that enjoy eminence in this category.

The one with the most quiescent potential is “Similar Feeds.” Type in your favourite blog and this app sorts 55,000 of the most fashionable feeds by similarity to the one you chose.

But that’s not all, you can reduce the popularity by a mysterious but nifty popularity gradient. That way you get only those that are in vogue or those few that remain outliers.

This is latent power at your fingertips. Want to expand your feed list? This is a wonderful first stop.

Grumet’s app is a niche identifier too. Got a favourite blog and there’s only one or two similar? You just found a niche. Niches, in a nanoeconomics world, are (can be) goldmines.

Maybe this is an old idea. Maybe I’m the last kid on the block to get it, but it seems to me that “frickin’ amazing” is the new normal and it’s not getting us much.

Read the marketing gurus. They talk endlessly about being amazing. And I’ve been giving myself headaches trying to figure out how both my clients can jolt themselves into that elite level of prestige.

Plagued by that never-attainable-goal I read Evelyn’s quiz about amazing vs. meaningful. Here’s one line: Name five Nobel prize winners. K, now name five people teachers who changed your life. Frickin’ amazing gets beat by meaningful everytime. As Evelyn said, “Accolades and awards are buried with their owners.”

When it gets right down to it, what is every entrepreneur trying to do? Make an independent living. There’s other drivers in the mix, but without this one all the rest will starve along with the entrepreneur.

But when I look at where my disposable income gets spent hardly any of it goes to frickin’ amazing things.

I don’t own an i-pod; I have a walkman I bought used in 1996.

I don’t have a bespoke tailor; I bought my last suit at Mexx.

My shoes are from Globo but they’re indistinguishable from my friend’s outrageously expensive, Parisian soles.

I buy my coffee at Starbucks, but they’re a commodity now, right?

I’ve purchased every Pulitzer Prize winner and every Nobel Prize winning author’s book I own in a used book store down the street.

So, if it’s not frickin’ amazing, what am I buying? Simplicity, elegance, practicality, affordability, and classic endurance. Where are these ingredients found? Most often in the long tail.

It’s easy to confuse innovation and insight with virility. But virility, audacity and surprise quickly become normal. Insights can produce brilliance or simplicity. Innovation can mean previously unseen or suddenly useful. The economics say there’s longevity in the latter rather than the former.

Oh hey, this looks pretty good! Aggregation a la PEI.

Robert Paterson and Jevon MacDonald have started Marketing Filter and it has the promise of being an helpful sift technology.

Some interesting points are raised in the comments. In particular Alan’s questions are sharp. He asks:

“Is there not an issue of when a marketing blog is not actually blogging about marketing? If the aggregator does not vet posts you are subject to the focus of the bloggers from whom you draw content.

“I do not think the model is adaptable to all topics, it is?”

I’ve got a couple questions too:

How does this not get too big too? Robert and company are trying to solve the challenge of information overload. But they’ve chosen “marketing” as their experimental field and while that is probably a good marketing move in itself the field is gigantic, ill-defined and ever-evolving. I understand that they will use a core group of bloggers to sift marketing ideas but they also plan on grabbing emerging writers too. Won’t it get big fast?

And Alan hints at another concern: What about vetting? How do you vet without understanding your client? I’m loving the idea of Marketing Filter but I think it really has legs if the filter can be tailored to specific clients. It’d be like a choose-your-own-adventure but for feeds.

It’s really a two part challenge. What information is new and needed? Why is that information usefil.

sift is about doing this second part. I provide three basic services around information: I understand your information needs. I find information you need. I translate information to help you understand why you need it.

What I’d really like is to partner up with some savvy aggregator dudes and just help with the translation: Robert and co?

In Presence: Human purpose and the field of the future, Peter Senge and others asked leading scientists and business and social entrepreneurs, “What question lies at the heart of your work?”

Jumps out out at you eh?

Makes you sort of coil up inside and groan a bit. If I was standing in front of you asking the question you’d scuff your feet, roll your eyes, stare at the ceiling and say, “Geez, that’s a good question.”

It is a good question. But that’s the point: What’s your good question?

Earlier this week I summarised Paul Lawrence’s and Nitin Nohria’s four drivers of human nature. The drivers are acquisition, bonding, learning and defending. Inside each driver is a question: How to get? How to stick? How to know? How to keep?

If you’re going to be strategic you need to know what question lies at the heart of your work. If you want to be successful you need to know how your answer puts wheels under the four drivers of human nature.

When I started sift I was working with two entrepreneurs that seemed to be working about 12 hours daily.

Being so busy, these guys weren’t able to keep up with the massive amount of information available to them. My idea was to stand between them and that deluge, be keeper of the gate, and help them keep on top of what they needed to know.

Mary Hodder wrote a personal post about this challenge early in January. I’ve paraphrased it and some of the comments and reposted here.

Mary’s personal anxiety about information overload describes the personal challenge in front of entrepreneurs. But consider how magnified this pressure becomes when the livelihood of your business depends on sifting that information.

“With information, ideas, expressions online, networks of activity and the desire to watch the behaviour, events, second order information tools, and my desire to write myself, in this and other blogs and in papers, I have felt pressure, to keep running ahead of the production of information, to keep apprehending it and then processing it, thinking about the deeper meaning, and yet there is so much, I cannot.

“Young people seem to take in smaller, more granular bits of information, as though they are rocks skimming across a lake, touching down briefly for a bit of information before the next lift off to the next dip for something.

“And the difference, I wonder, might be because those older were educated by parents and schools situated in the analog metaphor, where a classic book, Lord Jim by Conrad (one of my favourites), is read over and over, in a search for multiple layers of meaning and experience. Because of this training, my instinct initially was to read the flood of digital information as closely and deeply, looking for and ascribing meaning, even if not at quite the same level as when reading a classic novel.

“But those who are younger, and have grown up with the flood of the digital, may be less educated toward that kind of apprehension and desire to ascribe the same kind of meaning and depth to everything, maybe because while their parents and teachers reside in analog frameworks of their own, those younger are balancing that kind of apprehension with their experience online of granular, digital bits that are skimmed.”

Comments:

“The best way to respond is to be more selective in what gets there in the first place.

“Not completely closed filters, because we need serendipity to discover new concepts and ideas, but a judicious selection of sources.”

–

“I’ve been thinking about it as an information food pyramid. At the base level of the pyramid is a huge amount of raw data that is somewhat overwhelming. There are scholars and journalists who sift through that mass and extract interesting stories and useful information. Then there are second and third-order information consumers who take the results of those first-order consumers and process it themselves. I’ve been calling them ‘information carnivores’.

“In most cases, it’s an advantage to live higher up the pyramid. It’s more efficient and takes less time to keep up with the information flood. And, as you note, you can always drill back down to the primary data when you want to reflect more deeply. The disadvantage of looking only at processed information is that you have to worry about the biases and inaccuracies that may have accumulated in the processing stage.”

–

“I am in the ‘younger generation’ group you were referring to. In high school we are given, for the most part, busy work. You skim through the pages to find the paraphrasing or term you’re looking for then, boom! You have your answer and go on to the next question. Usually there was no need to read in context to get an answer. That, in part, trained us to just skim until we found what we wanted.”

After reading these comments I tried to weigh the advantages of teaching our children to skim versus teaching them to dig deeply. Of course there needs to be balance but we seem to be focusing on the former at the cost of the latter.

I’d be interested in links to any studies that consider the skills the net savvy, younger generations employ to find and use the information they need.

About 100 people (give or take 50) read this blog everyday. And I don’t have a clue what you’re coming here to see.

Outside of John Husband, Kevin, Alan, Evelyn Rodriguez, John Jantsch (only because I poked fun of him), and about five guys enamoured with their penises, new pharmaceuticals, and poker - I haven’t even heard a murmur from the bleachers.

I do this for two reasons. First, because I wanted to see if these ideas sang with anyone - it sings with 100 silent people per day. Second, because it’s a perfect incentive for me to actually do something with all the stuff I read.

But why do you come?

Negotiation is the art of making someone offer as a gift that which is your chief design to secure and for many bootstrapping entrepreneurs it’s a core competency.

James K. Sebenius in “Six Habits of Merely Effective Negotiators” (HBR, April 2001) lays out four keys to negotiation:

1. Focus on the full set of interests of all parties.

2. Look beyond common ground to unearth value-creating differences.

3. Assess and shape best alternatives to negotiated agreements.

4. Avoid role biases and partisan perceptions.

Use these guidelines to nail down your problem: understanding and influencing the other side’s decision in a way that it chooses what you want.

Negotiation is all about trying to get the the other side to say yes for its reasons, not yours. This requires understanding and addressing the other side’s problems as a means of solving your own.

By building an understanding of the other side’s concerns you can flesh out a shared vision for the issue at hand, investigate the key concerns of each side (including price) and craft trade-offs among the full set of issues to meet their interests.

You want to start by sharing the view of the other side and conclude with them sharing your own.

Books recommended on negotiating:

Art and Science of Negotiation by Howard Raiffa

The Manager as Negotiator by David Lax and James Sebenius

Negotiating Rationally by Max Bazerman and Margaret Neale

3-D Negotiation: Creating and Claiming Value for the Long Term by David Lax and James K. Sebenius

I’m a bit late putting this up but Chuck Frey at the Innovation Weblog posted a helpful review of, you guessed it, innovation in 2004.

From the book, Driven: How Human Nature Shapes Our Choices, by Paul Lawrence and Nitin Nohria:

Lawrence and Nohria spin together lessons from biology and social sciences to describe a theory of human nature. The lessons they highlight apply to every relationship we navigate and so, there’s good lessons here for the entrepreneur.

Our choices are driven by a desire to acquire, bond, learn, and defend.

Acquiring: builds on competition for scarce resources.

Bonding: includes sharing tasks, joint performance and being part of a group.

Balancing acquisition and bonding is key. Inherent in this balance is a tension between cut-throat competition and respectful relationships. Think dodge-ball: Try to tell nine-year-old boys that everyone wins - no game. Try to play without rules - utter chaos. Combine winners and losers with clear boundaries: favourite-sport-of-all-time.

In the second half of the equation lives learning and defending. Learning scratches the itch of curiosity - the drive to resolve the gap between the known and the unknown. And defending means fending off attacks both internal and external - this is mine, screw off.

Defending is different than competition. Defending involves a legitimate claim of ownership. Competition spins on strongest player wins. Their nature overlaps but each are distinct.

Together these four drives define how we make choices. We need to be engaged and engage others in all four drives. For the entrepreneur quality, resonance, novelty, and reliability must justify the price.

Similarly, the relation between entrepreneurs and their suppliers, to remain sustainable, need to engage both buyers and sellers in all four drives.

But the lesson really hits home when you catch an entrepreneur boot-strapping. The clueless don’t understand these drives but the artful play these drivers without dropping a single dime.

Acquire, bond, learn and defend - criteria for the successful entrepreneur.

Thomas Merton, The Seven Storey Mountain

“The wonderful thing about France is how all her perfections harmonize so fully together. She has possessed all the skills, from cooking to logic and theology, from bridge-building to contemplation, from vine-growing to sculpture, from cattle-breeding to prayer: and possessed them more perfectly, separately and together, than any other nation.”

Whether or not you agree with Merton’s loving description of his homeland - More perfectly, separately and together is a beautiful way to describe proportion.

When I read this I immediately thought of business. Not business the enterprise but business the art. As in any other art, proportion matters to business and it is little recognized.

Often the entrepreneur is not a master of insights or innovations but a master of proportions. This much finesse, a touch of brazen marketing, 3/4 of quality and some blasphemous ambition: success.

I constantly marvel at the things my entrepreneurial friends can sell. As an academic/theorist/tactician I’ve trained myself to fight to the heights of perfection.

Perfection doesn’t sell but proportion does.

Gary Hamel, Leading the Revolution

“Today you can buy knowledge by the pound — from consultants hawking best practice, from the staff you’ve just hired from your competitor, and from all those companies that hope you will outsource everything. Yet in the age of revolution it is not knowledge that produces new wealth, but insight — insight into opportunities for dis-continuous innovation. Discovery is the journey; insight is the destination. You must become your own seer.”

I don’t want to sell you insights. I want to help you be insightful.

Brad, at Feld Thoughts, writes about the importance of business measures. I’m glad he did because it confirms some recent suspicions I’ve been having.

Let’s compare three of my favourite entrepreneurs. The first is a lawyer who loves his numbers. The second is a graphic artist who’s company making some neat transitions. And the last is one of the most insightful and creative entrepreneurs I know.

Two questions for each of them. What’s your favourite innovation last year? How much do you worry about money?

Lawyer: Favourite innovation - “A fax/copy/printer machine that saves me six cents per page.” Money worries - “Uhm, how to use it all wisely. I started with none 4 years ago, now I haven’t enough time to manage it wisely.”

Graphic designer: Favourite innovation - “Recognizing how badly companies need help with their public image.” Money worries - “Not bad today, but for the last 10 years it’s been brutal.”

Creative phenom: Favourite innovation - “These six cool, new services we cranked out last month.” Money worries - “This is my third start-up in eight years and I’m always wonder where’s all the money going, why am I working so hard, and I need more cash!”

It’s tough to make a direct comparison across these guys, but their attitudes to business numbers are nearly polar. The lawyer is obsessed by numbers and the creative juggernaut doesn’t think much beyond his target income this month.

Interestingly, their concerns about cash flow are just as polar but flipped. The lawyer is not too concerned and the creative company is burning lots of bandwidth trying to deal with the pinch.

And right in the middle is the creative, transitioning graphic designer. He recently completed an accounting course so he could “get a better handle on what his accountant is saying.” He hired a writer to fill in other gaps in his business. He’s ready for movement.

Brad writes, “While it’s easy to get lost in ‘data’ rather than synthesizing and understanding ‘information’, I find way too many early stage companies measuring very little - thinking this is something that ‘only big companies do’.”

It’s easy to get lost in data and it’s easy to be run by numbers. The beauty of early stage companies is the ability to move rapidly in new directions. And the love of movement sometimes distracts entrepreneurs from measuring if that movement is profitable.

Good news: Creative juggernaut asked for some help with an experiment. We’re going to firm up his books, nail down a strategy and put updates on the impacts here.

1) Don’t work with bad clients.

2) Don’t work with bad people.

The great temptation for every entrepreneur is to take every dollar you can get and hire any cheap brain you can find.

Seth Godin covers this in his Bootstrapper’s Bible. The tension between the leech and the bullion is unmistakable. And while Seth makes these points – he does advise the bootstrapper to grab every early dollar to be found.

It’d be fun to analyse the trade off between a dollar now and two years with a leech client. The results would be even sharper if we compared a cheap candidate (and all the management required) with a sharp, expensive but capable candidate (low management required).

Included as leech characteristics: cost of rerouting effort, time spent coaching, productivity gradients, and contacts per time unit. The benchmark would bullion clients and candidates.

The analysis would describe a threshold – a no-go-zone. Each client and candidate would have a conceptual circle around them. Of course you’d work hard to keep them within the circle, but once they’re out – you’re done.

Separate the leeches from the bullion often and regularly.

Nice checklist for entrepreneurs by Guy Kawasaki.

Scott Kisner, a contributing editor at Fast Company, has an interesting piece on what he calls “pure entrepreneurship.”

He says pure entrepreneurship “is often driven by a belief that a major shift is coming — and thus it’s hard to find customers who already understand that they need the product a pure entrepreneur is developing.” For this reason most pure entrepreneurs forsake market analysis and head straight into production.

He quotes Dan Brinklin, developer of VisiCalc, who says “Something just clicks, and you say, ‘This is worth doing, and I think other people will be interested’. It hits you that there’s a need, and that pursuing it is worth the risk.”

But what I found most interesting is a line nearly lost in the middle of the text: “In February, [Brinklin] left Atlanta-based Interland, which had acquired his last company, to return to pure entrepreneurship.”

It’s a rare, wise entrepreneur that understands herself well enough to walk away.

“Why are you choosing this?”

That’s such a gorgeous question.

It’s complete answer either reveals:

- all the information included in decision making,
- the criteria by which choices are being made,
- the rank of alternative paths to action,
- the final goal in mind, and
- the strategy for achieving that goal or …

… it provides a simple indicator of the gaps.

Either way the question gathers more important information than any other I’ve discovered.

Anyone got a better one? Or at least one just as good?

A few days ago I shared supper with the CEO and one of the executives of a small company here in town.

The executive asked me to join them and discuss their company’s strategy — they’re navigating through a growth phase and he believed my insights would help.

Turns out the CEO was fairly sceptical about anything I might suggest, so I spent a lot of the 2.5 hour meeting just listening.

There’s something tremendously freeing about entering an important conversation and sitting back to let it roll on around me. To sit silent through those situations where I feel pressure to speak up, make a mark, or prove my value. For one thing, I learn a lot more.

I learned about three stages of entrepreneurial growth. No one laid it out so distinctly but they seemed to spring out of the conversation on their own.

Stage 1:

- worried about cash flow
- single, dynamic leader
- driven by personal ambition and instinct
- cut corners, bootstrap like madmen
- work on spec regularly
- everything’s an experiment

Stage 2:

- cash flow a minor issue
- core of reasonably talented, self-motivated people is developing
- entrepreneur has become manager, accountant, supervisor, and leader
- instinct slowly replaced by rationality
- vision threatens to be overwhelmed by managing daily challenges
- experimentation replaced by reapplication of core competencies
- brand awareness starts to self-generate business
- main focus on quality rather than innovation

Stage 3:

- rationality prevails
- decisions threatened by rules-based automation
- hardly anything is experimental; experiments are threatening
- vision replaced by mission
- brand threatens to become irrelevant, commoditized, or diluted
- begin considering rebranding or augmenting core competencies
- entrepreneur is seeking new ventures and uses company as a stable
- competing completely on cost, quality and positioning instead of innovation

None of these stages are bad or good. All are necessary for a growing company.

The important thing to note is that most entrepreneurs don’t have all the skills to weather each of the stages. At one point or another, each entrepreneur will have to let someone else’s skills and insights weight their decisions.
I love doing this stuff!

In the comments for Optimists die, I wrote something about hiring “sift bandwidth”. That got me thinking of advertising and in particular billboards.

There’s a billboard not far from my place that seems to be one of the most highly con