Entrepreneurship is like crack

FEAR - it's designed to help you succeed

Sun, 03 Jun 2012 10:59:00 -0700

The head of an entrepreneur is a lonely place. Am I smart enough? Do I work hard enough? Is my idea right? Do I have what it takes? How do I stack up against other entrepreneurs? Do I have the best team? Are we better than the competition? What will this all look like in a year from now? What if I fail?

Failure looms over us every day, no matter how big or small the company. It talks to us inside our head, constantly questioning our ability to succeed. We don’t know the future. We don’t know what the competition is doing behind closed doors. We don’t know what our employees are really thinking or investors for that matter.

There is no KNOW in the entrepreneur game, there is only FAITH. It’s the religion of “I”. I will do this, I will succeed, I will work harder, I am smart enough, I will build the best team, I will inspire my team, I will instill confidence in my investors, I will build a product people love, I have what it takes. I will do it!

But no matter how confident you are there will always be fear. The entrepreneurs who pound their chests and seem to fear nothing are the most insecure of them all. We all have to deal with fear; there are no exceptions to the rule. Knowing we all have to deal with the same thing can be comforting. We are not alone and those insecure voices are just part of being human. The trick is to harness the fear. If harnessed correctly and balanced with optimism, hope and a clear vision for the future you will achieve your dreams.

So what does harness fear actually mean? Fear can manifest in many forms such as insecurity, doubt, hopelessness and paranoia. The entrepreneur x factor is the ability to recognize fear and instead of ignoring it you use it to your advantage. Fear comes from your instincts and it’s really just trying to help you survive. Fear can produce two critical components of success; energy and enlightenment.

Fear = Energy
Fear is the #1 human motivator, above sex believe it or not. Use fear to drive forward. Fear can give you that extra boost of energy when you need to overcome an obstacle. Similar to how the best athletes and soldiers perform better under stress. Fear can also cause you to freeze up or run away. Some people can naturally harness fear to perform better, for others it takes practice.

Fear = Enlightenment
Out of fear comes awareness. Fear is effective at shinning a light on areas that need your focus. Where is the fear coming from? Listen to fear as it can point out areas that need improvement or understanding. Knowledge alone will eliminate fear in many cases.

So when you hear the voices… when you feel the fear and paranoia creeping in… embrace, harness and Tai Chi the fuck out of it.

"A benefit of being an internet entrepreneur is you know the hot companies before most because you..."

Sat, 25 Feb 2012 17:42:00 -0800

“A benefit of being an internet entrepreneur is you know the hot companies before most because you eat, sleep and breath the internet, more than any investment banker and even more than VC’s so investing in the next hot company through secondmarket and investment firms like Felix is a great way to make money on the side while you build your company.”

Got Amazon stock?

Tue, 29 Nov 2011 10:04:00 -0800

I just got my Kindle Fire last week. Then I ordered 3 more, one for my roommates birthday and one for each of my parents. At $199 this is a sexy no brainier and it’s already the #1 selling product on Amazon and has been since launch 6 weeks ago. Unfortunately they don’t release their numbers but those numbers are going to be big.

The real magic behind the Fire is how seamless it is to buy digital movies, books, magazines, music and apps. I spent over $30 within the first hour on the device renting a movie, buying a book and several apps, all with just 1 to 2 clicks. Even my tech un-savvy Dad was buying away when I showed him my Kindle.

Where the iPad is great for creating, the Kindle is great for consuming. And all that digital content consumption is going to bring in serious revenue and profits for Amazon. The fact that the Kindle Fire is both sexy and affordable will ensure tens of millions of people end up using it to purchase tons of digital content.

This is the turning point for Amazon, they went from being a top seller of hard goods to also being a top seller of digital goods. The next 5 years are going to be up and to the right because of this brilliant move. Buy the stock now (at $187) and let’s revisit how much money you made 5 years from now. :)

If you’re wondering why the men of MojoPages look so...

Mon, 29 Nov 2010 12:25:00 -0800

If you’re wondering why the men of MojoPages look so creepy it’s because of Movember. Movember is a fairly new movement to help cure men’s cancer by having men grow mustaches in the month of November. 1 in 2 men will get cancer in their life yet there is very little money raised every year to fight it. Movember is doing for men’s cancer what Susan G. Komen does for women’s cancer.

The concept is simple, grow a mustache and people will ask why you are rocking a creepy mustache, therefore raising awareness and money for cancer. Simple yet effective. They raised $40M last year and are on track for over $60M this year. With the money raised last year they identified 24 different kinds of prostate cancer and how aggressive each is. Which is a critical step to helping develop medication to keep men alive and eventually to find a cure.Here’s a link to donate, today is the last day http://us.movember.com/mospace/1108438/

Google's Greed Growing? Google buries Online Yellow Pages and Review Sites

Wed, 27 Oct 2010 14:00:00 -0700

Today Google is rolling out a new search result design (see screen shot below) that puts business listings from it’s Google Places, formerly Google Maps, above almost all other search results when consumers perform a local search like Dentist in San Diego, or San Francisco Plumber. Google Places is a local business directory competing with Yelp.com, YellowPages.com, MojoPages.com and a dozen or so other business directories. In this bold move Google Places takes over 70% - 100% of the results you’ll see when you do a local search. There are still links to Yelp and others but they are buried at the bottom of the Places listings and most consumers won’t notice them. Is this a good move for consumers? Or should Google show a smaller set of listings from Google Places and show links to other directories on a more even basis?

Google has been systematically taking over more and more of the real-estate on local search results. A few years ago they launched the “7 pack” which showed 7 Google Maps listings at the top of results and pushed all other results from local business directories below the fold. It was an aggressive move but it did a decent job of showing what Google thought was the best businesses while leaving room for other directories so consumers had options. The reason the 7 pack didn’t revolutionize the industry is because most people would skip over the 7 pack and click on a directory like Yelp or MojoPages because, well, most consumers prefer these other directories’ user-experience over Google when looking for the best local businesses. Just like people prefer other comparison shopping engines to Google’s Froogle in most cases. But consumers are creatures of habit so they start and Google and then navigate to their favorite websites. Is it “evil” for Google to use mostly their own business results from Places or is it their right?

Well see how other online directories along with consumers respond to this shift.

In the screenshot below Google’s Advertisers and Places Businesses are in red, everyone else is in blue.

BEFORE

AFTER

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where..."

Thu, 02 Sep 2010 14:07:21 -0700

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

- Theodore Roosevelt

A few words on The Kelsey Conference (a must attend for anyone...

Wed, 23 Jun 2010 23:15:00 -0700

A few words on The Kelsey Conference (a must attend for anyone in the Local Search space) as well as game mechanics.

Game Mechanics - the new black

Sun, 25 Apr 2010 18:17:00 -0700

Game Mechanics is hot right now because companies like Foursquare.com and Groupons.com are experiencing insane growth rates and valuations because of it. But game mechanics have been having dramatic impacts on industries for decades, even going back to 1979 when Texas International Airlines created the first Frequent Flyer game and it was so successful every other airline was forced to adapt or die. There is almost no industry that can’t be changed in this same way as long as a company in the industry properly deploys game mechanics. Over the next decade we’ll see game mechanics become ubiquitous amongst companies. Consumers will migrate in droves to companies who properly deploy game mechanics because doing business with them is more fun, rewarding and even addictive.

So what are game mechanics?

Definition: A series of rules and functions that tap into our primal response patterns to drive a desired behavior.

Laymans Definition: Creating a game that grows your business.

Below are the four elements that Groupon, foursquare, frequent flyer programs and just about any other successful game all have in common. In addition I’ve included three nice-to-haves.

Must-haves:

Action
Goal
Scoreboard/Feedback
Reward

Nice-to-haves

Competition
Countdown Timer
Social

Let’s take a look at some case studies.

FourSquare.com is a location check-in service so you can share with your friends where you are and where you’ve been. It is also one of the hottest Internet businesses right now and has gotten to one million members faster than twitter thanks to game mechanics. Foursquare is just another company called Dodgeball.com (another location check-in service founded in 2000) with game mechanics applied to it. Let’s take a look at the simple game applied to foursquare that made it a raging success while dodgeball failed miserably and is now shut down.

Must-haves:

Action - Check-in at places
Goal - To have the most check-ins at a location and to discover hidden “badges”
Scoreboard/Feedback - The website shows total check-ins, Mayorships and badges earned
Reward - Show off badges on your profile and become the mayor of establishments(which in some cases involves free or discounted services from the business, like free drinks at a bar)

Nice-to-haves

Competition - Against other members for mayorship
Timer - no
Social - Tell your friends where you are and show off your accomplishments on Facebook

Groupons.com is a coupon service that just raised $135 million at a valuation over $1 Billion after just two years in business thanks to game mechanics. Coupons have been around online for more than decade but no one had properly deployed game mechanics until Groupons. Let’s look at the features of their game.

Must-haves:

Action - Purchasing coupons (yes, you actually have to pay for the coupon in advance of using it)
Goal - Get enough people to purchase the coupon before time runs out or no one gets it
Scoreboard/Feedback - There is a scoreboard that shows how many coupons need to be purchased before it’s unlocked for everyone
Reward - Everyone gets to buy the coupon

Nice-to-haves

Competition - no
Timer - yes
Social - Tell your friends to buy the coupon to ensure enough people buy it so you get it

And now for an old school example

Texas International Airline - In 1979 TIA invented the Frequent Flyer game and it forever changed the airline industry. As of January 2005, a total of 14 trillion frequent-flyer miles had been accumulated by people worldwide, which corresponds to a total value of 700 billion. Let’s take a look at this game that we’ve all played.

Must-haves:

Action - Buy airplane tickets from a particular airline company which earns you points
Goal - Earn enough points in a given time period to receive rewards
Scoreboard/Feedback - There is a scoreboard where you can see how much points you’ve received and how many you need to earn to receive a reward.
Reward - Ranges from free flights to upgrades and other special privileges.

Nice-to-haves

Competition - no
Timer - yes
Social - no

All these games have one thing in common, they are very simple and easy for people to engage and get rewarded from. Unlike video games, company games need to be simple and focused. This isn’t rocket science, follow these simple guidelines and try out a game for your company, you just might see a Quantum Shift in your growth rates.

How to get 100+ years of entrepreneurial wisdom every week

Wed, 03 Mar 2010 14:23:00 -0800

Thanks to the advent of video on the web content creation is getting more and more niche. One of those niches is entrepreneurship. Videos are popping up all over the web that have incredible insights from some of the best, most successful entrepreneurs in the world.

The tipping point for me was getting setup so I could watch it on my big screen TV from the comfort of my couch. To my surprise it’s super easy to hookup your laptop to your TV, it took me less than 15 minutes and cost me less than $100. Here’s a link to connect your laptop to your TV and here’s a mouse that will work on your couch.

Here are some of my favorites websites with videos for Entrepreneurs:

TWIST (this week in start-ups) - Probably my favorite, Jason Calacanis does 2 hour interviews with top entrepreneurs, venture capitalist and business experts focused around educating and motivating start-ups. The site is hard to navigate through older episodes, but their are some gems hidden in there.

Mixergy - Similar to this week in start-ups but the interviews are 1 hour and the video quality is poor (just two people on web cams talking back and forth) but the content is golden.

Entrepreneur.com - Interviews with some of best and brightest entrepreneurs

Stanford - Presentations and interviews with entrepreneurs well organized and each video is separated by topic so you can quickly get the content you want.

Harvard - A video archive that captures insights from leading members of the school’s entrepreneurial community.

Business Week - Their series Fresh profiles standout start-ups before they
become household names.

Forbes - A video archive with tons of content in various categories from billionaires to celebrities.

Inc. TV - Interviews a wide range of entrepreneurs on topics like marketing and hiring in short 2 minute video clips.

Open Forum (American Express) - Lots of great content broken out by subject in 1 - 5 minute video clips.

Young Entrepreneur - A series of random videos around the subject of Entrepreneurship.

Ted - “Riveting talks by remarkable people, free to the world.”

Fora TV - A series of great videos, mostly from conferences, that claim to make you smart.

Entrepreneur Journey - Advice focused primarily on internet marketing and blogging

Making It TV - Minority success stories

The Rise To the Top - A daily video show by David Siteman Garland, the show covers business and marketing tips & tricks, how to advice, social media marketing, tech etc.

Elientrepreneur - Video blog with interviews of entrepreneurs

D&B Digital TV - Professionally produced Videos focusing on different categories of business such as internet technology, manufacturing, sales etc.

Bnet - Professional interviews done on very specific business issues.

YouTube - 7,620 (and growing) play lists other people have put together of entrepreneur related videos (this could keep you busy for a looooong time)

All the links above are available on this delicious account

Know any other great sources for entrepreneur related videos? Go ahead and share them in the comments.

Surf a 30 foot wave before I die... CHECK!

Sun, 14 Feb 2010 20:07:00 -0800

Ever since I saw that magical picture hanging on my cabin wall at summer camp in junior high I’ve had a dream to surf a big wave. The picture was of Laird Hamilton surfing a huge wave which looked unbelievable. I remember telling my cabin mates it was probably computer generated because no one could survive falling on a wave that big. Well clearly I was wrong and as I got older I realized people around the world were surfing huge waves and not only surviving but enjoying some of the most amazing experiences nature has to offer.

About three years ago I decided to make my dream a reality and set a goal to surf a 30 foot wave before I die. The only problem is I’d been running companies for the last 7 years, I was out of shape and hardly surfed a dozen times a year. Most people who brave huge waves are in incredibly good shape and have worked their way up to surfing big waves through 1000’s of hours in the water. I was getting into something way out of my skill level and fitness level and it happened to have a severe consequence attached, death.

But I do have one asset on my side, an incredibly naive sense of optimism.

Fast forward through 3 years of tow surf training, 72 special lung capacity and muscle workouts, $20,000 of blown cash on equipment and travel and you end up at last night.

Here I am in my car, my tow partner Martin next to me, the jet ski in tow and all the equipment piled in the back. We’re pulling up to the Mexican border, our goal is to get down to a hotel and leave early in the morning for the island of Todos Santos (an island 8 miles of the coast of Ensenada which has some of the biggest waves on the planet). As we approach the security check point they sent us to be searched, most likely because of the jet ski. A lady approached the window and asked if I had proof of registration for the jet ski. Oops, forgot that one at home. She then walked over to the supervisor who proceeded slowly over to the car and coldly notified us we’d have to turn around and go back to the US. If we did turn around it would ruin the entire trip because it was already almost 10PM and with the Mexican drug cartel hijacking tourist at gun point on a regular basis after midnight we wouldn’t risk heading down to the hotel any later than it already was.

After a little begging and showing them 3 year old copy of an expired registration for an entirely different jet ski they suddenly let us pass. We were pretty ecstatic and a little shaky from the adrenaline which was already starting to pump.

The night time drive down to Ensenada was sketchy. I was constantly checking my mirror for police cars (the cartel dress as police, hijack you at gun point, steal your car and if you’re lucky they drop you in a ditch somewhere alive). It didn’t help that my passenger Martin was describing in detail a news story he saw on TV about an entire family that had just been hijacked on the very same road we were on. We decided we wouldn’t pull over for anything and just drove like a bat out of hell for the hotel.

When we get to the hotel it was all sold out, we had tried to make reservations but they never picked up the phone so we decided they’d probably have rooms and we went for it, I mean what hotel sells out in Mexico in this economy? I guess Hotel Coral does. So we snuck into the parking garage and slept in the car. Slept is a strong word, it was more like an uncomfortable nap. We got up at 4:30 AM, drove over to the dock and put the jet ski in the water. It was windy and choppy which made for a rough and freeeeezing 8 mile jet ski ride to Todos Santos.

When we got to the Todos Santos it was still dark outside and the island was covered in a spooky fog. The waves were big, bumpy and scary and we were the only ones there. I remember thinking “this is crazy, what was I thinking that I could just will myself to surf a monster wave, I could die out here. Maybe we should just go back and blame it on the bad weather.” I was scared to death. Just then another two surfers on a jet ski showed up, they drove up next to us and just said “pretty meaty, huh?”. Then drove off towards the waves. That didn’t help.

We watched them catch a couple waves. We didn’t want to admit it but we had no idea what we were doing out here. We watched and learned from our unsuspecting teachers. We then decided to go for it, we couldn’t put in all this effort and turn back now. So I jumped in the frigged water and martin started up the jet ski. We headed towards the waves. The closer we got to the waves, the bigger and louder they got. I think I peed myself, but at this point there was no turning back. It was so loud that even if I yelled to Martin to stop he probably wouldn’t hear me. And then it happened.

A wave started to build behind me. A wave bigger than anything I’d ever been on before. It was more like a mountain growing right under my feet, that also happened to be moving very fast. I let go of the tow rope and the power of the wave hurled me down the wave faster than I’d ever gone on a surfboard before and the mountain was now turning into an avalanche of water about to crush me. I turned towards the shoulder to avoid getting smashed and I saw this huge wall of water before me and then suddenly realized I was actually surfing a 30 foot wave. It was like time slowed down just enough for me to take it all in before my adrenaline kicked back in and I surfed my heart out to make it to the channel where I could be safely picked up. The smile on my face when Martin brought the jet ski over to pick me up was from ear to ear. I had done it, I had achieved my dream and it felt really damn good.

We continued to surf for another 4 hours, taking turns driving one another into waves. As the day progressed it got sunnier and the waves even got a little bigger. The wave sizes varied from 25 to 40 feet on some freak sets. The entire day was surreal. I hadn’t really had any big wipeouts, that is until my last wave. I came over the top of the wave thinking I was in the channel only to see a bomb set wave over 30 feet about to break nearly right on my head. I tried to swim into the channel but quickly realized there was no way I was going to make it. So I took one huge gasp of air and prepared to get destroyed.

Again time slowed, but this time the inner feeling was entirely different. It was like I was wrestling with the fact that I might die and questioning if I was really prepared for this. At this point there was nothing I could do, I was completely at the mercy of nature. Then before I knew it the wave smashed into me and drove me deep into it’s chaotic whitewater. It felt like four sumo wrestlers each had one of my limbs and their sole mission was to rip me apart. It seemed like I was underwater for an eternity, I learned later I got dragged about 300 yards underwater and in the process completely freaked out my tow partner who thought I was dead. Luckily all the training paid off and I was able to hold my breath for the entire time without panicking. Although I’m not sure I could have lasted much longer, I was at the breaking point.

All in all it was an amazing experience. I’ve just had on of the best days of my life. I’m completely drained from all the adrenaline and lack of sleep. Time to hit the sack. Special thanks to Martin Grunburg (my fearless tow partner) and his wife for letting him come out with me on Valentines day. :)

P.S. The picture on top is me on one of my first waves. If I had someone filming with a video camera from a helicopter it would have looked sort of like this video of Mike Parsons at “Jaws” in Maui except the waves at Todos were about half this size VIDEO .

13 Rules for Success - Follow them and you'll be rich bitch!

Fri, 13 Nov 2009 09:56:00 -0800

It’s Friday the 13th, so here are my 13 rules for success.

Never give up. In my career I have missed payrolls, been behind on payments for every one of my credit cards and, at one point, had amassed more than $12,000 in overdraft fees at $20 each. Looking back I can see that these were all stepping stones for me to achieve financial independence. It’s tempting to quit when your financial situation is looking bleak, but as Thomas Edison said “Many of life’s failures are people who did not realize how close they were to success when they gave up.”
Befriend well networked people. Become close to well-networked people and suddenly you will gain access to well-developed networks. I found my CFO, two key advisors and a primary investor from one well-networked lawyer. Return the favor and do whatever you can to help these people, a one-sided relationship won’t last.
Surround yourself with experts in areas where you are not an expert. I always surround myself with the smartest people I can find. Spend at least 25% of your time searching for these people. Never stop searching, everyone is a potential employee.
Entrepreneur/Business groups are a superb resource (e.g. EO, Master Minds, Vistage). These groups allow you to learn from others’ experiences. You can avoid serious headaches and stress by learning from other people’s mistakes. You also gain insight into what the successful people are doing that their competitors are not.
Stay balanced so that you remain creative and your brain functions at 100 %. Take vacations at least three times a year and rarely work on weekends. You’ll be more effective if you do. Read the Sharpen The Saw story for more on this subject.
Constantly seek new ways to grow your business. I changed the way Client Shop attracted customers every six months. From pay-per-click marketing to e-mail to affiliate programs to partnerships with marketing companies to offline marketing to an in-house call center to an oversees call center. The reason for doing this: competitors will catch onto your strategies and tactics. What once worked will no longer work. You always need to stay one step ahead.
Generate Creative Ideas Consistently – Take time every week to read, listen or watch some type of information pertaining to your specific business, sales or marketing. I often find when I’m reading a magazine, marketing article, book, blog or even watching a movie on business is when my ideas to improve the business are born.
Motivate your team. Hold pep rallies / weekly meetings to pump up your troops and keep everyone accountable.
Have Goals, Scoreboards and Top Priorities – Everyone in the organization should have a monthly goal that directly effects their departments goal that directly effects the companies #1 goal. A goal should be stated as we are here right now, we want to be here by the end of the month, so X to Y by Date. There should be a visible scoreboard that anyone can see at any time. There should be individual planners that management reviews weekly to ensure each employee is accomplishing their top priorities.
Read, Read, Read – When facing a certain business challenge, select the highest rated book on Amazon.com that is directly related to that issue.
Never criticize an employee. It will only break down their morale. If you are upset with someone in your organization, wait a day or two before addressing them or approaching them and start the conversation with appreciation for something positive that they have done. Then, in a cooperative and fostering manner, look for a solution to the problem.
Stay Laser Focused. There are always plenty of ideas that seem like great ways to make money. Focus on your core competencies / core business. Never try to run two businesses at the same time. Example: My second company Client Shop was a lead generator that happened to start in the mortgage industry. We had plenty of opportunities to go after other verticals like insurance. But we chose to stay focused on mortgage to come up with creative ways to generate better leads than our competitors. In the end, we were acquired due to the fact that we had a superior mortgage lead generation business than the competition – why – because we stayed focused on mortgage. Many entrepreneurs get caught attacking multiple ideas. This will only assure one thing: you will be mediocre at multiple businesses instead of excellent at one, which ultimately will ensure a mediocre outcome at best.
Retirement for true entrepreneurs is worse than death. Don’t believe that the goal is to make lots of money and retire. It’s about the journey and not the destination. You will find when you’ve made a ton of money that you can’t retire like you always thought you would or you will die of boredom. A true entrepreneur sees a problem and wants to solve it.

Bonus: Tips to happiness and less stress

Cash in whatever you can whenever you can. When you get offered a good deal to sell your company act on this instead of waiting for an ‘amazing deal’ that might never happen. You can eliminate so much stress with a little ‘safety net’ in the bank. I promise you’ll be able to find another business idea that can make the world a better place, there is an endless supply of problems that need solving.
When you have achieved your financial safety net, never touch it. Invest it conservatively (70% bonds / 30% equities). This is a safety net and is not intended to make you rich; it’s intended to support you between your companies in case one fails. The risk you take with your company is the vehicle that may make you rich. Use OPM (other people’s money) to fund your next business.
We are lucky to be entrepreneurs. We get to follow our dreams, live an exciting life, be free, create jobs, help the economy and change the world for the better.
Stay humble. Be confident not cocky (nobody likes a cocky person).
Never compromise on integrity…period.
Materialism is a slippery slope. The path of materialism leads to loneliness and being constantly unfulfilled. The opposite of materialism is focusing on forming lasting loving relationships with people, that is the guaranteed route to happiness.

MP3.com - How Michael Robertson made $350M

Fri, 30 Oct 2009 10:45:00 -0700

I spent the weekend at Michael Robertson’s Ranch. He is one of San Diego’s most successful Internet entrepreneurs. He sold MP3.com for over $350M, he also started Lindows (Linux based windows), MP3Tunes.com (cloud based music) and Gizmo5 (voip). There are rumors floating around that Michael sold the domain name MP3.com for $350M, got lucky and never built a great company. That is, well, just a rumor.

What people don’t know unless they get a chance to talk to Michael is he built a great company, one that was exploding in organic traffic and revenue before it was purchased. We all know that to generate explosive organic traffic and revenue you need a lot more than just a great domain name.

The story he tells is very entertaining. Back in the early days of the Internet he was watching for search terms that were growing in popularity. He found the search word MP3 was gaining in popularity and bought it for around $1,000, which in 1996 was an expensive price.

He didn’t even know what MP3s were or how to make a site around them but through trial and error he grew MP3.com into the #1 place for musicians to show off their music and for consumers to find great music, sort of the first Myspace.

The real secret of his success came from creating a network effect. He allowed Bands to upload their music and have a custom website to host their music all for free (revolutionary back in the late 90’s). They could even create a CD and sell it for whatever price they deemed necessary above the $5.00 cost of creating the CD. The network effect occurred when the bands would promote their music on MP3.com. Michael gave them all their own URL’s like MP3.com/bandname. The bands would have this URL on their business cards, email it to their fans, etc. and then the more fans that used the site the more bands that came on, and therefore a network effect was created.

By giving his customers (the bands) total freedom and making the service free he empowered them to become an army of marketers bringing consumers to site by the millions.

He was able to raise money from Sequoia and eventually sell the company not based on a domain name but based on this network effect.

What is your businesses network effect?

I started my training today to surf a 30 foot wave. It’s...

Sat, 03 Oct 2009 12:04:00 -0700

I started my training today to surf a 30 foot wave. It’s one of my “do before I die” goals. With my current shape I probably couldn’t survive a 20 foot wave hold down but hopefully in the next three months I’ll be ready. The wave I’m chasing down is in Todos Santos, an island off the coast of Ensenada. If the waves don’t kill me the Mexican drug cartel might. Wish me luck. Here are some photos from last season, I’m the wimp on the jetski taking the pictures.

Personal and Business Networking System

Fri, 02 Oct 2009 10:21:00 -0700

I just finished reading the book “Referral of a lifetime” by Tim Templeton and Ken Blanchard. It’s a quick and easy read to help you systematize your networking efforts. I love systems, they set you free, so I’m a fan of this book. The concept is basic, cold calls don’t work well and are painful, referrals are much more effective at helping you achieve success. The good news is you don’t have to smooze at tons of awkward networking events to make this happen. To generate referrals you need to keep in touch consistently, personally and systematically with the people you already know (which is most likely 200 or more according to statistics).

Step 1
Send out an email to all the people in your database letting them know that you are committed to keeping in better touch and if there is anything you can do for them “just let me know”

Step 2
Plan your calendar in advance for keeping in touch throughout the year. If you don’t have someone at your company who can manage the fulfillment of this system you can outsource this to a mail-house. Example:

January - New Years Greeting Card
February - Item of Value letter
March - Personalized Newsletter
April - Springtime Greeting Card
May - Item of Value Letter
June - Personalized Newsletter
July - Fourth of July Card
August - Item of Value Letter
September - Personalized Newsletter
October - Item of Value Letter
November - Thanksgiving Card
December - Personalized Newsletter

Step 3
Research the Internet for creative thank you gifts that can be sent out when appropriate to contacts that have done something nice for you. Tier it out from $10 to $200 depending on the contact and what they did for you.

Step 4
In your correspondence (like emails, newsletters, phone calls) always ask for a referral. It won’t rub the person the wrong way if you’ve kept in consistent contact and have/will do the same for them.

Disclaimer:
This system will work but it is reliant on the fact that you really do care about the people in your network and you mean it when you say “If you need anything, just let me know”

Biz lessons from the new Padres CEO Jeff Moorad

Mon, 14 Sep 2009 16:51:00 -0700

I had the good fortune of watching the Padres game from the owners box with Jeff Moorad yesterday. Jeff has recently come to San Diego to take over leadership of the Padres as their new CEO. Before this Jeff ran a successful turnaround of the Arizona Diamondbacks and before that was one of the most successful sports agents in both football and baseball. Jeff took time to share some of his lessons learned from his career and his strategy for the Padres. Here are a few tips he shared.

Set your goals according to your industry, not based on what the norms are.
- He believes sports teams can and should be cash flow neutral. Neutral? I thought he was really setting the bar low. But I learned that sports teams are almost never cash flow positive, but almost always cash flow negative. So while I thought his goal seemed to be shooting low, for his industry that was a high mark.
Don’t micro manage, BUT hold people firmly to financial goals.
- He made his success sound so easy. “I just hire the right people, and hold them accountable to their financial goals, if they are good they will figure it out eventually.”
Take your time to find the right people, and look outside your industry.
- He was looking for a critical role for his company, he interviewed everyone in the baseball world to find a fit and yet they just weren’t happy with the potential candidates. They did something unprecedented by going outside the baseball world and looked into candidates from Football, they found their man and he’s doing an amazing job.
Take care of customers and put resources on brand management.
- The Padres will be doing things unheard of in the baseball space like having a dedicated rep for every ticket season holder so they can have someone to call with issues or questions. Another ground breaking move was he created a new position - VP of Brand Management, baseball team’s don’t have someone dedicated 100% to improving brand image. What can you do that your competition is not?

Amy K. interviews me on San Diego Living. We discuss a few...

Wed, 09 Sep 2009 15:47:35 -0700

Amy K. interviews me on San Diego Living.

We discuss a few lessons learned through my experience as an Entrepreneur. You can see the video on her site http://bit.ly/ll1ag (along with a bunch of other great Entrepreneurial videos) or just watch it above.

Why diversification will kill a start-up

Fri, 04 Sep 2009 11:54:00 -0700

Shouldn’t entrepreneurs try many different opportunities so if one fails the other ones might make it? No… and yes. NO, meaning an entrepreneur should never try more than one opportunity at a time. Yes, meaning if the opportunity doesn’t pan out quickly move on to the next. Most of the time diversification is good, like when investing or dating, but the word diversification for entrepreneurs, especially in start-up situations, is deadly.

Here’s why diversification will kill a start-up

Focusing on more than one thing guarantees mediocrity
- It’s hard enough to build one really good widget (website, product, content etc.) but try building two at the same time and those widgets are going to be half as good as they would have been if you just picked one.

Your competition already knows not to diversify
- The competition is smart, someone over there already knows this lesson to stay focused and has all their resources focused on one widget, and it’s going to be amazing. You can’t afford to have your competition be focused and you be spread out.

You have limited resources
- Even with focus you’re lucky if you can build a better widget than the 800 pound guerrilla in your space. It’s a crap shoot because large corporations have lot’s of capital and human resources, you don’t. But you have passion and creativity on your side and a team willing to work crazy hours to win, so do them a favor and focus them all at 1 goal.

It’s hard to say NO
- Opportunities are like kryptonite to entrepreneurs. It’s against every fiber in our bodies to turn down an opportunity. It seems counter intuitive and crazy to say no to an opportunity that could deliver piles of cash. But this is what separates the successful entrepreneurs from the unsuccessful, the ability to say no to tempting but DISTRACTING opportunities.

Choose wisely, if it fails, choose again
- So what if your 1 focus isn’t working. Put a bullet in it and move on to the next one. It’s called “failing fast”, pick your one focus, give it all you’ve got and if it’s not working kill it and focus on the next one. But only one at a time!

I leave you with this fact:

A 5 watt light bulb can barely light a closet, but when focused like a laser can burn through steel

And this Chinese proverb

“Try to catch two rabbits at the same time and you will catch none.”

And finally this book, it talks about how In-N-Out rules all other burger fast food chains because they stayed focused on creating the best burger (for less money) while others diversified into breakfast, Teriyaki bowls, tacos etc.

In-N-Out-Burger, a behind-the-counter look at the fast-food chain that breaks all the rules

Cool way to check stats on Twitter users

Thu, 03 Sep 2009 14:16:00 -0700

You can see trends for posts, followers and friends (following).

TwitterCounter

Yammer is great for real-time collaboration and improves company culture

Thu, 03 Sep 2009 10:37:00 -0700

Our company is using Yammer (it’s like a private twitter/facebook for your office) for real-time collaboration but the unexpected benefit came from the real-time banter that has the office booming with laughter. Instant culture booster.