A colleague referred to me as Mariano Rivera this week. If you’re not a baseball buff, Mariano Rivera is the closer for the New York Yankees. Like most closers in baseball, Rivera usually comes into the game when it’s almost over and the Yankees are winning by only a couple of runs. It’s his job to make sure the other team doesn’t score so the team holds on and wins the game. If he does it, he gets a “Save” in his statistics. If he doesn’t, he usually ends up with a loss. He’s widely regarded as one of the best closers in baseball.

As I thought about this comparison, I realized that while flattering, it wasn’t remotely true. The people I work with don’t send me in to close a deal. I’m not there to “seal the deal” because I’m not that kind of person.

I’m the guy they call when all hell has broken loose. I’m the guy they call when someone screwed up, someone else got pissed, and tens of thousands of dollars of products, services, and future productivity are on the line. I’m the firefighter.

This week, I felt the urge to change my business card to Winston Wolfe or at least put a quote from him on there. If you remember the movie Pulp Fiction, he’s the guy who shows up to clean up the body after John Travolta’s character accidentally shoots “Marvin” in the face. When he arrives he says:

“I’m Winston Wolfe. I solve problems.”

In a nutshell, that’s generally what I do. I solve problems. And when I’m sent in to rescue a dying project, I look like an All-Star for a couple of reasons.
1) I know how to manage a project and set expectations
2) I have a deep and diverse set of skills
3) The customer expectations are based on the guy who went in before me.

How many of these projects fail?
A study by Gartner suggested that as many as 75% of IT projects fail and an informal poll by CNet in 2008 suggested that 62% of IT projects fail. Neither specifically calls out consulting projects, but personal experience from cleaning up some of these messes seems to indicate that it’s at least 20%. In the past 30 days, I’ve saved two different projects from completely falling apart after the customer lost confidence in both the consultant and in the vendor.

There are varying degrees of failure, but when the customer asks for a consultant to be replaced before the project is over, that’s a pretty good sign that they failed. I came in after one consultant who claimed to know how to use a software package that he had merely installed and used once or twice. When he started working on the project, the customer asked a bunch of questions he didn’t know the answers to, so the consultant went to the product documentation. After four days of reading the documentation, he’d found the answers. But by that time, the customer lost all faith in his ability to deliver and threw the company out. I delivered on the next several weeks of services and heard the story mid-way through the project. I’d be pretty irritated too if I paid $12,000 for a consultant to read documentation for a week. I knew what the customer was thinking and he didn’t hesitate to offer it up. “Hell, I could have read the documentation myself.”

Yes, you read that right. The customer paid $12,000 for a week of consulting services. Some consulting companies charge exorbitant rates is because they guarantee their work. If a project fails, they’ll throw another consultant on it for no charge. Usually they come out a little ahead or a lot ahead.

The problem for the customer is that they waste valuable employee time with the consultant doing things that end up being thrown out anyway. Failed projects cost them even more money. So how do you go about making sure that a project succeeds?

The obvious answer is to use great consultants in the first place. But finding a great consultant is a lot like hiring great employees. The difference is that you have less data and interaction with the consultant to make a decision. More interaction isn’t necessarily going to help because a consultant is generally taken at his word that he knows what he’s doing. It’s simply not cost effective to give a battery of proficiency tests to a consultant who is only going to be there to do a short term project.

When you hire a consulting company to come in and do work for you, you’re relying on the professional services manager to provide you with someone who knows what he is doing. You can stress how important that is, but at the end of the day, the company you hire is going to give you whomever happens to be free at the time unless there’s a very specific skill set needed for the job that nobody else has.

Basically that means it’s a total crap shoot. You can easily get stuck with a consultant who just doesn’t know what he’s doing. Guess what though?

It’s almost never his fault!

I generally feel bad for these guys, because if you hire a company to come in and deliver consulting services and end up with a consultant who really shouldn’t be there, it’s not his fault. It’s his boss’ fault for putting him there. Consultants don’t get to choose what projects they work on. They go where they’re told. And if that means they are put on a project they have no business working on, then so be it. But he didn’t choose to be there. Someone else did. His choice was “Give it a try, or find a new job.” If it works out, then great. He’s got some new skills they can peddle to the next customer. If not, there’s usually enough profit margin built in for the vendor to replace him with someone else who is more qualified and still at least break even. In either case, it reflects poorly on the consultant, even though it’s not his fault.

What’s the formula for being a great consultant?
If you think that a great consultant is someone who knows their products cold, then you’d be wrong. A great consultant is many things, but mostly is someone who is a good teacher. Customers don’t want to have to hire you every time they need something. They want you to come in and teach them to be self sufficient. If you can’t do that, then you’ve failed to do your job. I worked with a guy about 10 years ago who was a brilliant programmer. He could write C code in his sleep and was very good at it. But his abilities, much like the dark side of the Force, made him arrogant. As if he could do no wrong. His code was poorly documented and difficult to read. The few bugs that were in his code were notoriously difficult to find because of his programming style. Eventually, management fired him because he wasn’t willing to be a team player.

A great consultant has to straddle the line between being that kind of Lone Wolf who can accomplish a set of tasks without any supervision, but at the same time, fit well into a team. As a consultant you’re working with the customers employees and need to teach them the things they need to know to be successful. At the same time, you have to be something of a good project manager. If you’ve only got a week to finish a project, then wasting 3 days chasing down a “nice to have” isn’t going to help you finish the project on time, let alone give you time to do any sort of knowledge transfer with the customer employees.

Finally, dial up your Humility Meter a bit. So you’re a consultant. You’ve worked on multi-million dollar software deals. You’ve installed software on tens of thousands of computers in a globally distributed environment. Your customers are all over the Fortune 100 list. Big fat hairy deal.

Customers might be a little impressed by that, but at the end of the day they just don’t care. They want to know that you’re going to do the job in a professional and competent manner. If you do a competent job, they’ll want your company to come back. If you do an outstanding job, they’ll want you back and won’t take anyone else. Which is great for you as a consultant, but bad for the consulting company you work for. This puts their consultant in high demand, rather than the company’s services. Don’t get me wrong, it’s great for repeat business, but if a consultant is good at what he does, most of his customers don’t want to take a chance on another consultant who might have a different style or a lower level set of skills.

How do I become a great consultant?
Like being successful, there’s no one secret to success. A great consultant is a combination of a lot of different things. Usually, you have to branch out a bit to be more successful. I’ve seen both ends of the spectrum and there’s a world of difference between a great consultant and a mediocre one, let alone a bad one. If you want to go from mediocre to great, here’s what you need to do.

1) Learn to be a great presenter
This isn’t just about public speaking, although that’s definitely a big part of it. I’ll give a follow-up blog post in the next couple of weeks to address this specifically because it’s a pretty big topic. Suffice to say that building a good presentation is key, as is being a good public speaker. If you have an opportunity to take a course on how to be an effective instructor, then do it. It will help you. Courses that teach how to be an effective instructor are generally technology or product agnostic. They teach you how to hone your delivery.

2) Become well versed in a lot of different technologies
It’s fine to be a Windows or Unix guru. It’s great if you can build PL/SQL queries in your sleep. But if you can’t relate your skills to problems across multiple technologies and business processes, this is going to hold you back. The ability to at least be aware of the pros and cons of various technologies allows you to relate those technologies to one another to solve larger business problems. It also gives you an effective position from which to offer suggestions on how to approach problems differently. It also helps to provide insight into how things work (or how they should work) when you run into technical difficulties. I’ve been able to pinpoint bugs in a product by knowing how the technology itself is supposed to work, without ever having looked at the code.

This is why developers who turn into IT consultants are so good. They tend to have an innate sense of how things would have been put together that they can troubleshoot things that they think are wrong. It’s like a sixth… or even a seventh sense. A good consultant doesn’t always know why he does the things he does.

3) Be professional
This sounds easier than it is and there are more things that you shouldn’t do than anything else. Don’t badmouth your product, your competitor, your competitors’ product, your boss, your ex-girlfriend, your employer, your ex-employer, the guy who was there before, etc. Airing your personal dirty laundry is simply not appropriate when you’re at a customer. It’s ok to tell stories of when someone did X, which was really stupid. But make sure that you do two things. First, don’t say names. The customer doesn’t need to know who the idiot was. Second, make sure the story serves a purpose.

For example, one of the best practices that I tell people when using a specific product is to always drag the computer onto the job, rather than the job onto the computer. It technically works both ways, but in the list of computers is a node called “All Computers”. If the mouse skips, or there’s a UI glitch in a remote desktop session, it would be very easy to accidentally install a new OS on every computer in the company. The story I tell is of someone who actually did that. It illustrates a point which is the potential consequences of doing it against best practices even though it works. And it illustrates that point without being demeaning.

Don’t brag either. Nobody likes the guy who brags about all of his past successes or the massively complex things he’s done in the past. On the other hand, you have to bring up some things you’ve done in the past to help make the customer comfortable that you’ve done this before. Using past experiences is a great example and an effective way to do this. You get to stroke your own ego a bit by telling a short story of a successful project you’ve done in the past, and at the same time answer their question.

“Mike, how do other companies do this.” “Well, there was another health care company I worked with that had a similar problem. Here’s what we did and it took us this long to do it. I know you’re a much smaller company than them, but it still takes about that much time to get it done. The issue isn’t the number of machines. It’s the setup time for all of the potential configurations. And the thing to keep in mind is that you’re using this technology instead of that one. So it’s a bit different, but the basic process is still the same. Here’s what I think you should do…” As you can see, part of this goes back to #2.

Finally, don’t look like a scumbag. Iron your shirt and pants. If your pants are worn out and threads are coming loose, throw them away and buy new ones. Customers are paying for a professional. The least you could do is look the part. Coming into work wearing jeans and sneakers isn’t going to endear you to the customer, although you can get away with it if there are extenuating circumstances.

I had a customer in Indianapolis who wanted me to deliver training to a class of 12 people for 3 days. I flew out on Sunday night, arriving there shortly before midnight. Unfortunately, the airline lost my luggage with all of my dress clothes. All I had to wear to the training facility the next day was the jeans and t-shirt I’d worn the previous day. The class started at 8:30am and since most stores weren’t open until 9am, it wasn’t as if I could go buy new ones. So I showed up in jeans and a blue t-shirt. I’d spent some time thinking about how to explain it, as I’d never met some of these people before.

I got a lot of funny looks as they walked in the door, but I started the class promptly at 8:30am with no nonsense. I told them that I was wearing blue because I was still upset that my Patriots had lost to the Indianapolis Colts several weeks before and that the reason I was wearing jeans and a t-shirt had absolutely nothing to do with the airline losing my luggage. They laughed at the terrible joke because all of them could relate to the situation. My professional, instructor-like demeanor carried me through noon when I was able to get back to the hotel where my luggage had thankfully arrived. Feedback at the end of the sessions included comments about how some of them were initially skeptical based on how I was dressed, but that I had handled the situation very professionally and they were very pleased with the course.

The way you look and present yourself in business as a first impression is very important and it can go a long way. But if you act like a douche-bag or don’t know what you’re talking about, your value as a qualified professional decreases dramatically and in very short order.

4) Shut up and listen
Customers and people in general like to talk. They want to tell you what’s going on and if you let them, they’re not going to be shy about telling you more than they probably should. You need to let them talk. I’ve been told of goings on which are considered illegal by simply keeping quiet. If you have ideas of how to solve their problems, ask if they’ve considered them. Don’t tell them what they should do before you find out if it’s something they considered. Otherwise, they will tell you why they already tried or considered that option and knew that wouldn’t work in their environment. Eventually they stop listening because you haven’t actually contributed anything.

The point of the first day at any customer is not to solve their problem. It’s to get the lay of the land and figure out what needs to be done. If the first thing you do is jump right into the middle of things without taking the time to find out the background story and what’s really important to the customer, you’re simply setting yourself up for failure.

Listen first. Ask questions. And don’t offer suggestions unless directly asked what to do. Even if that happens, talk about a few different options and then ask more questions. Trust me, you’ll seem smarter and sounds like you know exactly what you’re doing, even if you don’t. Making decisions without all of the information simply leads to poor decisions. Let the customer tell you everything. In fact, ask them to. Then filter out what isn’t important. Don’t let the customer tell you what’s important and what isn’t. You need to make that decision. By all means they should decide what is important to them in terms of goals and accomplishments because that will help guide how your solution is implemented. But you need to decide what information is relevant to the success of the project. That’s part of why you’re there.

5) Manage the project and your time well
Arrive on time, especially the first day. Most customers tend to be a bit lax about the exact hours when they’re paying for X weeks of assistance. So long as you get the job done, they don’t care about the hours you spend unless they are far lower than the amount they paid for. Unless you make some major mistakes, there should not be an expectation placed on you to work late unless that was a commitment made as part of the project. I’ve had customers start at 7am every day. Others have said that 10am is fine. The customer generally dictates the hours. It’s up to you to make sure that the project gets done during that time frame.

As the project progresses, your role should change from that of an information gatherer to that of a project lead. You need to drive the engagement, as opposed to letting the customer tell you what should be done. The presumption is that you’ve been a consultant for a while and have done a job like this before. You know the process and what should be done next. The customer doesn’t. Show them why they hired you. Unless you’re truly at a standstill and there’s nothing else you could be doing, then you should be working and moving towards your goal.

I’m not a consultant. Why should I care about how to be a great consultant?
The skills that make a great consultant translate very well into being a great employee. These skills translate into being a solid and well rounded business owner.  If that’s not something you’re interested in, then there’s somewhere else they come in handy. These are the same skills you need to be a great manager and I’m sure we can all agree that the world needs better managers.

These skills really aren’t for making a great consultant. They will help turn you into a trained and polished professional. Being a polished technical professional will translate very well into any career path you choose. I’ve never heard of anyone who was called “too professional” for a job in the technology industry.

In 2006, I had been self-employed for less than a year. I knew a decent amount about business and a whole lot about technology, but wasn’t quite sure what I wanted to do. I had been involved in a startup called “Pedestal Software” for the previous few years and it was sold to Altiris to the tune of $75 million in March of 2005. I thought it was something that I wanted to be part of again, but having spoken with other founders who’d received angel and venture capital investment, the politics of it all made me queasy. I wanted to build software. Not cater to people who’d never actually done it before.

Then along came game Paul Graham, a former software founder who was offering people a chance at building their own startup via Y Combinator. Initially, it seemed like a great deal for an entrepreneurial founder but as I read the fine print, I realized that Y Combinator was not designed for someone like me in mind. It spawned a blog post called “Startups for the Rest of Us” that has since gone viral twice.

My biggest problem with Y Combinator wasn’t so much that you had to move, give up part of your company, or that you had to be selected. It was the fact that they were offering a paltry $2,000/month for three months to build a product and for that “privilege”, they would charge you 6% of your company.

Seriously?

Umm… This is Massachusetts. My mortgage alone is more than that. And their expectation would be that I would move to Cambridge, rent a house, and build something reasonably good in 3 months that people would be willing to pay for. In addition to paying my mortgage of course. Again, I don’t have a problem with the timetable, but the money is a deal breaker. For someone like me who is married with kids, a mortgage and the sole breadwinner for the family couldn’t possibly make ends meet for three months to do that. My only hope would be to use personal savings to help bridge the gap and if I’m taking that kind of risk, why should I bother giving up part of my company to do it? Feel free to read what I wrote back then, as I’m not going to rehash it here.

A tiny bit more background…

About 9 months ago, I reconnected with Rob Walling, who runs a blog called Software by Rob. Together, the two of us have been building a community of developers as part of the Micropreneur Academy to help people who want to be self employed but don’t know where to start. We came to the realization that we wanted to take things a step further. We wanted to provide even more information to developers who were interested in building and launching their own products. Not everyone who comes to our site is going to join the community, but that’s no reason to deny them valuable information to help them on their way.

The Actual Announcement

So today, it is with great fanfare and gusto that Rob and I are launching our new podcast, named “Startups for the Rest of Us“. If you’re looking for practical advice from experienced entrepreneurs who have been in your shoes, then our podcast is the place to get it.

The Details
We will release a new episode every Tuesday. The first episode is live at the podcast website and you can listen to it in your browser or download the MP3. We’re also providing full written transcripts of each episode in the show notes.

Episodes will be concise and run 20-30 minutes so you can listen to them during a jog, a short commute or part of a lunch hour.

We think that this is something you’ll want to check out. We’ve never done a podcast before and the first couple of episodes are a little bit rough, but we get better at it pretty quickly. Tune in and subscribe using any of the links below. Enjoy!

Subscribe Now:

• iTunes (this link opens iTunes)
• RSS
• Email

About 6 weeks ago, I had dinner at a pizza place near Boston with some fellow developers. We were generally discussing various aspects of business, things to do, things not to do, etc. One of the guys asked me a question that I feel like I get quite frequently:

“What’s the most important thing you need to do to be successful as a single founder?”

I immediately came up with three different things, but settled on explaining the importance of setting goals and having a plan for meeting those goals. We talked about how to go about setting goals for a few minutes and then went on to discuss other things.

This isn’t a new question to me, but I was uncomfortable with the answer. I seem to answer it differently every time I’m asked and not usually the same way twice. This past Friday, as I sat white-knuckled in a small turbo-prop plane that was being buffeted violently by winds over the mountains of West Virginia, it dawned on me why I had been uncomfortable with my answer.

I was wrong.

If you ask 100 successful people what the secret of their success is, every last one of them is going to be more than happy to tell you because successful people like to tell you their story. In listening to 100 stories, you will probably end up with at least 50 different answers. You will also get a mix of things to do, and things not to do. This is a problem because after listening to all of the answers, you are still left wondering what the secret is because everything they said will make sense and for each of them, it was probably true.

As my plane was buffeted by high winds and we dropped another 20 meters in a very short timespan, it dawned on me that being successful with your business is a lot like flying a plane. There are a lot of things that have to be done right in order to keep it going. There’s no single factor that makes a business successful and in fact, most of the time it takes many things done right to be successful.

It also isn’t so much about being great at any of them as it is about being competent at most of them. I had an interesting conversation one day with a pilot who was on his way to an assignment and he explained that he flew the big jumbo jets out of Minneapolis to Shanghai. I explained that I had a great deal of difficulty driving a 26 foot truck with a car trailer hitched to the back through the Berkshire Mountains in the middle of the night through rain and fog. I couldn’t begin to imagine how hard it would be to land a Boeing 747.

He explained: “Landing a jumbo jet really isn’t that difficult. It’s all about systems management. You are just making small adjustments based on what the instruments tell you is happening and where you need to be.” I’m certain that he was oversimplifying the issue, but I also realize that my answer of setting goals and having a plan for meeting those goals is an oversimplification as well.

Running a small business is like flying an airplane. There’s not a single thing that keeps you in the air. It’s doing a lot of things right. But the truth is that whether it’s landing a plane or running your business, you can screw some things up and still be successful. You can recover from most mistakes, while others are going to be catastrophic. Forgot to refuel the plane before heading overseas? Probably catastrophic. Didn’t do the best SEO for your website? It will probably cost you more to acquire customers by using AdWords, but ultimately is probably not going to kill your business unless you screw that up as well.

If you compound your mistakes, your chances of failure increase dramatically. But each success will reduce the consequences of the mistakes. This is why large companies can have such a shoddy product and still make money off of it. They have so many things going on that the law of averages ultimately weighs in their favor. Does the product manager suck? No big deal. The engineering team will probably pull his weight. The code is riddled with bugs? No problem. The support team is there to help with workarounds.

So the secret to success is to realize that there isn’t a secret. Everywhere you look, you will find something that needs to be done competently. For everything you do that doesn’t measure up, you will have to make up ground in other places, keeping in mind that one success is less than or equal to one failure and that the sum of your successes must be greater than or equal to the sum of your failures.

If it’s not, then you probably just crash landed.

I published a popular article named “The Single Founder Myth” a few years back. In this article, I contended that contrary to popular opinion, it was not impossible to go it alone with a software startup and be successful. To clarify up front, what I mean by “going it alone” is that you build up the company without handing over equity to someone else, be it either investors or other co-founders.

In this article, I gave several reasons why companies have multiple founders and countered the necessity of each for a single founder company. I came to a sudden realization the other day why most technology companies have two founders.

It’s because one of them is a builder, and the other is a salesman.

The Builder is the person who is doing the bulk of the work building whatever it is that you’re trying to sell. The Builder is most likely the better of the two at development or engineering than the other and it is internally agreed that the Builder is going to make the major design decisions.

The Salesman is the person who spends most, if not all of his time trying to find customers and sell the product. It’s quite possible that this person will be the person searching for investors for the company as well and in essence, is “selling” the company as a viable investment.

Responsibilities other than building the product or finding customers are likely to be divided between them to some degree, but these primary roles will remain steady for quite some time until the company either starts hiring employees or falls apart. Things like creating marketing collateral, business negotiations, financial planning, etc. All of these things can be done by either co-founder.

But the ability to sell technology products and the ability to build technology products are two entirely different skill sets. There are very few people who possess both skills and even if you do possess them both, there are only so many hours in the day. The problem with trying to build up a product while you’re also acting as the salesman is that at the beginning, both of these tasks are extremely time consuming and tend to be mutually exclusive.

I know from experience that developing software or designing hardware is something of an art and it helps if you’re “in the zone”. It takes time to get into that zone and once you’re there, if you’re interrupted it can take a long time to get back, assuming you can get back that day at all.

I also know from experience that sales is very much an interrupt driven process. It takes several minutes to prepare for any “major” sales calls and when you’re leaving messages, people can reply at any time which is very disruptive to whatever schedule you were trying to keep. With a co-founder, it would be a lot easier to have one person field all of the calls while the other concentrates on building whatever it is that you need to build.

Does that mean I’ve changed my tune? Do I now want to run out and find a co-founder for my company? Not a chance.

You see, the Builder and the Salesman model works great for companies where you really do need a sales force, be it for customers, angel investors, VC’s, or distributors. While one person is working hard in a back room somewhere, the other can be on the phones or hitting the pavement trying to land sales and close deals.

However a lot of software companies these days don’t hold themselves to that model. In fact, many shun it like the plague because the cost to acquire a customer on the internet is exponentially lower than it is if you require a sales rep to call on each of your prospective customers. It’s more efficient to use Google AdWords to solicit 1,000 visitors to a website and sell to 1,000 people at the same time than it is to have a sales rep call 1,000 people in succession and ask if they’d be interested in what you have.

“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, do you have a minute?” *click*
“Hi, do you have 30 seconds?” *click*
“Hi, I am in contact with you to disperse a sum of $30 million US dollars from a bank in Nigeria that is no longer being claimed.” *click*

This sort of thing gets old quick. You can hone your story as good as you want, but at the end of the day it’s still difficult to make sales one on one. A lot of large companies are still very successful these days doing it because they have price points that are so high you absolutely need to have a sales rep.

Do I need a Salesman as a Cofounder to be successful?

Absolutely not. There are millions of products being sold online today which don’t require or use a sales rep at all. Don’t get me wrong, the price points are a lot lower, but let’s be honest. What price point do you expect to be putting on your software?

The reality is that in many organizations, the role of the salesman can be eliminated, especially if you’re selling your products online. In that case, what you really need is a marketer. Building a better mousetrap doesn’t do the job like it used to. When two products go to war, the one that wins is going to be the one that has better marketing, not the better product.

Now here’s the best part about this arrangement. Because you’ve eliminated the salesman in favor of a marketer, guess what time is the best time of day to do business on the internet?

The answer is that it doesn’t matter. Whether it’s 2pm or 2am, you can make changes to your website, update your marketing collateral, review website visitors and statistics, etc.  No matter what time of day it is, you’re not actually interfacing directly with customers. You’re setting things up so that customers will see what you want them to see, and when you want them to see it. There’s never a time when a customer comes to your website, you size him up and say “No, come back tomorrow.” It just doesn’t happen. Sales reps on the other hand are required to work within the schedules of their customers and try to convince them to allot time to speak with you.

What this means is that you can be both a builder and a marketer and so long as you’re selling your products online and don’t require a sales channel, you don’t need that salesman. Hence, you don’t absolutely need a cofounder.

A Word of Caution

To be a successful single founder business, you need to be really really good at two things: Building software, and marketing it. Without both of those, you’re basically sunk. If you’re a great builder, then you’ll have a wonderful product that nobody is ever going to hear about. If you’re a great marketer but a lousy builder, you’re going to find that you can put lipstick on a pig, but it’s still a pig and everybody knows it.

Several weeks ago, someone pointed me to an article on a blog I’d never read before. It was very profound it its simplicity. It was called Smart People should do Stupid Stuff. The basic concept of this blog post was that there are millions of dollars to be made doing things on the internet that anyone is capable of doing. I mean quite literally, anyone can do these things, regardless of how smart or how dumb you are. Here’s a very short excerpt, because I know you’re not going to go actually read the entire article.

I once met a man that made over $1,000,000/year selling bowling balls on the Internet.  I asked him how he had built such a fantastic business. I was looking for this guy’s secret sauce. Was he a marketing guru, a tenacious entrepreneur that didn’t give up, saw an opportunity earlier than most? None of the above. He was an average guy, with below average technical skills. He hired 2 kids to work out of his garage to build his website.

When I hear about ideas like the Million Dollar Homepage, Santa Mail or Antenna Balls that easily rake in more than a million dollars, I almost want to puke. Or at least I used to. Let’s face it. These are stupid ideas that border on absurd. But they work. And do you know why?

Because the people behind them found a niche market that nobody else was looking at. Each of these people did something that any of us would have the skill or lack thereof to do. Making money online isn’t always about technical ability. Nor is it about being in the right place at the right time.

The key to success for these people finding a niche market that nobody else was in and dominating that market. Once you’ve dominated a niche market, you’ve done something that makes you virtually untouchable because you’ve done two things. First, you’ve identified a niche that nobody else had the time or energy to go into. Second, you have created a barrier to entry which virtually assures you of owning that market for years to come.

The next time someone tells you that they have an idea for an online business, think twice before spouting off about how dumb the idea is. I’d bet money that if you told someone more than a few years ago that you were going to make a 9 figure business out of sending 140 character messages to a website, a lot of people would have laughed at you. Guess who’s laughing today?

I remember the day very clearly, although it was not apparent to me at the time. It was the day that the Micro-ISV movement died.

A Brief History

For those of you who aren’t familiar with the history of the Micro-ISV, I’ll provide it for you here. Eric Sink is widely credited with the creation of the term “MicroISV”. As far back as May 8, 2003,  Eric was talking about what he referred to as “Small ISV’s“. The concept is rather simple in nature. An “ISV” is an independent software vendor, a phrase which is derived primarily from the Microsoft ecosystem and refers to software companies that are not Microsoft. As for the “Small” part, they’re small companies with anywhere from 3-100 employees. It’s a pretty simple definition, but definitive as well.

In September of 2004, Eric Sink published this article on his blog, which had appeared on MSDN a little bit earlier. His intent was to focus on what he called the “MicroISV”. It seems to have occurred to Eric that companies of only one or two employees were out there, producing software and doing rather well for themselves as single founder companies. This thought intrigued Eric. So much, in fact, that as part of his MSDN series of articles he decided to undertake the process of building a MicroISV himself to provide him additional content and experience to draw new articles from.

So it was, that Eric Sink, CEO of Source Gear and self-proclaimed .NET Redneck undertook a 16 month journey in which he built a product in his spare time and sold it online. Over the course of those 16 months, he chronicled his progress on both his blog and in his MSDN column titled “The Business of Software“. Developers and geeks around the world rallied to the battle cry raised by Eric. Large numbers of new MicroISV’s were founded, forums were started, and journalists latched on to write books about the topic and ride the wave of popularity to success.

“He can show us the way!” some thought.

“He has unfair advantages like his MSDN column and a massive blog following. This isn’t going to show us anything!” said others.

How much money would he make? How do I follow in his footsteps? The world of Geeks held its collective breath and watched as Eric raced down the path laid before him. Behind him followed a crowd of geeks, waving flags and pom-poms, watching intently to see which way the story turned. So for 16 months, we followed Eric to see the conclusion of the story.

And Then Eric Killed the MicroISV

Abruptly, one day Eric announced that his journey had ended. He sold his MicroISV to Dennis Cronin for an undisclosed 4 figure sum, which implies a maximum sale price of $9,999. With sales reaching a mere $215 over the course of 16 months (including September of 2004), we can surmise that the actual amount was probably a lot closer to $1,000 due to the multiples at which products are typically acquired. The “profits” were donated to charity.

What did this mean for the MicroISV movement? A giant kick to the crotch. That’s what it meant. And it accomplished virtually the same thing.

I’ve seen the statistics for one such website that marketed directly at MicroISV’s starting in 2004. Website traffic has approximately halved every single year since Eric’s announcement. Websites are supposed to grow. You add content, you build out the site, more  visitors come, and website traffic grows. That hasn’t happened. In fact, the reverse has happened. Traffic for this particular site shows that the current traffic levels are a mere 6.25% of what they were at the end of 2005. That’s not just bad. That’s appalling. I did some in-depth research and found that traffic started dropping quickly immediately after Eric’s announcement, after showing month over month growth the prior year. Other sites have disappeared from the internet entirely.

Therefore, I submit to you that it was on December 26th, 2005 with not much more than a keyboard and a blog entry, that Eric Sink effectively killed the MicroISV movement.

This Is NOT Eric’s Fault. It’s Ours.

I’m going to be blunt here. Eric was not trying to start a movement, nor was he out to kill it once it started. He started his MicroISV for two reasons, and only two reasons: He was curious about what it took to run a MicroISV and he wanted to help generate content for his Business of Software column on MSDN’s website. That’s it. He didn’t do it for you, he didn’t do it for me, and he certainly didn’t do it to build a new revenue stream for himself. I’m fairly certain that he is well compensated as the CEO of SourceGear.

Far too many people are under the impression that if Eric Sink couldn’t make it work, then what chance do they have to make it work? This is the wrong way to look at it. Instead, as I’ve said in the past: “If at first, you’re not successful, take a good hard look at what went wrong.” Unfortunately nobody seems to have done that and when the appointed figurehead of a movement falls, people lose interest.

Everyone has honed in on the fact that Eric failed. Thank you, but I beg to differ. Let’s get one thing straight. Eric accomplished what he set out to do. He never intended for it to turn his MicroISV into something bigger. In fact, Eric intentionally stacked the deck against himself.

Eric’s (Self-Admitted) Mistakes

Lack of Motivation- Eric was simply not committed to building his MicroISV into a solid revenue stream. He built the product to write articles and once that had run its course, he had little use for the product or the MicroISV that was built from it. To quote him directly:

But I must admit that my situation is unusual. Most people start a micro-ISV because they are attracted to the idea of being an entrepreneur. A sense of dissatisfaction with their current job is a source of motivation.

I’ve been there, but right now I don’t have that particular set of problems. I am already an entrepreneur, and I am quite happy with my situation. Here at SourceGear we actually like building developer tools, and we’re having some very nice success doing it.

So with Winnable Solitaire confined to my copious spare time, it may proceed slowly. But I do have some ideas for what I want to do next with this project. I will close with a few remarks about my next iteration through the cycle that Pavlina describes.

Choosing the Game Industry - Speaking from experience, I can tell you that the game industry is brutal. Either you have a hit or you don’t. And if you don’t, you need to dedicate significant resources to finding out how to make it more appealing. Selling games is different than selling business software because you’re not solving a pain point. You’re providing entertainment, which although it is technically a pain point for the consumer, there are millions of competitors.

If you’re selling source control products, you have maybe 20 competitors tops. When you sell games, you’re competing not only with other games, but all other types of entertainment mediums, such as tv, movies, newspapers, comic strips, not to mention all of the other computer games out there. I’m not saying this is impossible, just a lot harder than selling business software that solves a definitive need. Eric basically admits that he would likely be more successful in a different market, almost from day one in his First MicroISV report.

Competing with Free Products - Solitaire is included with every copy of Windows. I’m not sure I see the point in competing against Microsoft in what is arguably the smallest niche market I’ve ever seen. ie: Solitaire games that are guaranteed to be winnable. Thomas Warfield seems to do pretty well in the broader Solitaire niche.

Ignoring Common Sense – Eric openly admits in the Bottom Line of his initial blog entry that “Common sense would say that my product is doomed.” This is putting it lightly in my opinion, but is true nonetheless.

The bottom line is that if you know the mistakes that you’re making before you’ve even started, you’re going to wind up flat on your back like Charlie Brown. Letting Lucy hold the ball doesn’t excuse you from being the source of blame anymore than Charlie Brown’s faith that, just this once, Lucy will let him kick the ball.

Wait… How Is This Our Fault?

Eric killed the MicroISV movement because we let him. Eric never asked to be the poster child for the MicroISV movement. Neither did Joel Spolsky for that matter. But they have been for nearly a decade because we appointed them to those positions. The MicroISV concept struck a chord with a lot of developers and micropreneurs who wanted to start their own companies and quit their day jobs. The expectations that were placed on Eric to do well with Winnable Solitaire were unrealistic and quite frankly, not in line with what Eric was trying to do.

When Eric’s product failed to produce anything remotely close to a full-time income, scores of developers abandoned their MicroISV’s and started looking for another way out of their 9-5’s. They found what they were looking for in Paul Graham’s Y Combinator program. Paul launched Y Combinator with in early 2005 and quickly produced success with companies like Reddit and Loopt. The dynamic quickly shifted and as the MicroISV movement slowly withered away, the future for micropreneur hopefuls shifted to startup companies which leverage Angel and VC funding.

Let me be honest for a minute. In no way, shape or form would I claim that starting your own software company is for everyone. But the Angel and VC funding route is a lot harder to swing for most of us and living in the geographically blessed startup hubs is merely one of those reasons. Back in 2006, I wrote an article called “Startups for the Rest Of Us” and posed the question: What about me?

At the time, I had mixed feelings about Eric’s “failed” experiment. On one hand, I felt like he didn’t really follow through with it the way he could have. On the other, I had recently left the fold of Pedestal Software which was acquired for $65 million and the lure of doing a startup and cashing out after two or three years for millions was pretty high. I knew I could build products, but didn’t feel like I had any ideas at the time which were worthy of millions of dollars of investment. I had been offered $50k as an initial investment, but ultimately turned it down. Instead,  I decided to take it slow and build my own company.

The Landscape Today

Amazingly enough, the landscape of building an internet business today is not much different than it was five years ago. All you need is a computer, an internet connection, and knowledge of how to develop software and you can crank out a product. There are thousands of resources available to help you get started. There are countless blogs, startup schools, online academies, free or reduced cost software packages for startups, and a host of other advantages that didn’t exist several years ago.

It doesn’t matter how old you are today, where you live, or what you do for your full time job. If you have a computer, an internet connection, know how to write software, and most importantly, the drive to succeed, then you can sell products on the internet and make money from them.

Eric didn’t make a lot of money with his MicroISV. Big deal. Does one failed attempt from an internet legend define a movement? I think not.

Besides, just because you start out small, doesn’t mean you have to stay small.

The past several weeks I’ve been giving a lot of thought to the work associated with and the consequences of re-branding something. In part, I’m talking about my Blog but also some of the products that I have developed and some of my services offerings through my consulting company. The process made me sit down, think about re-branding in general, and do some research. Here’s what I learned.

Why Should You Re-brand?

There are a few different reasons to re-brand a product, offering, or company. The first is to shed a negative image. On May 11th, 1996 a DC-9 flown crashed in the Everglades killing 110 people. The airline that owned the plane was ValuJet. They were grounded by the government for three months following the incident. When they were given permission to begin flying again, they found it very difficult to attract customers because the public perception was that their low fares lead to shoddy maintenance and ultimately the crash. In 1997, ValuJet purchased a competitor that was one-third their size and re-branded the entire company to use the name of their newly acquired competitor. That company was AirTran.

The second reason for re-branding is to attract new customers. Sometimes even the name for a product doesn’t quite make sense. It’s unwieldy and doesn’t quite roll off the tongue. In early 2007, a company called SimulScribe was selling voicemail-to-text software and felt the company name was holding them back. They received a lot of their business from word of mouth referrals, but the name was difficult to spell and didn’t roll off the tongue.

They hired a re-branding consultant which ultimately didn’t work out. Eventually, the founder came up with the new name while on his own during a flight from LA to New York City. That name was PhoneTag. They had some challenges, but the new name seemed to work out really well. Their daily sign up rate is up 40% and the number of customer referrals has tripled. The only downside to the re-branding effort was not doing it sooner.

The third reason to re-brand is to focus your efforts, either because you didn’t have focus in the past, or because you’re trying to appeal to a sub-market. Many manufacturers re-brand their products to enter a lower end segment because they don’t want to dilute the value of their core brand or don’t want the new brand to be dragged down by the old one. For example Lexus is well known as a luxury car, but it is owned by Toyota. Dexxa is the name on low priced computer mice, but is manufactured by Logitech. There are a lot of other examples, but the key component here is making sure that the new brand doesn’t have a negative effect on the old brand or be influenced by the old brand.

Problems With Re-branding

Re-branding is a difficult thing to do correctly. It’s easy to change the name of something. It’s much harder to make it work to your advantage and in exactly the way that you intend. One of the difficulties with re-branding is striking a balance between attracting new customers, and alienating old ones. This applies whether you’re re-branding a product, a service or a blog. In a way, readers of your blog are customers. They have been attracted to your site for one or more articles that were written and subscribed for the same reasons. Re-branding can alienate some of them because you might not be focused on what originally attracted them, so some attrition is going to occur.

The same is true for products or services. A balance must be struck between going too far in the re-branding effort, and not far enough. How far you should go is dictated by your reasons for re-branding. If it is to shed a negative image, you will need to do a complete overhaul. If your intent is to attract new customers, then a mid-level change is required to strike a balance. And if you simply want to reinforce your brand with the existing customer base, then perhaps a fresh coat of paint will suffice.

No matter what, you need to have a plan moving forward. Without a plan, the re-branding process will not be as effective as it needs to be to make it work.

Re-branding The Single Founder Blog

So all of that re-branding mumbo-jumbo was a lead in to this. What follows are the efforts I’ve taken thus far, and will take in the future to re-brand my blog. I’ll post about some of my other re-branding efforts in the future, but one thing at a time.

Subscription Methods

In the past, I only offered RSS as a subscription method, but within the last month or so, I added the ability to subscribe via via email using Google Feedburner as the back end. It’s worked out well enough so far, and I’ve only had one person unsubscribe since I implemented it at the end of September. He or she might have switched to RSS, but I don’t know for sure. Other email subscribers have trickled in, but I suspect that people prefer to use RSS to manage their subscriptions instead of email. I’ve gathered a lot more RSS subscribers in the past 4 weeks than email subscribers. I’ve also started using and in only a week with absolutely zero marketing, I have a modest following of about 20 people already, none of whom I’ve ever met face to face.

The reality is that I have no good way of tracking whether I’m really getting the message out about being a single founder and running your own company from the comfort of your own home. I know others are making taking a similar journey and making it work, but I feel that the journey itself is just as important as the destination. I’d like to share that journey with as many people as possible and measuring subscribers is a much better indicator than unique website visitors.

Face Lift

Next, is obviously the face lift itself. I implemented a new theme, but the categories need to be changed up a bit because the new theme has them listed across the top of the menu bar and doesn’t display all of them. There’s a few cleanup items to do concerning the excerpts on the main page and adding a few descriptive pages to the site, but it looks a lot better than the previous SimpleX Wordpress theme I was using. I have a list of things that I’m working through right now.

New Domain Name

Perhaps the most significant change I’m making is to focus the content of the site more on how to build a business consisting of a recurring revenue stream as a single founder company, which some refer to as a solopreneur. About 2 years ago, I blogged about trying to land the singlefounder.com domain, only to find that someone else registered it a few days before I had. It had been on my radar to snag the domain name for months, but I waited because I was an idiot. Actually, I felt that I didn’t have the time to go about doing something significant with it so wasn’t willing to shell out a mere $10 for a domain when I wasn’t ready to use it. That’s prudent for some things, but not domain names.

Anyway, I contacted Scott Preston, who had purchased the site immediately after he registered it. He is a fellow blogger based in Ohio, has written a book on programming robots using Java, and seems like my kind of techie. Unfortunately, he wasn’t terribly interested in selling the domain as he had some of the same ideas I did about building it out into a place where people could leverage it as a resource for building single founder companies. Fast forward two years and he still hadn’t done anything with it. In fact, it didn’t point to a server at all. I considered making him another offer, but decided against it. I don’t know what he would have sold it me for or whether he would have sold it at all. In the end, Scott didn’t bother to renew the domain and I ended up buying the domain name as it expired without forking over loads of cash.

I’ll give the story behind how to buy expiring domain names in the next couple of weeks, but I think you’ll find the process interesting. I also managed to snag miketaber.com using the same method. If you don’t want to miss that story, subscribe now using either RSS or email. *hint* *hint*

More Frequent Blog Posts

For those of you who have been following me for the past few years, you’ll have noticed that since 2007, I’ve been rather absent. I’ve had a lot going on. I’ve added two children to my family, expanded my company, contracted my company, ridden an economic boom, suffered through the economic slowdown, opened an office, closed an office, and finished a Masters degree, among other things. It’s a lot to deal with, but I think I’ve learned how to manage it all moving forward. This past month, I’ve started writing a lot more and you can expect more of the same as time goes on. If you’ve lost faith since 2007 that I would shed some light on running a business as a single founder company, my apologies. I aim to right that wrong ASAP.

On that note, leaving comments or questions helps keep me going. If you want to help keep this blog going and appreciate the advice, distraction from reality, and general edutainment that it gives you, just post to the comments. It’s virtually no effort on your part, but does a great deal for my motivation to continue.

This Time It Will Be Different

In any case, I intend to move forward with the singlefounder.com domain name to provide a real identity for my blog and to reflect my goals for the future. I’m still a tech geek at heart. I love writing software, I really like interfacing software and hardware; doing cool geeky things is fun, but doing fun stuff doesn’t provide the lifestyle that I want. At least not yet it hasn’t.

I’ve been self employed for more than 4 years now and I’m not quite where I want to be. I’ve come to realize that I know exactly why I’m not. It’s because I lost focus of my goals. I used to post my goals at the beginning of each year. I did it in 2006 and again in 2007. Somehow I got off track posting those goals in 2008 and 2009, but realistically I got off track long before then. You see, once the consulting business started to take off, I never reviewed the goals I had written to begin with. I just ran off into the weeds without looking at the map I laid out. Bad Single Founder, no donut! It’s time to change all that.

In a way, I feel like PC guy in the Mac commercials. “This time it will be different. Trust me.”

But this time it will be different and for one very important reason. My life has changed, and my new goals reflect that. Back in 2005 when I started my journey toward self employment, I had one goal in mind, which was to run my own company and not have to work for someone else. It’s been 4 years now and I’ve been largely successful with that. It hasn’t been quite as smooth as I would have liked, but it has worked out well enough so far. Now I have a new goal which simply builds on the previous one.

My Next Goal

To transition my situation from offering consulting services to offering software products.

Over the past several years, I’ve traveled a lot for work, averaging about 3 months of every year on the road. It was fun at first. I flew all over the US from Minneapolis to southern Texas. From Boston to Vegas. I even did work overseas, flying to Paris, Athens, San Juan and working with a client out of Australia. I’m married, but the money was great and the wife understood what I was doing. Then I had two kids.

It’s a lot harder to leave two kids at home when they’re so young, because they grow up so fast and I feel like I missed quite a few things; like rolling over for the first time, the first few steps, the first hand wave, the first high five, etc. I probably would have missed them anyway, regardless of how I was making ends meet. But at such a young age, they learn to do so much in a week that I felt like I missed a lot more than I should have due to my travels. Besides I really liked traveling at first. I loved it even. It’s very exciting to fly into a new city or country, explore it as much as you are able in the time that you have, and then go off to something new. It just doesn’t work for me anymore.

So my new focus is to run my business completely from home to spend more time with my family, while making what I hope will be a substantial living doing it. It’s going to take time to put all of the different pieces together, but this blog will serve as the place where I document the journey, my successes, my failures, and the tools I use to get there.

The nice part is that I have a much more substantial network of people to help me than I did several years ago. I have software and hardware infrastructures in place from my consulting company, and at this point, I understand what it takes to maintain a company and grow it.

I will post my concrete goals in a blog entry next week, so stay tuned for more detailed information. Just one other quick hint before I go. Subscribe to this blog. I promise that I’ll make it well worth your while as I describe in detail my successes and failures on this expanded journey.

One of the biggest differences between selling software to small businesses versus selling into the Enterprise space is the price. Most people think that it has to do with how well the software scales and it’s ability to do its job on an “Enterprise” level, whatever that it supposed to mean. Others will say it has to do with the feature sets and whether you bought the Micro-ISV edition or the Enterprise Edition. Simply not true.

The one and only difference is the total price on the bottom of the bill. And it is this total price that dictates whether or not you need sales reps to sell your software.

First, let me quantify roughly what I consider to be the different market segments. This is mostly based on my experience as a Symantec partner, so your definitions may vary but I want to give you an idea of what I’m talking about. In my world, up to 1,000 client computers is considered small to medium business(SMB), up to 5,000 is the Enterprise, and above that is Large Enterprise.

The Problem

At any given company, managers and directors have a certain level of purchasing authority. Below a certain dollar amount, they have free reign and can buy whatever they feel is appropriate and within their yearly budget without getting a signature from their manager for approval. So $50 isn’t a problem. Spending $50,000 isn’t quite as easy.

The problem of selling “Enterprise” software comes about because of the size of the company making the purchase. If I’m selling widgets for $50 each, I can sell just one to an Enterprise level company and they won’t even think twice. But what if they want one for every employee?

Suddenly the price tag for your widgets went from $50 to $50,000 for a 1,000 employee company, and to $250,000 for a 5,000 employee company. These companies make millions, or even billions but they’re not stupid. They put spending controls in place to ensure that people aren’t wasting money on frivolous things. It’s just common sense.

Unfortunately for the vendor, this prolongs the sales process from what might have been a few minutes on the vendors’ website, to one that takes several weeks or even months to complete. This is why sales reps are hired to sell into Enterprise accounts. The sales process needs to be managed from beginning to end.

What does the sales rep do?

Well, they buy dinner, they buy drinks. They make sure you get drunk and have a good time at whatever event they happened to convince you to come to. Eventually, you like them enough, or are drunk enough to blow thousands of dollars of money that isn’t yours and everyone is happy.

I’ve seen that happen, but most companies don’t really work that way. Mainly, it is the job of the sales rep to manage the sale and try to close the deal. That means determining if there’s an opportunity for a sale, and then driving that sale to its Natural End. Note that I don’t say to completion. The Natural End of a sale can be one of four things.

1. You won the deal
2. A competitor won the deal
3. The sale got pushed into the future
4. The sale died somewhere along the way

Winning the deal or losing it to the competition are self-explanatory. Sales get pushed to the future for a variety of reasons. Some are budget related, some are concerns over the product or vendor, etc. We’re going to focus on the last outcome,  which is that the sale died.

When a sale dies, it typically happens because you weren’t paying attention to something important. This tends to be the most painful outcome. If you are head to head with a competitor, at least you had a shot at it. When deals get pushed, you still have a shot, but you won’t receive a PO anytime soon.

The biggest problem with deals that die is that you wasted your time, money and effort chasing something that you never had a chance at winning. Everything you did was for something that wasn’t ever going to happen. Unfortunately, we’re all too human and think that because the customer is talking to us, we have a chance at winning.

Let me break you of that habit right now. Just because a customer is talking to you and likes you doesn’t mean they’re going to buy anything from you. In fact, it might be your best friend in the whole world on the other end of the phone who completely trusts you and it still might not happen.

Sales reps are typically compensated by the volume of sales they make, not the relationships they have with the customers they talk to. To be successful making sales at the Enterprise level, you need to spend  your time working on deals that have a good chance of landing, and avoid talking to customers who are either unwilling, or unable to make a purchase. So how do you tell the difference? Enter the sales methodology BANT.

BANT

BANT is an acronym which stands for Budget, Authority, Need, and Timeline. Without all four of these things, any deal you’re working on is going to die before you get a PO. This methodology technically is applicable to any sale, regardless of the price. But it becomes a lot more important at the Enterprise level where you are spending human resources chasing a small handful of customers. A sales rep can only talk to so many customers in a day, but a single website can “talk” to millions of customers all at the same time. So what do these terms mean and why are they important?

Budget – Make sure that whomever you’re talking to has a budget for whatever you’re selling or that they can get one. And remember that just because someone says they can get the money, doesn’t mean that they can. You can have all the ROI justifications you want in your back pocket, and if they don’t have the cash to spend, it’s just not going to happen. Spending $1 million now to save $10 million sounds great, but if they don’t have $1 million, it doesn’t matter.

Authority - Is the person you’re talking to the guy or gal who makes the final decision? Does he put his name on the PO? If not, you need to find out who does make the decision and talk to them instead. It’s ok to ask to talk to this other person. If you’re afraid of offending the person, then you’re in the wrong business. Always try to talk to the person in charge. You can convince every single one of his minions that what you’re selling will really help them out, but at the end of the day, they’re not the ones who have the authority to make the decision. Without speaking to him or her, you won’t know if there are other projects that take precedence.

Need - Is there a genuine need for what you’re selling? At the personal level, luxury items like chocolate and nice cars are not absolutely necessary. A Honda gets you to the same place as a Ferrari. It might be slower, but it gets the job done. Find out if what you’re selling is a necessity, or if they can get by with the way things are today.

Timeline - How long can things go on the way they are without addressing the issues that your product or service would address? If you sell RFID tags which help companies do inventory, ask how long they can do their inventory manually. If they can go forever, move on to the next lead. Remember that you can’t push a rope.

Summary

It’s important to make sure that the people you’re talking to have the ability to move forward and make a purchase. If they don’t have the ability to move forward, it doesn’t matter how badly they want what you have to offer. It’s a little unnatural to avoid calling people whom you’ve started to develop a relationship with, but it’s necessary if you want to make the best use of your time.

The fact of the matter is that this methodology applies whether you’re selling Enterprise software or dish detergent. Understanding the methodology behind the sales process is the key to being successful, no matter what it is that you’re actually selling or who you’re selling it to.

Do you have a favorite sales methodology that works for you? Leave a comment and let us know.

I happened across this little tidbit a few days ago and was a little surprised that someone as high up as the CFO of Microsoft might actually think this way.

Microsoft CFO Chris Liddle had this to say on a conference call after their Q3 earnings report.

Businesses’ reluctance to upgrade PCs, he said, has to fade eventually. “This can’t continue forever,” Liddell said. “Eventually those PCs wear out and have to be replaced. We hope and expect (the refresh cycle) to be next year.”

I realize that picking on Microsoft is like trying to hit the broad side of a barn with a rock, but this is just so easy I can’t help myself. Really Chris? Are you kidding me? I’m sure that as the CFO of Microsoft, you probably think that computers break every three years like magic. The warranty on the hardware expires and *POOF*, the computer dies and is thrown in the recycling bin, along with all the Microsoft software that was installed. Naturally, this happens in every company around the world, and naturally they all rush out and buy a brand new computer and brand new software for every employee as soon as the first one breaks.

The reality is that it just doesn’t work that way.

Skeptics who read my blog are going to point out that he said “eventually”. I’ll concede the point that “eventually” everything is going to wear out, but he “expects” that to be next year. Computers tend to be different than most other physical goods and if this recession has shown people anything, it’s that doing a full hardware refresh for the entire company every three years is no longer necessary. In fact, I would argue that it hasn’t really been necessary for the last three years. So what makes the next three any different?

The answer is absolutely nothing.

Companies across the world said loud and clear “We’re not going to upgrade our operating systems to that piece of garbage you call Vista.” And you know the kicker?

NOTHING BAD HAPPENED!

Amazing. Just absolutely amazing. People still bought new hardware though. So, lets talk about why.

Corporate Hardware Refreshes

Companies have a tendency to replace PC’s every 3 years because they want to, not necessarily because they need to. From around 1995 – 2007, companies were conditioned to buy new computers for every employee every 3 – 5 years because the hardware was so dramatically improved in the course of 3 years that they could see instant productivity gains. At the time, buying newer hardware was a relatively inexpensive way to get great productivity increases out of workers for relatively low cost. Moore’s law essentially held true and every 18 months, processing power would double. This loosely translated to doubling the speed of computers every 18 months.

Then the speed of silicon hit a brick wall and it wasn’t cost effective to get faster processors. But Moore’s Law persevered for a bit longer and on May 25, 2005 Intel released the Pentium D. With that release, multi-core processors started to take over the market. Instead of faster processors, you have more of them in a single chip. And the business world was content with the Pentium D, Core Duo, Core 2 Duo, Athlon MP, Athlon XP, and all the other multi-core processors that came out.

Suddenly,  it’s 2007 and Microsoft releases Vista and it bombs hard core. People still refresh their PC’s because they think they need to, but they choose not to upgrade to Vista, instead choosing a 5 year old operating system for their brand spanking new hardware. Now here’s the problem.

All these companies bought dual processor computers with beefed up hardware specs because that’s what it would have taken to run Vista. Compliments of Wikipedia, below are the minimum hardware requirements to run Vista.

And here are the specs for Windows 7:

You’ll notice that the hardware requirements to run Windows 7 are basically the same as they were for Vista.

No business in their right mind bought a computer in 2007 that had a 1GHz processor. Not even notebooks were that lame and netbooks didn’t exist yet. At a minimum, they were at least 2GHz and had dual-core processors because that’s what it took to sell computers in 2007. Computers today are not significantly better than what was available in 2007, as much as Intel, AMD, Dell, HP and all the other computer manufacturers would like to have you believe. All of this means that the hardware refresh rate can be extended for those PC’s bought in 2007 with virtually no ill effects.

Some pretty smart companies over the past few years figured out that if you can extend a hardware refresh from every 3 years to every 4 years, the company will achieve a substantial 25% yearly savings. If you extend it from 3 years to 5 years, it becomes a 40% yearly savings. That means that a company with 1,000 employees using computers with an average cost of $1,500 are going to spend $500,000 on hardware alone every year if they do a complete hardware refresh every 3 years. If they are able to extend it to four years, they’ll save $125,000 each year and extending the hardware refresh to 5 years, saves $200k every year.

When the guy in charge of the IT budget is being forced to do more with less each year, he’s going to quickly realize that buying new hardware for every drone in the company isn’t going to help him do his job. He’s going to find places to cut the budget which doesn’t involve the lost of his employees. The hardware refresh cycle is the perfect place because there’s very little downside and a huge upside.

Why Companies Refresh Hardware

There’s a short list of reasons why companies use a 3 year hardware refresh rate.

1. They have money to burn
2. They’ve always done it that way
3. The hardware today is so much better than it was 3 years ago
4. The warranty on the hardware has expired

That’s about it. Until a few years go, the first three were true. They’re not anymore. As for the fourth, it’s called a warranty. Most major computer vendors offer 3 year warranties on computers for their corporate customers. Depending on your vendor, you may be able to swing a 4 or even a 5 year warranty for just a fraction of the cost. Replacing parts is a heck of a lot cheaper than replacing entire computers, so they’ll save buckets of cash by extending the hardware refresh, whether they get extended warranties or not.

Back to Microsoft

The latest hardware refresh has obviously been delayed for quite some time and it is impacting both Microsoft and the major computer vendors. As the economy improves, we’re going to see a lot of companies that initially pushed out their hardware refresh commit to it and spend the money. Microsoft will probably still sell millions of copies of Windows 7 and Bill Lumbergh’s stock will go up 1/4 of a point.

Unfortunately, many of these companies are going to realize that the latest hardware refresh didn’t do them a bit of good beyond renewing their hardware warranties. The next hardware refresh will get pushed out even longer as companies realize that it just isn’t necessary. When that happens, Microsoft is going to be in real trouble, as are the PC manufacturers whose major revenue source is selling hardware.

Earlier this year, Dell bought Perot Systems in an effort to boost their lucrative services arm and compete better with HP and IBM. Smart move. I think they see this coming and realize that the virtualization trend isn’t the only thing working against them. Moore’s law has been undergone a transition such that it now applies to overall computing power, not just raw speed. Past a certain point, 99% of corporate employees just don’t need more computing power. It’s going to waste. So why should you upgrade those PC’s?

The smart answer is: You don’t.

Microsoft needs to start looking ahead beyond Windows because it’s not going to be a cash cow for much longer. The fact that people are still using an operating system that is bearing down on 7 years old is telling, especially when it’s in preference to a more recent release. It means that customers don’t see a compelling reason to upgrade. This is part of the reason that Apple is doing so well with the Mac.

Without a compelling reason to upgrade, customers aren’t buying new licenses or upgrading old ones and Microsoft isn’t making nearly as much money. Microsoft uses the money they make from Windows to fund other business lines, so if the margin on Windows starts to falter 5 years out, they’re going to have to make some hard choices. It makes me wonder if I’ll even care in five years. Will you? Let me know your thoughts by commenting below.

For the past six to eight weeks, I’ve been on the lookout for a new laptop. Now, I know that I have high standards, but I can’t believe that some of the things that I really want in a laptop are no longer available. About a year ago, my old Dell Inspiron 8100 was about to bite the dust. It was 6 years old, overheated frequently, one of the two batteries I had was essentially a short circuit, and did I mention it was six years old?

One of the main reasons I bought that laptop was that it went well with my 20″ LCD monitor. They both had the same resolution, and 1600×1200 resolution on a 15″ screen really isn’t that bad once you’re used to it. In fact, when you get used to it it’s very hard to go to anything else. The middle of last year, I broke down and bought a new laptop. I was a little bit concerned that the screen resolution wasn’t quite what I was used to, but it was a widescreen monitor. Apple didn’t make anything else for their 15″ MacBook Pro series, so that’s what I went with.

I’ve been using this thing for just shy of a year now, and I have to be honest: I have some pretty major gripes about this laptop, which I’ll cover in a different article. Don’t get me wrong, the raw power and the light weight of the MacBook Pro are great. But using BootCamp isn’t all it’s cracked up to be. More on that later.

So here were the criteria that I put forth for my new laptop:

• Dual core is a must. Don’t care whether it’s Core 2 Duo or Athlon X2. Either would work fine.
• I want 2GB of RAM. This shouldn’t be hard to do, although I would prefer a single 1GB RAM chip installed so I could buy the additional RAM at a reasonable price.
• 15″ screen. It can be 15.0″, 15.1″, or 15.4″. I don’t really care. I don’t want 14″ because the screen is too small, and I don’t want 17″ because they’re too heavy. Neither of those would fit well into my laptop bag and I don’t care to blow another $60 on another laptop bag.
• 1600×1200 resolution. Having been running my Macbook Pro at 1440×900 for the nine months, I can’t tell you how much I miss that extra 300 pixels at the bottom of the screen. I’m not a fan of widescreen, so I’d prefer not to have WUXGA.
• 7200 RPM main hard drive. Doesn’t need to be large. 60GB would probably work fine. I use an external 80GB USB drive to house VMWare images and the system performs better with VMWare running on a separate drive.
• Must be reasonably light weight. I’m somewhat willing to compromise on this. I know I won’t find anything as light as the Macbook, but the 1600×1200 resolution is more important.

I didn’t think that these requirements were too much to ask. My current search for a new laptop has run the gauntlet of every reputable notebook maker I could find. I’ve looked at Dell, HP, Alienware, Prostar, Sony, Toshiba, Gateway, etc… It turns out that finding a laptop with a screen resolution of 1600×1200 these days is close to impossible. Since I bought my last laptop back in the year 2000, the 1600×1200 screen resolution has become less common rather than more common. The ONLY laptop I’ve found that meets that criteria is a Panasonic Toughbook 51 from NexTag.com and it’s really not what I’m looking for. Everything else has been widescreen, which as I said before, isn’t something I particularly care for.

Part of the reason laptop manufacturers no longer make UXGA screens is that widescreen laptops are cheaper to manufacture because the screens have less screen real estate overall. It’s hard to quantify this without having two LCD’s that are nearly identical to compare, so as an example we’ll use Dell’s 20″ 2007FP monitor and compare it to the Dell 20″ 2007FPW because excepting the screen resolution, they are virtually identical. The first thing you notice is that the 2007FP retails for $449 while the 2007FPW retails for $399. Comparing the screen resolutions, we have 1600×1200 and 1680×1050. So what? That’s basically the same, right?

Actually, they’re not. You don’t need to be a rocket scientist here. Just do the math. 1600×1200=1,920,000 pixels while 1680×1050=1,764,000 pixels. That’s nearly a 9% difference in screen real estate for the “same 20 inch screen” yet the retail cost increase is roughly 12.5%. But nobody pays retail for these things, right? After all, Dell runs deals every week in an effort to top your local supermarket in the number of deals they give you. Current sale prices are $384 and $359, respectively. Voila! You’re getting a better deal by buying the 4:3 format screen as opposed to the widescreen based on raw percentages. With computer margins as thin as they are, laptop manufacturers are being squeezed to save money anywhere they can. Going back to our widescreen laptop problem, using widescreen monitors on their laptops is how they shave dollars off the cost.

If you look at LCD monitors larger than 20″ from Dell, you’ll find that all of them are widescreen and it’s not possible to get one larger than 20″ with the 4:3 format. One rumor I read from a laptop forum last fall was that there were production problems making UXGA screens, but I suspect that’s not the case. They were making 15″ monitors with 1600×1200 resolution 7 years ago so unless someone deleted a hard drive that had some important information on how to do it, they still have the technology to do it. If there were supply problems, laptop makers would get it resolved. If you go to Pricewatch.com and look for UXGA notebooks, there’s only one on the entire site.

You also might think that these are laptops, so their video cards aren’t up to par but that’s not true either. Again, laptop makers were selling UXGA screens on laptops 7 years ago so technology has only gotten better. Besides, my Macbook Pro supports an external connection to a 2560×1600 monitor!!! I never did real well at Calculus, but something tells me that’s a much larger number than 1600×1200.

So we know that it’s still technically possible to make UXGA notebooks; what bothers me is that they’ve stopped making them. What’s even more mystifying is why more developers and CAD engineers aren’t complaining. There are a few people commenting on the lack of high screen resolutions for higher end laptops on the Dell IdeaStorm website, but not enough to make a difference. In a world where mobility has become more and more important, laptop vendors are responding with 17″ laptops with WUXGA screens. Let me make one thing clear to laptop makers.

For software development purposes, or dare I say most business purposes, widescreen sucks.

Are we clear on that? Now, I realize that widescreen has a place in the world. People in the accounting department use spreadsheets for which widescreen could be useful to see more columns of their financial statements. Home users would certainly want to be able to watch movies on their laptops. But isn’t it entirely possible that having more vertical screen real estate would be just as important as horizontal real estate? Indeed it would. I like ketchup on my burgers. On my cheesecake, not so much. I love widescreen for movies. For writing code… not so much. Everything has a place, and widescreen does not have a place on my laptop.

The astute reader will point out that there are many 15″ notebooks out there that feature 1920×1200 LCD’s. To this, I will refer you to my previous point: that widescreen sucks for software development and most business purposes. Somehow, writing a design document in letterbox format doesn’t appeal to me and I don’t remember the last time I had a single line of code that was so long that I needed a widescreen monitor to see it all. The problem with widescreen is that you are sacrificing height for width, when for software development purposes, the opposite is what you need. I need to see more lines of code, not less. The only conceivable benefit of a widescreen would be to have multiple windows open, and 1920 pixels just isn’t enough to have multiple software development applications open side by side. Anyone who’s ever used Visual Studio would know this. Heck, when I’m using Viso Enterprise Architect on my desktop, I use two 20″ monitors to get me 3200×1200 and shift all of the tabbed windows onto my other monitor. Guess what? I still wish I had more vertical real estate. I’m tempted to move to 4 monitors in order to get it.

It’s an unfortunate reality that over the past few years, the push for widescreen televisions has carried over so much into laptops. It’s as if laptops are suddenly no longer used for anything else except watching movies. Let’s think about this for a minute. What percentage of time that you use your laptop are you watching movies vs. doing something where widescreen really doesn’t help? I think I’ve watched a grand total of 3 movies on my widescreen laptop in the last 9 months. To me, that in no way justifies a complete transition to widescreen laptops.

As applications move from the desktop to the web, browser based applications will become more and more prevalent. If you’re a web application developer, widescreen is a terrible waste of otherwise good screen real estate. There’s a limit to the width of the web pages that you design because you have to be sure that the majority of people will be able to see everything horizontally without scrolling right and left. The standard 4:3 format seems like a better fit for not only the developers, but for the web application users as well. What’s worse is the fact that our option to choose widescreen or standard format is being eliminated entirely. We no longer have a choice, as illustrated by the fact that there is only one high resolution laptop left on the market.

I blame Apple for part of this transition. For years, widescreen has been the only format available for their computers. They’ve morphed their company into something of a media mogul with the iPod and iTunes. With the recent release of AppleTV, they’re poised to enter the video market after dominating the audio market. Somehow, that translates into hundreds of lemming companies yanking standard format laptops from the shelves and replacing them with widescreen. Is there a good reason? I don’t think so, but lets take a closer look.

What are the real arguments for widescreen? As I mentioned before, you can fit more columns on a screen in Excel. Ooh. A whole 3 extra columns and 30 less rows. Yea, I’m not excited about that, either.

How about the fact that using a laptop on a plane is a little bit easier because the laptop isn’t as deep and fits better onto the tray table. That’s a good reason. Of course, since it’s wider, you no longer have room for soda and peanuts. What, no peanuts? Just soda I guess. I’ll hold it and type one handed because my laptop is too wide to actually set my soda down.

Yep. That sucks too, and it’s a legitimate problem for those of you who haven’t had the ‘pleasure’ of this problem.

What about watching movies? Ah yes. The proverbial golden hammer. In my eyes, that’s something of a lame excuse given that business class laptops are meant for well… business purposes and I don’t know anyone running a business that makes money from watching movies. For all you widescreen fanatics out there complaining about “artists rights“, feel free to chime in on this at any time. Artists rights have nothing to do with the screen. It has to do with the format of the medium (that being VHS, DVD, Blu-ray, HDDVD, etc). If you want to watch a movie, get a TV, a PSP, or a portable DVD player. Let the rest of us get our laptops with screen sizes and resolutions that actually help us do our jobs.

I can’t think of any particularly good reasons to have widescreen LCD’s on laptops or to make them generally unavailable on larger LCD’s that are intended as desktop monitors, so I pose this simple innocuous question. What good is widescreen on a laptop? Anyone?

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