Meetings happen faster here, you don’t have to think about timezones and languages so much and you can talk to product face to face if you don’t agree with their direction. These are things that are easy to take for granted if you work in the US. On the flip side the diversity and distance challenges in APAC make it an incredibly exciting area to be working in.

It would be nice to have the best of both worlds, but not sure when or if that will happen. I’m starting to think that the best way to operate is to make APAC as self-sufficient as possible. Borrow the good things, and go it alone in areas you don’t agree. I think we can even get to the point where APAC is the innovative region and the US can learn from us. That sounds like an inspiring challenge to me. It’s not quite a start-up, but it’s the same skills right?

Lately I have been trying to build my management and leadership skills. Amongst other things, this involved taking a Leadership training course at Google. It emphasised a number of pretty deep concepts, things like being an authentic person and this importance of bringing this authenticity to work with you (which is a fairly intimidating concept). There were of course articles from the Harvard Business Review to cover, including the four steps in the art of persuasion. These being:

1. Establish Credibility – demonstrate you know your stuff
2. Frame for Common Ground – find the stuff you both agree on
3. Provide Evidence – demonstrate something new that builds on your common ground
4. Connect Emotionally – expand the current ground with them at your side

Next steps? Find mentors. I loved watching an interview of Jack Dorsey, one of the founders of Twitter and now Squareup. He isn’t an amazing presenter, however I feel that I present in a similar way and have a similar view on the world. Reading his Vanity Fair interview and numerous Venture Beat articles, it paints an inspirational picture of a guy who throws every part of him into his goals and passions. Is this authentic leadership? He built everything himself form scratch, based on his passion and getting his hands dirty. The noble story of the engineer, putting the product first and that product now paying the salaries.

Or what about someone like Greg Ellis, the current CEO of REA? I watched his CEO Hub interview today on Business Spectator. He built his career like a pyramid. Rather than rising to the top with a single skillbase and being forced to add to it while riding product growth, he worked the other way around. Build marketing, sales, HR, legal and other skills at the best companies you can find, and then find or make one of your own. Is this any more or less a noble to be paying the salaries?

Or maybe it’s like Alan Noble explained this week. It’s not about mentors, it’s about surrounding yourself with great people and taking the opportunities when you see them. Meanwhile, where is that copy of How to Win Friends and Influence People…

http://www.youtube.com/watch?v=ke_KWJMgjQI

The first thing to note about this book is that it is a story, not your normal dry textbook style business book. I guess teaching through narratives worked for the Bible, so why not a business book? It is a tricky balance though, and I feel at some points the author gets a little distracted by the back story. To make up for this he then compresses a number of key points into one paragraph of wise dialogue. It all flows reasonably well overall, it just means you can’t start skimming what appears to be light reading or you might miss key insights.

So what are the morals? The story starts with plenty of despair and common frustrations, but I love that it also starts with a reasonable company making reasonable decisions – yet everyone is burned out and under resourced. In my experience this is an incredibly common situation and probably where the “work smarter, not harder” phrase comes from. Even though the book sets its story in a manufacturing plant I found it really easy to adapt to my experience, especially working with an Agile software development team.

The solutions expressed in the book are all about a back to basics approach to finding and optimising within your constraints. Every process has a bottleneck, the trick is identifying what it is and then applying techniques to make the best of what you have. For example, if your developers are constantly overworked then test the requirements documents before they start work and offload some of their tasks to other roles who are not bottlenecks. Sounds simple right? To justify these changes to your accountant you can note that if your developer works 50 hours a week and your total operating expenses for a week are $50,000 then the cost of them wasting an hour is $50,000 divided by 50 – $1,000. This is because it adds downtime and inventory jams across the rest of your process and is the limiting factor of overall output. Puts things in perspective right?

The book doesn’t stop there however – it talks about synchronising bottlenecks and non-bottlenecks, the importance of minimising inventory, how to focus on market demand across your organisation, why data is misleading and no substitute for getting out on the floor, problems with modern efficiency accounting practices and even how organising a regular “date night” with your partner is a good idea! Overall I really loved this book, it was very easy to read and relate to. Although it doesn’t mention this, I think it is a great read for fast growing companies that face resource constraints every day and can get easily distracted by their purpose as a company.

1. You are most vulnerable when you are most profitable
2. You need to create the start-up that undermines your most profitable products before someone else does
3. New markets need simple, cheap products which hit a critical new requirement

This book is great inspiration for those seeking to become entrepreneurs, it shows practical examples of where start-ups have seized on opportunities and completely blind-sided the highly profitable incumbent. That’s the dream right? It also serves as a great warning to those in big business who feel chasing the margins instead of innovation is the path to success. It certainly puts forward a compelling argument, one that even NASA seems to think has merit.

Perhaps margins should be the guide for businesses, but they should work on a goal of an average margin across all their products instead. That way they can maintain a balance of high profitability mature businesses with low profitability emerging businesses. Of course this would need to be combined with some “profit margins must never decrease on a product” rule. Doing this without cannibalising your own offerings (by differentiating based on high end vs low end customers) however is a very fine line to tread.

The other practical reflection I had reading this book was on the Engineering vs Sales argument. Which side is better equipped to run a successful business? I am still yet to work anywhere that balances these two sides perfectly, it always seems to fall one way or the other. My thoughts after reading this book were that an emerging organisation needs to be run by the engineers (focus on product success, not profits or impossible projections) and mature businesses by sales people (focus on profits, finding upmarket customers).

What did you get out of this book?

This graph was used to illustrate how poorly Microsoft Office 2010 was performing sales-wise, but wow what a difference between Windows Vista (Jan 2007 launch) and Windows 7 ( Oct 2009 launch). It completely masks the decline in Office sales, even though Office sales are obviously an equally big cash cow for Microsoft. It also makes the Server and Tools slice of the pie look tiny, even though it actually represents $1b a year in operating profit.

I also liked this chart of how Apple cannibalised the entire mobile phone industries’ sales with the iPhone. I am reading the Innovators Dilemma at the moment, and the release of a well executed touch screen phone certainly represents a disruptive technology in my eyes. It still amazes me that such a massive market filled with well established players can just be turned on its head in a few short years. More specifically Nokia’s share price copped a beating ever since the release of the iPhone, the subject of yet another chart. What is interesting to me is that Apple’s rapid rise ironically precipitated a huge boom in the adoption of open source mobile software in Android. I guess that the previous market leaders had their hands full competing with Apple’s hardware and didn’t have the time or resources to produce new software from scratch.

There are plenty more charts out there that will make you stop and think, and each one can be read into (rightly or wrongly) 100 different ways.

The Whole Product concept instantly resonated with me. The only thing worse than an engineer that thinks “I built it, now I just have to wait for them to come” is a sales person who thinks “we need a custom version for every customer who promises millions”. The central theme to the book is that getting a product to be successful is like organising a battle; from amassing a strong force to landing on the beach and finally taking the flag. At each stage there is a huge pit of despair that you can easily fall into. The key to it is where you spend your effort. Don’t focus too much on satisfying every product need, but just enough to appeal to a mass market. Don’t focus too much on a sophisticated marketing message, customers will get confused by and forget anything that is longer than two sentences.

One of the key learnings for me was that you shouldn’t pitch your product as a one of a kind, because nothing freaks a pragmatic buyer out more than having nothing to compare you with. How can you make a decision without a reasonable comparison? First you need to establish a market alternative (a familiar problem you are solving in an innovative new way) and secondly you establish a product alternative (a familiar solution that you have uniquely tailored to this application). By drawing a line between these two points of reference, you have created a new niche that customers will understand and appreciate.

The only aspects of this book I didn’t like were some technology references were a little outdated (even the revised edition is now 11 years old). I understand the historical examples where there was a conclusion, but some predictions are a little off (although probably good “what went wrong?” case studies). I also felt the book was a little repetitive in places, with the author jumping ahead and back again.

Overall however it was a great book and really thought provoking. It is a hard topic from my perspective because how do you teach minimalism, balance and keeping things simple? It is easy to go off on a tangent and over-invest in the area that has your short attention span as an entrepreneur. I guess not seeing the forest for the trees is a simple analogy? Anyway, I will no doubt use this book as a source of re-focusing when I do eventually realise my entrepreneurial dreams.

From MarketingCharts.com

Online media is growing up. All the big media players (News, Fairfax etc.) are currently fighting it out with the new kids on the block, online pure plays (Google, Microsoft, Realestate.com.au etc.). The prize is the rapidly growing pool of online advertising revenue, predicted to pass the US$50 billion mark next year. Historically the provider with the most content has attracted the most consumers, in turn attracting the most customers. Eventually this network effect lead to breakaway market leaders establishing dominance and gradually raising the market barriers of entry. Holding all the content was a licence to print money.

Slowly general search tools like Google and Bing, as well as vertical specific search sites like Zillow, started gaining momentum. They established themselves as “middle men”, generating advertising while helping people more efficiently find the content they were looking for. They were not interested in hosting or contributing content, but rather focused on the delivery of that content. They realised that the front-end distribution is where the money is at, not at the back-end creating content. Google in particular understands this, and the publishers do not. The publishers hate that Google News provides a beautiful user interface to access their content easily and for free, yet despite their threats they do not block Google’s bots because they need a strong online delivery channel and half their traffic comes from search engines.

This style of reluctant symbiotic relationship also appears outside news content, it is extending further into real estate and videos to name just a few. Microsoft are attempting to flip the relationship by making Bing Video index Google’s YouTube content and Google Maps is indexing real estate content.

The big media content creators have recognised one thing at least, for the partnership to work each participant has to have a stake in it’s success (or failure). Licencing deals, share stakes and other structures are occurring left, right and centre as the various players align themselves. This “sorting out” period has amusing side effects, like media companies being on both sides of the legal fence. Eventually the flurry of deals will subside and the media companies will realise that YouTube is no different to their old printing press and delivery operation, it is a necessary distribution channel that takes a commission. If your printing press operator decided to make your boring black and white rag and turn it into a glossy high end publication that successfully retailed at twice the price (despite having the same content) then good luck to them, in the end you benefit from a more valuable distribution channel.

For now we are faced with more sabre rattling by the media companies, constant partnership renegotiation’s and declining print revenues. As with any market forces, the digital media market will eventually reach an unsteady equilibrium. Some sort of duopoly with Google/Microsoft as the distribution channels, and the old media companies aligned behind them as the content creators. It is unlikely that the print rivers of gold will be seen in one place again, but sharing these rivers over a wider and more competitive landscape will benefit consumers. Sooner or later content producers will realise that revenue is a balance between consumption price and volume, withholding content only encourages piracy and other forces that undermine their progress to a fair and efficient new distribution channel.

A good product should sell itself. Good products will get recommended. A personal recommendation is more valuable than a website lead. And so the circle continues. Now back to watching the video again…