Author: johnhooley

Shooting Through Windows

There’s a software product in the association market called Prop Fuel. It delivers one question surveys via email. It’s doing well and I can tell that it’s growing from the regular referrals I hear for it. What’s interesting to me is that I built it eleven years ago.

Back in 2013, I coded my first software product. It was a plugin for Joomla that I called “Mail in Vote.” I developed it for people that needed an easy mechanism to get consensus from a group and it did what Prop Fuel does now. I worked nights and evenings for nine months and made a few sales, but mostly I learned was that I had a lot to learn about building and marketing software products. Mail in Vote actually killed my career as a developer, because in the process of grinding away on it, I developed serious repetitive-stress injuries which forced me to build a team to do the work instead.

Eleven years ago Mail in Vote was a failure, today Prop Fuel is a success. The market context is different, a platform market versus a vertical market, but as big of a difference is that the time hadn’t come for the concept. Prop Fuel does well because associations have over-used survey tools in the past ten years and need a survey “lite” method to get information. Even if Mail in Vote was tightly tied to the association market eleven years ago, it would have had a similar ho-hum reception because there wasn’t the same “survey fatigue” then as there is now. Eventually, things will change enough in the market that even the one question survey won’t be desirable.

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Focus & Iterate

Last week, in a weekly meeting, my team discussed how we could improve projects with clients to avoid what we call “zombie” projects where the client’s behavior kills project momentum.

We looked at a specific project that is in motion with a client who has frequently disengaged in the past. My team listed off all the trouble behavior that they’re sure that the client will do that will result in the project being difficult to work on and hamper momentum in the coming weeks:

– Fail to deliver assets
– Continually change the scope
– Stop communicating
– And etc.

They held up their collective Zoom hands in frustration, as if to say, “We’re powerless in this situation.”

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Renewing Your Franchise

This weekend I read a 1978 Harvard Business Review article on strategy for service firms, “Strategy is Different in Service Businesses.” (Thomas)

It was an interesting read for a variety of reasons, but one of the lines that stuck out to me was, “Every company depends on an ability to renew its franchise in the marketplace.”

When I think back over my career, I remember many businesses that were the darlings of our conversations and that either no longer exist or have faded into shadows of their former selves.

That this is the natural state of the market fills me with both wariness and inspiration.

Wariness, because I have to be vigilant about creating new value to maintain our existing business. Inspiration, because there’s another opportunity emerging to build something great.

What Is Better?

I’m a “big” with Big Brothers Big Sisters. The kid that I spend time with is similar to me in many ways:

– He likes board and video games
– He likes to cook
– He enjoys adventures

But, he’s also very different from me in other ways. I workout most days, meditate twice a day, and relentlessly pursue personal growth. My “little” is instead very comfort oriented: he wants to eat rich food, watch TV, and sit by the fire. I doubt he’ll ever embrace challenge or regimen like I have.

And that’s okay- he’s not me. I have no interest in mentoring him onto my path. Instead, I see my role as creating opportunities for him to discover his own path.

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A Better Cactus

I’m back in not-so-sunny Portland after a month in Baja. Right before I left, I wrote this post on environmental change being a catalyst for new growth:

This morning, I woke and sat at the kitchen table, sipping coffee, and feeling grateful for all the shifts in thinking that happened while I was experiencing the desert vistas.

One of those shifts was to re-think my goals. Last fall, I wrote about how the goals we pursue affect our experience and our outcomes, often in ways we don’t understand when we set the goal:

In behavioral psychology, there’s a phenomenon known as “goal contagion,” where others’ goals become our own, simply through our interactions. Your friend gets excited about Tae Bo, and the next thing you know, you’re hooking and jabbing in your living room to an old Billy Blanks VHS tape.

One of the goals that entrepreneurs get infected with is growth. It’s rare to encounter an entrepreneur that isn’t trying to figure out how to grow to “the next level.” Two years ago, when I visited Baja the first time, I decided to anchor my thinking around this challenge because it was so prevalent.

But as I enjoyed my morning coffees this past month, watching sunrises over the Sea of Cortez, I wondered if it’s not actually a good goal to pursue? With the benefit of two years of thinking about it, I wondered if pursuing growth can inhibit growth?

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On Sunday morning, I dropped down to 60 feet beneath the Sea of Cortez and swam around a rocky point into a sandy bottomed bay. The dive master leading our group, stopped and pointed off into the distance. I saw a large shadow drift through the haze. Then suddenly a seven foot bull shark glided over the bottom on a slow cruise around our group. Another joined him and a larger bull shark circled overhead. Somewhere between five and ten sharks came to inspect our little group, but fortunately no one was eaten.

Back on the boat, between dives, I talked with another diver who is a co-founder in a drone software company (side bar: if you want to meet interesting entrepreneurs, go diving, sailing, etc. when no one else is). I was curious about his business journey and he told me the broad outlines. He said that they were eventually able to establish the business by focusing on a niche.

Then he told me that he was responsible for growth and felt like his self-funded software company needed to spend $20 – 30k a month on marketing in order to grow to the next level. This made me curious, because it’s an arbitrary investment. I asked him, “Why? Why $20-30k?”

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Around The Mountain

What would you do if you couldn’t grow the number of customers your business serves?

For many businesses, new customer growth is how the business grows. Demand determines the size of the business and its concurrent impact.

However, a reality that every business faces is that demand is limited. Even Amazon, a corporate leviathan that sells everything to everyone, has a limited number of customers that they can acquire.

Yesterday, I did market estimates for a new enterprise that I’m partnering on. My partner had thrown out some pricing numbers for a service we’re developing and I wanted to identify what the impact would be for different price points.

The formula looks like:

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Adding things is tough.

If you look at your business, adding customers, employees, products, marketing, and systems all require a significant series of investments. And once you’ve added the thing, the return is inconsistent. Even if you’re scrupulous in your execution, you rarely get home-runs. Mostly, you get a mixture of base-hits and strikeouts. It often takes months and years to see your new addition bear fruit.

Subtracting things, on the other hand, is much easier. It’s typically quick, simple, and has an immediate and positive effects. You cut a bad-fit employee and profit jumps up,  you fire a bad-fit customer and life gets easier, you kill an unproductive service and suddenly the business is more valuable.

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What if your criteria for what objectives you would take on was that they were easy?

In the book Scaling Up, author Verne Harnish, uses a graphic to challenge the traditional mentality of entrepreneurship. He replaces the model of summiting a mountain with a river that flows downhill. His point is that nature chooses the easiest route and businesses should too.

Easy is an interesting criteria to play with because so many things in business are hard.

One of the consequences of using easy as a filter is that it curtails over-investment. If something doesn’t easily work, then it’s abandoned. More initiatives die because they ask too much, but the ones that remain are profitable.

Additionally, easy as a criteria engenders thinking because thinking is easier than doing. Thinking is often helpful in business because it anticipates problems and identifies opportunities. Both of which are missed when you’re heavily involved in doing.

Whether easy as a decision filter is right for you, it’s important to understand that we all have internal priorities that shape our decisions. Yet, we tend to be unaware of them.

Consciously choosing how you’ll make decisions, even for just a season, can help expose your inherent priorities and their impact on you and your business.

Stepping Into The Casino

One of the inherent challenges of entrepreneurship is that some initiatives you launch will require time to have an effect.

For example, I spoke with an agency owner last year who was developing leads through LinkedIn. He said that he posted for almost a year before he started to see any business from that channel.

What makes time a challenge is that often the initiative you launch leads to a dead end. There are many marketing channels that the agency owner I talked to could have invested in that would not have had any impact after a year.

And it’s even trickier to navigate because it’s easy to slip into sunk cost fallacy where you assess whether to keep investing in an initiative based upon how much you’ve already put into it.

It’s a gamble. Knowing it’s a gamble is helpful, because gamblers have rules to manage risk. They decide in advance when it’s time to get up from the table and cash in their chips.

For anything significant you’re starting, it’s helpful to set some boundaries. Answer questions like:

  • How much will you invest and for how long?
  • What signs do you need to see to merit further investment?
  • When will you move on? 

Just understanding that you’re stepping into the casino will help you to better navigate the data you collect as your investment resolves.