Category: Growth Series

Gauging Your Ignorance

Ignorance is its own hurdle.

It’s easy to make progress when you understand what needs to be done.

Growth in a business is similar.  Often, the capacity our business has achieved is a reflection of our understanding.

Our understanding of the market, of our business model, and of the obstacles and opportunities those present.

A trick to gauge your ignorance is to conceptualize your business at the next stage of its capacity. 

If you were to reverse engineer that possible business, what are the differences between it and the one you operate today?  How confident are you in your conclusions?


Featured image is of the Fool card from the Rider–Waite tarot deck (1909). Used under public domain.

Self Employment

“If I don’t do it, it won’t get done right.”

This belief is a common constraining factor in many businesses’ growth.  There are variations of it, but the common thread is that you, the business operator, have to be central to the work being completed.

Only you can sell.  Only you can manage.  Only you can complete some complex task.

I organized a local business mastermind several years ago that included a smart fellow who ran an agency.  When we discussed his business model, he said that he had a team that provided services and that he would also occasionally do consulting work for their clients.  

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Investing In Your Business

Imagine that you were an investor in your business.   You agreed to invest with the caveat that you wanted to dictate where your cash went.

What would you need to know to make that investment productive?

A key data point that you’d probably want to know is what produced and what cost.

There’s an 80/20 analysis you can do where you reduce your business to line items and estimate the contribution to production.  It’s 80/20 because you’re looking for spikes in productivity and spikes in losses.

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The Wrong Tools

Last week, my PM told me that we were behind on an urgent Laravel project and that our team was at capacity for the developers who could work on it.

In that moment, I realized that I could step into the code and help out or stay out of it and look for alternate solutions.

I decided to help out and carved off a few pieces of the project to spend just a day and a half on.

Then I spent the last three days writing code. It was the first time in eight years that I’ve programmed anything. Most of the time was spent getting my environment set up and learning Laravel’s API.

Just when I was wrapping up my section of the project, our lead developer hopped on a call and said not to worry about it- he had completed the same work earlier that morning in a little 30 minutes sprint.

I had to laugh.

In the moment when I made my decision, I knew that getting into the operational work was a huge red flag.

I hadn’t slept well and was tired and frustrated and not in a good place to think. I was also feeling pressured because this summer has been crazy.

With the benefit of hindsight, it was obviously a mistake. But the next time something like this happens, I won’t have hindsight until it’s too late.

For me, the lesson to remember is that as the business operator, your primary implements are your systems and people. And the skill you should be applying is thinking, not doing.

If I had slowed down, calmed down, and thought it through I could have worked with my team to navigate a path through this little crisis with higher impact rather than dusting off my development environment.

Experience is a painful teacher, but you remember her lessons.


Featured image is of Shakespeare’s’ Henvry V- print of Act III, Scene i: “Once more unto the breach, dear friends!” By Thomas Robinson (printmaker) – Folger Shakespeare Library Digital Image Collection used under CC BY-SA 4.0

Lessons From a Large Fir

We have a towering Douglas Fir in our backyard. In trying to figure out how old the tree was, I attempted to look up the ratio between tree height and age. What I discovered was that height is not an indicator of age.

If you have a tightly packed grove of Douglas Firs they may be extremely old, but not very tall. On the opposite side, you might have a young and tall tree that dwarfs similar trees because it has more space around it.

Competitors in markets have a similar effect.

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How Do You Fit?

I installed the furnace and HVAC system in our house. It was a solid 3 – 4 months of working weekends.

Here in Portland, there is massive demand for skilled blue collar workers and not enough supply. The consequence is that it’s common to pay three to five times what you would in another city and still have the work poorly implemented.

Hiring a HVAC company seemed riskier than doing the work myself.

One of the things that stood out for me in the research I recently completed on marketing channels for digital agencies was that most work was referral based.

I already knew that referrals were a significant source of most agencies’ work- but that has never been my experience. It was eye opening to see how many referrals occurred, how they happened, and the impact on pricing.

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Chasms

A few friends and I debated which is harder: developing effective marketing strategies or hiring sales people.

I fell on the side of developing effective marketing strategies.

Every business has to be able to generate leads to survive, but there is a limit of escalating difficulty that we all hit. Often, that limit becomes the single biggest constraint on our growth.

For example, if you’re a restaurant, you might naturally capture a certain amount of foot traffic, but expanding beyond that is challenging.

In that frontier of growth opportunity, most marketing tactics don’t work.

It’s a harder problem to solve than hiring sales because you operate with limited information. It’s an innovation for the business- the creation of something new.

Innovation is like mapping the sea floor with a depth gauge.

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Nosce Te Ipsum

Blair Enns is a sales educator whose course I participated in a couple of years ago. In one of the lessons, Blair recommended taking the time to identify your underlying drives. Then before a sale’s situation, you tell yourself, “I don’t need it,” whatever “it” is.

For example, if what you want deep down is for people to like you, you might make concessions in a sales situation that you shouldn’t. So before you hop on a call with a lead you tell yourself, “I have enough friends. I couldn’t possibly fit another friend into my network.”

Those deep drives govern much of our behavior. One way this manifests is that you might be pursuing growth as a form of validation. For example, it’s common for small businesses to have $1,000,000 annual revenue as a goal. Under a million and you haven’t “made it.”

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Stepping Back

In the lead up to the US invasion of Iraq, I was in charge of a detachment of Marines guarding civilian ships in the Persian Gulf. Our mission was to protect the vessels against boat born IED’s like the one that killed 17 sailors on the USS Cole in October of 2000. We maintained a 24 hour watch, both at sea and in port, with Marines armed with machine guns covering all directions of approach.

In the middle of this mission, I discovered that our standards had started to slip and the teams weren’t properly changing over the guard. The impact of this was that Marines weren’t fully prepared to repulse an attack while they were on post.

I decided to fix things by personally managing the change over of each shift.

“F*ck no!” One of my team leaders, Arciga, told me. “You always do ths s%$#!”

“What are you talking about?!” I asked him.

“Something gets messed up and you step in and take control. You always have to control everything. It’s my and the other team leader’s jobs. We screwed up. We’ll fix it.”

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Navigating the Desert

For years, I worked at building and selling software products through our agency with little success.  This is how I used to characterize it to my friends:

It’s like driving through the desert to Las Vegas.  You know you’re heading in the right direction, but you don’t know how far away it is.  And the agency is like an anchor that you’re dragging behind you.

I remember telling this to another agency owner that was also building software and he said, “Oh my god, that’s exactly it.”

Today, I’m looking at building another small software product.

It’s been more than five years since I told my anchor in the desert analogy to someone.

What permeated my experience back then was a sense of ignorance: being in the desert and not knowing the distance.

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