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Are MBA’s Actually Worthless?

August 29, 2023 /

During my entrepreneurial career, MBA’s have been unpopular with most of the other small business owner-operators I know.

Seth Godin kicked things off with a rant on the problems of business schools back in 2007 and launched his own altMBA a few years later. Josh Kauffman picked the idea up and wrote a book, The Personal MBA (which I rather like).

Tim Ferris penned an essay about using the cost of business school to design his own version of an MBA in, Tools for Titans ($120k focused on angel investing.)

“The MBA’s value is only in the network you develop or the clout of the school,” is a common refrain.

Because of this perspective, I never thought much of business school. “Learning by doing” was where I believed real value to be.

Though I still believe in the value of experiential learning, as time has passed I’ve come to question this common judgment of formal education as frivolous.

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Vision’s Utility & Self Knowledge

August 23, 2023 /

Six years ago, I met an entrepreneur in Philadelphia who was running a mid-sized service oriented business. Over dinner, he shared that at one point he was homeless and sleeping on a park bench. He was still “in business,” he was just running his operation from the library.

One of the recommendations he gave me was to write out my vision for the business and my life. He told me that he did it and nearly every fantastic goal he projected, he achieved. His experience with creating a vision isn’t unique; I’ve linked to a couple of other examples at the bottom of this article.

I’m working on a book on growth strategy for service businesses and, as part of that, I’ve been thinking and writing about visions, both for you (primary) and for your business (derivative.)

Good visions create clear pictures of the future that show what, how, and why your world will be different. But what makes them challenging is that we don’t know what we want.

More accurately, we only know some of what we want and often what we desire doesn’t actually serve us.

For example, I get fired up when I watch mixed martial arts. When I was fresh out of the military I thought, “This stuff is amazing, I should do this.” So I did. Within a little over a year I had my first amateur fight. After that fight, I planned on taking another fight at the next local event in three months. But three months turned to six months because I wasn’t training as hard as I needed to. Six turned to nine months as my training tempo dropped further. Eventually, I realized I didn’t actually like the lifestyle of being a fighter.

Watching fights was exciting. Training three hours a day, six days a week was a grind.

Similarly, with visions, we often make three mistakes. We choose goals:

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The Current

August 20, 2023 /

I had some beers with a few other entrepreneurs last week. One of them split with his business partner four months ago. He re-partnered with another person from the industry and started over. In four months, they’re just under $20,000 a month in revenue.

“It’s a bit crazy,” he told me, “I remember working for years and trying all sorts of things, first with my e-commerce business and then the last company. This new business is easy. Things just flow. Every sales conversation is positive. It’s like everything in the business is aligned.”

“What’s the difference?” I asked him.

“Selling people what they want,” he said, “I was always looking for a wave of demand. Interest. A trend. This feels like that wave.”

Your execution can be tight, your strategy sound, your culture connected. But none of those has near the same impact on the business as your relationship to the market.

You can’t swim faster than the current.

Why Advice Is and Isn’t Helpful

August 15, 2023 /

“When I started ignoring the advice and doing what I thought I should do is when things really started to kick into gear for me,” my friend John told me in between bites on a chicken wing. We were talking shop in a hip, Korean BBQ restaurant in downtown Portland last Wednesday.

I had shared some recommendations I received from a consultant last year concerning a goal we both have and John doubted the advice because it ran counter to his plans.

In the past ten years, I’ve spent around $100,000 in training, education, and working with consultants and coaches.

I would have to agree with John that it’s a bit of a fool’s errand.

There were no post-education inflection points where I learned something that was transformational to the business. In fact, there were several things I learned that when I applied them worked against my goals.

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Two Lessons on Values

August 13, 2023 /

I’m president of my local Toastmasters club. Every meeting that I’ve attended has started with the president reviewing the Toastmasters’ mission. Under my leadership, we’ve started instead with a brief question or example of one of the club values. There are four values from our international organization parent:

  • Respect
  • Integrity
  • Service
  • Excellence

I introduced the values at a meeting by asking who knew them? Only one veteran member knew what the values were. When I gave the members the opportunity to speak on the role of values, someone said, “Values are what an organization tells you to try and make you fit into the system they’ve created.” In other words, a top-down attempt at manipulation.

To these four values that Toastmasters International provided, I’ve added:

  • Acceptance
  • Fun

I believe the four original values accurately reflect our culture today. However, they’re missing the additional two values which I’ve observed in our club’s behavior. In other words, bottom-up values derived from members.

Five years ago, I set the values of my business:

  • Freedom
  • Integrity
  • Results
  • Growth

These are a reflection of my personal values. I.e. Top-down.

The past two years, in weekly meetings spanning May through July each year, our team has discussed and refined these values into ten more specific expressions. I.e. bottom-up. Each week, I challenged them with actual scenarios from our work and asked them to derive principles from those scenarios, based on how they thought we should respond. Then we would discuss the long list of principles we all came up with and the pros and cons of each.

Below is what we eventually ended up with:

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Weeds & Catch-22

August 8, 2023 /

There’s a Catch-22 situation that entrepreneurs often find themselves in. My agency is in it right now.

We’re trying to penetrate the professional association market. The problem is that associations will only work with agencies who have already worked with associations- especially on association specific software. To get new association clients, you have to have worked with association clients. Catch-22.

This limits the competition in the market to just a handful of existing agencies who have been doing this work for twenty to thirty years. “Insular” is a phrase I’ve heard thrown around a lot by consultants who service the space.

It’s a great market- if you’re on the inside. But how do outsiders like us get on the inside?

There’s a tactic that I’ve employed in the past that I call, “Folding Nothing.” You start with nothing, and you fold it in half. What you end up with is something a little more than nothing. You fold it again and it becomes more substantial yet. Within a few more folds you have something and you keep working with that something until you have what you need.

That reads like the inscrutable, seemingly nonsensical Tao Te Ching. But it’s not so esoteric (or profound) in practice, it’s just investment, sacrifice, and risk taking.

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Lessons Mark

August 6, 2023 /

“There were three things I would have done differently,” Jake told me as we were driving to the trail on a recent backpacking trip. “First, I would have moved most of my staff offshore; US employees are too expensive. Second, I would have niched down. Third, I wouldn’t have leased out that expensive space. Am I wrong? What do you think?”

We were discussing the business situation of another friend of ours, Ehsan, who we were meeting at the trailhead.

Three years ago, Ehsan had purchased a digital marketing agency. He’d hired additional staff and signed a ten-year lease for a new office space downtown at the rate of $20,000 a month. He’d put $250,000 into escrow as part of an agreement with the bank to back the landlord’s investment remodeling it into a fancy office space.

Initially, the business was growing and he was making a tidy profit. But the last year he’d been hammered with setbacks:

  • A key manager abruptly left. In the aftermath, Ehsan discovered that the manager was harming the business- ultimately costing him one of his best clients.
  • The bank didn’t want to release his money in escrow after the build-out was completed and put him in a cash-flow crunch.
  • And the software market that formed the bulk of his revenue vanished with the collapse of Silicon Valley Bank.

“I don’t know,” I told Jake as I thought about Ehsan’s situation. “I agree with your points, but for an agency of his size, his strategy might be different than for a smaller agency. Ehsan pursues larger deals. His clients might expect fancy office space and a US staff. That might tell them that his company is a low-risk, established, agency for them to purchase from. Additionally, Ehsan is excellent at building systems and teams that are all in the same physical space. And while his company isn’t tightly positioned to one market, he does have a heavy focus on serving software companies.”

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The Magic Key

August 1, 2023 /

“There are less than ten companies that serve the association market. Everyone knows who they are and they all have fifteen to thirty years of focused experience. We’re relatively new entrants. What would we have to do differently for a customer to choose us over one of the incumbents?”

This was the question I posed to two grizzled technology consultants that work in the market.

“Back in the nineties when we built and sold our software company we had the same problem,” one of them advised me. “I think you’re right. Differentiation is the magic key. For us, we were lucky enough to be building on a technology stack that enabled us to better adapt to the market… But it was a tough problem.” He paused and looked at his partner, “Jim, do you think we could have built that software today?”

The other consultant smiled and said, “Probably not. Too competitive.”

In my time in business, I’ve never seen any digital market that didn’t have stiff competition. If there’s an opportunity worth pursuing, someone started years ahead of you.

However, that doesn’t mean there aren’t opportunities. One of the working theories that I’m playing with is that success pushes businesses towards generalization.

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Sophistication

July 30, 2023 /

In Brazilian Jiu-Jitsu, you’ll learn most of the moves as a white belt. Everyone gets the same toolbox. But there’s a gulf of effectiveness between how the black belt and the white belt implement those tools.

The difference between the white and the black belt is years of training. The consequence of that training is sophistication. There are functional differences between how the expert and the beginner setup, execute, and follow through on a choke.

For the sake of argument, let’s say that it takes someone five years of consistent and regular practice to become a black belt. If you’re a mixed martial artist balancing your time over five years with BJJ, boxing, and wrestling you’re not going to end up a black belt because you don’t have enough of that sustained focus. You’ll probably have a purple belt’s advanced, but inexpert, understanding of the toolbox.

It’s the same with your business.

The more focused your business is, the more sophisticated it will tend to become over time. The result is increased ability to compete in your domain.

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Unnecessary Challenges

July 25, 2023 /

“They’d pay $60,000 to $120,000, and really sixty is on the very low end,” Wes told me. I had just asked him his ballpark price range for a website redesign for the target market we’re positioning our Steward brand around. With this range, he validated the price point I expected to hit on these projects.

I had cold emailed Wes asking for his advice. The goal with approaching him was to both form a connection with someone who could refer us, part of our marketing strategy, and also to learn about the market to address risk in our growth plan. As a veteran technology consultant in our target market, he met both goals.

In May, for a six-week cycle, I worked on a second version of our growth plan. If you’re not familiar, a growth plan is similar to a business plan, but for an established business that is making a strategic push to grow.

Over the six weeks, I did a lot of thinking, analysis, and research. In the process of developing the growth plan, I tweaked several of our systems and existing strategies. Due to that planning, I’m smarter today than I was previous to working on the growth plan.

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