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Friday, July 10th, 2009

How to Scrum & Sprint (Agile Computing)

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I’m sitting here talking with Jane Newcomb, a firm believer in Agile Project Management, including the Scrum approach, to getting things done.

Jane works on product development for BabyCenter.com, the dominant Internet baby company.

Srum Enthusiast Jane Newcomb of BabyCenter

Srum Enthusiast Jane Newcomb of BabyCenter

I thought I’d share her perspective with you through a question and answer session.

Why do you use Agile Project Management with Scrum?

BabyCenter applies the Agile Scrum Methodology to our new product and software development because we found through trial and error (including trying the Waterfall methodology) that Scrum was the most efficient project/product management tool.

Talk about Agile Methology versus Waterfall Methodology?

At the core, Waterfall Methodology assumes all aspects of a project, all features, all the funtionality — it’s all completely mapped out upfront…and then four months later the finished product is rolled out to the business owners. The business owners don’t see any code or software until the entire feature/product is delivered.

And then it’s often not the deliverable that the business owners were expected.

Whereas Agile Methodoliges are more flexible and allows business owners to see working code rolled out every two to four weeks…that allows for change in direction, alterations based on business need changes, marketplace changes.

What’s An Agile Scrum?

The Agile Scrum represents executionof  the Agile Methodology: it’s the daily huddle where team members come prepared to talk about what they worked on, what their obstacles are and what they’re working on for the next 24 hours.

It’s the daily check-in to allow business owners to understand what’s going on…and make adjustments as needed.

Do You Use Agile software development with Scrum?

Yes, we use an out of the box software tool called VersionOne.

What Is An Agile Scrum Master?

The role of the Scrum Master is to keep the team focused on the tasks and the stories that are part of whatever Sprint we are working on. It is their job to remove any obstacles and to help keep the team on track

What is an Agile Sprint?

A Sprint is the amount of time from start to finish that business owners agree to let the team work on the pre-defined set of requirements that were agreed upon prior to going into that Sprint.

How often do you use Agile Sprints?

The average Sprint lasts two to four weeks.

Did BabyCenter provide you Agile Scrum training?

I personally learned it on the go. But you can become a certified scrummaster through Agile training.

Thanks for sharing, Jane!

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Thursday, July 2nd, 2009

Top 10 eBay Selling Tips

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eBay has a lot to offer for you to sell products on the Web, though the various costs of selling on eBay reads like a Chinese Menu (check out a list of eBay fees).

Costs for selling on eBay may include:

  • eBay Auction listing fee
  • eBay Auction listing final value fee
  • eBay Fixed price listing fee
  • eBay Final value fees for fixed price listing
  • eBay Business and Industrial Equipment insertion fee
  • eBay Business and Industrial Equipment reserve fee
  • eBay Business and Industrial Equipment final value fee
  • eBay Reserve fee
  • eBay Buy it Now fee
  • eBay Listing upgrade fee
  • eBay picture hosting fee

eBay’s fees are so complicated that a few clever people have built eBay fee calculators….try out this free eBay calculator — just looking at it stresses me out!

So I was happy to hear that Marshall Smith, a Senior Software Engineer at ChannelAdvisor, was doing a presentation on cost-saving tips for selling on eBay (at eBay’s DevCon ’09 earlier this month at eBay’s headquarters in San Jose).

I sat in and here are Marshall’s Ten Selling Tips for Reducing eBay Fees:

1) eBay Variations

You can list 12 variations of a product (e.g. different sizes and colors of the same priced t-shirt) as one listing and thus save listing fees. This only applies to certain categories (which eBay seems to be actively adding right now).

2) eBay Catalog Adoption

You can cut eBay submission fees in half if you are selling a catalog of products by using the eBay Catalog. You also get promotion in product-based search methods.

3) eBay International Site Visibility

You can reduce ebay auction listing fees for additional countries by inputting in one country. It’s more advantageous for auction/dynamic priced listings where you could save $1.63 on a $49 auction listing (For eBay fixed-price listings, it makes sense to list once for each country).

Note: Some categories are not supported.

4) PayPal Micropayments

Leverage PayPal’s Micropayments — this is useful for sales with order value of less than $12 .

For example, you can get a rate of $.05 + 5% (instead of $.30 + $2.9%).

For eBay sellers with variable sales, configure two Paypal accounts used based on order value.

For 200 $5 transactions a month you could save $29.

5) eBay Sales History Relist

Sales history is one element used for eBay Fixed Price items in the Best Match algorithm. When you list an item, that specific item doesn’t have any history (it hasn’t had any purchases).

So what you can do is use the relist functionality and link the two items together. It tells eBay this is the same as the previous item I was selling so that you have a starting score when you have just opened an item (otherwise it’ll have a score of zero).

There is no need to use the eBay Featured First function.

6) Immediate Payment

There can be some real advantages to using eBay’s Immediate Payment — it requires the payment from buyer at the time of purchase (as opposed to the buyer paying later).

You don’t have to file any UPI (unpaid item) requests. This could be really desirable for a highly desirable item (event tickets). Because it’s already been paid for, you’ll be faster to ship and the customer receive the product sooner.

7) Improving eBay Seller Metrics

Providing Shipping information to eBay (using CompleteSale API so it shows up in MyeBay. This reduces buyers requesting “Where’s my item?”

It also gives you more leverage in any potential INR disputes. You might also find better DSRs on communication.

8) Submit detailed eBay Seller Policies

In your eBay listing detail your return policy, handling time and shipping options — This reduces buyer confusion and increases confidence in the transaction.

You as a seller have to follow through on your policy. If, for example, you provide returns everywhere except Australia, you must mention that!

9) Efficient Timing When Processing eBay Orders

The eBay order import needs to work with seller’s fulfillment processes and timing — Missing a shipping cutoff window may delay buyer’s receipt by 3 days (Friday to Monday).

Sellers need to get packages into the system as fast as possible (you’ll get better ratings and thus potentially lower fees).

10) Higher DSR’s Reduce Seller Fees

E.g.

  • A rating of 4.6 earns a 5% discount on final value fees
  • A 4.8 earns a 15% discount
  • A 4.9 earns a 20% discount

If all of these eBay costs seem like too much a headache, you can try the little “free ebay” service my friend and I put up.

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Tuesday, June 30th, 2009

Entrepreneurial Tips From Four Venture Capitalists

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I sat in on a venture capital panel at earlier this month at eBay’s DevCon at San Jose headquarters. Below are some highlights.

Here’s the panel:

Sergio Monsalve, Partner, Northwest Venture Partners

  • Five years at eBay; then went to PhotoBucket
  • Last fund was $650MM
  • Nothwest focuses on investments of $1MM to $50MM (sweet spot is someone who has a product with traction (perhaps early revenue or no revenue)

Rob Hayes, Partner, First Round Capital

  • Background includes Pam, Geoworks, Go Corp, Japan External Trade Organization
  • First Round focuses on investments less than $1MM investments (from 2 to 20 people) (likes to invest in companies with “two guys and a dog.”)

Ravi Mohan, Managing Director, Shasta Ventures

  • Background includes Accentutre, Hyperion, MIC (in India) and McKinsey

Mark Gorenberg, Managing Director, Hummer Winblad

  • Background includes Sun Microsystems
  • Has sat on many boards including Omniture, AdForce, HomeGrocer

(The questions were asked by Moderator Charline Li, Founder of Altimeter Group)

Where do you see the new opportunities to invest your venture capital?

Mark: We see four trends:

  1. Common Inventory Model
  2. Commerce on the Internet is Blending With Offline — We invested in Crillian Krillion — eight or nine percent of people want to shop online but want to pick it up in the store.
  3. MobCommerce — Wisdom of the crowds.
  4. Analytics is Now Just Table Stakes — (Mark invested in Omniture). Every company has to have core analytics.

Ravi: The word is commerce. Not just e-commerce. Where do people want to buy?

I believe the mobile device is the platform to bring that together.

The second thing is that everything that is happening in the offline world, is increasingly happening in the online world.

Rob: One of the themes we invest in is the Implicit Web. People don’t really care where they buy things from. If I can reach into ebay though an API, Amazon through an API, etc…where can I put all this data together to tap into all this?

E-commerce used to be about getting the best price. Now it’s more about getting the best experience.

That’s why we’re invested in BazaarVoice— Companies have to get used to people saying bad things about them online (even on their own Web site).

Sergio: There’s a trend of big companies working with small companies.

I think we’re in the third inning of e-commerce. It’s now that the incumbents (big companies like eBay) are starting to reach out with small companies to have symbiotic relationships.

We’re seeing a lot agencies investing with us.

How does an entrepreneur get venture capital funding

Rob: If it’s a really good idea in a really big market with a really good team (and can they pivot when things don’t go exactly according to plan).

Mark: I think you’d be surprised at how many of us fund things that really early. We funded Ace Metrix even though we’d never met them. They had really done their homework.

Ravi: There are a lot of great business ideas…as entrepreneurs you have to really look at the market size and how disruptive your idea is.

Sergio: The question of pivoting is important to underline. I see innovation…as continuous innovation throughout the life of a company. If you look at a company like RackSpace (now a $1.5 Bil. market cap) the defining moment was not when they started the company…it was in 2001 during the meltdown.

Look at Qumranet (a year before selling to Red Hat) they completely scratched their plan. The market wasn’t there…so they were able to pivot the company and then get sold a year later (for $107MM).

When’s a good time for an entrepreneur to look for venture capital funding?

Mark: With Arbor Software — we talked to them when they were really young…we worked together for six months and we funded the company six months later.

Ravi — Plastic Jungle (an online exchange for gift cards) — we met with them last summer and it was a complete offline business. We began looking at the vision and what this could be.

Gary Briggs (eBay’s ex CMO) was an advisor and we started to look at it together. The whole process took seven to eight months. During that time we helped expand the vision of the company and bring in additional team members.

What are some alternatives to venture capital funding?

Mark: Bootstrapping is natural. The lines between angel and venture firms has really blurred. Angels have seen 30% to 40% of their net worth go away. As a result, we (VCs) are seeing entrepreneurs earlier.

What do you think about exit scenarios (liquidity events) for startups these days?

Ravi: You need to build a business that is worth something. I’m thinking of a business that will reach $100MM and is growing 20% to 30% with EBIDTA of 20% to 30%…and then apply 10 to 30 cash flow multiple.

If there is no exit, then we may end up dividending the cash to management and investors. Or sell to private equity firms.

Rob: I believe that we’re going to see a lot of exits between $50MM and $100MM. So, if you’re going for the billion dollar company exit, you should be talking to venture capitalists.

An entrepreneur with a $50 million exit could be taking care of their great grandchildren.

Ravi: Rob and I are invested in a company called Outright, a free accounting service — everything that a small business doesn’t want to do. One of our target markets is ebay sellers.

Now we’re going to roll Outright out on ebay Selling Manager in August or September.

Would you invest in a company that has done a DPO (Direct Public Offering)?

Mark: We tend to shy away from that. We like clean paperwork…private stock only.

What’s the biggest mistakes entrepreneurs make?

Rob: Not taking enough money. Entrepreneurs get so tied up in the dilution math. It’s the most painful thing.

Mark: Entrepreneurs saying they have no competition. That’s indicative of not doing enough homework.

Ravi: It’s market size. Just being intellectually honest about the market size is important.

Sergio: There’s a balance between optimism and being intellectually honest that is needed.

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Sunday, June 28th, 2009

SEO Tips From eBay’s SEO Specialist

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I sat in on a talk that eBay’s SEO (Search Engine Optimization) Manager Dennis Goedegebuure gave at eBay’s headquarters in San Jose earlier this month.

I got to chat with Dennis and he’s both smart and interesting — away from eBay he blogs about poetry, tips on San Francisco (in Dutch) and a favorite topic of mine: Black Coffee.

SEO Tips from eBay's Dennis Goedegebuure

eBay's Dennis Goedegebuure likes WordPress and so do I!

Note: Just to be clear, even though this was an eBay SEO specialist presenting his tips are not focused on eBay Store SEO or any other SEO for eBay Web pages.

While Dennis was through most of his presentation, I realized that he was going to make the slides available online — They are located here: Dennis Goedegebuure on SEO at eBay DecCon09.

I decided to go ahead and include my notes (below) as there were some comments Dennis and attendees made that are not in the slides — I encourage you to look at both!

Ok, on to my notes:

Dennis’s Definition of SEO

  • Free traffic
  • More visitors
  • More downloads
  • More transactions

Those sound like things you want?

Here are some SEO tips, tricks and topics:

Be Worthy

First and foremost, Dennis recommends that you make sure that your product is worth talking about; if you don’t, no person will link to you or visit your site or install your application.

Read the Search Engine Webmaster Guidelines

Dennis adds that you can learn a lot from what the search engines give you…the top search engines have documentation so you should read it… such as Google’s Webmaster Guidelines.

Google Universal Search: Threat or Opportunity?

Google and other search engines have moved more towards images, video and news — what we call Universal Search.

This is a threat — if you are just text-based…yet this is also a great opportunity to rank higher since there are fewer businesses that have images right now.

Sniplets Presentation

Through structured meta data the presentation of your site can be enhanced. Two tools on this are Yahoo Search Monkey or Google Rich Snippets.

Microformats.org is a great resource for how to code, present, etc. better for search engines to have better display — you won’t rank better but your appearance will be better.

How Do Search Engines Work?

Search engines have crawlers crawling links to discover your content.

If your content is not linked to (hidden in java script or flash) it can not be easily discovered. Crawlers will look at your Link Structure.

Site Indexing

Search engines download html content of the page and store it in their database. As they perform this Site Index, only extractable content is stored.

Then, search engines rank it. Here are keys to their ranking (in no particular order):

  • Keyword in anchor tag to the page
  • Links to the page/site
  • Page Title
  • H1 Tag
  • Quality of the content

How Do I Get Google To Index My Site?

To get into the Google Site Index, or other website indexing, you simply have to publish your content onto Web pages and then link to it from somewhere. Google site indexing can be done as fast as just couple of minutes or many weeks depending on the type of Web site you have (note: Google indexes blogs more frequently than other Web sites).

Taking Your “LUMPS”

LUMP stands for Links, URL Structure, Meta Content, Page Content, SiteMap. Here are some

Links

Search engines discover you through links. It also helps with relevancy.

For example, Adobe Reader is ranked for “click here” (because its Anchor Text reads: “If you don’t have Adobe Reader, click here”

Google was the first to do a link-based algorithm based primarily on:

  • Quality of links to a page
  • Quantity of links to a page

Four other important Link-related tips to keep in mind:

  1. Keyword used in the anchor tag
  2. The age of a link
  3. External Links — The majority of your links are typically to your home page
  4. Internal Links — You need a good site structure to leverage your link juice.

URL structure

  • If you have a good domain name with a keyword in it, that is considered a “keyword rich domain.”
  • If you don’t have a good domain name, you want to include keywords in the URL — you’ll notice that the URL for this page is robdkelly.com/blog/increasing-web-traffic/seo-tips-from-ebay.
  • Avoid a lot of “parameters” in your domain (like symbols and numbers) as that confuses the crawler.
  • You should also avoid canonical URL problems such as using multiple URLs for the same page (e.g. Purchase.com/index and Purchase.com/main).  Canonical tag is a band aid to solve this problem.
  • A general rule of thumb is that you should use dashes between words in your URLs so that the search engines look at them all as individual words. Dashes are always preferred over underscores.

Meta Content

Meta tags are HTML elements used to provide structured metadata about a web page. Make sure all of your pages have a unique page title with the keywords you want to focus on.

Page Content & Elements

  • Build pags for two user agents: Users and Crawlers — You should focus on serving Users first and then Crawlers next.
  • Build your Web site in plain HTML — Because text is extractable by crawlers.
  • Prevent usage of flash or other rich media — It’s harder for crawlers to extract this.
  • MicroSite — A business called BlendTech built WillItBlend.com  in pure HTML with embedded videos and every video has its own URL. They now dominate the first page on “Will it Blend.” Sales went sky-high for BlendTech.
  • Avoid Cloaking, etc.– This is an approach that looks at crawlers and treats them differently — don’t do this! You will be violating most search engine’s guidelines. “Don’t try to fool a search engine as they are smarter than you!” Also don’t buy links or put white text in the meta tags. Don’t put text on a minus 99 location so it’s all the way to the left of the screen. These are all flags to the crawlers.

SiteMap Protocol

  • What are sitemaps? — An XML file that Webmasters provide search engines about  your URLs with metadata about each URL such as how often it changes, how important it is, etc.
  • Sitemaps can help crawlers discover pages such as XML sitemap and HTML sitemap.
  • Tip: Submit an XML sitemap to all major search engines for easy discovery of your pages
  • Add sitemap location to robots.txt file.

Image Search Optimization

  • Use a file name that contains the keyword
  • Supply an ALT text
  • Provide relevant text around the image

For one of MR. Goedegebuure’s sites, 50% of his traffic is coming from image search.

Use Semantic HTML

If you would like to have one thing emphasized, use an h1 and only one h1 per page.

Three main factors

  1. Anchor text in the link
  2. Page title
  3. H1 tag on the page

If you do those three best practices, you will rank pretty well.

SiteMaps Continued: HTML SiteMap

Build an HTML sitemap with all links on your site for users and for search engines.

Keep your number of links to 50 or fewer because Google Sitemaps frowns upon anything more than that.

Four free tools

1) Sitemaps

Dennis recommends the following tools:

Google Webmaster Tools

Yahoo Site Explorer

Bing Webmaster Center

…to help you to:

  • See incoming links
  • Submit Sitemaps
  • Get alerts on problems
  • See how search engines crawl your site

2) Free Firefox plug-in toolbar

You can disable cookies, images, javascript to see what the search engines see when they look at your site

3) Google Insight for Search

You can use this to see what’s searched more: singular or plural keywords.

4) Microsoft  Advertising Intellgence Plug-In

It provides trending data for keywords, Cost Per Clicks, demographic data and real data from bing.com.

Thanks for sharing your knowledge, Dennis!

If you found this posting valuable, you may want to check out my Got Google Juice? item.

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Wednesday, June 24th, 2009

Financial Crisis Most Wanted Playing Cards

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There have been numerous financial crises in our world’s history but the financial meltdown of 2007-2008 will certainly be remembered in the history books.

A clever man named Jason Witt has compiled a list of the 52 key players in the financial crisis.

Why 52, you might ask? Well, to put them on the faces of a deck of cards of course.

Witt, from my neighboring town San Ramon, California, is emulating the success of other Most Wanted Playing Cards such as the Iraq Most Wanted.

I spoke to Jason and he’s a good guy — If you’d like to buy a deck, you can do so here: Financial Crisis Cards.

While this isn’t meant to be a financial crisis blog, I am into business, the media and Wall Street…so I couldn’t wait to order a pack of these for myself and one other for my good buddy Larry the Wall Street Recruiter (Jason says that most people are like me: They’re buying 2 to 3 packs each).

And for those who can’t wait to see who “made the deck,” below is a list of the players that Jason was kind enough to email me. He told me he felt bad about putting Obama in the deck but that he believes that half the country thinks Obama is to blame for the financial crisis.

Without further adou, here are the men Witt thinks made financial crisis history.

The Spades

Ace: Bernard Madoff, Chairman, Bernard L. Madoff Investment Securities

2: Warren Buffett, CEO, Berkshire Hathaway Inc. (WILD CARD)

3:  Martin Sullivan, ex-CEO, AIG

4:  James Lockhart, Director, Office of Federal Housing Enterprise Oversight

5: Stephen Schwarzman, Chairman, Blackstone Group

6: Stephen Joynt, President, Fitch Ratings

7: Herb Sandler, ex-CEO, Golden West Financial Corp.

8: Vikram Pandit, CEO, Citigroup

9: James “Jimmy”Cayne, ex-CEO, Bear Stearns

10: Timothy Geithner, Secretary, U.S. Department of Treasury

Jack: Christopher Cox, ex-Chairman, U.S. Securities and Exchange Commission

Queen:  Deven Sharma, President, Standard and Poor’s

King:  Alan Greenspan, ex-Chairman, U.S. Federal Reserve

The Hearts

Ace. George Bush, President of the United States (2000-2008)

2:  Jeffrey Immelt, CEO, General Electric

3:  Bill Miller, Chairman, Legg Mason Capital Management

4:  Ronald Logue, CEO, State Street Corporation

5:  John Paulson, President, Paulson & Co.

6:  Neel Kashkari, Assistant Treasury Secretary, U.S. Department of Treasury

7:  Sheila Bair, Chairman, U.S. Federal Deposit Insurance Corporation (FDIC)

8: Jamie Dimon, CEO, JPMorgan Chase & Co.

9:  Rick Wagoner, CEO, General Motors

10: Alphonso Jackson, ex-Secretary, Housing and Urban Development, (HUD)

Jack: Hank Paulson, ex-Secretary, U.S. Department of Treasury

Queen: Barney Frank, Chairman, House Financial Services Committee

King: Ken Lewis, CEO, Bank of America

The Diamonds

Ace: Ben Bernake, Chairman, U.S. Federal Reserve

2: Michael Perry, ex-CEO, IndyMac Bank

3: John Stumpf, CEO, Wells Fargo

4: Christopher Dodd, U.S. Senate, Chairman Senate Committee on Banking

5: Allen Stanford, Chairman, Stanford Financial Group

6: Alan Mulally, CEO, Ford Motor Company

7: Kerry Killinger, ex-CEO, Washington Mutual

8: Charles “Chuck” Prince, ex-CEO, Citigroup

9: Lloyd Blankfein, CEO, Goldman Sachs

10: Phil Gramm, U.S. Senate, ex- Chairman Senate Committee on Banking

Jack: John Thain, ex-CEO, Merrill Lynch

Queen: Jerome Kerviel, Trader, Societe Generale

King: Daniel Mudd, ex-CEO, Fannie Mae

The Clubs

Ace:  Jim Cramer, TV Host/Author, CNBC

2:  Richard Syron, ex-CEO, Freddie Mac

3:  Robert Toll, CEO, Toll Brothers Inc.

4:  Ken Thompson, ex-CEO, Wachovia Corporation

5:  Stanley O’Neal, ex-CEO, Merrill Lynch

6: Robert Nardelli, CEO, Chrysler

7:  Robert Kelly, CEO, Bank of New York Mellon

8: Barack Obama, President of the United States (2008- )

9:  Raymond McDaniel, President, Moody’s Corporation

10: John Mack, CEO, Morgan Stanley

Jack: David Lereah, ex-Chief Economist, National Association of Realtors (NAR)

Queen: Angelo Mozilo, ex-CEO, Countrywide Financial

King: Richard “Dick” Fuld, ex-CEO, Lehman Brothers

If you like Financial Crisis Cards, you may also be interesting in buying the Iraqi Most Wanted Playing Cards and America’s Most Wanted Playing Cards.

Disclaimer: I do earn commissions off of products mentioned in this blog.

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Tuesday, June 23rd, 2009

How To Shape A Market By John Hagel

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A very insightful man named John Hagel III spoke to a couple of hundred developers at eBay’s DevCon 09 gathering at eBay’s headquarters in San Jose last week.

I attended (even though I’m not a developer) and luckily Hagel’s talk was not technical!

Some of you may know John Hagel from his book Net Gain, which discusses how online networks have shifted the power in goods and services. He also runs The Center for the Edge in Silicon Valley.

shapingstrategy

Mr. Hagel’s topic last week was “Shaping Markets”

By Shapers, Mr. Hagel is referring to companies that transform a market sector. His Shaping examples included the following:

  • Containerized Shipping (1950’s) — Sea-Land founder Malcolm McLean reshaped global shipping by developing a design for four-corner fittings and twist-lock mechanismis on shipping containers…and made the design available industry-wide.
  • The Visa Credit Card (1970’s) — VIsa Founder Dee Hawk reshaped the credit card industry around the notion of a shared utility. This allowed banks to outsource their credit-card processing to Visa so that the banks could focus on customer acquisition
  • Microsoft and Intel’s PC Marketplace (early 1980’s) — Microsoft and Intel led the charge of a set of protocols of a chip and operating system that formed the personal computer ecosystem.
  • Li & Fung Apparel Supply Chain (1980’s — Victor and William Fung reengineerd the apparel industry by providing a simple phone/fax system for its 10,000 partners. Roughly 40% of all apparel is sourced through one of Li & Fung’s supply chain

The Three Elements to Being a Shaper

Hagel says that a Shaper must have three things:

1) A Shaping View

An example of a shaping view is Microsoft Co-founder Bill Gates’ message in the early 1980s that is summarized: “Computing power is inexorably moving from mainframes to desktop. If you want to be a leader in the computing industry, you have to be a leader in the desktop.”

At the time, the mainframe (IBM) and minicomputer (DEC) guys were discounting the personal computer.

Gates’ Shaping View galvanized small companies to invest in his vision of a “Computer on every desktop.”

A more recent example of a shaping view is Salesforce.com’s Founder Marc Benioff’s Shaping View that companies could reduce their technology expense if they used software through network services (as opposed to software packages installed within each company).

In short, Gates and Benioff are saying: “The future is over here — this is where you ought to invest…and there are real rewards associated with it.”

2) A Shaping Platform

Mr. Hagel explains that to be a “Shaper” you also need a platform that offer one of two types of leverage:

A) Development Leverage — A technology such as the force.com technology from Salesforce.com or Facebook’s Application Development Tools that reduces the investment required to build and deliver products or services.

B) Interaction Leverage —  A set of protocols and practices to facilitate interaction. Google AdSense is a good example of this as it allows a connection between advertisers, content providers and consumers.

3) Shaping Acts & Assets

Mr. Hagel says that a Shaper must demonstrate  conviction, capability as well as assurance to other participants in the industry that it will not compete with them.

His best example here was Novell, the computer networking company that sold off its hardware business to concentrate on its local area networking operating system.  That was a bold move that signaled to others in the industry that Novell was serious about focusing on a network operating system — their dominance of that industry soon followed.

Another example: Malcolm McLean released his patents for the four-corner fittings and twist-lock mechanisms royalty-free to the International Organization for Standardization

Incentives are Important

There is also the question of how do you motivate people through positive rewards as opposed to negative rewards.

Clay Shirken, for example, believes in negative rewards — your company will go out of business if you don’t act.

Mr. Hagel seems to lean more towards positive incentives — He recommends shifting perceptions of risk and reward.

Crisis is an Opportunity

During crisis, we magnify risk and minimize reward. That’s an opportunity for a shaper is to come in and flip that.

You should magnify perception of reward and discount the perception of risk. If you do that you can motivate people to make investments around your strategy, you can reshape entire markets or industries.

Shapers Can Start off Small (even within other platforms)

You don’t need to be a large company to be a shaper. Visa at one point was a no-name startup. Malcolm McLean was a trucker from Arkansas.

Startups can be very successful shapers if they mobilize the three elements above — Shaping View, Shaping Platform and Shaping Acts and Assets —  together.

Facebook is a current shaper. There are also opportunities to be shapers within an ecosystem — a company called Social Media Networks is creating a platform for Facebook to help faciliate aedvertising revnenue.  It’s a  shaping play within the broader Facebook ecosystem.

Making Money Even If You’re Not a Shaper

Here are some key lessons for you to make money in these shaping strategies even if you’re not the Shaper.

1) Be Acute in measuring a Shaper’s capabilities and potential for success. You ought to be comfortable that that Shaper is going to pull it off.

2) You’ve got to be clear about what niche you’re operating in…and what’s truly distinctive that insulates you from the rest of the participants.

3) Leverage Skills — You have to think about who else is out there in the ecosystem to take full advantage of the ecosystem. Who are those people and how to I build those relationships so that we all gain value from the shaping strategy.

4) Ultimately, the power of these shaping strategies is that you are able to learn faster. How do you learn from the experience of everyone else (not just your own experience)…and how do you adapt for your own sake.

Final Thoughts

The core message: not everyone is going to be a shaper. But more and more markets will be shaped over time.

The key question: do you want to be a shaper…or do you want to be shaped? You can make a lot of money either way. But you have to understand the rules of the game in order to succeed.

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Saturday, June 13th, 2009

How to Write A Purpose Statement

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In late 2007 I was introduced to “Coach Terry,” a phone-based life coach.

I was dubious about the phone-only part but I gave it a shot for a few months and learned a ton.

The most important thing I learned from Terry was the importance of having a statement of purpose for anything substantial in my life (you can find a sample statement of purpose below).

I began writing a statement of purpose for my life, my business, my role in business, a holiday trip, my romantic relationship or even just my plan for a day.

I’ve found it useful to constantly be asking myself what the purpose of something I’m doing is, or when people ask me to do something or say they are doing something, I ask them: “What is the purpose of that?”

Be purposeful about all things in your life…and you’ll find that the outcome is more favorable.

So, here’s how to write a statement of purpose along with some purpose statement tips:

1) List Your Expectations

Write down all the expectations you have about your purpose related to a certain topic (e.g. your life, job, relationship with someone, etc.) on the left-hand side of the page.

Examples of expectations are wants, needs and even fears — for example, if you’re writing a purpose statement about a job you should be answering the following questions:

What do I really want my job to be?

What do I really need in my job?

What fears do I have about my job?

Spend at least 5 to 10 minutes on this part…and really open up!

You should now have at least 7 to 10 expectations — and they will probably be centered around a few topics or themes  (e.g. for a job, it might be to make money, have fun, have a flexible schedule, etc.)

2) Purpose Statement

Now, fresh from writing out those expectations, immediately write down one long sentence that starts with “The purpose of my __________ is to …” and the rest of the statement should flow pretty naturally (hint: if you have any challenge here, take your Expectations and group them into a few topics or themes and use those as your purpose statement).

Writing a purpose statement is that easy!

You now have the beginnings of the purpose statement — you can refine this now or later (if you’re like me, you’ll find that you remember new wants, needs and fears later on — so just add them in and iterate).

3) Bonus Round: WriteI Will” Statements

If you want to take this thing one step further, return to the expectations and to the right of each of them write down an “I will” statement.

The “I will” statement should be something actionable that you could do to be more purposeful.

Try to make each “I will” statement specific, measureable, actionable and timely.

Don’t worry about ever doing such things — this isn’t a to-do list — just write it down!

The act of merely writing them down will make you more mindful of your purpose.

I promise you that if you do this exercise, you will be more purposeful on whatever the topic.

So, now you have a purpose statement (remember, you can refine it all you want) and even some actions that you can take (I sometimes DO treat it like a to-do list by printing it out and doing some of the actions immediately)

Samples of Purpose Statements

Here are some sample purpose statements I’ve written:

Life Purpose Statement — My life purpose is to smile most of the time, develop myself constantly to find my greatness, be productive the vast majority of the time, give plenty to others and to have a positive vibration on the planet.

Purpose Statement For Layoffs I Had To Make — The purpose of our layoffs is to be able to execute the plan on a timely basis, to be respected in the execution and to protect the jobs of productive people

Business Purpose Statement — The purpose of our business is to have fun, help people and make a little money.

Purpose Statement For My Job —  The purpose of my job is to make money, meet only with people I love and respect, work on things I enjoy and provide a flexible schedule to take care of the primary choices in my life. Check out 3 Easy Steps To Write A Purpose Statement For Your Next Job.

Purpose Statement For A New Management Meeting I Had To Start (see my Daily Huddle Article) — The purpose of the daily huddle meeting is to align the management team and to increase the speed of our growth.

Purpose Statement for My Wife — The purpose of the relationship with my life-mate is to have a passionate, healthy and positive relationship — while still enjoying some vices! — that leads to a larger family with children I adore.

I also highly recommend you check out this How To Write A Purpose Statement article by Steve Pavlina.

That lead to the following life purpose statement by Mr. Pavlina: To live consciously and courageously, to resonate with love and compassion, to awaken the great spirits within others, and to leave this world in peace.

Enjoy being purposeful!

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Friday, June 12th, 2009

How To Communicate During Crisis

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When you are in conflict- or crisis-mode, the tendency is to get emotionally charged and that sometimes leads to folks taking actions that are unhealthy for the business.

Here are four steps that I adopted from the University of Maryland’s Leadership Program to deal with communicating during crisis or conflict:

1) Separate the People from the Problem

A good communication about conflict should focus on the underlying problem (not the person).

Two examples:

” We just discovered that we did not ship out products to certain customers over the last 10 days and now sales will be down 16% this month” (good)

“George (in Shipping) slipped up and forgot to confirm that our shipping facility received our go-ahead to ship products out this month…and our sales are plummeting” (bad)

If you indeed do have a person-problem, then deal with the problem as a relationship problem by talking directly to the person you have a problem with (i.e. George)

2) Generate a Variety of Possible Solutions before Deciding What to Do

Don’t assume there is just one solution.

Example:

“After discussing this with all of you, we have two potential solutions:

  • Do nothing and just ship the customers their products late
  • Send an apology email to each customer that their shipment will be late and that they will receive a bonus product as a thank you for their patience.”

And it doesn’t have to be your solution versus your team’s solution.

3) Insist That Results Be Based On Some Objective Standard.

Examples:

  • Efficiency
  • Profitability
  • Cash flow
  • Ethics

That way, you and your team can measure how you get out of the crisis/conflict.

And if you’re involved in a conflict and feeling angry about it, this Chinese Proverb has proven invaluable to many people:

“Never write when you’re angry.”

It’s better to pause, collect your thoughts first and even talk to a colleague if you can…then start writing when you’re more calm.

Your communication will now be more effective.

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