Cheap vs. Inexpensive

Posted by lorenzo on August 29th, 2006

“We sell everything cheap!”

“We are looking for something cheap!”

When I hear the word “cheap” I cringe, and my skin crawls.  Personally I HATE cheap stuff.

Running a company involves acquiring goods and services in order to fulfill a business need (not to just spend money, contrary to what a lot of vendors believe).  Many CEOs, Entrepreneurs, and executives, including CFOs, have too short a visual to discern between cheap and inexpensive.  Often something cheap is just that, CHEAP.  It takes effort to determine clearly what is the business purpose and the business rationale for what is “needed” by the company, then going into the marketplace and figure out which solution will fulfill the business need the best, and then, and only then, the resources (time, money, people, intangibles) needed to procure such item.  Is the cheapest solution the best one?
No if it requires constant maintenance, even if is done in-house, or it will be obsolete in a short period of time (shorter than the business need), require extra attention from people in your staff, or if it will alienate your audience, or tarnish your brand.

So next time someone offers you something cheap, or asks you to buy something cheap, are they misspoken and they mean something inexpensive, with a great ratio of value to price, or are they asking you to scrape the bottom of the barrel?

When you factor everything in, often times cheap is too expensive.

A matter of trust?

Posted by lorenzo on August 28th, 2006

Never trust anyone who says “Trust me”.

Trust me on this one.

You NEVER raise money

Posted by lorenzo on August 27th, 2006

The question that EVERY entrepreneur wants to know is:  “How do I raise money?” or some other version of it.  The question is that you NEVER raise money.  WHAAAAAAAAAAAAT? You say (I am sure).

Plain and simply you NEVER raise money . . .

. . .  but you SELL something:

  1. you sell shares in your company (e.g.: Angels, VCs);
  2. you sell portion of your company’s future cash flow (e,g,: loans, bank);
  3. you sell seats on the board (usually an accessory top a.);
  4. you sell control: in a VC deal, often the first 49% of a company is free, it’s the additional 2% that’s very expensive.

Therefore raising money is a selling activity, a selling process that encompasses institutional branding, institutional marketing its own collateral (e.g.: business plan), and its own selling experience.

Of course if you believe that things are no longer sold, but they are bought:  what are you doing today to stimulate the purchase of what you are selling, either your goods or services, your shares or both?

Try to approach the raising money process as a selling process, sell, sell, sell, sell in everything you do:  will interested investor call your support line?  Will they place an order with you?

Q.: Where does the selling/branding stop and where does it begin?
A.: NEVER!  It never stops!  From the way you answer the phone, to whether you answer the phone (Amazon.com does not have a phone #, but you can have Amazon.com customer service call you), Zappos uses white boxes highly distinguishable if you see someone walking carrying one, in Rome (Italy) there’s a restaurant called “LA PAROLACCIA” where the wait staff is rude, and calls customers names ON PURPOSE, and customers do the same.  Do not go there alone or on a date!  Calling their customers dorks and a-holes is their brand!

Suggested reading:  SELLING IS DEAD

Selling is dead

Speaking of change (again)

Posted by lorenzo on August 25th, 2006

Leadership & change: are you sure you know everything there’s to know?

If you enjoyed my other post on change, and the Change or Die article linked there, here’s another one for you: The Neuroscience of Leadership is a thought-provoking article from strategy+business.

What you really want vs. what you want to hear

Posted by lorenzo on August 25th, 2006

Consumers have always been an audience, while marketers and sellers have been the undisputed performers.

Has this ever happened to you?

Customer: “What colors do you have?”
Seller: “What color are you looking for?”
Customer: “Metallic Silver”
Seller: “We have it”.

Later in the buying process, the seller does not have a Metallic Silver product, but in one way or another tries to rescue the sale.  If a sale is based on lies and deceit, was there ever a sale?

Some of the techniques used by some sellers:

You didn’t say Metallic Silver
This is metallic Silver (pointing at something Red)
and the best of all: seller waste buyer’s time with excuses and procrastinations till the buyer has no more time to start a new process somewhere else.

So, next time you interact with someone, sellers, clients, prospects, employees, bosses and you walk away happy: did they tell you the facts, or what you wanted to hear?

By the way:  the check is in the mail

Do people change? And should you care?

Posted by lorenzo on August 24th, 2006

Do people really change?  Or is it that people can be managed?

There’s a difference, a HUGE difference.

If you hire people with your same worldview, who share your visions, and your ethics, it’s no different than multiple people naturally pushing toward the same direction.  If instead the majority of people do not share the vision, worldview, and ethics, the pushing toward the envision direction can still happen, but requires:

  • supervision
  • management
  • training
  • . . . . .
  • . . . . .
  • . . . . .

All these initiatives are non-core, have a monetary cost associated with them, and require time.  In a business environment extremely transparent, where achieving corporate milestones is to be equated to a race against the competition, can you afford to waste time, money and resources when your more nimble competition does not, or does it to a lesser extent?

The choice of people that you make affects directly your P&L.

Reading: EXECUTION by Larry Bossidy, Ram Charan, Charlies Burck (the part about hiring is a MUST DO for everyone)

Execution: the discipline of getting things done

Something to think about

Posted by admin on August 19th, 2006

Q.: What’s the difference between Art School and Business School?
A.: In Business school you don’t get to practice what you learn (are case studies and business plans without execution business practice?)

Pasta with vongole

Pasta with vongole

Q.: What’s the difference between Music School and Business School?
A.: In Business School you don’t get to practice what you learn (are case studies and business plans without execution business practice?)

Q.: What’s the difference between Cooking School and Business School?
A.: In Business school you don’t get to practice what you learn (are case studies and business plans without execution business practice?)

On a related note:  you have resolved to finally learn a new skill, let’s say swimming or to speak Italiano.  Would you take lessons from someone who doesn’t know how to swim, and doesn’t speak Italian?

Something to think about.

Life, Business, and the art of playing guitar

Posted by admin on August 19th, 2006

Do you play guitar?  You should!  Here’s why:

  • Musicians have more fun: ask around
  • It’s portable fun: once you start playing guitar, you’ll start collecting gear, somehow it comes with the territory.  Buy a cheap guitar and take it with you at the beach, camp, wherever you go.
  • It’s social: start playing and people will stop talking, turn off cell phones, detach from their iPod, and start humming, some will sing, and the most courageous may eve dance.  You’ll make new friends, and get to know amazing people.  (Add dog if you are single).

But wait!  There’s more:  learning to play guitar will embed in you the most valuable business tool there is:  Project Management:

  • Plan: make one (online resources etc..), buy one (Books, methods etc..) or hire someone to make one fore you (teacher)
    Ovation guitar
  • Perfect Practice make perfect:  only by playing constantly and on a regular basis you will progress on the plan.  30 minutes every day will yield greater results that 3.5 hours every Sunday.
  • Use it or lose it:  put practice off long enough and you will find that you have fallen behind where you were the last time you practice.
  • Learn by doing is the only way to learn:  how many books on swimming can you read and never jump into the water?
  • Push the envelope:  practicing every day what you know will get you nowhere.  Set the task too high and you will fail without learning.  Set the bar every time a bit higher, practice slow, then increase speed, practice until the conscious efforts grows enough neurons to become habit or second nature, a part of your new you; then move on to the next task.
  • Enjoy the process, the process is the destination.

Can you say the same about your business tools and habits?

How to attain a competitive advantage, easily and inexpensively: PART II

Posted by admin on August 18th, 2006

DO WHAT YOU SAID YOU WERE GOING TO DO!
(and if you can’t do it, don’t say you can!)

It works only if you:

1) Etch this in stone
2) Assure that everyone, from the top down DOES IT.

How to attain a competitive advantage, easily and inexpensively: PART I

Posted by admin on August 18th, 2006

Keep it simple:

Simplicity: The New Competitive Advantage in a World of More, Better, Faster

Need I say more? (If I did it would violate this very same post).


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