Peer Pressure

Steven Pressfield wrote that “the highest treason a crab can commit is to make a leap for the rim of the bucket.”

When you commit to building a business, the resistance from friends and relatives might be greater than if you lived in a suburban environment.

Many people in your town are there because they chose a superior lifestyle. But you are surrounded by many people who live there as the default situation. Inside themselves, they know they have more to offer in the city. They are ashamed that they lack the courage to either leave or to blossom where they are. They rarely admit it to themselves, and usually construct complicated, vivid stories to explain their lack of courage.

If you decide to be the crab that tries to crawl to the bucket rim, these people will try to drag you back in, so that you don’t expose their self-disappointment. Here is what they might say, and the translations of their words.

“This plan just isn’t feasible.” = “I wish I had thought of it.”

“That kind of plan never works around here.” = “Why can’t you just work at Walmart like the rest of us.”

“Have you heard about ___’s new business? He always was a little crazy.” = “I hope it fails.”

“If you want some advice, you need to work hard on marketing.” = “Why didn’t they call me? I’m the marketing expert in town.”

“If I were you, I would quit this and just get a safe job.” = “I should have been successful, but it was impossible because of ____.”

Learning to ignore the other crabs is essential.

Customer Service, continued

Last time we discussed direct client-facing businesses. Now let’s talk to those who sell mainly to those outside the region.

The good news is that the internet almost completely erases barriers to entry to a business. (You can sell to people all over the world, while sitting in your underwear in front of a computer on a table in your bedroom.)

The bad news is that the internet almost completely erases barriers to entry to a business. (So anyone can replace you by providing the same product or service at a lower price.)

So you need to differentiate yourself, creating an unassailable fortress. A good way to do that is with superior service. My wife differentiates her quilt fabric business by superior procurement (she has excellent taste in fabrics), by responding quickly, by shipping quickly, and by wrapping nicely (a skill she learned in Japan.)

So instead of competing on price, compete by differentiating.

To repeat today’s tips:

o   Respond quickly, in an upbeat style, to inquiries

o   Don’t push

o   Ship promptly

o   Wrap it up nicely

o   Turn off your webcam, in case you are sitting in your

          underwear in front of a computer on a table in your bedroom

           whilst you sell. 

Customer Service

Chillicothe, Missouri, seems to have kept its Piggly Wiggly. I looked for it as I drove through yesterday. I never shop there, but I can’t help but stare as I drive by, because the store name is so fun to say.

Now they have a Walmart. Why? Maybe people prefer one-stop shopping, or perhaps because they believe the “lowest price” hype (which is sometimes true.) The residents know that Walmart will erode the value of their town, but the lure is so irresistible.

So why do people still shop at Piggly Wiggly?

Perhaps they are skilled at the human connection.

Does your business sell primarily face-to-face to people in your area? Your business might be the next one to be driven to disaster by global competition. So why not be proactive now, and start treating your customers in a polite way?

A lot of small rural businesses actually do treat their customers well. But I am appalled by some of the horrific service I’ve experienced recently.

These are some of the philosophies that seem to be running through the minds of shop owners and their employees.

“I have too many customers, and I want to retire soon and close my business without selling it.”

“I want my customers to realize that I’m busy and work hard, so I need to complain when they make a request.”

If your employees are mistreating employees, either you have not trained them correctly, or you are treating them well (remember what Steven Covey used to advise: treat you employees the way you would treat your most important customers, because they will be the ones interacting with your customers.)

Here are some examples of things I’ve experienced in the past week:

A health food store in Burlington, Iowa…

“We don’t take Amex!” (Then flinging the card back at me, even though they display the American Express logo on the shop door.)

…and how it might be improved

 “I’m sorry, we don’t currently have a merchant agreement with American Express. Do you possibly have another card?”

A McDonalds in western Kansas…

“I don’t know.”

…and how it might be improved

“Let me find someone who does know the directions to the interstate.”

Seem like common sense, hardly worth reading about on a blog? They why is it so uncommon in real life?  For certain, being rude doesn’t take less energy than being helpful and polite. If you need to make a statement about how busy and overworked you are, don’t use a customer as your punching bag. 

Silver Entrepreneurs

Dear post-career-aged reader:

In Japanese, they say "silver" instead of "gray" to refer to their elders. It is respectful. A "silver seat" is a seat on the train designated for the elderly. It is now time to address the Silver Entrepreneur segment. As population collapse appears imminent in many countries, WE NEED YOU!

Some facts:
    - The idea of retiring at age 60 or 65 and engaging in constant leisure is
       historically new. Until an economic quirk in the 1950s allowed people
       to stop working, people retired from their jobs, then started a second job
       (or grew vegetables and sold them, or worked temp positions.) Spending
       the last third of one's life watching Matlock reruns is a historic anomaly.
       It is not an inalienable right.
    - People of 65 have so much to give our economy. We should be drawing
       on their knowledge experience, not relegating them to fetching our
       shopping carts. Society needs you to start businesses.
    - Middle age is now defined as 60 years old. So if you take care of
      yourself, you don't approach old age until your late seventies.
    - As population declines are nigh in many countries (and will be soon
      enough in the U.S. and China), societies need people over 65 to
      participate in the small-business economy. Please fill the gap.

Respect Your Elders

I am not the first source to say that society is aging. But you may not realize that it is not a problem only in what we call the First World. Evidence indicates that society is getting older in South America. Retirees in China, now supported by only 5.4 workers, will in my lifetime be reduced to 1.6 workers. Think of how everyone will be different when the world's dominant superpower is a country where almost no one has ever had siblings, cousins, aunts, or uncles. Demographic shifts will be the driver of change in the next few decades.

This relevancy for you, as a rural entrepreneur:

    - Advertising that glorifies youth and mocks the aged is
      a dumb idea
    - A business that serves the elderly is a smart idea
    - Governments made commitments to retirees before they
       knew so many people would be retired at the same time,
       and now cannot possibly cover their commitments. A
       business that serves the elderly, increasing efficiency to
       compensate for revenue shortfalls so lifestyle doesn't suffer,
       is a smarter idea
    - Retirees should start businesses (we'll cover that in more depth
      tomorrow)

(selected reference: http://www.weeklystandard.com/articles/america’s-one-child-policy)

Control freaks: time for some introspection

How strong is your Research and Development function?

Okay, so your small business on the Banks of Plum Creek doesn't have a large R&D team full of scientists. And you don't hold a PhD in computer science.
No problem. Research is increasingly outsourced now, even in large companies. P&G's goal is for 50 percent of all new products to come from outside the company.


A lot of ideas about trends in our world you hear about from experts originally came from Alvin Toffler 40 years ago, when he wrote Future Shock. People are still re-packaging his ideas. So he may be a good source for again predicting future trends. 

         "Technologies will not be developed in-house.  Successful organizations will 
          become adept at integrating large problem-solver networks, linking 'answer 
          seekers' with “problem solvers” across the globe to rapidly harness the 
          brainpower of international experts."

So you can buy or rent ideas from other people. Many people have great ideas, and are waiting for YOU to help them develop those ideas. Remember that 99 percent of success is perspiration. Hordes of people have great ideas which will never see fruition because they don't have your ability to execute. 


Don't feel like you need to invent everything, come up with all the ideas, develop processes yourself. 

Networking

Again, how sparse is your hometown?

If you live where the buffalo roam, networking with other entrepreneurs is crucial.

Alistair Nolan, at a Main Streets of Tomorrow conference in Kansas City in the late 1990s, said that "entrepreneurs who develop and maintain ties with other entrepreneurs outperform those who do not." How do you network when no other people are near you? You connect with people of similar interests on line. A profile on LinkedIn or Facebook is not sufficient. You need to go where other business owners in your field go. Engage with them.

Another fact from Nolan is that "businesses that are started by teams of entrepreneurs are more likely to succeed than those started by individuals." That could be another discouraging fact for those of us in sparsely-populated regions. But it really only means that you need to create virtual teams. Some of the most innovative new companies I'm seeing are composed of teams who rarely meet. Some of them NEVER meet. You are not obligated to hire people in your neighborhood, so you are free to find the most creative people in the world for your teams.

The summary: networking and team-building will require more creativity for you. But you also have the world as your neighborhood. You don't need to rely on the Chamber of Commerce for support.

Think locally, recruit globally.

Don't work smarter

We always hear the phrase "work smarter, not harder." The idea is to use your brain to develop a way that requires less effort, so you can accomplish more with the same amount of work.

But too often we use concept as an excuse for not working. We sit around, thinking of a better way. Meanwhile, nothing happens.

Like this blog posting, for instance. I have nothing to say today, but I post anyway. Moving forward, staying in the habit of working, is extremely important. So that is the lesson of the day.

Evangelize yourself, not your movement

Here is a rule I once learned from a wise man. "Never talk religion at a political gathering and never talk politics at church."

Your job as an entrepreneur is to make money. You want to sell to Democrats, Republicans, Baptists, atheists, Lakers fans, Celtic fans, every color of people, and those with chicken pox. 


Your goal of making money should be so important that you are willing to stop evangelizing people for your pet cause. Leave it at home. 

So few farms, so little time

We've discussed the idea of farming as a viable business option for those living in a farming area.

Have you ever met a farmer who has become wealthy from farming? (Those who inherit land became wealthy by inheriting land.) Few would admit to becoming rich by farming.

But an increasing number of researchers claim that farmers don't farm or market the correct way, and that is why few make a decent living by working the land. They cultivate and sell commodity products at commodity prices, so they can never win the game. Commodity prices are determined by hedge funds trading on exchanges. The farmer just tries to lower costs in order to survive.

An increasing number of farmers are making respectable money on small farms, often leasing land. Their approaches are quite different from what traditional farmers are doing.

Here at the Nauvoo Commuter, we don't farm, so we can't say which way is better. But if you are searching for a business that you can do, where you are today, then you should investigate the research.

Examples:

Beginning Farmers

Beginning farmers and ranchers

And be sure to check out the Greenhorns on Heritage Radio.

Your Personal Manifesto

The Great Recession of 2008 will probably continue for some time. It was five decades in the making. Some causes can be traced back to LBJ's administration. You don't solve something like that immediately, by adjusting monetary policy, or by repaving rural roads, or by spending $212,000 to create a $35,000 job, or by making a speech about new policies. It will take time.

But for you, the recession is over. You're creating a new economy. You are building something that makes the economy more efficient. That brings you more money. You are in expansionary mode.

Now we just need a few more people like you.

Who Wants to Be a Billionaire?

Harold Hamm grew up milking cows, gathering eggs, and feeding chickens. The youngest of 13 kids born to sharecropper parents in Oklahoma, Hamm says that he hardly remembers a time when he wasn't working. "We came up working for the family unit," Hamm says. "You certainly learned quickly to do your part." At the age of 20, he bought a water pump truck to deliver drilling fluids and service drilling rigs. "That is the company that became Continental Resources (CLR)," Hamm says. "It was a very meager start." He says he raised his kids in much the same way he grew up. As his fledging company got off the ground, Hamm's wife kept the books and his daughter, starting as young as six, would answer telephones. At the end of last year, the Enid (Okla.)-based company estimated its proved reserves at 257.3 million barrels of oil, with interests in 2,317 wells. Continental Resources generated $627.7 million in revenue, according to the company's 10-K. Hamm remains at the helm. As he puts it: "I get as much excitement going to work today as I did when I was 20 years old."

The above is from Hamm's BusinessWeek profile. Could your profile someday read this way? The magazine recently profiled twenty billionaires who started with nothing. 

So some excuses might work, but you can't reasonably use "I have nothing" as an excuse.

Purity of Purpose Test for Gloom Merchants

Both the right wing and the left wing agree on one thing: the world is ending shortly. They don't agree on the cause. One thinks it is government debt. One thinks it is polar ice cap melting. But end it soon must, this ideal life we now enjoy.

Just remember one thing: the purpose of preaching doom and glom is usually one thing: to sell something. Most prophets of doom are selling a newsletter, a book, an investment vehicle. Their motives are rarely pure.

One more warning: if you are unhappy with your life, if you don't feel personally successful, then you are more susceptible to being swayed by the Gloom Merchants.  Some may have pure motives. But the man behind the curtain is usually manipulating your fear reflex to close an order for a subscription. Name any celebrity or pundit who preaches doom, and I will tell you the personal motive.

So of all end-of-the-world predictions, be wary. Tough times might be ahead. But this is the best time in history to start a business, as long as you sell to needs, not wants.

The Importance of Being Numerate

"I'm never going to use this stuff," we would tell our mathematics teachers. And we were right, because if you don't learn math well, you never use it.

But those who learned it now use it to map the human genome or to model derivatives or to invent new formulas or to manipulate survey results. They make big money.

We live in a world based on numbers. The numerate win.

Let's say you avoided mastering mathematics and work in a field of soft skills, such as marketing. Even that world belongs to people who can use numbers to prove why their ideas are better.

If you must choose between two marketers, which will you choose to hire? One who can conclusively prove, numerically, that "my plan will increase market share by 12 percent." The other one that says "my plan feels right in my gut, so choose me."

You are 90 percent more likely to choose the one with the numbers.

Here is a story problem. Let's say rap singer 50 Cent (Curtis Jackson) earns an annual salary of 150 million dollars. For every singer at that level, 150,000 youths struggle to break into that level. They all did gigs and called themselves rap artists.

Question: what is the average (mean) salary for all those artists?

Answer: 1,000 dollars. That is not enough money to live on, especially after deducting costs of sound equipment and necessary excessive bling. So stay in school and study calculus.

Economic Predictions and Your Business

I don't know if the U.S. is on the verge of inflation, deflation, stagflation, or unbounded prosperity. I know even less about the rest of the world. If I did, I wouldn't tell you. I would sell that information.

But I do have one prediction. I believe that state and local governments will significantly cut back services. They will have to break commitments. Many municipalities are bankrupt so have no choice but to cut back.

I don't believe this is the end of the world, and I hope you also feel cautiously optimistic. But we are going to need to use our own bootstraps for picking ourselves up. You can seek SBA loans, government grants, and public advisors for assistance. But if your business model hangs on it, disappointment might be your lot.

Defining Rural Entrepreneurship

Do you live in a rural area? 

That is like asking "are you tall?" Regardless of your height, you are tall compared to someone. You can always find someone shorter or taller than you.

You might live in a town of less than 50,000 and call it rural. You might be the only person within 100 kilometers. 

We aim to speak to all of you, but the message will need to be received differently. 

Which Category Do You Represent?

Here are the Nauvoo Commuter, we seem to like categorizing people. But that is the best way we can think of to isolate issues requiring confrontation and the best way to isolate for instruction.

   - Are you a current business owner, seeking to grow or improve your business?

   - Are you in the middle of trying to start a business, possibly bogged down because of a glitch?

   - Are you hoping to start a business?

The question of how to move forward can, to some extent, be answered the same. But it is also very different. Some of the postings will apply severally to each category of reader. That is something to keep in mind if you think some information here is irrelevant for you.

Introduction

I have always been dubious about entrepreneurship education. Running a business, in fact, is not about theories. It is about covering payroll next Friday. You don't learn it by reading about it.

But reality doesn't agree with me.

A large portion of the really innovative new companies, the really cool companies, are coming out of university entrepreneurship education programs.

Education in this area helps you to make sure you haven't missed something, it gives you mentors, and it helps you realize that you don't already know everything. It might give you crucial feedback about your plans, before you use real money. It does work.

Sign of things to come

As you enter my town from the north, the first thing you see is a grand hotel. Or it would have been, if they had built it. Now all you see is a crumbling foundation. The builders used large blocks rather than pouring concrete, and some of them have shifted, making it look like a failed Lego project, all in gray. It hasn't changed in years. The land was recently sold at a sheriff's auction.

This is your first impression of the town, and it has discouraged many would-be entrepreneurs, and certainly investors. "My business could end up like the Lego Hotel," people lament. So they keep their heads down at Walmart jobs in a nearby county.

Here is the good news. If you attempt to start a business, it might fail in a big way, and might leave a Landmark of Despair and Shame.

But you might knock the cover off the ball.

As mentioned a few months ago in this forum, our culture has become too fearful of risk. Risk is what makes success so remarkable. It is why success is worth it. Let's embrace it.

Did the internet 12-second-business-plan era scar us forever? If we have to make an effort, over an extended time period, do we wilt?

Let's round up our shoulders and take the challenge. It will take time + effort. It might makes us cry ourselves to sleep more than once. And it might fail the first time or two. But the law of averages guarantees the success of the persistent.

Luck favors those who move forward

Recently I was traveling in the midwestern United States and met a family that had struggled to earn a living in a very sparsely-populated area.  So they set up some hoop houses and began growing vegetables and herbs to sell in a larger city.

Their situation analysis: "The Lord has been good to us."

The Lord just might be good to you. So start your business this week.

Friends and Family discount

If you sell to the residents of your area, you know your customers. You have more than an e-mail relationship. Their kids go to school with your kids.

But what happens when they don't buy from you? You notice them carrying Walmart bags, those ungrateful turncoats. Maybe they came to your shop, asked you for a brain dump of all your product knowledge, then drove to the city to buy the product.

How do you respond? My recommendation is to be generous and forgiving.

Some people might be reluctant to buy from you in the first place if they think you will be offended when they ask for a discount, don't buy enough, or just browse without buying. So they don't enter your shop or dealership.

Some people like business to be anonymous. You need to help them overcome that anxiety by making it clear, through words and non-verbal cues and actions, that the transaction is not personal. Forgive them when they stray. But be aggressive about wooing them back.

State of the State

I spent the morning analyzing entrepreneurial growth in the U.S.  Not such great news for the midwest. The West, particularly in states where property tax is low, is producing more rural entrepreneurs than other areas.

Interestingly, even though this blog is written in English, it has almost as many followers in China and Russia as it does in North America.

These two facts mean that region does matter. Some regional cultures are encouraging business formation and others are discouraging it. And national culture does not matter as much as local culture.

Negotiation Power

In building your negotiation ability, you need to learn two things:

  - how negotiation works
  - how to negotiate

The first one deals with structure, knowing how the negotiation process should work and how to be aware of the other party's combative tactics. Understanding this is essential for large-scale deals.

The second deals with personal skills, and includes overcoming your own personal weaknesses.

The second one is more important for you. You probably will not be negotiating nuclear disarmament treaties for your country. But you may very likely fail when negotiating rental terms for your shop, employment conditions, transportation costs for your materials, or agreeing to a bedtime with your children.

Here at the Nauvoo Commuter, we like people to focus on developing their strengths instead of spending their self-development time in mitigating weaknesses. But you probably have one short coming, one bad habit, that prevents you from negotiating success.

Market Research that works

Here we repeat the Nauvoo Commuter philosophy of starting a business.

Your goal is to prove your hypothesis as soon as possible. Explanation: everyone starts a business based on a hypothesis:
     - People need a more convenient way to purchase books
     - Area residents would pay a premium for coffee that doesn’t taste horrible
     - Senior citizens would jump if you offered in-home computer support
     - People would flock to a discount store if it were located in the middle of Maple Street

You should start some type of business that does the actual business, and test that hypothesis. See how people respond. That is real market research. So you expand as those signals dictate.

Compare that way to that of the typical start up, let’s say an internet-based company: spend six months writing the business plan, do a road show and secure funding. Rent an office, hire a team, buy cubicles and Aero chairs for all of them. Let people bring their dogs to work, because motivating people is your priority. Then start writing the site’s software. Hire SEO experts to bring in traffic. Set up shopping cart and start selling. After burning through millions of dollars, learn if anyone is interested in your product. Or not.

Our philosophy is just the opposite. Start doing the business as soon as possible, on as small of a scale as possible. Today. 

Competence

A non-American boss once told me that Americans often confuse arrogance with competence. It is a national failing.

But in the end, real competence, if consistent, will win. Bank on it.

It's not personal. It's business.

Some of us are sensitive. So when someone is aggressive, or even a little loud, we get our feelings hurt.

"Only a really bad person would do something like that. So I don't want to work with him. The deal's off."

We assign the worst possible motives to the person. But in fact, people's motives are usually better than we assume.

Evil people do exist in this world, but they are rare. And they're trying to take over the world, so probably don't have time for a small business in the countryside.

Go ahead and open your heart, not just your head. Just don't be a doormat.

Today's Number

The number of the day is 250 billion.

Honestly, you don't have time to start your own business. In between working your day job, attending your kid's sports games, shopping for birthday cards, laundering your socks, commuting, acquiring food to eat, volunteering to make the world better, attending meetings, and occasionally sleeping, you are too busy.

But America watches 250 billion hours of television annually. That's about 28 hours per week. (The average English citizen watches the same number, and the rest of Europe is not much better.)

According to the Sustainability Institute, cutting out television can add 12 years to your life. Those 12 years, well spent, can create an enormous legacy for yourself.  The 10,000 hours it takes to master a skill (see earlier comments about Malcolm Gladwell) can easily come in 6.5 years by cutting out television.

If you have spent more than three minutes of your life watching any program featuring Miley Cyrus, you have no excuse for not accomplishing something significant.

Next decision

This is a follow up to Monday's posting. 

Now let’s assume you are instead in the other category: you are trying to avoid a decision.

Here are some of the signs of avoidance:

-       you believe you need a really, really good business plan

-       you feel you need a little more formal education first

-       you think you need to make another major decision first

-       you are not sure you are really a “business type” of person

-       you think this recession makes business start up impossible, but maybe in a year

These signs do not indicate you are a bad person. Bad people drown kittens, or destroy a person’s career, or deceive investors. These signs only indicate you are anxious about making a decision. Lots of things can cause this anxiety.

Maybe that is okay. Or maybe you can deal with your anxieties and move forward. We’ll keep talking about that. 

The best source of support for entrepreneurs

You don’t need outside resources from the government, from non-profits, or from a rich uncle. Most  of the important resources you need are inside of you. 

Yet another choice

Another choice: either you are living in a sparse area, the place in which you have lived for a long time, or you moved there recently (or plan to do so as soon as you can).

The two situations need to be approached very differently.

If you are a long-term resident, you have a support network, you know how to get things done, you are familiar with all the local resources. You are less likely to step on the toes of locals.

If you are a newcomer, you have the outsider (lateral-thinker) advantage, you are not encumbered by “that’s how we do it here,” and you probably have access to outside resources.

Good businesses for the old-timer:

Something that caters to locals

A venture that involves hiring locals

Good businesses for the newcomer:

Internet sales

Something exported to the type of people from your old neighborhood

Tourism-based businesses

I often see newcomers establish businesses that sell to locals. But they don’t understand local needs, networks, old alliances, or who is still angry with whom for a diss in middle school. Sometimes they get caught up in old feuds they don’t understand.

Often I see people who have always lived in the town. They want to start a business, but cannot think outside the box. They try to do the same thing they have always seen done. So they compete with an established business, dividing up a market barely large enough to support one business.

The next decision

Let’s assume you are participating in this forum because you are ready to make a decision (refer to 11/23/2010 posting), then you must make another decision. 

You have one of two motivations for starting a business. Either you need cash now, or you want to build an empire. “I wanna’ be my own boss” is in the second category, while “my day job don’t pay enough” is in the first category.

The first category comprises those we sometimes call necessipreneurs.

Into our town last year moved a couple. The husband’s company had transferred him to the area. After they arrived, they learned that the job had been placed on hold for three months later due to the recession. A few months later, the position (along with the position he held before the transfer) was dissolved. They could not find suitable employment, and they were running out of cash.

So they opened a restaurant. Food services was not particularly a hobby or avocation, but a way to earn their own daily bread, and they thought they had some good recipes. The dining options increased in town, and the couple was able to pay the rent and utilities at their apartment. Many people around the world are following this pattern.

Necessipreneurship is a very solid reason for starting a company. But it requires a different methodology than building a Google-sized endeavor. 

Economic Development

Small towns need to encourage entrepreneurship.

Economic development often means, unfortunately, bribing big companies to build a factory in the bribers’ town. You spend unconscientiously to woo, you offer tax breaks and incentives, you beg.

That model was never effective. Even larger cities like Phoenix and Salt Lake City spent huge efforts to woo consumer finance companies to open call centers in their cities. So all the high-paying executive jobs remained in New York, and the minimum wage phone jobs were moved to the West. The cities gave up more than they gained, and they used resources that could have been used for creating real jobs.

But now the model is completely unrealistic. Why would a manufacturer move their factory to your town instead of to coastal China? Your town is already hollowed out and Guangzhou is dynamic.

Courting companies is begging for a piece of the pie. Creating companies is baking more pies. 

Really bad news, Really good news

What an exciting time to be alive. What an exciting time to start a business. Especially in a rural area.

Every 500 years or so, civilization seems to implode and reinvent itself. We are in the midst of that now.

About 500 years ago, Reformation and Renaissance (rise of trade within Asia).  Roughly 500 years before that, the Roman Empire completed dividing into Christian and Islamic domains, leading to the cultural divide of today (Chinese civil wars and succession of dynasties and peak of Chinese technological advances). And 500 years before that saw a shift in power from the Mediterranean to Northern Europe (Japan began the pattern of adopting best practices from abroad). The beginning of Christianity in the 500 years before that, with its power to unite Western civilization (Silk Road uniting ancient world and inventing modern world). Of course this is somewhat of an exaggeration, but some sociologists find merit in the concept.

So what will happen this time?  Will secularism become the undisputed state religion?  Plagues or famines? Will we feel protracted wars are needed to wrench away from clutches of progress?  Will population shifts reverse, causing rural populations to start growing again?

Just think of the marvelous possibilities.

Why you are participating in this forum

You read this blog for one of two reasons:

1) You want to make a decision
2) You want to avoid a decision

Either option is acceptable. But you need to analyze which is your reason. Because that is the first decision of the forum.

A hint that you are in Category #2: you think you need a detailed, bullet-proof business plan, protected by a nice binder, before you begin. Hint you might be in Category #1: you have tried building a business that either succeeded or failed.

Please don't ignore this issue as something trivial to fill blog space. Think for 7 minutes, decide where you stand, and move forward.

Dealing with your city council

This Steve Pressfield quote is profound enough to type here:

"Most of us define ourselves hierarchically and don't even know it. It's hard not to. School, advertising, the entire materialist culture drills us from birth to define ourselves by others' opinions. Drink this beer, get this job, look this way and everyone will love you. What is a hierarchy, anyway? Hollywood is a hierarchy. So are Washington, Wall Street, and the Daughters of the American Revolution. High school is the ultimate hierarchy. And it works; in a pond that small, the hierarchical orientation succeeds.... When the numbers get too big, the thing breaks down. A pecking order can hold only so many chickens. In Massapequa High, you can find your place. Move to Manhattan, and the trick no longer works. New York City is too big to function as a hierarchy. So is IBM. So is Michigan State. The individual in multitudes this vast feels overwhelmed, anonymous. He is submerged in the mass. He's lost."

For you, the Rural Entrepreneur, the implications are important. 

First, you are tied to a hierarchy. In the big city you would be free of hierarchy, but here you have to be part of a system, less free.

Secondly, you know where you stand. You can move your place in the pecking order, but in either place you are not lost. 


So city entrepreneurs can be more creative, but have a harder time getting things done. 

You musn't allow yourself to be tied to the small-town "system," but you can't ignore it, either. 

Your new strategy: Dawn of the Dead

Maybe the key to your success in the countryside is not by trying to build a dotcom better than Silicon Valley can. Maybe it is to do something excellent in a dying industry.

Trying to compete with world-class entrepreneurs might lead to competing on price. Instead, be the best at something no one else wants to do. Check out this Business Week article, especially #9:

Rugged survivors in Dying Industries

R U afraid of success?

This sounds crazy, because everyone wants to be successful.


But this fear is in fact one of the biggest barriers to success. 


This might be you:


If I become successful, will I become a jerk, like my jerk father was?
Will I become unable to cope with the increased demands?
Will people find out that I'm not as smart as they thought, that I'm a fraud?
Will I stop spending time on the hobby I feel so passionate about?
Will the increased success cause me to die of a heart attack at age 47?


This is not an issue only for those of us in the countryside. But we particularly need to face it. Today. 

Plan B

We discourage thinking too much about "Plan B," because should you really plan on your "Plan A" failing?

But Plan B is usually what happens. Plan A is based on assumptions, numbers, conditions that are incorrect. So you have to be flexible to morph into Plan B. And not feel badly about it.

But a backup plan would also be based on incorrect assumptions, so better to form Plan B as you move along. Start out with Plan A, then shift as needed.

You might end up with a completely different business, but that puts you in good company. Some of the greatest businesses of our age also did. Completely shifting business models after startup is actually actually a business model. It is, in fact, typical.

(See Getting to Plan B: Breaking Through to a Better Business Model).

Reasons enough to fail

You want to start or expand a business, and possible excuses are numerous:


Too few customers in the countryside
Customers have no money anyway
Can't find appropriate building/real estate
Can't obtain bank loan
Investors don't understand your potential
Stimulus money all went to the wrong people instead of you
You are a single parent without family support
Not enough savings to survive the start up stage
Current day job is overwhelmingly, monopolizing of your time and energy
Too many kids
Unsupportive spouse
Frail health
Can't give up health insurance benefits
Bad back
Fear of selling
Fear of rejection
No university education
Remote location limits transportation options
Someone took your brilliant idea
Starting a business could lead to financial ruin (at least now you have a steady income)
Timing is bad; after Christmas would be better
In-laws disapprove


Now that they're all out in the open, can you let go of them and move forward? You must set a deadline for yourself and remain conscious of the Resistance (see the earlier posting on Steven Pressfield's book War of Art).


A lot of people have faced excuses better than the ones above and ignored them and became moguls.

Competition for Worst Marketing of 2010

If you have a lousy product, and if you are not creative enough to sell your product, you can use other tools. Racy ads, manufactured events, phony positive reviews made by employees, psychological manipulation.

Speaking of manipulation, Toyota wins our competition for worst marketing of 2010. "Just because you are a parent doesn't mean you have to be lame."

If you are struggling to provide for your family and drive an older non-Toyota, then you are a horrible parent. You bring shame to your children. Go now, sell a kidney to pay for the down payment on a Toyota Land Cruiser, and we will stop embarrassing you in front of your children, who are also watching our TV ads.

That is the latest scheme from the company that has been reporting questionable quality statistics for years. Shame on Toyota.

Negotiation Power

Something I told my students today in Negotiations 315:

Knowing the theory behind negotiation success is very important. That's why we spend so much time on it during the semester. Understanding the tools will make you a much more powerful negotiator, and that is why we focus on developing those.

But if you really fail in a negotiation, it will probably be because of you. We all have personal weaknesses, anxieties, and foibles that can trigger spectacular failure. Two examples:

- Inability to stand up to bullies. Most children have either experienced being bullied, or felt sympathy for someone being bullied. When an adult uses verbal abuse as a tactic in business communication, some people respond with fear. "Just make it stop!" the voice in your head screams. You do whatever it takes to get the person to stop, i.e. giving in to their demands, so you can return to your comfort zone.

Bad form.

- Inability to ask. I once worked for an evil man, who took money and self-respect from anyone who allowed him to. But he taught me an important thing. "You don't get nothin' in this world without askin'," he would say. He asked for ridiculous things. He had no inhibitions. So he became super wealthy.

Most of us hate to be rejected, so we don't ask for anything.  Letting go of that fear can multiply your success ratio. You don't ask for a better salary, a better seat at a concert, a better interest rate on a loan. All because Clarissa Mayfield turned you down for a slow dance in middle school.

Clarissa doesn't remember the incident, and you shouldn't either. So let go. And become successful.

We goofed up

My wife's business, the Nauvoo Quilt & Textile Co.(www.nauvooquiltco.com), made a mistake last week. One of the fabrics we sent to a customer was wrong. It happens about .00000002% of the time. This is our public confession. On the internet. Public flagellation.

 We want to reach 100% reliability. No mistakes, ever.

But to do that, the passion would be sacrificed. The reason the business is successful is that my wife feels passion about reproduction fabrics, quilting, and clothing. She has taste in fabric procurement that people appreciate. Should we throw out the reason for existence to achieve zero defects?

No, and your business should not either.

We repeat: the world is not ending

As mentioned a few a few posts ago, no one in the world knows what the short-term future holds for the economy. We could be headed for grim times. 
But as we've also discussed in this forum, you shouldn't worry about it. Seth Godin agrees:
"If everyone around you is sure the economy is tanking, that the end is near, that time is up and the company is headed for the tubes, it's almost impossible to find a creative solution."
Seth was a marketing rock star, but he has become appreciably more than that. Remember this quote when you feel nervous about the economy. Fear temporarily weakens your creativity muscles. 

How Wall Street Trading works

Here is how many front-office functions work. A young person enters a training program, then is assigned to a desk.

Let's say a lad is assigned to an equity trading desk. He is gradually allowed more and more responsibility as he learns the ropes.

Then one day he has reason to believe he can win big on a trade. He has a hunch or gets a lead. So he bets the farm on that trade. He goes for it. He puts all his eggs in that basket.

If he wins, he is a hero, everything he does after that is considered heroic. The person that successfully does that most often moves to the top of the pyramid.

If he loses on his first trade, he moves into consulting or goes to take an MBA, then moves into consulting. Or he moves to the operations department.

This is a huge overgeneralization. But maybe it is a good model for your business if it is stuck. Bet the farm on one big trade. If you're already failing, throw long into the end zone.

Wall Street Exposed

From where we sit, Wall Street is hard to understand, so can seem suspicious. I have interviewed several thousand Wall Street executives and employees, so have a hint of how it works. It is both simpler and more complicated than most people think.

First, investment bank offices are divided into three parts: front office, middle office, and back office. Front office is composed of sales and trading, and origination. Back office is the support functions (settlements, operations, HR). Middle office people are supposed to monitor and keep in check the front office (risk management, compliance, legal). The relationship between front and middle is adversarial.

The bank is also divided into primary markets and secondary markets. Primary markets are the people who create securities, and are often referred to as "the investment bankers." They do the IPOs, the M&A advisory, bond issuance, and those sorts of activities. In secondary markets, they trade the securities. They either make money by trading (prop traders): buy low, sell high. Or they trade for customers, and earn a fee. Those two types of traders are not supposed to talk to each other.

The relationship between investment bankers and the traders is sometimes competitive. They compete for resources. Which business will the bank focus on? That depends on the bank's culture, but it affects the budget and prestige enjoyed by each group.

That is how the industry is organized. It is not one giant, perpetual conspiracy. And it is only part of the finance industry.

In general, Wall Street bankers are a lot smarter than we think they are. And not nearly as smart and they individually think they are.

Marketing Art

Need a way to FUND your artistic project?  Check out this site:

http://www.indiegogo.com/projects

Success Definition

In interacting with readers of this blog, I've learned that motivations vary for starting businesses in rural areas. Some want to find a way to earn a living that allows them to live in an agrarian environment. Some want to do something remarkable, to delight customers, and the location is irrelevant. Other motivations have also become apparent.

Regardless of the basic motivation, I feel affinity with all of you.

All of you, go forth, and succeed, according to your own definition!

Whither the economy?

Here at the Nauvoo Commuter, we are still monitoring the economy. We don't know any more than you do.

Recently I've talked to Wall Street investment bankers, prop traders, global hedge fund managers. They don't know more than you do.

One group believes the U.S. is headed for hyper-inflation, with dire consequences for the planet. The other group is convinced that we are headed for deflation, as the current recession continues. They are nearly opposite scenarios.  And yet both groups have compelling stories to prove the accuracy of their predictions.

Does it matter? You need to move forward with faith in the future. Hedge, but don't procrastinate because of the stock market levels.

Getting things done

As I've mentioned before, an upside of rural entrepreneurship is that you have fewer distractions. So you can actually get something done.

But it still requires discipline. We often end up Shaving the Yak, a term for being sidetracked, then looping. (Joi Ito and Seth Godin have good posts on it.)  I did it tonight.  At the end of a long day, I want to watch a DVD of the John Adams miniseries, but I can't find it. I look to see if it fell behind the TV, and notice how dusty it has become and pull the TV out to clean. I notice another DVD that fell, and go hunting for the case to which it belongs. Now it is time to blog and too late to watch anything.

I should have noticed the pattern early, because I had done it earlier in the same day, when I had started sweeping the floor, and noticed something needed adjusting....

So you see, even though we have fewer distractions, we can easily create them. You need to print an invoice (the single most important activity you do: billing), and the printer is out of toner. You decide to order more, but want to order more office supplies, so you can save on shipping, so you look for the Office Depot catalogue, then remember that if you order online, via the Delta Airlines website, you can earn mileage. Free mileage!  So you look up the password for logging onto www.Delta.com. You realize it is time to change all your passwords. Need to discourage identity theft, you know. Three days later, you still haven't mailed the invoice.

Don't get distracted. Send invoices.

The last two blog posts

Those last two posts...  The point was that we need to take risks. Our culture is increasingly risk averse, and I am concerned about that. Earning an MBA, reading success books, and many other activities are no longer designed to give us a boost, but to help avoid failure.

Can success books be your model?

In the success literature, more and more we are seeing a examples of sports psychology, new age* platitudes, and biographies of people who successfully climbed corporate ladders. Some of it stretches isolated examples to mean too much. Just look at the self-help section of any Barnes & Noble. 


One thing I don't understand: a lot of the genre claims that money is not important. (Perhaps this is a revulsion against the Michael Korda philosophy of the 1980s.) Some can be summarized as: "Money doesn't matter... find your own definition of success… if you follow these principles the way that Joe Montana did, you will be rich like Warren Buffett."


A particular peeve of mine is writing that uses sports training examples and laudable incidents on the field to teach how to succeed in business. These analogies can be useful, but the connection is very, very thin. Success in business requires far different skills from those required to throw a ball well. It doesn't translate well. For example, football technology has hardly changed in a century. When it has, all competitors have simultaneous access to the same technology. In sports, the playing field is not continually changing shape, surface texture, slope, or softness. Players are not traded between teams mid-game.


"Game Rules" prohibit change. Sports stars don't need the ability to predict how the field shape will suddenly change. And even in sports, the old maxims don't apply. Everyone now works hard, so merely believing in oneself is no longer enough. To consistently win, one needs to want to win more than anyone else wants to win AND also must be extremely gifted. Similarly, in business many are doing their best, so having more heart, trying to "win one for the Gipper" is insufficient. Perhaps sports analogies can only be used for highly regulated industries such as utilities, which are not allowed to compete, but that would not be useful because sports is all about competition. 


Some of the books out there are valuable. We have profiled some of them in this blog. 


----------------
* Example: new Age philosophies of "find your path" and "listen to your heart" seem to mean "do whatever you want." Isn't that a return to a hunter-gatherer society? Is that beneficial to society in general? Shouldn't we should be working hard to fulfill human needs, for which humans will compensate us? People won't pay for really bad poetry, so I have opted out of poet as a career option. You heart might lead you to play XBOX all day, but can a revenue model come from that? 

Goals Bite

When I left home to find my way in the world, I approached my father for advice on the night before my departure. It is probably a strange time for most people, picking up a new life stage while simultaneously letting go of another, and unsure you should be doing so. As we stood in the kitchen, both leaning against different counters, both filled with that combination of nervousness and excitement that fills the air on such occasions, he scratched his chin. 

He said, "if you are ever in the final 10 seconds, down by four points and on the fourth down, and you have possession of the ball, then THROW LONG."

On many occasions I have taken his advice. Sometimes the metaphorical ball hits the metaphorical Astroturf, and I lose. Sometime it is caught by a metaphorical receiver, and I get one dance with the prom queen that night.

Like many of you, my home is full of self-help books. I also have read more than my share of "business success" books.

Adam Smith taught, or least we interpret his teaching to be, that in a free economy we are all benefited when people work hard and innovate to make a profit. Society in general is rewarded. But here is something we often ignore: those profit seekers must take risks, and that means some will fail. The Law of Averages declares that not everyone can be The Best. But those who do succeed are amply rewarded.

This means that some pain will be involved. In societies that have had things good for a long time, perception of risk focuses on potential downside more than on potential upside. On the other side of the coin, people in countries with nowhere to go but up focus on positive potential. 

In American society, we don't want to take risks anymore. So we do two things:

1)       Lobby for regulations. Large, established companies which cannot grow their market or take more market share can only stop competitors from becoming strong. That's what burdensome regulations do. On CNN or on CSPAN, regulations might sound like lifelines for the downtrodden, like earth-graders which level the playing field. But in most cases, those proposals fundamentally un-level the field. They favor current entrenched players, especially oligopolies. (Some economists dedicate their lives to this topic, but it is outside the scope of this article.)

2)       The other thing that both established and potential players are doing more and more is to decrease risk by increasing the likelihood that a possible venture or career choice is a sure bet. We have a model in observing what securities firms do: Goldman Sachs lowers the risk created by proprietary traders by hiring risk managers, mathematics experts who can quantify risk and monitor it and shift it. If they can do it, why can't I do it for my career trades? So I try to quantify everything. I find a perfect model and turn it into a formula and replicate it. Andrew Carnegie religiously used personal goals to succeed, so that's what I'll do. Steve Jobs comes up with better ideas and motivates others to help him implement those ideas. I certainly want to be like Jack Welch, so I'll mimic him. I read their books. I try to turn his way of doing business into a formula for developing my leadership skills. 

But Steve and Jack and Andrew have qualities I don't have, and they worked in different situations. If I copy them, I will not do what they did. What Steve Jobs did has already been done. 


But if I copy him, I'm not really trying to succeed. I'm just trying to avoid failure. Mimicry is a risk-avoidance strategy. And that is an increasingly common problem, with potential cause our society to melt like the dew before a July sun. 


Starting a business might end in failure. You can't eliminate that risk. Just try something, work so hard that occasionally you want to cry yourself to sleep at night, and then see what the result will be. If you don't become a mogul, then your turn will come next.

A not-so-momentous week

We are excited here at the Nauvoo Commuter. The party that traditionally supports small business is back in power (controlling part of one branch of government). But will it make a difference?

Here is a prediction. In two years, the economy will still be weak, and people will blame the Republican-held House of Representatives. They'll be thrown out, and we'll return to business as usual, and that will  not make a difference either. Not because "they're all the same anyway," but because the economic forces we're facing are much bigger than Congress.

The fact is, government makes almost no difference in improving the economy. Sometimes (once or twice in a century), Congress will get out of the way and let us succeed, but normally they get in the way regardless of intent.

The U.S. economy and the global economy are experiencing fundamental shifts. We are experiencing growing pains. The stimulus plan has lengthened the pain (just as it did under FDR, in Japan during the 1990s, and in every other case it has been attempted), but the pain would be here regardless of who sits on Capitol Hill.

Just ignore it. Don't wait for jobs to be "created." Make your own way. You can vote for those who will be more likely to get out of your way. But the best stimulus is the stimulus of your own making.

So if you're still sitting on the sofa waiting for a politician to make or break you, you need to turn on the television and forget all of your dreams.

Maybe this Blog is Irrevelevant

When we say "rural business," we are talking about many things. let's categorize them into several types:

  - franchised businesses serving local residents (auto parts, fried chicken, convenience stores)

  - independent businesses serving local residents (we'll include those belonging to associations such as IGA or Foodtown and some petrol service stations)

  - the internet-based direct sales business operated out of a spare bedroom, including eBay sellers

  - telecommuters offering software development, writing and editing, internet mystery shopping, or a host of other activities, as long as they are not on the payroll of a company owned by someone else

  - manufacturers (if located in agricultural regions)

  - farmers

They may all be entrepreneurs, with some exceptions:

  - the franchise owners who follows the corporate manual for all operations and marketing decisions, and adds no value through applying self-generated creativity

  - someone who sells, via eBay, some junk found in the garage, but doesn't do it as an ongoing business

Can this blog address the concerns of all those people? Let's review the blog's purpose:

"to encourage entrepreneurs and potential entrepreneurs, and the communities that support them."

We can address them all. Let's keep it up.

Raising Bunnies

The home office, discussed yesterday, is only one solo-preneur option for rural residents.

Here's another inspiring idea that would fit into an agricultural lifestyle.

Check out Ambika Conroy's business. She worked in New York's fashion industry. Now she raises Angora rabbits, goats, harvests the wool, and creates amazing Angora products. Check out Ambika's site at Ambikaboutique.

You could have done this.

Huge Caveat

So you want to be a work-from-home star? The Nauvoo Commuter is here to encourage you.

My goal is to help you succeed in some rural-based entrepreneurial venture, and a home-based business is a good option. We are not selling a program, just encouraging you to get started.

But a lot of people are selling programs, some are enticing you with scams, and others want you to stuff envelopes.

Of all such be wary.

Start your own business. Don't pretend to start your own business but really working for someone else. That is particularly true with multi-level marketing. You take 100% of the risk, yet you don't have independence. (If you were independent, you would be able to sell Nuskin and Herbalife at the same time. Try it, and Nuskin will steal your business from you. They'll fire you, and take the organization you built for themselves, without compensating you for any of the time and money you spent. The justification is probably covered in the contract you sign when you join.)

Do it for real. Don't pretend to start a business by being lured into someone else's dream or into a scam.

Soliloquy on Working From Home

A couple of decades ago, women began to complain that men should not be the only ones to leave home each day and go into the workplace. They could do it also.

But historically speaking, the idea of adults leaving home each day and working somewhere else is a very, very new concept. It began in the industrial revolution. From an evolutionary standpoint it is not natural. Throughout human history, almost all men and almost all women, in fact, stayed home and worked. All day long.

And children worked alongside them. Children respected the work their parents did. So they respected their parents.

Then men left, their work became abstract, and children lost respect for fathers. The same thing is now happening to mothers.

Working from home is not a new concept. It is a return to the way we did things for thousands of years. That is the realization I had when I first set up a home office in 1997.

Working from home is challenging. But for many people, it reconnects them with their natural state.

Hotizontal Villages

I've been arguing for years that our neighbor is not the person next door. It is the person who shares your interests.

Jesus was right, and it has huge consequences for your business. Maybe the town you live in only has 236 people, including the kid who actually away at army basic training. But you have neighbors all over the planet.

About 20 years ago I was in Switzerland doing a hotel inspection. One of the workers angrily approached the group I was with, yelling in Suisse-Deutsche. No one could understand him, so could not address his concerns. But I understood him. "We just walked through a pile of dust and we're tracking it onto the freshly-laid carpet."
I understood, not because I know German, but because I had worked the construction industry in a past life, so I understood his mindset. He and I lived in the same village. The connections between people are horizontal, stretching across the map, rather than vertically within our individual countries.

Someone in your neighborhood feels a closer bond to a person living 1,462 kilometers away who shares a fascination with Star Trek. They reside far apart, but live in the same trekkie village. Another resident of your community is a Lakers fan and you are a Bulls fan, so you live in different villages. Truck drivers can gather at specific diners and commiserate, rather than futilely trying to strike up conversations with pharmacists down the street when they return home on the weekend.

We no longer have social classes. They've been replaced by Avocation Strata.

So don't try to push those geographically close to buy something they don't want. Find the like-minded people around the world and sell to them. UPS awaits your beckon.

The Marketing is the Product

Toyota is one of the best marketers in generations. They start with reliable products. They distribute well. They trust their American subsidiary to promote the way they see best.

Everyone knows Toyota's quality is the best. But is it?

Perception is reality. Quality surveys are based on REPORTED defects. And Toyota owners report fewer defects. 

I have seen friends purchase Toyotas with major flaws and take them back to the dealer, just to be told that "we can't find a problem." So the new owner responds, "Toyota doesn't make poor quality, so I must have been wrong." Selective perception. The emperor has no clothes. The car whistles loudly over 50 mph, and they turn up the stereo. Nothing negative reported to JD Powers. 

(They also benefit from the fact that Americans are far more forgiving of foreign companies than they are of their American competitors. A family member's infidelity is far more serious than a stranger's indiscretion in another town. That's how we believe.) 

If you want to consistently knock the ball out of the park, year after year, as Toyota has done, you need to be like Toyota. You need to reinforce. Every marketing message from Toyota is a pat on the head. They tell you one thing: you made the right decision in buying a Toyota. After a decade, you believe it, so you buy another Toyota and tell your friends to do the same. Reinforce, reinforce. 

Having a low-cost manufacturing base also helps. So be like Toyota:

1) Gouge suppliers in ways that would make Walmart blush. 

2) Monopolize fleet sales in your home country so that you achieve economies of scale before you've exported one model. 

3) Silence dissenting voices.

Also, remember that it took Toyota decades to achieve mogul-hood. So you also need to stop being American and seeking the get-rich-quick solution. Stop flipping and start building a foundation. Mogul-hood takes a LONG time.   

Control. Cut costs. Reinforce. Set 100-year goals.

Midwest Manifesto

I think it is time to repeat my Midwest Manifesto. 

The Midwest has many remarkable companies, and should not concede to foreign competition. The tide is turning back in our favor.

People in the Midwest are smart, industrious, and prudent. Through those traits, we have built lasting companies. 

Our remaining need is to capture insight and skills those companies need to progress to the next level by hiring additional executives and specialists from outside the region.