Changing Business Model

When you start a new software business, you need to decide how to set up a business model. Where are your customers? How you will drain money from them? What exactly you’ll sell and what you’ll be just giving away for free? You have to name all those things unless you plan to be charity organization.

When talking about choosing a business model one thing is worth emphasis – the model you’ve chosen on the beginning will most likely change. Assumptions you’ve made on start will appear to be incorrect and the whole business environment (or rather your knowledge about the environment) suddenly will change. And, you want it or not, your business model shall follow.

You can quite safely assume that chosen business model will change. Especially when you run yet-to-be-established company, a microISV for example. Seth Godin mentioned that when he was writing about Squidoo outcome:

“What you start with is wrong. At least what we started with was. Fortunately, we planned on being wrong, and have revamped most aspects of what we built.”

The same thing we did with Overto. On the very beginning we believed people would be willing to pay for additional information we can provide. After service growth and analysis which people come and how they interact with the service we changed our approach much. For the moment we don’t plan to give paid functionality – all features should remain free in predictable future (which in software business isn’t very long by the way). The way we see environment we act in is significantly different. We’ve just learned much about our audience and it wouldn’t be the best idea to keep the old track with that knowledge.

By the way the actual business model is a subject for another post – I hope to reveal a bit of that in near future on the blog.

CEO’s Alter Ego

I’ve already mentioned here several times different CEOs and their attributes, the most popular one was about Bill Gates. Generally I think that you need quite a strong individuality for that position. There can be only one leader. Yes, I know, of course Google is different in that area too. In vast majority firms I know you could easily point one person who is a locomotive of a train. Usually a natural leader with strong business and/or technical skills and a vision.

However natural leaders, who are most often (but not necessarily) CEOs need a kind of Alter Ego. Someone who more less shares general vision, but usually has quite different perspective when it comes to lower-level decisions. “Yes, we’re going south, but why do you think the train is the best means of transport?” “Yes, we’re dedicated to take this deal, but I’m not so sure we should take outsourcing of support services.” “Yes, we have some free positions, but we better don’t keep rotten apples just because good men are hard to find.” And so on...

Usually the Doppelganger is weaker than the Leader, but that’s good. His role is to keep the Leader constantly evaluating new ideas, knowing that they’ll face the Skeptic Guy. To keep the connection between the locomotive and the rest of the train. To catch Leader’s feet and bring them back to the ground.

I believe that’s very important, yet not very prominent role. The Alter Ego is sometimes considered as a brakesman or a dream-crusher. But take the company (no, not Google, I’ve already said that’s a bad example here) where there’s strong leader without his Alter Ego. Take the company you know well. Try to analyze their decisions – both good and bad. Then think how many of bad ones could be avoided with “evil twin” as an advisor of the CEO. Someone whose voice is respected but definitely not decisive. I guess quite a bunch of better choices could have been made.

That’s why if I looked for people to run a company I’d try to find both a dreamer and a realist.

Start Small, Grow When You Can Afford It

Recently I had a discussion with my friend about building own business. As he’s very ambitious he described the vision of quite an established company with a couple of dozens employees as his goal for a first couple of years. Nice vision, indeed. My advice was: “Start small, and then grow whenever there’s a good environment around you. If there is any. Two people on the beginning are enough. You’ll go big later, when you can afford it.”

It’s easy to have big plans, fight on many arenas and then run out of gas. It’s much easier to work on vision and strategy than to solve all small everyday issues or keep cash flow above water level. It’s easy to forget about all costs of growth or overestimate chances of getting a contract. Hiring a bunch of new people in marketing department won’t help when your developers can’t finish current projects. Adding a million bucks in an income forecast by increasing success chances isn’t a self fulfilling prophecy. It just doesn’t work like that (as far as I know).

We forget how much can cost us living beyond our means. Even when we lose just a lousy 100$ per month. No matter if you’re big or small, spending more than you earn and waiting for a hero on a white horse with a big bag of VC money isn’t the best business strategy I’ve heard of. Alas, quite a popular one nowadays.

Perfect Employer

A couple of days ago I was on the party where I could find a lot of people from the first company I worked for. CDN (that’s the name of the company) no longer exists – it was acquired and assimilated by a local corporation. There are new teams, new people, and new organization. Over the time people, who didn’t accept new corporate rules, left and now are in different companies. But in some way we still form the group. We meet on events like that party. We always have something to discuss. We’re always happy to see those well-known faces.

I don’t know another company, which built something like this. Some kind of environment which was dragging “good souls.” I wish I knew the recipe to achieve that. I was wandering why it could happen. Why good people stuck to the organization while bad apples were out soon. I guess there’s a bunch of reasons.

Low rotation

Szymon, who co-owned the company, points very low rotation as one of main reasons. It helps to build more informal relation between people and that’s definitely improves cooperation at work and, when multiplied, builds a kind of social network covering the organization. Keeping rotation at low levels is a quite difficult task (and subject for another post), but CDN was successful in that area. However I think that wasn’t the only important reason.

Middle management

The company was fairly lucky with middle management – those people who stand between the board and worker bees making real work. There were a couple of manager who made the difference. The kind of people you’d always like to work for. The kind of people you’d always like to learn from. Middle management is important because these are the people who create reality in teams. Their influence on our everyday work can be very impressive. In most cases CEO’s couldn’t get even close in that area, even if he wanted to.

Growth

Another thing was CDN’s growth. Over 5 years the company has grown from about 80 to almost 200 people. This meant that people could grow with the organization. I became a manager there not only because I wanted and I had some predispositions but also because guys up there decided they needed to create another little team in the company.

People-centric

That one is vague. I can’t define it clearly but I consider CDN as people-centric company. Sure, there was business down there, but it didn’t look like a rat race. We didn’t do anything special – some integration events, nice atmosphere, willingness to help, flexible approach to employees. A series of little things which built a bigger wholeness.

I think there might have to be some magic element in that mixture, because these all are quite simple things. There are a lot of companies which are almost all compliant to the list, but they give different output. Maybe in that case “almost” makes a great difference. Hopefully I will check it in my current company and let you know soon.

Strategy versus Reality

Yesterday, when I was writing about forgetting to look under your feet I forgot about one, very typical, example. It’s when The Great Board of Directors introduces something I call internal strategy – usually it’s official company strategy (or Strategy I should say) wrapped into Mission Statements, Creeds, Company Rules every employee should follow etc.

Those big words usually say something about customer satisfaction, creativity, improving quality and so on. Those big words usually obscure the true motto of the company: making more money. Those big words are usually empty. If you asked average headcount er... employee about them in the pub he would say where he had all those slogans. And believe me, it wouldn’t be a heart.

For The Great Board of Directors this internal strategy is usually a way of improving quality and customer satisfaction, promoting creativity and making company a better place. They actually believe that prominently displayed mission statement makes the work better. They really do. They believe that something like company system can be born only by stating it exists. Ignorance is bliss.

Our mission statement (small letters on intent) goes something like that: “We’re trying hard to do our work well, because then our customers like us more and it makes more money for us.” Sure, go shoot me – wasn’t I ranting about that stuff above? You got me, I was. But we don’t have any mission statement prominently displayed all over the place. We don’t even had it announced in any way. It doesn’t exist in terms of people used to consider it. We just (try to) work like that. When we can choose between fixing a bug in a faster or more proper way, we choose the latter. We don’t leave totally-minor issues unsolved, even when forgetting them costs us zero dollars. We don’t read the agreement literally when it comes to decide whether the issue is a bug or an issue. Oh, at least not always. It’s all about doing, not talking.

The Real Mission Statement is created by organization’s rank and file employees and their everyday actions, not by management and their announcements.

Below Radar of Management

One side of becoming a manager is taking greater responsibility. You have to look at more and more things. You go higher and you become less connected with real work and start to create strategies, visions etc. You start to have people to do the work. He will develop that feature. She will resolve this issue with the user. He will manage support team. She will organize project management team. It’s easy. If you’re lucky or you’re a good recruiter they will do all those things and they will do that well.

The trap is that lose contact with reality. Not reality as a whole, but reality as it is seen by most of your people. You look higher and higher, but you forget to look, even get a glimpse, down there, where everyone’s eyes are pointed. It’s just below your radar.

When I think about all those surprised managers, when something went completely different way than they’d planned, usually the reason was forgetting about everyday people’s problems. A VP who lost all but one of his directors during a year. A director who dealt with constant rotation in his team. A manager who had a series of conflicts with other managers about “unimportant” things.

Great visions of future aren’t as important when it’s another time when you run out of coffee in the kitchen. Forging perfect strategy isn’t the key thing when people become frustrated with constant chaos in administration. Discussion about new product ideas shouldn’t be number one on to-do list, when people don’t trust management. I know it’s hard to see that kind of things from heights, but if they’re below radars of the management, radars should be reset.

Great successes start from great people. Keeping great people happy is one the most important of managers’ roles. Definitely the one which is most often forgotten.

Try-and-Buy and Fair Price

Several posts ago I was advising to consider or reconsider a business model even when you’re an established company. A thing which experiences its renaissance these days is try-and-buy model of sale.

It became popular with shareware, when you had either limited features of the application or limited period you was allowed to use it. Nice idea, although not working perfectly. It was always a tough decision which features should be turned off to encourage users to pay for the application. On the other hand there were a lot of different hacks (not quite legal of course) which could overrun your protections and make freeware out of your shareware.

Nowadays, with moving your app to the Web it’s not an issue any longer. When you host the application you can turn it off any moment. Now, trials earned another meaning. You don’t need to limit features any more. You don’t have to fear about stealing your software. You can give it all for a month. If someone like it she’ll buy it.

When talking about selling, the Web gives you even more. With the on-line application you have a control over the whole installation and you don’t need to sell it once for a big bunch of bucks. You can set the fair price, paid monthly, for your services and take advantage of low maintenance cost per user. Customers won’t take away a piece of software they’ve bough leaving you without even a support fee simply because there isn’t any “piece of software” any longer. Now it’s a service, not a product.

The examples of combined try-and-buy model and fair prices come from everywhere. Emusic.com charges fairly for its content and they have of course a try option. 37signals gives 30-day trial for all of their applications. Want to buy? Aren’t sure? Go and get some. You can leave it you want. No money needed. At lest not for the first month. Another example: FogCreek with 90-day money-back guarantee (no question asked). Lately FogCreek user used chargeback for the first time ever. Ian Landsman with his HelpSpot uses the same approach. Try-and-buy model pays off in his case too. That’s just a bunch of examples, but the list could be obviously much, much longer.

Try and buy with fair monthly fee is the business model which become popular recently. It’s fair for vendor. It’s fair for user. A typical win-win scenario. That’s why the combination is so successful.

Choosing a Business Model

I’ve heard recently some bad news for internet radio stations. I guess it’ll end up either with closing internet radio stations or, most likely, having all of them moved to some kind of internet paradise which can’t be controlled from US.

I don’t get it. Instead of exploiting new, fast growing market they’re trying to kill it w before the birth. Don’t they see that people won’t start buying tons of audio CDs even if they were successful with destroying all internet radio stations (which won’t happen by the way)? It’s like saying “Hey, it worked 10 years ago, why it shouldn’t work now?” It’s like closing eyes and pretending the sun is shining on midnight. Hello guys, the world has changed.

Now with all this Web 2.0 buzz and constant migration from desktops to web applications, everyone, when starting a new project, should seriously consider this business model. The application no longer gives an advantage only for the sake of just having it. You need to give something different, easily accessible and, with more and more competitive market, you have to price it fairly. As mainstream record labels grouped in RIAA example shows it’s not impossible that you’ll have to redesign your business model even when you have a leading position now.

If I was about to start a new software business now, it would be definitely a web-based application. It gives you a bunch of options. You can sell your services for a monthly fee. You can earn your money with on-line ads. You can build the user-base in the long run and then sell it as the main asset of your service. You can build some unique technology, gain some activity to prove you’re better and then sell it to the bigger player on the market. You can mix all of those creating something new. There many possibilities with the Web and you’re not limited with standard old-fashioned business models.

Sure, if you’re a big player you have quite different perspective. That entire Web 2.0 buzz isn’t a good message for you, unless you’re Google of course. However, in this scenario you’re a desirable partner for many web start-ups. Just like Pandora, which needs to cooperate with record labels. Just like in my start-up – Overto – where we cooperate with internet auctions platforms: Polish branch of eBay and the biggest player in Poland – Allegro (Polish links only). Sure, you can say that you don’t want to see any “competitors” around and try to kill a bunch of them – that’s the way RIAA tries to do right now. On the other hand you can exploit chances young wolves offer you. Some additional income from internet radio stations if music is priced fairly. A lot of affiliated services add value and sometimes gives even better functionality than base service. E.g. we search through Allegro better than Allegro itself.

In every case the business model and cooperation policy, which I believe is a part of the business model, is very important for the future of organization. Even when you’re now fat and lazy it’s not give for a lifetime.

Solve Small Problems

A couple of days ago I asked my bosses to solve a problem. There was some mess in company’s official papers. I described the problem, not trying to blame anyone, although I can guess who responsible for that. A reaction disappointed me a bit. Generally I was pointed that there are more important issue to deal with at the time.

Sure, there are. I’m aware of most of them. Alas, for now it’s hard to find a quick solution for them. On the other hand, a resolution of the issue I was describing was quick and rather easy. I believe it would be enough to talk with the people responsible for the mess, asking them to be more careful with their actions. In that case nothing happened. I see the same mess day by day. Frustrating.

Frustrating, because when you can’t solve big problems, you should at least take care about smaller ones. It pays off because small problems tend to grow over time and, when unmanaged, they often become big ones which you are no longer able to deal with.

If you don’t care about minor misunderstandings within the team they’ll grow up until they’ll become conflicts and finally you’ll ruin atmosphere in the team. When you don’t care about minor issues in relations with vendors they’ll become major issues and finally you’ll have a problem with hardware deliveries. When you don’t care about mess in official papers mess will grow until finally you’ll find printed payroll laying next to printer open for general use. I guess none of them is something the management would like to deal with. Why don’t they eager to deal with early symptoms then?

It’s like risk management. It isn’t limited to project management. You should do it on every level of business management.

Your Tool

Jason from 37signals tells us a nice anecdote comparing organization of software companies to tools used by prisoners to escape from a jail. They use a spoon, as a subtle alternative for a brute force jackhammer. Using the spoon to break out from the jail takes more time, but you can easily adjust your process to be more successful. On the other hand with the jackhammer you have a single chance and if you happen to fail, the failure will be really loud – no chance to adjust anything.

Nice comparison, although a bit exaggerated for me. Having more resources doesn’t have to mean that you should use thousands of spoons. Another thing is that your choice isn’t limited to the spoon and the jackhammer – there’s a wide variety of tools. Exactly the same situation is with companies – they aren’t limited to big, fat, slow bur very rich (the jackhammer) and small, flexible, with limited resources but great teams (the spoon) only.

I think guys from 37singals are in situation comfortable enough, they can spend their time digging with the spoon. They don’t feel an urge to break out. If they needed to be out of there within a day they’d probably have chosen another tool. If there were any choice anyway.

To keep in the climate of the Jason’s story my tool is a knife. A bit better than the spoon, although you can find it in exactly the same drawer in the kitchen. We have a great team, yet we still running out of time trying (too?) hard to catch the budget. Sometimes I feel like I had a toothpick instead.

How about you?

Let Engineers Work with Engineers

Cooperation between engineers and business persons was, is and will be hard. It’s as clear as a day. They just have mutually exclusive goals. An average developer wants to make as little features as possible, yet he wants his code to be a masterpiece when talking about architectural design and technologies used (not exactly when talking about quality). An average salesperson wants as many features as possible and good quality, because then a customer will be happy and won’t call her with any quality issues. The salesperson doesn’t give a damn about technology, architectural details etc. Ruby on Rails? So what?

There will be always a conflict here unless you can isolate those groups with several persons who feel both sides. Yes I know, this kind of people are quite rare, they don’t grow on trees or something. Nevertheless, if you happen to have some, use them to build a kind of shield for the rest of the team.

Don’t get me wrong, I don’t say to isolate engineers from business background of their work. What more, I’m convinced that the average developer has to hear often how his actions leverages sales, marketing etc. However, the average salesperson isn’t the best choice for a messenger.

Why should you separate those groups of people then? They generally don’t understand each others so they work ineffectively in a group, where you don’t have a mediator being able to lead to the reasonable consensus. Let the engineers work with engineers – it will make them happy, effective and cooperative. Every time I have an occasion to see a small group of engineers working on clearly defined problem, it’s cheering up to me.

They can be our R&D boss working with a lead developer from our subcontractor on resolving project issues. They can be me as lead tester working with a senior developer on eliminating deadlocks-related bugs. They can be our support engineer trying to find a solution to a critical error with maintenance guys on the customer side. I could count examples endlessly. It’s much, much harder to find similar cooperation when the salesperson works directly with the developer.

That’s why I believe that even in small organizations (20-30 persons) you need someone, who brings some isolation between sales force and development force. A project manager or a program manager. Someone who feels business needs yet is an equal partner in discussion with technical staff. Yes, I know, you bring some additional communication effort here, but still it makes organization’s work more effective.

Creating a Logo

Every business needs a logo. No matter if you sell flagstones or some services on your website, you want to be recognizable and having the logo which is easy to remember is crucial. Sure, you can go for some automatically generated stuff but it’ll look crappy or similar to lots of others logos and I guess you don’t want either one.


I and some of my friends started recently a micro-ISV. We’re building a service which helps auctioneers with searching and deciding how much something is worth. For now service is addressed for Polish market only so it’s entirely in Polish. I’ll write more on that soon. Today I want to share our experience with creating the logo for the service and the company, because there’s one name for both.

We started in a point where the name (Overto) was agreed and we haven’t much idea how the logo itself should look like. As none of us is skilled graphic we decided to hire a professional to do the job. I’d been working earlier on similar project with Michal Faron and was happy with the results so we decided to go that way.

Before starting his work Michal asks about “creative brief” where he gathers all the information his customer can deliver. For us it was very short description what the service would be doing and one hint: “We want wide range of propositions, no constraints for now.” I believe that one shouldn’t limit graphic’s creativity and let him bring some new ideas. If you have your own strong concept, ask for it as one of possible options, but not the only one. You never know for sure how you’d like other ideas.

Michal came with two sheets of different concepts.



As you can see variety of ideas were really wide. We had several people judging the propositions and it was hard to agree on a single one or even a couple of them to let Michal continue his work. We started with a brainstorming session, asking ourselves which logos we like and why. Especially the last part of question was important because we quickly agreed that general path we want to follow is “text as logo” approach with rather conservative font and a little tweak, which makes the logo looking modern. To select four propositions to continue the work we had to make negative voting, crossing out those we didn’t like until only four left.

Our thoughts were sent to Michal, who came with another sheet of concepts.


In the last line, called “baza” you can see candidates we’d chosen. Unfortunately we still weren’t happy with any on propositions. We tried another approach – we took some of creative part of job on ourselves. We started to merge some concepts from the sheet working in advanced Windows-based hi-end graphical tool, called Paint. Effects looked crappy but it was OK, as we wanted just to try if ideas are worth further effort or not. The session was successful but not in the way we expected. When I was trying to cut out “overto” string from B2 I came with that:


Then, magic happened. That was the idea. The next round of Michal’s work was started with three requests:

• Make only small tweaks of input logo (the one we accidentally created).

• Propose some different colors of triangle (including one with no changes).

• Rather don’t change colors of letters.

Up to then we didn’t make any decisions about colors – we tried to focus on design, knowing that it was the hardest part of the process. To limit variety of color palettes Michal could use during that iteration, we asked about not very strong versions of blue, claret and orange. I also asked Michal to make black and white versions, as it’s needed in different materials and there are some tricks with them, e.g. grey and orange differ nicely in color version, but it’s hard to see a difference in grayscale.

Last iteration resulted with two sheets: one in color and another in grayscale.



Before looking at the new logos we were committed to the one we’d sent as a proposition, so I expected that the only discussion would be about colors. However, as I stated on the beginning, let the designer work, maybe he’d come with something better. In this case he came. We chose D2 as a final shape of the logo and color of triangle from A2.

The final logo looks like that:


We’re happy with the final result. There’s some concepts we’ve taken from the logo into a website design, but that’s the subject for another post. Key lessons for me here are:

• Employ a professional. None of us would come through all those ideas. Two of us are very creative guys, at least when you think about technology, but I don’t think they would bring all those concepts when thinking about graphic job.

• Don’t be a cheapskate. Michal prices his job about 1000$ and as far as I know it is neither highest nor lowest price on the market. However when talking about substantial part of his work I hereby recommend Michal as a designer – feel free to contact him through his website.

• Brainstorm. One side of making a logo is designer’s work. Another is yours. As we are the group, it was harder to meet the consensus, but even when you’re a single decision-maker I’d recommend asking some friends about their opinions and inviting a discussion. It’s also much better when it’s face to face discussion (not an e-mail one) as you can work on designer’s work tweaking it a bit. And believe me, you don’t need anything more than Paint here.

I hope you find my "how to create a logo" article helpful, as I haven’t seen much of this kind of experience shared. One you can find on Ian Landsman’s Blog.

Little update: Mike Rohde has described his design work on ProBlogger logo. That's another insightful article on the subject.

Remote Workers

David from 37signals asks why we aren’t hiring remote workers. He brings an example of Mark – their new systems administrator who lives in different time zone (an hour of difference). David’s point is that you shouldn’t care about geography when hiring and just choose best available candidate, no matter where he lives. If you have other opinion you’re “crazy”. By the way comments following the post are great reading, which I strongly recommend.

Well, call me “crazy” then. I prefer to have whole team in a single place. The place where I work everyday. I managed team which was located in two cities and third was under development and now I work with people in three different locations, so I guess I have some experience to share.

Possible issues with remote workers:

• Commitment. Sure, if someone really likes what he’s doing he’ll be motivated and committed to do his best. At least as long as he doesn’t find another more interesting activity. It can be a pet project. It can be a game. It can be a family. It can be new absorbing hobby. It can be whatever. Then, work will go down on the priorities list. So will the commitment.

• Collaboration. There is one, extremely efficient method of communication. “Real” meetings. You hear tone of voice, you see gestures, you can use easily whiteboard, etc. Everything is easier. Everything is faster. You don’t have to deal conferencing infrastructure, voice and video quality, whatsoever. You don’t lose time on writing down things you can say in much shorter time.

• Interferences. When you work at home there’re many things that disturbs you. Wife or husband, children, this darn guy who dares to park on your lawn, refrigerator begging you to eat something, brilliant idea to go shopping right now, your faulty internet connection, etc. Sure, at work you have distractions too, but they’re usually work-related – colleague asking you about last bug-fix, boss requesting actual status, intern begging for help. At the very moment you don’t push your own work, but still help others to do theirs.

• Emergencies. I’ve experienced a lot of situations when someone accidentally heard about some emergency situation being discussed and helped to deal with the problem. Only because she was accidentally in the same place. If she had been at home she wouldn’t have helped. Knowledge is always shredded among many people. They won’t share it if there’s no occasion to do that.

• Control. Yes, I hear you: manage, don’t control. Sure, go optimists – everyone in the team is easily manageable. Unfortunately it isn’t true in vast majority of cases. There’re many people, who need to be controlled or they won’t be very helpful surfing the web and drinking coffee instead of doing real work.

• Progress. It’s especially important when you work with some newbies, who have to learn everything from basics. They will ask. The more they’ll ask the faster they’ll learn. You should make asking as easy as possible. Having phone/communicator contact only isn’t the best choice here. Oh, that means you shouldn’t send your interns far away unless they’re a pain in the ass for you.

• Performance. Here, I won’t say it is the rule, but statistically performance of remote worker is usually lower than the one working with others. Usually at least several factors from the list above affects remote’s performance. Yes, there’re people who are immune and they perform superbly no matter where they work – if you have them in the team you should build them an altar.

Having said that, I’m not religious about the subject. Today I have at least two colleagues in the team, who are working in different cities and they perform very well (yeah, I know, I should build the altar or something).

Nevertheless, when recruiting I’m still “crazy” and look people willing to work in my town. Hey, haven’t I just mentioned that I’m happy with my remotes? Yes, but first, it’s really hard to find this kind of people and second, I believe they’d work better if they could be with the rest of the team on a daily basis.

How to Fire People

Firing people is nothing nice – for both sides. Although I was never dismissed I can easily imagine what laid off person feels then. I was few times on the other side, firing people and I can tell it’s extremely hard task for me. No matter how strongly I’m convinced to terminate contract I always feel like I had a hangover then.

However there’re some things which can make dismissing a bit smoother.

• Try retraining. If you accept to keep working with the person (that’s not always true) try to find her different position. Maybe she’ll fulfill new tasks better. I remember a situation when a person, who was underperforming while being in support team, became great consultant in the implementation team.

• Allow employee to resign. It always looks better when you resign instead of being fired. You don’t need to ruin guy’s resume. His colleagues will also feel better, at least if he wasn’t highly toxic.

• Tell about dismissal in advance. Sometimes the person tries hard but she just doesn’t suit to a position. If you trust her a bit, tell her you’re going to fire her when you find the better candidate. You risk her commitment will peak down but you give her a time to look for a new job with lower stress. She’s not yet fired.

• Don’t fire. Nice advice in “how to lay off” list, isn’t it? If you can allow yourself to keep a guy for few months more it’s sometimes a good idea to wait for him to resign. With decreased role in the team, low bonus money there’re high chances that he’ll eventually leave. I know some case which worked that way. Some of them done intentionally, some unintentionally.

• Explain why you do that. Always. Face to face. It’s so obvious but sometimes is forgotten. Be well prepared – don’t treat that meeting as an unpleasant duty. She deserves that.

• Sweeten the situation. Play into fired person’s hand with things like leave, working hours etc.

• Pay some bonus money at the end. Companies are very often tempted not to pay any additional money to people who are fired. Yes, it’s saving few hundred bucks. But for that bunch of dollars you can earn not only a little improvement in laid off person’s morale, but also improvement of your reputation on the labor market. Besides that if the one wasn’t fired you’d probably pay him small bonus, wouldn’t you? Don’t be a cheapskate here.

• Agree to confidentiality. If dismissed person asks you not to announce the decision right away agree. That’s another thing which costs you nothing.

Unless Catbert is you personal hero, you can try to make dismissal a bit more pleasant. It pays off because you don’t burn your boats and you earn your reputation as good employer. The latter is especially important now when it’s hard to find great employees in IT because of big demand for workforce.

What are your methods to keep this unpleasant task more pleasant?

Role of Passion

Coming back to Connect 2006 in Prague I attended last week. The conference was very well organized. Even though it was the event focused on NMS and its community, whole first day was spent on general presentations instead of just selling NMS products. It’s a great idea because hosts are usually tempted to make “buy a lot of our stuff” event concentrating on things, which are good for them, not for attendees. NMS restrained the temptation. They prepared a set of panel discussions engaging a bunch of representatives from leading companies in telecommunication business. Of course there were also NMS products sessions, but they were moved to the second day. Generally whole conference came up as well balanced event.

From attendee perspective I can recommend hosting a conference in Prague’s Marriott. Organization and catering were superb. These things don’t make a conference successful but if they’re poor they can ruin whole effort invested in a substantial part of the event.

I’d like to say a bit more about panel discussions from the first conference day. I saw quite a lot of this kind of sessions, but they’re very rarely successful. Those at Connect 2006 managed to be good. I think there’re two main requirements that have to be met if a panel discussion is planned to be a successful one. First, a subject should be controversial, at least a bit. If all panelists agrees on subject there’s nothing more to add. Yawn. Boring. Second, people engaged should show some passion. If a whole bunch of people sitting behind a panel table aren’t passionate, they just pass (boring) information instead of presenting their vision, discussion is doomed to be boring.

A role of passion could be seen clearly during the first presentation of the conference, when a future of telecommunication market and candidates for killer applications were discussed. There were four panelists – recruited mostly from managers of leading telecommunication companies (like Siemens or Vodafone). There was also Andrew Bud from mBlox, who is an Executive Chairman there. That was Andrew who brought passion into discussion. When he was talking he was not only well prepared, but he also believed in what he was actually saying. And he was passionate about that. It was a contrast to other panelists who looked like they’d repeat anything their companies’ spokesman told.

Andrew brought a life to discussion (he brought some doubts about one of NMS flagship products also) and sounded most reasonable among all panelists. There’s only a thing that made that – the passion. He was the most successful of panelists in convincing the audience that he’s the one who is actually right. Even if a one didn’t agree with Andrew his speeches were definitely most remarkable.

If you want to convince others to anything you have to believe in that yourself first. And you have to show it. Another thing is that it’s much easier to change someone’s mind going through his heart, not through his mind. Actually substantial discussion can change someone’s mind only if she accepts possibility of being wrong (and that’s not so common). In other case even the most reasonable argumentation won’t help. Going through heart can be more successful, because if you won someone’s heart she often won’t listen to counterarguments for what she believes, even if they’re reasonable. Be passionate then. Hearts are won by passion, not by information.

On the contrary to Andrew Bud I can put a sales guy from NMS we talked with during the conference. He didn’t believe in success with his product. If you hear from a sales guy “I don’t actually see any potential killer app based on our product” it calms your enthusiasm down. Hey, if the sales guy doesn’t believe it success with the product, why should I? Where’s his passion? I bet it’s far away. In the same place where his success is.

Best Time to Become an Entrepreneur

During past few months many of my friends started their new businesses. By the way: so did I. It’s quite funny because it looks right everyone’s starting a new business now, at least among my friends. I haven’t really thought why all those entrepreneurships start this year. It’s probably a coincidence – people are in different age, different knowledge and experience, different areas of software business (OK, all of us actually are in the software business), even period of time spent on preparation differs. It just has to be a coincidence.

However, I started to think about all of that after reading great Robert May’s article about the best age to become an entrepreneur. Robert gives list of advantages for both youth and experience. The former covers: energy, amount of free time, ability and time to recover from failure, open mind and narrow learning curve. The latter contains: amount of money dedicated to establish business, number of connections, wisdom gathered through the years of work and patience.

If I had to choose a single factor from above lists, which I believe is most important (but not mandatory!) to achieve a success I’d take wisdom. Wisdom allows you to avoid many mistakes, yet it quite often holds you back from doing visionary things. I treat wisdom as a driver to choose better path when you’re on a crossroads. Yes, if I had to choose I’d be on the „experience” side.

Coming back to all those new entrepreneurships around me I think that fortunately not everyone has to choose the side. I can see a couple of businesses where the youth is mixed with the experience. There are people from both worlds among founders. The mix levels weak points and leverages strong ones. This is my answer to a question when to become an entrepreneur – being both young and experienced. You just need at least two persons to do that.