Get Rich Slow

I am an avid collector of domains. Sort of ridiculous how many I have because I always thought that I’d pursue 100 things. But doing 100 things poorly is not worth anything. No one wants 100 half assed things. Further, pursuing things outside of your immediate capabilities also adds friction.

Doing anything well requires a bit of expertise. It requires understanding how something works and giving your all to it. Doing things half-assed weighs at you as you never feel accomplished. You can’t give all your energy to it so it always feels unfinished. And you burnout because you have a 100 screws on the ground.

So why does it seem so fun to start a new project? Procrastinating comes in many forms and building something new does result in immediate dopamine. However, at some point the dopamine goes away and you are left with the realization that you have to put in the work. It can be an easy project or a hard one, regardless there will be a time when the work has to get done and you can’t just step aside. You have to put in the effort.

Second, FOMO is big with millennials. We are inundated with social media telling us we need to act a certain way. But the problem is that we always feel like we are missing out. The endless people who seem to be getting rich on media doesn’t stop. So we feel like we need to pursue things we are not necessarily good at which seems to exacerbate our anxiety.

Every person and company has certain capabilities and it is a huge detriment to pursue something completely 180 from it. It makes sense if you can move from x to y easily if x and y share 80% same infrastructure, but if x and y are 100% different say by pursuing a B2B and a B2C business you will fail. The failure happens because you cannot share your capabilities.

Further, there are only so many things that you can be good at. It is better to invest in another business or person pursuing what you want than to try doing it all yourself. This is where I am at. I don’t have the time to pursue everything but I can invest in others.

The end goal of this is that I am divesting most of my domains or letting them expire. I am no longer pushing myself towards things I am not good at. I am focused on building opsZero and making it the best it can be. I’m going to try not to get pulled into FOMO which will require working on myself. I think this will be the big challenge, can I focus?

Content Warehouse

I recently have decided to play with the WordPress API and it is pretty great. I enjoy writing within WordPress and I am writing a whole lot more now that I am no longer trying to do a hipster static website. One of the challenges I’ve had is that I have a bunch of domains but I hate building those websites because I dislike having to create complete new entities and move blog posts around.

WordPress is a perfect place to store all the content, a single place to write and then distribute it elsewhere using its API. I’m sure many marketing companies do this already and it is not a revolutionary idea. However, it does make it easier to ship content websites faster and makes having a centralized warehouse from where to do it.

So I’m going to start experimenting with this approach. See what happens.

Simplicity of Execution

Complexity is Entropy. If something takes you much longer to do than doing it the easy way you are basically wasting energy. I’ve been wondering why that is? I think the reason is that though simplicity scales better it gets boring. For people who can run a marathon or do the same weightlifting routine for years there is obvious regularity and gains. But an entrepreneur is by nature someone restless.

Doing the same thing over and over from an execution standpoint gets boring. It is a reason I think companies like Amazon have moved to a microservices model. Each service can be modeled simply and other services can build on top. Each individual component is simple but work together to create a complex adaptive system.

Anyways, as a business owner the real goal then is to produce simplicity at the core of what you do so that others can execute and understand the rules of the game, create rules that others are bound by which leads to an outcome. If the rules are too complex the game won’t be played well. So simplicity is quite important. Though defining if a finite or infinite game is being played also creates a challenge.

Paying Yourself and Incentives in a Small Business

Owning a small business has a pitfall that where you start and where the company starts are blurred. You take money out whenever you want and treat the company as a personal bank. I think this has caused misaligned incentives and coming to the conclusion that it be avoided.

When you are the owner of a business that business belongs to you and you decide whether to keep it or not as an investment, when you work on the business you allocate capital including hiring and creating dividend, when you work in the business you get paid for the work you do. An entrepreneur needs to think in these three terms.

An ownership of a business does not mean treat the company like a bank. A company should exist as its own independent unit that like any life force is seeking to optimize itself toward a mission while giving a ROI. The owner of the business needs to think of the business in this term. So a flush out of cash leads to the company not performing at its peak. If anything ownership is an external factor.

Working on the company is using the capital within the company for the benefit of growing the company while also benefitting the stakeholders such as the owners. It is for this reason giving employees ownership is seen as a benefit. When working on the company Capital is allocated to where it is needed and excess capital should be returned as a dividend. The important drive here is while working on the company the incentives should be to think like an owner while acting like a worker. So the worker should be paid a compensation appropriate to their work, but their drive should be to increase the growth rate.

Lastly, working in the company is commiserate to being paid for the work performed. Your incentives are to work to get paid.

As a small business entrepreneur or any entrepreneur, for that matter, it seems that the best way to achieve the desired outcome is to go up the chain. When working in the company you get paid for the work performed, when working on the company you get paid for the work performed and once a quarter give a dividend if it is appropriate, as an owner you seek to ensure that the ROI is appropriate and find other investors who’d want to invest or raise capital to put into growing the business.

Each task set is completely independent.

Consulting Business Model

For a business cash is king. This has been a truism and it is definitely something that I have paid little thought to. However, how money comes in and how it goes out to vendors/employees plays a huge role. Unfortunately, I have come more and more to the conclusion that getting paid upfront for a retainer and customers purchasing chunks of time is a better model.

Fixed-Costs

  • Fixed-Cost projects are great for customers because they only pay a certain amount for a task and overages are on the consultant.
  • For a consultant it may not be the best because based on how the contract is structured they payment may be based on milestones so the onus is on the consultant to figure out how to raise money to pay vendors in the meanwhile. This can lead to not being able to grow as you are constantly chasing the money in the future.
  • Cost overruns and spec creep. Fixed costs are also a benefit to customers in that customers can change the scope or add to the work that wasn’t previously scoped. Or there is a discovery that happens after the contract is signed that results in complexity.

Hourly

  • Hourly is beneficial to the consumer and consultant in that work can be more regularly paid leading to consultant having to only float the vendors/employees for a shorter period. The amount of accounts payable should hopefully be reduced in this scenario.
  • However, growth in the scenarios is still zigzaggy as you can get more work but you may be pulled back from a lack of cash to pay the workers since there is a discrepency between when you are paid and when you pay your vendors.
  • Some customers pay much slower than others resulting in a percipitous drop in cash so large cash cushion is needed which could otherwise be used for growth.
  • The problem with the hourly model is that payment is always in the future, which means if you have a sales team that is growing your company, you may not be able to fulfill the work as you will have a lack of cash. So growing will lead to failure.
  • Lastly, it is hard to prioritize work as every client is paying in the future. So each client is equally important.

Hourly Retainer

  • I think hourly retainer is the best mechanism for both a customer and consultant. A retainer being an upfront payment for a set amount of hours.
  • A retainer gives a float to the consultant to allow them to hire the employees/vendors that can help fulfill the work quickly ensuring quality of delivery.
  • It benefits the customer in that they can commit a small amount of hours and test the waters with the consultant and constantly move forward to the finish of the project. The hours can have accountability.
  • The consultant can hire a team of sales and admin staff to help grow the company further, while not being afraid to fulfill the work needed.
  • This model also incentivizes and prioritizes work to the clients that have a regular retainer. Ensuring that work is always prioritized.

Anyways this whole article is to say I’m moving to an hourly retainer model.

Bundling and Unbundling

While writing PR.FAQs for my projects I keep doing, “this project does x and y and z.” Basically, bundling too many things into a single thing. This results in lack of focus and projects that are not connected to each other but if you squint it looks like they are.

For example, I wanted to combine DevOps, Kubernetes and Serverless. While seemingly related in that they all are Cloud based the similarities stop quickly and optimizing the offering to deliver consistently and reliably fails fast. Providing services for DevOps can entail all sorts of things from Android, iOS, Cloud, Databases, etc. Really too much for any one person or company to necessarily get good at. Kubernetes and Serverless while related in terms of getting code running on a server somewhere has another set of issues. You can learn Kubernetes for the different Cloud providers but then Serverless is difficult because you have to figure out what Serverless platform you want to use. Optimizing delivery of Kubernetes problems is much much different than optimizing delivery of Serverless offerings.

I’ve had mentors and people tell me that doing too many things like this is unproductive. Obviously, I didn’t listen to them because I am special… But simplicity of offering matters. For all the complexity that Stripe handles and their seemingly endless products their API is simple. All their products are build into a consistent whole which is take payments on the Internet.

So as much as I wanted opsZero to do multiple things I do not think a brand can be made to handle multiple things. People need a brand to do exactly one thing for them. A job to be done. A business is a “person” after all. It just does the same task a person would do themselves but as a repeatable entity that does it for n people.

The lesson learned is that a company, as Peter Drucker noted, exists to exploit an opportunity. And a business that is simple and easy to understand from the outside looking in, is better at exploiting opportunities than a company that tries to do too many things.

So how does this affect what I’m doing? By having everything combined into one it was providing to be difficult to hire. How do you hire for a plumber and ice cream shop built into one? I’m now looking at every business as a machine. A machine that does a single thing well with different people working on the different parts with a singular metric to optimize around. My goal is as I go through building the machine I will be able to step back from each piece going from contributor, to manager, to owner delegating responsibility.

Product vs Service Business

Product businesses are so hot right now. There is a literal app for every single thing. Product companies are great because margins are high, custom work is low and scaling that is relatively easy. Unfortunately, with opsZero I’m in the service game.

Services are interesting because after doing services for 20+ companies in the last 5 years a few patterns emerge:

  • Services can be delivered in a Productized manner.
  • Most companies aren’t unique in their requirements. If you do it for one company, likely many more have the same need.
  • Most things require scaffolding. If you can Productized the scaffolding and provide the value on top it allows the value to be delivered faster.

Some negatives of a service business.

  • Since people are interacting with a person instead of a product they have weird things they want to throw in versus what they would do with a product. A product can fail and you move on because a product can’t do everything. A service on the other hand people have weird expectations that they wouldn’t have of a product because they are speaking to another person. “Oh you do Kubernetes, let’s have you do database optimization.”
  • A product company is mostly a subscription business now. This is unfortunate because I grew up in the shareware generation and I think a lot of products can be that model. Anyways, this results in people thinking the old model is product based subscription businesses and everything else is a “lifestyle” business.
  • People are willing to treat other people poorly versus having to go through a support channel to treat people poorly.

So why do I like service businesses?

  • Everyone wants to build a product but to use your product someone needs to do the work. Just because a product is created doesn’t mean that your customer can do it themselves. Webflow, WordPress, Wix, etc. Have figured out how to do this by creating a partner marketplace. But if you are just starting out it doesn’t exist.
  • Value is easier to discern. You deliver value and you get paid for it. Time is literally money.
  • The price of time has a higher value in the short term than in the long term compared to a product. Overtime a product has the better revenue + profit vs a service business. But in the short term a service has a better outcome. On the other hand a product has a harder time getting a footing which is also a risk a service company doesn’t have to do.

What are some things a service company can do to innovate?

  • A company can innovate in delivery. Process delivery, i.e delivering the same things multiple times for multiple customers, is the best way to deliver value. Basically make things as cheap as possible by constantly reducing cost.
  • As a business model service businesses don’t incentive workers. A person delivering $100 dollars in value isn’t that different from a company providing $150 in value if they are following the same checklist. Essentially a service business is seeking engineers at the cheapest rate possible and isn’t looking for the sake of tomorrow but the needs of today. Incentives in this structure is hard as people doing harder work usually results in higher pay. In a service business the goal should be getting the work done for the same amount over time.

Empowering Others

Inspiring leaders motivate others towards a bigger goal. I am not an inspiring leader. I have trust issues, I want things done my way, I micromanage, I give tight confines with no ability for creativity. I utterly make myself miserable when others don’t do things my way and I make others miserable by denying their humanity, seeking to treat their output like a machine.

As I face the reality of burnout I suppose I’m having a come to Jesus moment. I can’t keep doing what I’ve been doing. I need to become a better manager to grow my business and I need to empower others to make decisions.

I’m never going to be an inspirational leader. I don’t think that is my style. I think I’d rather be a good teacher. I want to help others be the best versions of themselves and achieve their goals and as a side effect help me with my goals.

I can’t work on everything at once so I’m going to work on one thing. How to give trust. How to trust others within a set of constraints. Maybe that is the real goal of a manager. You set constraints and give your people trust within a framework. You then empower them within that framework by removing all obstacles that prevent them and you from functioning well.

Not rocket science, but harder to do than writing some code.

Climate Change KPIs

There is so much data about how climate change is affecting us that it is overwhelming. I’ve created a website climate.sh to start tracking an initial set of KPIs, however rough it may be. The initial data was just public companies that are actively causing climate change. I used this metric, predominantly coal and oil companies, because the change in their valuation seems to be an excellent way to correspond to climate action. If they go down, then climate action is going well.

However, I’ve only looked at the KPI from a “less of that” mindset. How do we have less of that? Essentially, the metrics I have is an output metric. I haven’t proposed the input metric.

So I’ve been trying to think about the input metrics. The input metric, I believe, is a total investment into renewables and zero-carbon energy. I know there is a whole host of other factors into climate change that needs resolution. Solving for the 60% case seems to be zero-carbon energy.

So what are the input metrics? I think there should be two:

  • Total renewable / zero-carbon energy used by country.
  • Investments in zero-carbon projects around the world.

I’m trying to gauge how to think about renewables per country. Some countries are entirely dependent on oil. For example, Antigua and Barbuda get 99% of their energy from oil. However, their population is only about 98,000. Should renewable projects be bottom-up or top-down? Should the rich countries change first then move to poor countries, or should the poor countries be helped first, so they avoid the problems of the rich countries?

The reason for this is that it affects how to look at data. If we are to move bottom-up, the goal would be to get as many countries to renewables as possible making overall trends look better. But if we do top rich to poor, then the data changes to be more skewed.

Maybe the better KPI is to look at renewables as a percent of the population may be a better number. Still need to explore…

Designing a Workflow Engine

Well I’m at it again, designing yet another crowd workflow engine. One of the things about workflow engines are that one size doesn’t really fit all especially if you want it to be easy to use. The workflow engine I’m working on is for getting code completed. The problem is how to do it in a way that:

  1. Limits scope and ACL
  2. Allows for new workflows to be generated quickly.
  3. Ensures that Workers are isolated from each other and do not see each others tasks.
  4. Ensure that Managers can see everyones tasks.

Doing all of this cheaply without spending an arm and a leg on Jira, Asana or some other tool has been the major bottleneck. In the future that may be a possibility, but for right now just doing the first four are the MVP of the solution.