December 15th, 2010 → 1:47 pm @ James Walker
I am no longer actively pursuing search engine optimization and website development through WebVilla, though this website will remain in place for posterity until 2012.
-James
September 1st, 2010 → 10:44 pm @ James Walker
My experience in business has taught me a very important lesson about working on commission: Don’t do it! If you’re not in sales and you take it as a replacement for compensation, you’re a chump. Commission means that if you didn’t have a hand in a sale, you don’t deserve a share of the money. Sounds reasonable, right? Well, let’s look at an example everyone is familiar with in order to illustrate where the system breaks down: Many retail salespeople work on commission. They get a portion of whatever they sell because they were directly responsible for securing the transaction with a customer. The more t-shirts or hockey sticks they sell, the more money they make. There is a strong incentive to work hard because you are in complete control of how much money you make. Sales is where commission works.
Now offer the janitor a commission based on t-shirt sales. Tell him that for every t-shirt he helps to sell, he gets a percentage. He plays a small role in every single sale, but what is his measurable effect? How much should he get for keeping the bathroom clean? Sounds like a tough calculation; where would you even start? How about the stager–the company responsible for organizing or designing the way products are presented in the store. They certainly influence sales, but how much? Who have they influenced and how? They never directly interact with clients, so how can you offer them a commission? The answer: You can’t.
The Online Marketer faces the same dilemma. According to a 2007 study by Yahoo! 1 in 6 in store sales occur because of something that a customer has seen on the website. Maybe that number is higher or lower depending on the product and how good you are; in any case, it’s a difficult task to convince a business to give you a cut of their in-store sales when they’ve hired you to do online marketing! Even if you do somehow win them over, they will forever feel like you’re getting the better end of the bargain and maybe harbour some resentment because of it.
Here’s the biggest problem: You’re working for free. Even if you eventually get paid, at first you get nothing. It’s hard to justify to yourself spending countless hours on somebody else’s business when your compensation hinges on two dubious intangibles: A promise, and their ability to success in business. Too many times I see business owners hire somebody using a profit sharing model at 10 or 15%, then expect them to do all the work to drive sales. Maybe they’re hoping for a miracle, or maybe there is a flaw in their business model. Also consider what happens if a new client arrives and wants to pay you up front, in cash. Realistically, who would you prioritize? If you want to build a positive reputation, you need to be fair to yourself and to your clients.
If someone isn’t prepared to pay you what you’re worth, you should think carefully about why that might be. What happens when you have finished your job? Their website is done, you’ve seeded the marketing strategies and designed their graphics and you are no longer doing work for them. Do they still have to give you a cut? For how long? What if your client changes their mind about sharing the booty? Now we’re entering a grey area: Can you trust them to be honest with you about their sales? I know it seems a bit paranoid but I’ve had clients that I liked hide things from me and withhold payment, saying “I did almost all the work!” Yes, they did almost all the work so they deserve 90% of the take–but I was involved, we had a signed contract, and they broke it because they never really expected to make a lot of money. To someone who has no business, 10% sounds like nothing; tell them that they owe you 10% of one million dollars and they recoil at the thought.
If the client you’re dealing with isn’t willing to take a risk on you and pay what you’re asking, why should you take a risk on them and work for free? On the other hand, if someone offers you a share in the company as a reward, and you are not expected to do any work, that’s a way better deal. In that case you can also get a lawyer involved to formalize the arrangement and you will be far less vulnerable. But make no mistake, marketing on commission is a fool’s game and it would take a lot to convince me to go down that road again.
August 13th, 2010 → 9:27 am @ James Walker
One of my house guests must have brought a Readers Digest magazine over because I found one in my bathroom the other day. Being a bathroom reader, I picked it up and started reading an article about a guy named Todd Carmichael. The co-founder of a premium coffee roaster, for some reason Todd decided to walk across Antarctica to the South Pole. His journey was gruelling and ultimately successful, but what struck me about the article was what I consider to be a controversial quote about work:
You can never stray from your routine. If you rely on adrenaline or emotion, you burn out. Inspiration comes from doing the work, not as a catalyst to do the work.
I think that, while that may be true for Todd, it isn’t true for everyone. I have long debated the advantages and disadvantages of working using inspiration versus working with a routine. I find it nearly impossible to follow a set work routine, and the times when I have done it have yielded comparatively small returns.
Routine
If you’re one of the people who can get up every single day at the same time, eat the same breakfast, go for the same run, and start on the same self-directed work as yesterday, then I envy you (sometimes). I’m not talking here about going to a job where you dig trenches all day–even I can do mindless tasks–I’m talking about building your business. This approach means that you “work” every day for 6 – 12 hours, although what you might actually accomplish on a daily basis is fairly insignificant. The strength of this approach is that, after months of doing a tiny bit every day, you will actually have a lot to show for it at the end. Sometimes the daily routine can even take on a life of its own and sweep you up so that what you’re doing feels inspired. It is very predictable, reliable, and guaranteed to produce some kind of result. The disadvantage is that it takes up nearly all of your time, keeps you tired, and is very hard to maintain for people of a more capricious nature.
Inspiration
Right now the routine people are probably wondering why I’m even writing this post if the benefits of routine are so obvious. Well, here’s a question: Have you ever written a book…in a week? Working on inspiration is all about structuring your life to maximize the potential for flashes of insight and moments of frenzied passion. You spend more time working to make sure you are happy, healthy, and open than you do plugging away at a particular task. When inspiration hits, you might work for days without food or rest (much, anyways). You will be unable to fall asleep at night, become distracted to the point where you’re unable to have regular conversations with people, and produce tremendous results in a short period of time. In the same way that I cannot appreciate routine, most routine people cannot fathom the truly inspired state of mind. The quality and quantity of work can be orders of magnitude greater than the cumulative result of a routine (Eureka! happens in the bathtub), and the amount of time required to complete most tasks becomes nominal when you are operating at full potential. Unfortunately, you are subject to moods, you may get no work done for weeks (feast or famine), you can’t force yourself to work, the results–and even the processes–are unpredictable to the point where you cannot honour deadlines, and by embracing it you become a social deviant. Think about it, would you hire someone (any pay them a lot of money) who was inconsistent but potentially brilliant?
Here’s the happy ending: No matter which type of person you are, you should be okay with it and not try to force yourself to change. Realize where your strengths are and capitalize on them. By working with people who have complimentary abilities, you will maximize your potential for growth and success. If you get the right mix, you will be able to optimize your work habits and dampen your weaknesses. Just don’t forget: Routine people need inspiration people to shake things up, and inspiration people need routine people to get down to earth.
July 19th, 2010 → 4:20 pm @ James Walker
The world is slowly remembering that the key to establishing a successful enterprise is by building long term relationships with clients, suppliers, and employees. Maybe that seems obvious, but there are other ideas that compete for the position of prime importance, such as offering the lowest price, having the best customer service, promoting a consistently positive experience, or creating the best quality product.
89.4 per cent of the companies with over 100 years of history are businesses employing fewer than 300 people.
WalMart, Starbucks, and McDonald’s are very successful at out-competing small businesses and have experienced tremendous growth over the last decade. Surely most people expect them to continue growing indefinitely, but the reality is that large businesses fail relatively quickly (read about the oldest companies in the world). The two factors that will contribute to the “Relationship Revolution” of the next decade are the backlash against market domination and the search for information.
Is your community the same as one in another city? province? on the other side of the world?
Large multinationals become successful by creating systems that can be deployed anywhere in the world using the most readily available class of worker (i.e. minimum wage labourers). The inherent strength and weakness of this approach is that it is uniform. Here is a case study: WalMart is successful at displacing existing competitiors because it is able to offer the lowest price to consumers; it does this by gouging it’s suppliers and stocking low quality products (i.e. “Value”). As WalMart saturates the market and shuts down its competitors, it becomes a form of monopoly. Without competition, they will be free to gradually manipulate their product structure in order to make more money; this will eventually lead to a backlash against the initial problem, which is that WalMart has no connection to the community where it exists and is untrustworthy in the sense that it sells people crap. Historically, this reaction leads to a grassroots movement that engenders a regression towards more human values.
Profit is easily derived by minimizing costs, labour being the largest. In order to grow you must create a system that allows you to duplicate your initial business without requiring too much direct involvement. Systems employing minimally skilled labourers only function if they are rigid and uniform because you are hiring people who lack common sense. Uniformity is the antithesis of human culture, but social responses have a lag time compared to the comparatively rapid pace of business activities. Therefore, a business will initially make profit by exploiting some aspect of human nature, but it will ultimately be destroyed by the resulting backlash against anti-social business policies. This is a logical argument proven by history; the question is, does it apply to large corporations like WalMart, Starbucks, Home Depot, Loblaws, Best Buy, Ikea, and CostCo? I think it does.
Do you ever use the internet to research a future purchase?
I’m sure you’ve heard the phrase “The Information Age” hundreds of times without really thinking about what that means. The Pew Research Center has some interesting statistics showing how there has been an exponential increase in the number of people who regularly use the internet. They also show that most people use the internet to search for knowledge–humans are addicted to information, and always have been. Think about shopping at a large chain grocery store like Loblaws: Does someone ask you what you’re having for dinner and suggest recipes for you to try? Millions of people search the internet for recipes every day. Do the employees tell you what’s freshest, highest quality, or what new products they just got in? No, but the flyer lets you know what’s on sale. Now think about walking into a Starbucks to buy an Espresso machine: Does the Barista even know where it was made, or what makes it better or worse than models made by other manufacturers? The answer is almost always no.
Although “price” has always been a driving factor in purchasing decisions, by coupling it with the mentality that everything is disposable and renewable, and the temporally unprecedented level of weath enjoyed by most North Americans, corporations have been able to artifically boost their growth and extend their life span despite a staggering externality defecit. Now that people are actively demanding information and making socially repsonsible decisions, we will see a wild push for “Relationship Building” as companies struggle to retain their customers.
Humans are social creatures: They like to have relationships with other people, and derive satisfaction from the energy exchange that accompanies a transfer of information. To add information value to their products and services, businesses will have to spend more money on labour and training, and things like customer loyalty initiatives and local adaptability will be the marketing push of the 10′s.
June 23rd, 2010 → 12:22 am @ James Walker
I was thinking today about the phrase “I’m too busy” because I’ve heard it a lot lately and thought I should talk about why being “too busy” can be a problem.
The phrase “too busy” is actually redundant–you are either busy or you are not. People usually say it to excuse themselves from something; they mean that they are normally “busy”, but now they are “even busier” and have no time for anything else. Appropriately, the phrase “too busy” is a double entendre–it can mean that there should be an absence of busy: e.g. “The wallpaper makes this room too busy, therefore the wallpaper should be removed”.
If you are saying “I’m too busy” a lot, then removing “busy” from your life should be a top priority. Are you working at capacity, all the time? If so, then you will soon become a world leader in whatever it is that you do, and you can stop reading now. Unfortunately, it’s likely that most of what you do is a waste of your time. Many people deceive themselves into thinking that every little thing is integral to the success of their operation, but most of it has nothing to do with growth and everything to do with maintenance. Be honest with yourself: examine every task you do each day and ask yourself, “am I the only one who could do this?” If every time the answer is “yes,” then you are doomed to mediocrity.
Over Growth
The most common cause of being “too busy” is growing too quickly, or too unevenly. If you are trying to build relationships with large numbers of clients by yourself, then you will quickly be overwhelmed. If you are building infrastructure without the client base to support it, then you will be stretched too thin. If you are building staff before you have infrastructure, then you will collapse under your own weight. If you aren’t making enough money to do any of those things then you are undercharging. The right balance for a business is difficult to find, but “too busy” is a good litmus test. Your job is to be as efficient as possible with everything you do so that you will never be “too busy”.
How Busy Can Be Bad
It starts with simple things like “I’m too busy to see my family”, then builds into stupid things like “I’m too busy to listen to my clients”. You are never too big to make that mistake. Multi-billion dollar companies are falling like redwoods every year because they are struck with this destructive group-think. The key to a successful business is for you to never be busy, but always actively looking for things to do!
This is good for two reasons: You are less likely to miss opportunities when they smack you in the face; and you get to enjoy your life more. Isn’t that what it’s all about, anyways?
