Publishing industry new the massacre was coming

While job hunting in 2008 and 2009, I met waves of people displaced from the publishing industry. It was a massacre. Interesting to see that they industry knew it was coming in 1994 but was in denial.

P.S. Where the shoulder pads really that big in 1994?

http://t.co/TobjmJE

SaaS 101: 7 Simple Lessons From Inside HubSpot

A nice quick and very interesting read for those interested in the Software as a Service (SaaS) business model either as a buyers or investors…

SaaS 101: 7 Simple Lessons From Inside HubSpot

// It’s been a little over 4 years since I officially launched my internet marketing software company, HubSpot.  (The “official” date is June 9^th, 2006 — for those that are curious about such things).  So, I’ve had about 4 years on the “inside” of a fast-growing, venture-backed B2B SaaS startup.  Quick stats:  ~2,900 customers, ~170 employees and $33 million in capital raised.  But, this is not an article about HubSpot, it’s an article about things I’ve learned in the process of being a part of one of the fastest growing SaaS startups ever. (I looked at data for a bunch of publicly traded SaaS companies, and the only one that grew revenues faster than HubSpot was Salesforce.com).

In any case, let’s jump right in.

7 Non-Obvious SaaS Startup Lessons From HubSpot

1.  You are financing your customers. Most SaaS businesses are subscription-based (there’s usually no big upfront payment when you signup a customer).  As a result, sales and marketing costs are front-loaded, but revenue comes in over time.  This can create cash-flow issues.  The higher your sales growth, the larger the gap in cash-flows.  This is why SaaS companies often raise large amounts of capital.

Quick Example: Lets say it costs you about $1,000 to acquire a customer (this covers marketing programs, marketing staff, sales staff, etc.).  If customers pay you $100/month for your product and stay (on average) for 30 months, you make $3,000 per customer over their lifetime.  That’s a 3:1 ratio of life-time-value to acquisition cost.  Not bad.  But, here’s the problem.  If you sign up 100 customers this month, you will have incurred $100,000 in acquisition costs ($1,000 x 100).  You’re going to make $300,000 over the next 30 months on those customers by way of subscriptions.  The problem is that you pay the $100,000 today whereas the $300,000 payback will come over time.  So, from a cash perspective, you’re down $100,000.  If you have the cash to support it, not a big deal.  If you don’t, it’s a VERY BIG DEAL.  Take that same example, and say you grew your new sales by 100% in 6 months (woo hoo!).  Now, you’re depleting your cash at $200,000/month.  Basically, in a subscription business, the faster you are growing, the more cash you’re going to need.

2 Retaining customers is critical. In the old enterprise software days, a common model was to have some sort of upfront license fee — and then some ongoing maintenance revenue (15–20%) which covered things like support and upgrades.  Sure, the recurring revenue was important (because it added up) but much of the mojo was in those big upfront fees.  The holy grail as an enterprise software startup was when you could get these recurring maintenance fees to exceed your operating costs (which meant that in theory, you didn’t have to make a single sale to still keep the lights on).   In the SaaS world, everything is usually some sort of recurring revenue.  This, in the long-term is a mostly good thing.  But, in the short-term, it means you really need to keep those customers that you sell or things are going to get really painful, very quickly.  Looking at our example from #1, if you spent $1,000 to acquire a customer, and they quit in 6 months, you lost $400.  Also, in the installed-software world, your customers were somewhat likely to have invested in getting your product up and running and customizing it to their needs.  As such, switching costs were reasonably high.  In SaaS, things are simple by design — and contracts are shorter.  The net result is that it is easier for customers to leave.

Quick math: Figure out your total acquisition cost (lets say it’s $1,000) and your monthly subscription revenue (let’s say again say it’s $100).  This means that you need a customer to stay at least 10 months in order to “recover” your acquisition cost — otherwise, you’re losing money.

3  It’s Software — But There Are Hard Costs. In the enterprise-installed software business, you shipped disks/CDs/DVDs (or made the software available to download).  There were very few infrastructure costs.  To deliver software as a service, you need to invest in infrastructure — including people to keep things running.  Services like Amazon’s EC2 help a lot (in terms of having flexible scalability and very low up-front costs), but it still doesn’t obviate the need to have people that will manage the infrastructure.  And, people still cost money.  Oh, and by that way, Amazon’s EC2 is great in terms of low capital expense (i.e. you’re not out of pocket lots of money to buy servers and stuff), but it’s not free.  By the time you get a couple of production instances, a QA instance, some S3 storage, perhaps some software load-balancing, and maybe 50% of someone’s time to manage it all (because any one of those things will degrade/fail), you’re talking about real money.  Too many non-technical founders hand-wave the infrastructure costs because they think “hey we have cloud computing now, we can scale as we need it.”  That’s true, you can scale as you need it, but there are some real dollars just getting the basics up and running.

Quick exercise: Talk to other SaaS companies in your peer group (at your stage), that are willing to share data.  Try and figure out what monthly hosting costs you can expect as you grow (and what percentage that is of revenue).

4  It Pays To Know Your Funnel. One of the central drivers in the business will be understanding the shape of your marketing/sales funnel.  What channels are driving prospects into your funnel?  What’s the conversion rate of a random web visitor to trial?  Trial to purchase?  Purchase to delighted customer?  The better you know your funnel the better decisions you will make as to where to invest your limited resources.  If you have a “top of the funnel” problem (i.e. your website is only getting 10 visitors a week), then creating the world’s best landing page and trying to optimize your conversions is unlikely to move the dial much.  On the other hand, if only 1 in 10,000 people that visit your website ultimately convert to a lead (or user), growing your web traffic to 100,000 visitors is not going to move the dial either.  Understand your funnel, so you can optimize it.  The bottleneck (and opportunity for improvement) is always somewhere.  Find it, and optimize it — until the bottleneck moves somewhere else.  It’s a lot like optimzing your software product.  Grab the low-hanging fruit first.

Quick tip: Make sure you have a way to generate the data for your funnel as early in your startup’s history as possible.  At a minimum, you need numbers on web visitors, leads/trials generated and customer sign-ups (so you know the percentage conversion at each step).

5  You Need Knobs and Dials In The Business. One of the great things about the SaaS business is you have lots of aspects of the business you can tweak (examples include pricing, packaging/features and trial duration).  It’s often tempting to tweak and optimize the business too early.  In the early days, the key is to install the knobs and dials and build gauges to measure as much as you can (without driving yourself crazy).  Get really good at efficient experimentation (i.e. I can turn this knob and see it have this effect).  But, be careful that you don’t make too many changes too quickly (because often, there’s a lag-time before the impact of a change shows up).  Also, try not to make several big changes at once — otherwise you won’t know which of the changes actually had the impact.  As you grow, you should be spending a fair amount of your time understanding the metrics in your business and how those metrics are moving over time.

Quick advice: If you do experiment with pricing, try hard to take care of your early customers with some sort of “grandparenting” clause.  It’s good karma.

6  Visibility and Brakes Let You Go Faster. One of the big benefits of SaaS businesses is that they often operate on a shorter cycle.  You’re dealing in days/weeks/months not in quarters/years.  What this means is that when bad things start to happen (as many experienced during the start of the economic downturn), you’ll notice it sooner.  This is a very good thing.  It’s like driving a fast car.  Good breaks allow you to go faster (because you can slow down if conditions require).  But, great visibility helps too — you can better see what’s happening around you, and what’s coming.  The net result is that the risk of going faster is mitigated.

Quick question: If something really big happened in your industry, do you have internal “alarms” that would go off in your business?  How long would it take for you to find out?

7 User Interface and Experience Counts: If you’re used to selling client-server enterprise software that was installed on premises, there’s a chance that you didn’t think that much about UI and UX. You were focused on other things (like customization, rules engines and remote troubleshooting).  That was mostly OK, because on average, the UI/UX of most of the other applications that were running on user desktops at the enterprise sucked too.  So, when you got compared against the other Windows client-server apps, you didn’t fare too badly.  In the SaaS world, everything is running in a browser.  Now, the applications you are getting compared to are ones where someone likely spent some time thinking about UI/UX.  Including those slick consumer apps.  You’re going to need to step it up.  In this world, design matters much more.  Further, as noted in #2 above, success in SaaS is not just about selling customers, it’s also about retaining them.  If your user experience makes people want to pull their hair out and run out of the room screaming, there’s a decent chance that your cancellation rate is going to be higher than you want.  High cancellation rates kill SaaS startups.

Quick tip: Start recruiting great design and user experience talent now.  They’re in-demand and hard to find, so it might take a while.

—-

So, what do you think?  Are you running a SaaS startup now?  What have you learned?  Would love to hear about your experiences in the comments.

You can follow me on twitter @dharmesh.
//

via SaaS 101: 7 Simple Lessons From Inside HubSpot.

Posted by Dharmesh Shah on Mon, Jul 19, 2010

NASA and Rackspace Open Up the Cloud | CIOZone.com

Very interesting market play. I’m speculating that they are betting on “viral marketing” to propel them into becoming the 800 pound guerrilla in this domain.  If enough geeks and hacks dive-in, we may be looking at the next Tomcat/Apache…

… July -19 – 2010

NASA and Rackspace Open Up the Cloud

Posted by meggebrecht in Rackspace, OpenStack, Nebula, NASA, Lew Moorman, Jim Curry, Cloud Computing, Chris Kemp

Rackspace announced Monday that it is open-sourcing its cloud computing platform, making a bid to bring some sorely needed interoperability to the cloud with the launch of the OpenStack project.

First up is the software behind the company’s cloud storage engine, Rackspace Cloud Files. You can freely download early code at the OpenStack site under the Apache 2.0 license — meaning of course that you can do pretty anything you want with the code. The full release is expected in mid-September, according to the site.

In mid-October, Rackspace will release OpenStack Compute, code based on its Cloud Servers technology and the Nebula platform operated by NASA, which is partnering with Rackspace on the project.

So basically, anyone will be able to download the software behind two massive cloud computing platforms and build their own. And NASA and Rackspace have pledged that their engineers will continue to develop the technology — they kind of have to, considering that both organizations will be powering their clouds using OpenStack. Rackspace also says that it will commit money and manpower to supporting enterprise and service provider adoption of OpenStack….

via CIOZone.com – Professional Network for CIOs and IT Professionals – NASA and Rackspace Open Up the Cloud.

BPO/IPT Forum: Total Cost of Ownership Strikes Again

I had a blast these past two days at the World Business Process Outsourcing/IT Outsourcing Forum (http://www.worldbpoforum.com).

I met some fascinating folks that have been on the bleeding edge of outsourcing.  Seems that IT has been on the forefront and consequently has taken the punches.  As outsourcing business functions/processes becomes more prevalent, those experiences will be invaluable (if they are consulted or heeded). Which leads to my first takeaway…

My favorite takeaway from the event was the story of a global energy company.  It is my favorite because it illustrates one of my passions (and peeves):  Total Cost of Ownership (TCO).  This company had operations in dozens of countries throughout the world, many in the typical “low labor cost” countries — the usual suspects.  Well, instead of jumping on the bandwagon, the CIO and his team looked at TCO which includes all costs to the company; not just labor.  Long story short, they found that it was substantially more profitable to consolidate operations in a particular Scandinavian county in lieu of a popular South East Asian one.  How?  Tax implications were one of the factors.  Counter intuitive? You bet.  But that’s TCO.  You don’t know the answer until you do your homework and look at the big picture.  Without TCO, its so easy to save a bundle in your department but cost an even bigger bundle to the company.

My second favorite takeaway — move fast.  Yep, I’m a proponent of pulling bandages off quickly.  Same goes for organizational change.  I have to admit that I did feel some sense of pleasure in hearing several highly successful leaders say the same. Their pitch to their Mgmt Committees and Boards was that moving quickly reduces flight risk of customers and suppliers. In the past, I’ve pitched for moving fast on the grounds of minimizing disruption of operations and impact on morale. For me, this is a new perspective and reason. I’ll be putting that one in my toolbox for future use.

It was reported that business process outsourcing is continuing to build momentum.  It will more than likely be as rampant as IT outsourcing; hopefully, this time with less pain and disappointment.  The danger is that these types of initiatives come into vague and become the fashion of the day.  So, every nabob that only interested in collecting a big bonus and get a juicy bullet on their resume will jump blindly onto the bandwagon.  In the end, they move on to their next job while the company and its shareholders (as well as the employees that remain) are left holding the bag and paying the price. Well, that’s why events like this one are important — so that one can see where it worked and where it didn’t and meet the players that are doing it right.

One final point… both the buyers and sellers at the forum agreed that there is a lot of work left to be done with the procurement process and governance.  So, we will all have plenty to discuss next year.

Breaking Out Of Long-Term Unemployment | Glassdoor.com

It’s especially difficult when one encounters HR staff and recruiters that are clueless to what happened in 2009.

Breaking Out Of Long-Term Unemployment

Posted by Yahoo! Hot Jobs • April 22nd, 2010

Long-term unemployment can wreak havoc on a person’s sense of self-worth and well-being. Worse, big resume gaps, or current unemployment, may also mark a job seeker as “damaged goods” and make a long job search even longer.

“I wouldn’t say the bias [against hiring the unemployed] is pervasive, but too many hiring managers don’t realize that the world has changed and that people have had a hard time finding jobs through no fault of their own,” says Cheryl Ferguson, president of Recruiter’s Studio and recruiter for Decision Toolbox.

Throw in the towel? Don’t even think about it, career experts say. They suggest these practical steps to help even the most discouraged unemployed job seeker get motivated and beat the odds.

1. Check your mental attitudes.
It’s a vicious circle: the longer you’re out of work, the more anxious, insecure, or depressed you may be–and this can hurt your chances of landing a job. “Attitude is a crucial part of the job search, and unfortunately it’s easy to be caught up in negative mental self-talk, especially with the media telling us how terrible everything is,” says Helaine Z. Harris, a Los Angeles-based psychotherapist.

If anxiety or depression is significant, don’t be afraid to seek counseling. If that’s not an option, simple calming breaths and even meditation can be effective, Harris says. “It’s essential to relax and clear the mind, so you’ll know the right actions to take and be able to magnetize the opportunities you want.” Connecting with nurturing friends and sharing your feelings about being unemployed can also help if you’re feeling isolated.

2. Move your body.
There’s documented evidence that physical exercise improves mental health and reduces anxiety. And a gym regimen or even daily walks around the neighborhood can help your job-search efforts by adding structure to your day. “Regular exercise creates more self-discipline and shows that you can do hard things, which makes it easier to handle tasks like making difficult phone calls,” says Penelope Trunk, creator of the social network site Brazen Careerist.

3. Step away from the computer.
Job boards and social networking sites such as Twitter can be helpful, but they are not the only ways to connect. And relying on them can perpetuate the unemployment “hermit” trap. “If you’ve been out of circulation for a while, you have to remind people you’re still around,” Ferguson says. “You’re also likely to be a little rusty in networking, so it’s important to get out once or twice a week, at least, for a face-to-face meeting, lunch, or networking event.”

4. Re-examine employment strategies and tactics.
With a clearer mind, an energized body, and a fuller social calendar, you can better gauge the effectiveness of your search. Career coach and author Dr. Marty Nemko urges unemployed job hunters to not assume they’ve been doing everything right:

“Are you really spending 30 hours a week job searching? Do you have a job-search buddy, so you can be accountable to each other? Are you active in your professional association, in-person and online? After an interview, have you sent a proposal that explains what you’d do for the employer? Have you followed up relentlessly with warm leads? If you’ve done all of those things and still aren’t getting a job, you probably need to change your job target to a more in-demand job title or a lower-level job,” says Nemko.

5. Fill the resume gap.
A resume should be a history of things you’ve accomplished, not necessarily a chronology of things you’ve been paid for, according to Trunk. With that philosophy, there’s no reason to have a gap in your resume. “There are very few professions where you have to be on the payroll in order to do the work,” Trunk says. “If you’re a programmer, write a patch on your own time. If you’re a shoe designer, design your own shoes. Just do it. You’ll have something to show on the resume, and you’ll be taking back your power.” (See all HotJobs articles about resumes.)

6. Don’t be defensive about unemployment.
You’ve been out of work for a while. So what? So have many of the other candidates. “Don’t hide the fact you’ve been unemployed,” says John M. McKee, job coach and founder of BussinessSuccessCoach.net. “People won’t hire others who are prickly.”

McKee adds that you might need to stop saying the word “unemployed” if the word is getting in your way. Trunk agrees: “When someone asks what you’re doing now, don’t say you’re out of work, because you’re not. You’re just not getting paid. Talk about the projects you’ve done and what you’re learning, and then mention, ‘I’m looking for a paid position like this.’”–Larry Buhl, for Yahoo! HotJobs

via Breaking Out Of Long-Term Unemployment | Glassdoor.com Blog.

Why VCs Won’t Sign Your NDA

Plain and simple: just don’t do business with people that you don’t trust. Once the genie is out of the bottle…

Written by Audrey Watters / May 10, 2010 7:30 PM / 7 Comments

« Prior Post

There are several important documents you’ll want to have ready when you meet with potential investors. Your mission statement. Your founding team’s resume and responsibilities. A business plan.

But most investors agree: they do not want to sign an NDA.

While non-disclosure agreements are designed to protect your ideas, asking potential investors to sign an NDA is generally seen as unnecessary and unwise. Most VCs point to the following reasons for avoiding NDAs:

1. Trust. Potential investors are not your competition, and asking them to sign an NDA is often interpreted as a sign you don’t trust them. As professional integrity is important to VCs, requiring an NDA is generally seen as a violation of business etiquette.

2. Legality. An NDA is a legally binding document, and as such, it’s something people will refuse to sign without having a lawyer review. Most investors are unwilling to accept the risk of litigation should they hear about a similar concept – and it isn’t a stretch to assume that investors are weighing multiple pitches with similar or related concepts. Furthermore, an NDA means the investor is restricted from mentioning you, your idea or your project. And chances are, as an entrepreneur, you do want your investors to talk about you.

3. Ideas. Good ideas are dime-a-dozen. As Andrew Warner argues, “Ideas are worthless. It’s your execution of those ideas that will be valuable. Besides, this idea that you’re so proud of now will probably change completely as you build your company.”

There may be times in which you should require a non-disclosure agreement. As Anil Dash recently wrote on this subject, “Now, I’ve had clients ask for an NDA, which makes perfect sense, and I might ask contractors working for me to do the same. Or some big companies just have a boilerplate NDA that they throw in front of people as a matter of course. But for individual entrepreneurs who just have a good idea and big dreams, it’s easy to be misled into thinking that walking in the door with a fancy legal document makes you look professional or ‘serious’.”

Whether or not you ever consider an NDA, it is advisable in the early stages of forming your business that you share your ideas and plans with people you trust. And if you are approaching someone as a potential investor, it’s important that relationship be build on credibility and integrity, not on a legal document.

via Why VCs Won’t Sign Your NDA.

Salesforce buys Jigsaw

I like this move. This acquisition is an interesting and complementary addition to the suite. The sales and marketing department users should be very happy with this move.

Salesforce Puts Jigsaw Together

Written by Curt Hopkins / May 9, 2010 6:35 PM

Thanks, David

Customer relationship management software company Salesforce has bought Jigsaw, according to an announcement from the company. The San Mateo, CA-based Jigsaw is a crowd-sourced business contact data outfit.

Salesforce delivers its information via cloud computing, as does Jigsaw, so their models match up.

“Jigsaw’s data cloud platform also creates an enormous opportunity for developers and independent software vendors to deliver entirely new applications that leverage the business contact data found in Jigsaw.”

This is in keeping with Salesforce’s emphasis on integrating other data and apps with Salesforce via its Service Cloud 2 system.

Jigsaw offers a searchable online database of business contacts, assembled, corrected and added to by the public at large, including the contacts themselves. This seems a good fit for Salesforce and a big selling point for their users and potential users.

Jigsaw has built up a customer base of 1.2 million users in six years. Its data includes 21 million contacts at four million companies and serves 800 corporate clients. The deal is $142 million, plus performance contingent earns of up to 10% of the purchase.

via Salesforce Puts Jigsaw Together.

Staples seeks bigger role in IT services

Seems that Staples is headed to becoming the CDW for small business.  It will be interesting to how CDW responds; if they do.

I had a small business; so, whenever I see a small business owner or an entrepreneur, I usually ask a lot of questions about their business. I still hear that the banks are gumming it all up.  Credit lines have been slashed and there still is [practically] no new credit available to small businesses.  Unfortunately, small businesses feed the the economy and will fuel the recovery.

So, what’s my point?  With Staples targeting the small business IT market at this time, will they have the perseverance and forethought to stay the course until that segment recovers?  Right now, small businesses just don’t have the cash.  Even if they do, the owners are still in “survival mode” so they are hording it for a rainy day.  Staples’ value proposition has to show that the Staples solution/package is cheaper (not just better) than having your sister’s kid doing it out of her basement. The devil will be in the details.

Now if Staples does hold out for the long haul and presents a “win-win” package, then buy their stock.

Staples seeks bigger role in IT services

Retailer is creating a new business unit

By Patrick Thibodeau

February 16, 2010 06:13 AM ET

Computerworld – Staples Inc., the Framingham, Mass.-based retailer with 1,872 stores in North America, is expanding its IT services capabilities in a move that will take it right inside the data center.

The company has been working deliberately in recent years to expand its services capabilities. In 2006, Staples bought Thrive Networks, a managed services provider, and in 2008 it acquired Corporate Express, a supplier of office products to businesses and institutions, for $4.8 billion. The new unit, Staples Technology Solutions, “is the combined entity of those two groups,” said Joe Kalinowski, the vice president of finance for the technology solutions unit.

Staples, which has 91,000 employees, reported total net sales last quarter of $6.5 billion. “Technology was a logical extension…,” said Kalinowski.

Staples officials said they’re aiming for all sizes of clients with consulting services, data center services such as disaster recovery and data center media management. The company also has printer management services and has built its own software for managing operations.

From the Thrive Networks acquisition, Staples developed managed services for smaller firms of less than 250 employees, though some large customers use the services, too, said Jim Lippie, vice president of Staples Network Services.

The company, which has 3,000 clients, runs a 24-by-7 network operations center that can offer managed services for all major small-business technologies, including the Linux and Macintosh operating systems. Staples can install agents on hardware to monitor performance and dispatch people for on-site work.

Bob Laliberte, an analyst at the Enterprise Strategy Group in Milford, Mass., said Staples’ printer services are already reaching into large enterprises, while many of its other services are aimed at SMBs, including customers with whom it already has supply contracts. “I think they are looking at this as an extension of their brand and services,” he said.

Staples sees local resellers and IT services shops as its primary competitors.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick’s RSS feed . His e-mail address is pthibodeau@computerworld.com.

Read more about servers and data center in Computerworld’s Servers and Data Center Knowledge Center.

via Staples seeks bigger role in IT services.

13 Reasons You will Never Get a Job | via “The Job Genius”

Its so easy to ascribe blame to external forces but sometimes it is actually you (me). The author presents 13 points that make for a good self assessment.  Maybe its time to look in the mirror…

13 Reasons You will Never Get a Job

Filed under: Change is Good, Changing Careers, General, Motivation, Networking — Tags: Lack of education, Motivation, Personal Branding, Personal development — admin @ 2:28 pm

Yes I know that 13 is an unlucky number and even that may deter some of you from reading this. Just this once how about being a contrarian? That’s right, go against the grain. Make a difference in your life. Okay let me be perfectly honest with you. Nobody owes you a job. And to make it worse most job seekers are faced with a perfect storm of barriers that never existed in the past. Those barriers include huge competition for a single position, social media, applicant tracking systems, the complete elimination of entire job descriptions and industries, not to mention a totally overwhelmed HR and recruiting department. You have to be prepared to put your best foot forward. Your most prepared foot. And the one that completely differentiates you from the flock.

Although “experts” are skirting the issue and giving you false hope, I don’t have any problem telling you that you are likely going to stay unemployed, unhappy and a complete burden on society if you continue to do the things I’ve outlined below. Consider it a wake up call; consider it an opportunity. Because statistics show that only a very small percentage of you will take any action. Interesting, that’s about the same percentage of people in the world who are independently successful.

Your choice, it’s a new world with new rules so you have to be ready to do new things.

These 13 reasons outline opportunities that most people will never take advantage of. That’s good news for some of you because the difference between successful people and unsuccessful people is that successful people will do what unsuccessful people will not. Here you go (don’t kill the messenger).

1) You spew facts vs. stories. There’s an old adage in sales and marketing that stories sell and facts tell. People can relate personally to stories and the more you know about the company and person that you are interviewing with the better you can get that person to relate to what you are talking about. Stories evoke emotions and get people connected. And being personally connected is the differentiator you need. Think about the book series, “Chicken Soup for the Soul”. It is just a compilation of short stories about real life. It’s also the best selling book series of all time. But what if instead of telling a heart wrenching story about a paraplegic who learns to walk again and fights all odds to win a dog sled race in the Antarctic all alone, it was just a series of facts like, “Man rides sled across the snow”? One of the most powerful things you can do is call up former employees and employers and just shoot the breeze with them. Write down all the wonderful, “remember when” stories as well as the stories of success and challenge that make you unique. You need other people to jog your memory. If you can give your story personality and feelings, then you will gain instant rapport with anyone you talk to. Instant differentiator, you win.

2) You don’t present solutions. Let’s be real, an employer wants to hire someone to solve a particular problem. Either they don’t have enough of something or they want to fix/change something. And if they had all the solutions then they wouldn’t need you. So after you have thoroughly researched and analyzed the company, its culture, the competition, the industry and the people you are interviewing with then you better know what solutions they need and be able to communicate it. If you don’t, it’s okay because somebody else will. One great tool is to actually perform a S.W.O.T. analysis on the department, industry or company you are interested in. S.W.O.T. stands for Strengths, Weaknesses, Opportunities and Threats. Just Google it if you need a template to help guide you. And believe me, any employer worth working for will be completely impressed not only by your research but by your diligence.

3) You’re lazy. Anything worth doing is worth doing well. Abe Lincoln said that if he had 8 hours to chop down a tree then he would spend the first 6 sharpening his axe. Unfortunately most people don’t want to put forth the time and effort to do what they need to do to secure an interview and a job. The facts are clear that the vast majority of jobs are attained by some sort of active networking practice. And not by posting your resume on-line or applying for job after job. Yet most people are not willing to do what it takes to establish and nurture (you don’t just make a connection and then magic happens) the right networks. When I suggest that people actually call companies and build a rapport with associates in order to seek referrals, they look at me like I’m crazy. But that one additional step can mean the difference between having or not having network contacts, job referrals, insight, interview process feedback and much more.

4) You’re boring. Surveys of recruiters and Human Resource managers show that the number one trait that job seekers lack is high energy. The bottom line is that people want to be around other people who are upbeat, exciting and at the very least, energetic. The perception is that high energy people are on the ball and exude confidence; low energy people are lazy, unmotivated and no fun. Regardless of whether that is true or not, you had better have a gut check about your output. And I’m not just talking about the live interview where your handshake needs to be strong and secure (ladies included) and your voice confident and strong. During your phone interview, your energy is even more important because no one can see the bright expression of excitement that is hidden by technology. The only way to portray confidence and high energy on the phone is to have the proper inflection, tonality and great volume. With blue tooth and other type headsets, it’s more and more important to speak up. And after all, if you’re not excited about what you have to offer, why should anyone else be? And please get some honest feedback from someone about how you sound. True story; I was actually offered a job because of a message I left on an answering machine. It wasn’t the message itself; it was the energy, passion and drive that delivered it.

5) You don’t add up. Have you ever talked to someone and they just make you turn your head and say, “hmm”? Well how do you know if someone isn’t saying that about you? Here’s the best way to tell. If you have anything to hide, have covered something up, or speak in half truths or your resume doesn’t match what you say or what you wrote on your application. If any of those things are true, people will say, “Hmm”
about you. The biggest lies we tell are the one’s we tell ourselves (think of your kids who will honestly say they didn’t get into the cake, all the while covered in chocolate icing). No job, guaranteed. Be honest and be consistent. There are no perfect people in the world. In fact the only people with no problems are well, dead people. What differentiates people is how they handle those problems. So turn your past issues into opportunities. Employers are looking for solution providers so be one.

6) You only speak one language. I’m not talking French or Spanish. I’m talking about the three ways that people communicate and learn. People
learn and disseminate information in one of three ways; auditory,
visual and kinesthetic. Without a full dissertation, this is what I’m talking bout. Auditory learners can grasp information just by you talking to them. Visual learners need some form of pictures or stories to create the picture before they “get it”. Kinesthetic learners need to be an active participant before the information gets through their thick skulls (that’s me). These interviewers would most benefit from a Socratic type interview where they were guided to come up with their own conclusions about why you are the “man” for the job.

Oh and by the way most people are visual. I just happen to be kinesthetic. Which means that I am so dense that you can talk ‘till you
are blue in the face and I won’t get it. I know what you are saying, “So what”? Well let’s say that that there is an even distribution of the population (33.33% each) that prefers to communicate in one of the three styles. And you prefer to communicate in one of the other. So you are visual and the interviewer is auditory. You show graphs and pictures but don’t really “explain” why you are the best candidate (stories are also like pictures). Have you ever wondered why you have a passionate message that just doesn’t produce the results that you are looking for? Well this is the number one reason. Why do you think that Google paid like a gazillion (I’m sure that’s the official term) dollars for YouTube? Because video appealed to the masses in a way that written text never could. So the solution is always to appeal to the interviewers preferred style. How do you do that? We’ll it would be great if you could give them a test to determine their preferred style but the fact is that you just don’t know. So the only solution is to ALWAYS communicate in all three styles. And if you do…..wow you will do what 99% of job seekers not only don’t know how to do but they are also not willing (see lazy above) to do. Hey what’s the big deal anyway…being unemployed is not that bad. I’m sure that Obama will extend your jobless benefits and eating out is so over rated.

7) You’re a quitter. If I hadn’t just had two glasses of wine complements of Delta on my first class upgrade I would have said that you need to have more perseverance. (Disclaimer: I am not condoning the use of alcohol to enhance your creative abilities) But let’s be
real here. Most people quit too soon. Studies show that 81% of professional sales people take 5 calls to close a sale. But a full 90% give up prior to making that critical 5th call (48% quit after the first call and another 24% quit after the 2nd call). I can think of a significant number of hires who scored the position just because they were the one who stayed front and center with me. And not just when I had a position open, no these candidates made regular contact regardless of whether anything was available. And you know the best part is that I really appreciated those candidates staying top of mind with me. Why? Because it kept me from having to weed through hundreds of unqualified candidates.

8) You don’t take advantage of opportunities right in front of your face. Right now I am sitting on a two hour plane ride from Kansas City back to my home in Atlanta. I had an idea pop into my head to write this article after talking to a couple of job seekers who are close to 100% guaranteed not to get employment anytime soon (see reasons 1-13). Oops the battery on my laptop is completely dead and Delta just doesn’t have the foresight like the Virgin Atlantic visionaries to add AC; even in first class (yeah I’m spoiled, so). I am actually writing this entire article on my iPhone because my laptop battery died (I thought about writing a book about writing a book on my phone). I have never understood how someone can spend hours on a plane and not at least have something to read, let alone work on. But in all seriousness, opportunities are all around us every day. Most of the time we are just not prepared to take advantage of them. They say that luck is when preparation and opportunity cross paths and that is so true. Here’s a great example. And this story came from an article in the Atlanta Journal almost a year ago. Yes I was prepared for the opportunity and cut the article out and filed it under, “opportunities”. Anyway the article is about a marketing executive who was a little down on his luck (not enough business) so he decided to create some by actually scheduling flights (mostly first class) to no-where in particular. Why? Because most decision makers were on flights and in first class. The result was that David Topus, marketing and business consultant, landed a 3 year business relationship with former Delta CEO, Leo Mullin, countless contacts and even a 100k deal because of a seat assignment mix up. Now I understand that most people don’t have the means to spend a couple of grand on a first class ticket just on the chance that they will meet someone, but you are missing the point. David just created networking opportunities that exist for all of us, every day. Instead of a first class flight, the opportunity you create could come from a Chamber Networking function or a MeetUp group that you start, or god forbid strike up a conversation with someone in line at the grocery store. The differentiator is that David took an active role in his networking whereas most people think that “showing up” is good enough. Seriously, the whole “90% of life is just showing up” has really screwed up a lot of folks. In the very best of markets maybe that has a hint of truth; with the results only lasting short term. In this market it has no relevance what so ever.

9) Your resume sucks. Alright I’ve reviewed more resumes than I can count. Do you want to know the bottom line? Okay here you go. You know that resume writer that you paid big bucks for? Fire them and hire an editor instead (at a fraction of the price). Your resume won’t get you the job or interview but it can certainly lose it for you. So use this as a rule of thumb. Don’t make it too long, too complicate (go for it if you are a PhD in Neuroscience and are applying for the same but still be careful because a recruiter is likely screening your resume) or too messy. It doesn’t matter how good a candidate you are if your resume shows how poorly you can hire a proof reader or do it yourself. And here’s some very valuable information (you can send me a check if you want) that will completely differentiate you from the rest of the world. Go back and read number 6 above. Take out some words (no fluff in the resume please) and add a few graphs or charts that are easy to read. It will immediately catch someone’s eye and it will resonate with another 33 1/3% of the population who are visual learners (come on, we all like to look at the pictures).

10) You need immediate gratification. An article in The New Yorker highlighted a 1960’s study that showed there is a direct correlation between a child’s ability to delay immediate gratification and success. In fact the 30% of kids who could delay getting a marshmallow for just 15 minutes scored on average 210 points higher on SAT scores. The 70% who could not delay immediate gratification struggled making friends and handling stressful situations. To put this in perspective, the job seeker that needs immediate gratification is the one who posts their resume every day, they do mass mailings of cover letters, and they mindlessly apply for job after job. The job seeker who can delay immediate gratification will do their due diligence by researching companies, individuals, industries and competitors. They will put together a package of solutions and take the time to build relationships as well as practice until their message is clear and value oriented.  So what’s it going to be? One marshmallow now or two in 15 minutes?

11) You’re a taker, not a giver. If you are always looking for what a company is going to do for you and what your benefits will be then you are thinking backwards and you are doomed to fail. Everyone’s favorite radio station is WIIFM (what’s in it for me) so it’s only natural to be a little selfish. The only problem is that your potential employer listens to the same station and they have the upper hand. So if your mission is not to add value to individuals and organizations then you’ve added one more reason why you may never get a job in this economy. The best way to learn how to add value is to make a list of the common concerns an employer might have about hiring someone and answer them. Employers are really only concerned about 3 things. If you can do the job. If you will do the job. If they like you. Answer the objections before the interviewer has had a chance to ask you about them and you are in baby. Other great ways to add value is by doing a S.W.O.T. Analysis or actually preparing a summary of how you will attack the position in your first 90 days (please include items related to soliciting the help of other people in the company).

12) You’re going it alone. Here’s the bottom line. Two heads are better than one and you only have one (if you do in fact have two, skip this section). Napoleon Hill in his masterpiece, Think and Grow Rich, described it a little more elegantly. He said that a mastermind is “The coordination of knowledge and effort of two or more people, who work toward a definite purpose, in the spirit of harmony.” And also, “No two minds ever come together without thereby creating a third, invisible intangible force, which may be likened to a third mind.” In fact he also stated that nothing of greatness was ever achieved by a single man. Yet so often, especially when we are down and out, we tend to play turtle and hide in our shell. You should be doing just the opposite by joining forces with accountability partners who will challenge you to do things that you would never do on your own. And of course, you should return the favor. If you want to know where to find an accountability partner, don’t worry, they are everywhere and likely looking for you as well. See number 8 above.

13) You aren’t prepared. I had to add this in just to make it an even 13 reasons that you will never get a job (only if you are actually a participant in one or more of them). Brian Tracy, the world famous sales trainer said that for every minute you spend planning, you save 10 minutes in execution. That’s a 1000% return on your energy. To put that in perspective, if you do the proper planning and preparation then you can have one interview and get the job or you can be poorly prepared and continue to interview over and over and over again. Get it? So what should you be preparing? In a word, everything. Interview questions (with your accountability partner), reviewing your resume (with your accountability partner), interviewing other people (because you learn when you teach), researching companies, individuals, industries, trends etc and practice relating the information over and over until you are good at it and you exude confidence (because you will when you know your stuff). I could go on and on but I think you get the point. Everything you do, you should plan and prepare for.

There you have it. 13 reasons why you may not ever get a job in this economy. I hope that is not the case. I hope this has been a wake up call for you because these are also 13 ways that you can differentiate yourself from most every other job seeker. It’s a buyers market and you better have the right product for anyone to be interested. Dents, dings and scratches need not apply.

via The Job Genius.

Time to rethink offshoring? – McKinsey Quarterly (Sept 2008)

This is a recent reprint of a “McKinsey Classic”.  Every so often, they release a Premium content ($$$) report for free.  I love this one because its short, crisp, and rich with information. A quick read with a lot of wallop. LEAN practitioners and Total Cost of Ownership fans will enjoy it.

Total Cost of Ownership fans will like seeing how seemingly secondary factors can drive the analysis to different conclusions.  Anyone remember “sensitivity analysis” (no, it has nothing to do with HR).  Can’t tell you how many major business decisions I’ve seen made where there were reams of data and analysis yet no one did a correlation or sensitivity analysis.

If you’re into LEAN then this indicates the premise that you need to be close to the customer.  The customer PULL the time to satisfy must be as short as possible….

Time to rethink offshoring?

SEPTEMBER 2008 • Ajay Goel, Nazgol Moussavi, and Vats N. Srivatsan

Source: Business Technology Office

Changing economic conditions may have undermined some of the benefits of offshoring. For managers of global supply chains, this could be the time to reevaluate.

The production of high-tech goods has moved steadily from the United States to Asia over the last decade. The reasons are familiar: lower wages, a stable global economy, and rapidly growing local markets. These factors combined to make nations such as China and Malaysia favored manufacturing locations. In the last two years, however, the favorable economic winds that carried offshoring forward have turned turbulent. The new conditions are undermining some of the factors that made manufacturers of every stripe, including those in high tech, move production offshore.

For executives managing global supply networks, the question now is whether or not conditions are moving toward a tipping point. Is this the moment to consider sharply scaling back offshore production plans and bringing manufacturing back or close to the United States? Is there a more measured response that better suits the new circumstances? Before executives change their strategies, however, they must determine the total landed cost of each product produced offshore and better understand the shifting trade-offs between cost savings from offshoring (such as lower wages) and rising logistics charges.

Oil prices, and consequently the cost of shipping, have risen to heights few foresaw even just several years ago. Since 2003, crude oil has soared from $28 to more than $100 a barrel. The economics research institution CIBC World Markets estimates that in 2000, when oil prices were near $20 a barrel, the costs embedded in shipping were equivalent to a 3 percent tariff on imports. Today, that figure is 11 percent—meaning that the cost of shipping a standard 40-foot container has tripled since 2000.

The oil spike not only affects exports from Asia but also sharply increases the price its manufacturers pay for raw materials. It now costs about $100 to ship a ton of iron from Brazil to China—more than the cost of the mineral itself. Wage inflation, coupled with a weaker dollar, adds to the challenge: in dollar terms, annual wage inflation in China has averaged 19 percent since 2003 (Exhibit 1). An average production worker, paid $1,740 a year in 2003, makes $4,140 today. By contrast, wage inflation in the United States has averaged only 3 percent. The wage differential between Mexico and China has also narrowed significantly. In 2003, Mexican workers made over twice what their Chinese counterparts did; today that gap has narrowed to 1.15 times. Combined, these trends are reshaping the competitive landscape for offshore manufacturing in a number of locales.

To develop a clearer picture of the changing environment, we analyzed a number of products manufactured for the US market and mapped the optimal region to manufacture them by straightforwardly comparing the wage savings from offshoring with the cost of logistics. Exhibit 2 shows the optimal regions for products with a range of different unit manufacturing costs (all related to the transformation of raw materials into one unit of finished goods in US dollars) and various product weights (which affect logistics costs). We have chosen breakeven curves for China, a traditional low-cost manufacturing location, and for Mexico, a near-shore location

However, these curves are shifting amid the economic dislocations. Products that were once profitably made in areas where the local costs are lowest (dark-gray area) are therefore moving into the near-shoring zone (light-gray area)—or in some cases may now be suitable for production in the United States (blue area). A midrange server, for example, made profitably in China three years ago, has slipped below the breakeven line because of higher wages and freight costs. The server now could be produced more economically at a plant closer to consumers (in Mexico, for example, where the mix of logistics and labor costs is more favorable).

To estimate the trade-offs more precisely, supply chain managers also need a true picture of landed costs. These include the cost of raw materials, carrying inventory, managing product returns, and other hidden charges² not typically considered in the simple trade-off between offshore wages and logistics described previously.

As an illustration, we studied the total landed cost for a midrange server, comparing scenarios in Asia and the United States (Exhibit 3). Five years ago, in 2003, manufacturing this product in Asia rather than the United States provided a 60 percent savings in labor costs. We have indexed that labor savings to $100. When we calculated total landed costs, however, we found that 36 percent of those labor savings were offset by freight, shipping-related charges, inventory, product returns, and other hidden costs. That gave Asian production a $64 landed-cost advantage. Today, economic conditions have reversed it. After factoring in the higher labor and freight costs, we find that the former offshore savings have turned negative—a burden of an extra $16. The labor savings, $100 in 2003, are now only $45 because of wage inflation. In addition, freight costs have risen by $21 and product returns by an additional $4 because of higher oil prices.

As these examples suggest, changing economic conditions may have undermined your supply chain advantage. This may be an appropriate moment to reevaluate the location of your manufacturing facilities. Take the total landed-cost analysis to the next level of detail and determine if bringing some production back home or to near-shore locations will help counterbalance the higher costs of shipping and freight. At the same time, consider the long-term geographic distribution of demand for your products. In rethinking your global supply chain, you must carefully evaluate the importance of speed, the availability of skilled talent, the potential for further productivity gains in Asia, one-time transition costs, the local import and tax implications, and organizational interfaces.

About the Authors

Ajay Goel and Nazgol Moussavi are consultants and Vats Srivatsan is a principal in McKinsey’s Silicon Valley office.

Notes

¹Exhibit 2 shows, for example, that the total cost of manufacturing a 60-pound high-tech product would have to be at least $260 to counterbalance the higher logistics costs of producing in Asia.

²Hidden costs include reworking errors, incremental financing, and exchange-rate risk.

via Time to rethink offshoring? – McKinsey Quarterly – Operations – Supply Chain & Logistics.