I want to start this with a story. I’m quoting Jason Cohen in his post Business advice plagued by survivor bias, with thanks to Alan Gleeson for tipping me off to this one. As you read this story, think of how it applies to business experts and business advice:

During World War II the English sent daily bombing raids into Germany. Many planes never returned; those that did were often riddled with bullet holes from anti-aircraft machine guns and German fighters.

Wanting to improve the odds of getting a crew home alive, English engineers studied the locations of the bullet holes. Where the planes were hit most, they reasoned, is where they should attach heavy armor plating. Sure enough, a pattern emerged: Bullets clustered on the wings, tail, and rear gunner’s station. Few bullets were found in the main cockpit or fuel tanks.

The logical conclusion is that they should add armor plating to the spots that get hit most often by bullets. But that’s wrong.

Planes with bullets in the cockpit or fuel tanks didn’t make it home; the bullet holes in returning planes were “found” in places that were by definition relatively benign. The real data is in the planes that were shot down, not the ones that survived.

Could there possibly be a better summary of survivor bias? Do you see how it matters with business research? I need to thank Steve King as well, because he focused on survivor bias recently in his post Don’t Quit Your Job Until You’ve Talked to a Small Business Failure. Steve points out, in that post, that if we only ask small business owners about risk, we only get opinions from the survivors. 

But if your goal is to find out how all small businesses owners think about risk, this approach is flawed.  This is because former small business owners – the folks that went bankrupt, lost their companies or were removed from their jobs – are no longer small business owners so they aren’t included in these surveys.  Because business failures are excluded, the survey results are biased towards successful small businesses. 

Do you see his point? You can’t get an accurate picture of a contest by asking only the winners. Sure, the winners are the right ones to ask for stories of what worked. But the losers have some insight too, like on what didn’t work. 

 (Image: Nick Schroedl/Shutterstock)

The next big thing is never a repeat of last big thing. It’s always something new and different. It’s an original, not a copy.

What if the next Facebook already happened, and it was Twitter? What if the next Netflix already happened, and it was YouTube.

I see this a lot in business plans: businesses out to become “the next this” or “the next that.” Among the recent ones to cross my desk were “the Netflix of books” and “Facebook for business.” Yawn. Boring. Unrealistic. Copies are so unoriginal.

A tag line referring to some existing big thing (”Netflix for books“) rarely works.

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I posted 10 questions on this topic last week.  Today I have three more, on the same topic.

It sounds attractive, doesn’t it? Get a business plan by hiring somebody to do it for you? I can see how you’d think of that as division of labor, like hiring an expert to do design, or programming; have an expert do a plan. And you can do that, if you’re careful; but you really have to understand the underlying management questions, what you’re getting, and what you want.

Still, here are 3 more questions:

1. What would you estimate to be the hourly rate of somebody with business experience, financial knowledge, and computer knowledge to do a competent business plan?
2. How many hours would you expect that person to take?
3. What would you get if you multiplied that hourly rate question by the number of hours question?

I don’t know about you, but I’d estimate $200 or so per hour for that first question. It would depend on the market, and the specific person, but we’re probably talking about MBA or CPA. I’d say 20-40 hours for the second question, although that depends too, on other factors. And for the third question, multiply $200 times 20 hours and you get $4,000.

So what are you planning to pay that business plan writer?  And how is it that I see business plan writing advertised for a few hundred dollars? How do they make money like that? And if the plan writers’ prices are that cheap, is the plan quality cheap as well?

(Photo credit: Artem Samokhvalov/Shutterstock)

What delicious irony. The champion of the little guy has become big brother.

Remember the groundbreaking first Macintosh television commercial, in 1984, with the young woman throwing a hammer into the giant video screen on an evil big brother, smashing it into bits? There’s a role reversal going on.

Apple Computer has taken the establishment role in the booming new iPhone application market. First the iPhone, then well-publicized stories of trivial iPhone apps making thousands of dollars daily, and then the application review process got swamped. And now there’s Apple Computer, the gatekeeper, protector of the establishment, standing between all those developers with stars in their eyes, on one had, and admission into the app store, on the other.

The original idea of review was a combination of protecting the software from crashing, and protecting the Apple store from embarrassment. Ever since the stories of iPhone application fortunes first broke — I fear it was with a fart app making $10,000 a day — the software developers are flocking to iPhone apps. Of course I have no special knowledge, but from the outside looking in, it would seem like the crush of applicants makes long waits, unfair rejections, and inconsistencies inevitable. I’m guessing Apple’s private-sector resources to manage the tidal wave are completely overwhelmed. Mobclix, which tracks iPhone applications with analytics, is reporting that there are more than 85,000 applications approved by Apple so far, and the wait has gone from days to weeks, and is rising.

On a Mobclix blog about the iPhone applications market, iPhone app developer Max Zamkow says:

iPhone developers live in constant fear of receiving an email from Apple with what can only be termed the ‘Death Sentence’: “We’ve reviewed your application and we have determined that this application…will not be appropriate for the App Store.”

He’s developed an app called FruitShoot Lite that lets unhappy iPhone developers (or anybody else) vent their anger by mock shooting at mock apples on their iPhones. But the default fruit target is a banana. And it passed the review.

It’s a couple of months ago now that Jason Calacanis, celebrity entrepreneur and blogger with a known taste for controversy, lashed out against Apple in The Case Against Apple–in Five Parts, in which he complained not just about the “draconian policies” of the iPhone app review, but also four other sins including “anti-competitive” practices with MP3 players, “monopolistic” dealings with telecommunications (a reference to AT&T’s lock on the US iPhone), “hypocrisy” of blocking competing browsers on the iPhone, and blocking Google voice on the iPhone.

TechCrunch highlighted a dumb-but-approved “upskirt” app last week, mocking the glaring inconsistencies:

Let me just get this straight: A hilarious satirical app made by the Someecards guys cannot get approved because it contains cards that, for example, mock Hitler. But an upskirt app is just fine? That is so ridiculous.

Yes, ironic indeed. On first glance, I look at the rising tide of complaints and I think they’re all delusional: Apple is a business, not a public service, and it owns the iTunes store, so it can do what it likes. Developers waiting weeks to get into the market, living in fear of rejection after all that work? It’s Apple’s clubhouse, so Apple can admit whoever it wants. However, as the whole thing starts to sink in, I have to add that Apple Computer has made this bed for itself, so it deserves to lie in it.

Not that I don’t like Apple. I’ve been a serious Mac user twice, first for about 10 years from the beginning in 1984 until the middle 90s, and again for the last two years. I like the Mac, love the iPhone, love Apple’s products in general. However, I’ve never quite accepted the odd phenomenon of Macintosh and Apple as crusade. The whole phenomenon of some connection between operating systems and good (Apple) or evil (Windows) has always seemed a bit creepy to me. After all, they’re just products for sale. Apple, IBM, Microsoft … they are all big companies.

Apple Computer, however, has actively catered to this odd canonization of brand throughout its history. It wasn’t for nothing that the Macintosh anti-big-brother image is part of our cultural heritage. It wasn’t for nothing that IBM became “big blue” and Microsoft “the dark side” … Apple spent a lot of thinking time, effort, and money on building that anti-establishment tinge to its brand. And it’s not totally crazy to suggest that Apple managed to change brand to aura, or halo.

Live by the anti-establishment brand, die by the anti-establishment brand. What we’re seeing, I think, with the rising protest of developers against Apple, is something akin to a jilted lover, or the famous Shakespeare epithet about a woman scorned. It seems like the backlash is whipped to a frenzy with Apple in a way that it might not be if it were some other big company, or, say, the US Patent and Trademark Office. Companies move slowly, government agencies move slowly, but not Apple Computer. The woman with the hammer in that 1984 commercial, crashing big brother and all. Say it isn’t so. Disillusion.

(Photo credit:wikipedia)

No, it’s not that I have anything against business plan writers for hire. I spent some years doing that, although I never just wrote the plan; I always facilitated and translated and coached planning. (Unless, of course, you’ve read my post on my worst business plan engagement, in which case you’ll know I’ve used “never” and “always” wrong in the above).

1. If you wanted to get your body in shape, would you hire somebody else to eat better and exercise regularly?
2. How would you feel about sending somebody else to the doctor to be examined to determine your health?
3. How do you feel about pre-packaged vacations?
4. What would you tell your ghost writer? How long would that take you? Could you type that out, maybe? Could you do it in YouTube?
5. How will you deal with questions that come up, after the plan is done?
6. How much good will a single one-time plan document do you?
7. What will you do about revisions later on? Will you just accept a plan done once, and never revise?
8. How long would you estimate is the average shelf life of a written business plan, before it begs for revisions?
9. What would you do about regularly reviewing and revising a business plan that some outside business plan writer had written?
10. How would you get a team of people committed to a business plan that an outsider wrote?

(Photo credit: Linn Currie/Shutterstock)

In an ideal world, saying no to one thing makes you more credible when you say yes to another. Telling a caller the truth about what your product doesn’t do makes them more likely to call back when they need what it does do. Turning down one kind of consulting job because you’re not expert enough makes you that much more credible when you call yourself an expert in something else later on.

I’ve really enjoyed the power of no in the past. No, our software doesn’t do that, it does this instead. And no, that’s not the kind of consulting I do. It’s a good feeling to say no during a sales call.

The world we live in, however, is not that ideal world. A lot of those customers don’t come back for what you really can say yes to.  A lot of them go somewhere else, settle for something else, and their itch is scratched, and they’re done.

I’ve never forgotten the hard lesson I learned in 1985 when I turned down an invitation to speak at COMDEX, the then-big PC industry show in Las Vegas, on PC industry trends. I’d been an industry trends follower previously, but had been concentrating on business planning for a couple of years. I attended the show for a client, looking at trends for their business plan, and attended the workshop I would have given. To my dismay, the guy who did it presented nothing more than what anybody could read in the trade magazines the week before. And to my further dismay, the audience seemed to like it. My turning down this opportunity was my paying homage to a standard of professionalism that apparently no longer existed. And nobody cared.

Last week Matthew Scott (MatthewRayScott on Twitter) sent me back to that memory with his very interesting eight-minute reflection on expertise, on his blog The Strategic Incubator. He called it Social Media Experts + Irrelevance. 

His eight-minute audio post is about turning down what would have been a $21,000 engagement conducting workshops on Twitter and Facebook about marketing because he didn’t consider himself “expert” enough. And then discovering that the person who ended up doing it was probably way less knowledgeable than he is. And younger, with no visible track record in marketing, and not nearly as visible in Twitter.

Matthew, on the other hand, is a successful marketing/strategy coach who’s really good at Twitter (in my opinion). He should publish a collection of his “note to self” tweets as a book. He’s also a veteran of actual management in big companies, and a former military officer, a good writer, and a good thinker. And I don’t think he should have turned down that job, because, well, if he isn’t an expert, then I don’t know who is.

But in his thoughtful podcast on the subject, Matthew says:

“I had to turn it down because I’m not an expert. … and how the heck is this person going to stand up and deliver a message in which they have credibility?”

He ends up dismissing his own question, as:

“Irrelevant. The conference invited them. The conference gave them credibility.”

And that’s the problem – who is an expert? Who gets to be the expert in these things? Is there an age requirement? Success requirement? Some minimum number of Twitter followers, Facebook friends, or blog subscribers? Last month I posted this post tracking a blogger who complained about social media experts without sales or new product launch experience, and then this one suggesting that expertise comes from more than specific middle management experience. I think these are real issues, without good answers.   

What we’re calling social media is a new phenomenon. It’s very hard to measure expertise. I have to admit that I’m very impressed with blog subscriber numbers, less so with large numbers of Twitter followers, but at least that’s a metric. And they don’t publish revenue stats like they do the winnings of pro golfers or tennis players. And Twitter, particularly, is a virtual ocean of people who are putting expert beside their names and are getting by with it.

Too bad Matthew, you should have taken the money. The conference and its audience would have been better off.

(Photo credit: Levent Konuk/Shutterstock)

Business stories aren’t just stories. They’re the underpinnings of company culture and policy; powerful, and possibly dangerous.

Consider this: If customer service representatives get together for morning coffee and swap stories about annoying customers, the level of customer service will go down. It’s unavoidable. If the people behind the counter at the coffee shop share annoying customer stories behind the scenes, they smile less. They like the customers less.

No, I don’t have the research to prove it. But it’s true.

The owners and managers of a business need to realize their stories set tones and themes for the business.

My wife said my extreme customer service post here Monday encourages anti-customer stories. She has a good point.

This is easy to explain in parent mode, and from there it’s an easy hop to business mode.

• Let’s assume that when you were a teenage driver your dad insisted he’d always been a careful driver. All dads do. But you drove too fast as a teenager, despite your dad’s warning.
• What if your dad just winked and said “don’t worry about it, I drove like a maniac as a kid. I got lots of speeding tickets.” You would have driven even faster, right? It’s OK because dad did it.

The same thing happens with your business. Don’t swap stories about the annoying customers. Talk about the good ones.

The most important-but-forgotten salary negotiation tip is: finish well. In sports they call it the follow-through. When it’s over, be happy.

So you wanted more, and you pushed for it, which made you nervous when you did it, but they gave you more than they originally offered, although it was also less than what you’d hoped for. And at this moment you know that this is what you’re getting. Further pushing isn’t going to work.

Scene one: you shake your head, look down, grimace a bit, sigh, and say something related to how that’s the best offer, but you’re still disappointed. You walk away leaving your boss wishing he or she hadn’t given you that extra bit.

Scene two: you look them straight in the eye and thank them for the extra push. You show relief. You mention how you hate salary negotiations with people you like, and you’re glad that’s over. You tell them how much you like the job and the company. You leave your boss glad he or she added the extra.

Either way, you got what you were going to get. Even if you are disappointed, and looking for another job, or deciding to start the new business, keep that to yourself. In the meantime, whatever it is that you’re doing in the current job, do it well.  The people you deal with as you go through jobs will remain with you, as friends and references, for a long time … or not.

Jonathan Fields, author of Career Renegade, drew out the best of me for his podcast with me that he posted yesterday. He has a real knack for getting into the bigger issues, like both sides of entrepreneurship, and how important the rest of your life is, as compared to your business.

Yes, we do talk about business planning and classics of entrepreneurship in this interview, but he also got me talking about how much of my career hinged on mistakes, luck, and my wife saying things like how we’d take the risk together.

My advice: if you get a chance to do a podcast with Jonathan, say yes.

He hooked me easily. On the phone. He had a believable story, how he’d partnered with my company’s main competitor for strategic business alliances, but that person screwed him, took the deals but didn’t pay him.

He knew the market segment we were in, he knew that competitor, and he dropped a lot of very convincing names. Decision makers in major companies, websites, all very convincing. And he had deals ready to go, he said. Contacts in companies who wanted to do volume buying of our product.

This was exciting. I’m an entrepreneur; I wanted the sales. And the names he dropped checked, the companies checked. It all made me happy.

But it was just a plain swindle. He ended up taking several thousand dollars as an advance payment. He cashed the check, closed the account, and disappeared. The telephone number he’d been on was disconnected.

And I had made a point of trusting him. Before we sent the check, our controller suggested we should check him out a bit. I said no, thanks, but I trust my instinct, send him the check. Sigh…

If you explore this, there’s an obvious lesson in healthy cynicism, but there’s also a bit of a morality play here, because he was offering me a shortcut, leverage on work already done, something vaguely akin to something for nothing. I admit it.

This all happened more than 10 years ago. I’m posting it today because I liked Alexis Martin Neeley’s post on The Scammers Who Conned Me Out of $10,000 on her Intreprid Mompreneur blog a week or so ago. It’s a refreshingly honest account, which might help others. And when I saw it, I decided to post this one.

Both stories could go onto John Caddell’s Mistake Bank, a delightful collection of stories about mistakes. Learn from my mistakes, or Alexis’ mistakes, and don’t make the same mistakes. Good idea, no?