Do you invest more in people or gear?

There was a job posting over on a message list I follow, and it got me to thinking. It seems that lots of companies feel safer and more comfortable about investing in a lot of high end equipment, but then want to find people to work on spec or for very little pay or for fame. As a creator though, I have some different opinions, so I posed the question to a group of colleagues at ad:tech last week. You can listen to their opinions, then make up your own mind - and please tell me what you think!

Here's the original posting for context:

[Company X] is looking for a video engineer to manage, enhance and
operate our state-of-the-art HD multi-camera streaming video studio.
We're switched, have about 3,000 square feet of shooting space, a green
screen, etc. We need someone who wants to chart the course of what a
videoblogging/streaming studio should look be, on a beer budget.

In all fairness, beer is part of the company's culture, so you could take that last comment a couple of different ways. Feel free to leave a comment right in the video as well - you'll just have to create a quick account over at viddler.

Getting Clients to Pay On Time

We are a small business. We invoice once a month, for services performed in the previous month. Our payment terms are "due on receipt." Some clients pay accordingly. Others have tended to lump us into the "net-30" category based (my ass-u-mption) on the terms they receive from other vendors. A few others appear to have a "squeaky wheel" folder, aka don't pay until someone is bugging them repeatedly to pay.

Years ago I contemplated putting up a web site called "theydontpay.com" that would serve as a sort of small business Dun & Bradstreet service. Small business owners could post their experiences of companies with a bad record of not paying, so other small companies could check out a potential client in advance. Back in those days, we had a few big names you would think would be an asset to the client list. But in reality, they had a high P.I.T.A. score often based on refusal to pay normal invoices. The concept was very similar to another social media site I recently discovered, RottenNeighbor.com. (I could have some fun there!)

Since I was too busy to do that, and am wary in general of putting out stink eye for all the world to see (I prefer Aloha), I decided instead to offer positive incentives. I've been having fun, but have to report that it has only made the good clients better and not the "bad" clients better. The first month was a 10% discount to the first payment received. We accept and encourage electronic payments so the first payment was delivered in less than 20 minutes by a nonprofit client, NAWBO. I reported that in my next monthly mailing.

The next time I offered a free $10 iTunes Gift Card to anyone who left a comment on our blog. This was to also help our clients get more comfortable leaving blog comments and hey, do any of you not love getting more blog comments?

Guess what? Only one person played. Meredith of HereComesTheGuide.com was stoked, and I extended it some because she actually left two comments! I sent her a 25 gift card that also donates 10% to AIDS relief in Africa. (I hope that link survives outside of my browser cookie settings...)

This month, I am offering a more generic BareFeetShop/Amazon.com $10 gift certificate and link love to all those who tell me about a blog they read and why. (And I even encouraged them to get staff involved.) Early congrats to Andy at Packet Analytics who replied in less than 15 minutes! I'll compile the results here in a few weeks.

Wish me luck. I'd sure like to find out what the tipping point is to get old invoices paid. (You know who you are, though I wonder if you read our blog. Please contact me privately to tell me about your sweet spots.) I am all ears to the rest of you who have fun ways to help clients pay on time and feel so good about it they'll want to do it over and over again.

How much should you budget for monthly website expenses?

Now that most businesses and organizations have a web site, they are used to the line item in the budget for initial development. And for many, getting a site up and running is such a grueling task that they are ready to sit and rest on their laurels for a while after launch! We completely understand; we wish we could take a vacation for a few days after each site launch too.

But really, after launch is when the fun begins. Ideally, your web site has been built so you can play with it as often as you like, and as easily as filling out a web-based form. You are now set free to talk to your customers, to tell the world all about how special you are and why your products and services are the better choice.

As you use your site more, you will run into wanting to do things that you don't how to do or that you don't know if your site can do for you.

1. Training
   • Getting your content to look and speak well is an art that goes far beyond just typing into a form. Photos and graphics for example add tremendous value to a web page, IF they are sized and processed for the web and you know how to add title tags, alignment, and can get the text to wrap around them correctly.
   • Using blog software is easy if you want to do the basics. But once you want to do power blogging, you'll want to know about ping servers, trackbacks, blogrolls, how to find A-list blogs, and so much more.
   • Strategy makes a huge difference too. Using the software to accomplish a marketing or communication goal is not obvious because most people don't have the web in their DNA. It's much more than just remembering to add your web address on all your printed material. It's remembering to blog after you've been invited somewhere and sharing your experience and a public mahalo while linking out to others you met. It's called link love and it's one of the web's power currencies right now.
2. Feature Upgrades
   • Just like anything else you own, if you use it even a little, you are going to want to trick it out. Maybe you want to add an extension or plug-in or social networking application that adds power to your site.
   • Maybe you want to dress it up with a more sophisticated design or add some audio or video.
   • Maybe your competitors started selling directly online, and now you want some e-commerce features.
   • And just like your house or your boat, there is virtually no end to upgrades and widgets you can install to make your site perform better for you.
3. The Unexpected
   • It could be anything right? That's why it is unexpected. Life happens.
   • Even the most user-friendly sites still have a few things that are deep in the code and are better left to your developer to handle for you, like periodic software upgrades.

So bottom line, what should you budget for this ongoing support and maintenance? I think a good rule of thumb is at least 15-25% of initial site development costs to be budgeted over the following 12 months. The less you spend initially, the higher the percentage on average to dedicate to upgrades and support.

It's just no fun (and poor business planning) to build yourself a nice new site and not be able to add a new "work station" or some "grounds maintenance" when the situation arises. More and more, the company web site is becoming its most important communication, sales, and even operations tool. So budget accordingly to keep it humming along nicely.

P.S. To my blogging students: I could have written this post in about half the time if I did not include all the links. But it would have less impact and would have been less useful to you readers who want more resources on these topics. In the process, I actually came across some new interesting blog posts! Just right-click on each link to open it in a new window so you can continue reading here. And I could have saved another 10 minutes by not looking for the confused puppy pic. But how much were you drawn in by that one photo??

Turning Technology into a Commodity

Tom Peters reviewed a new business book over on his blog, and his closing comment claims “Canaries applies to GM .… and a new one-person business … equally.” IMO, this is hard to do!  But based on the few quotes from Tom, this book succeeds. And it definitely applies to the web development business.

In the past 10+ years, we've seen several of our colleagues go out of business. We rarely win RFPs, as we typically come in as the highest bidder. I remember talking to one associate several years back, whose company had grown considerably. She described her company as a shark; it had to keep getting new clients to underwrite the cost of the existing clients.

That's not a sustainable business model. They are no longer in business. That's a small business story that relates to Corporate Canaries. This is my favorite excerpt from Tom's review of the book:

There are parables and such, but the bedrock notions are simple, profound, frequently ignored—and use-able starting today. There are just 5 key ideas. The first, "You can't outgrow losses." E.g.: "New business is a great thing, an important thing, and critical for success. But trying to sell your way out of profit problems only magnifies the trouble. Fix profits first. Then add business." Margin (profit) problems won't be solved by selling more low-margin, no-margin stuff. The malaise, "trying to sell your way out of losses," Sutton claims, "is the most common cause of business failure." (Yikes, does that strike—again and again—close to home.)

Living and working in such a price-sensitive culture does make it really hard to hold the line on prices. High prices that is. Most customers really believe they will be better off if they pay less. This is often not the case, but at least it seems to protect people from thinking they got screwed.

Only problem is, they may be getting screwed on the other end! What if your vendor goes out of business? What if your vendor does not have the margins to invest in training to stay ahead of the curve in helping you protect your assets? What are you saving by having a smart vendor, "on your team but not on your payroll" as we say about us here at Bare Feet Studios?

Large companies are now setting up software escrow accounts to essentially bank a vendor's code, to access should the vendor go out of business. We all depend on software and the internet to function minute by minute. It makes sense to be proactive in this way from the customer point of view.

From the vendor point of view, it makes sense to keep prices set at a sustainable level while educating customers on all the aspects of the value proposition. We have kept our prices above many (though not all) of our competitors, and are in our 11th year of business. We are also deeply appreciative of our clients, several of whom have been with us for nearly a decade. Lowering prices on services (unless there is some aggregation component to the price restructuring) usually ends up being a lose-lose proposition IMO.

So for any service vendors out there reading this blog, and especially small businesses, know that I've got your back and encourage you to find a way to let your pricing strategies keep you in business as a more competent professional, rather than being bullied out of business by well-meaning customers who just haven't yet learned the intrinsic value of your skills.

And to all of the investors and support professionals who advise start-ups and entrepreneurs, beware of the "penny saved, pound lost" approach to hiring professional services. Knowing when and were to bootstrap is a key decision. Knowing what is a commodity purchase and what is a value purchase is not the most obvious thing in today's marketplace.

COMMENT:
AUTHOR: Mary Schmidt
URL: http://www.maryschmidt.com
DATE: 02/10/2006 05:57:06 AM
As you know, I'm a huge fan of Peters. It's unfortunate that more people don't truly listen to him. As he titled one of his posts, "If I'm so smart" So, even he gets frustrated.

The challenge for any size company is to have the guts to be different, to not only talk but to act, and to recognize that you have to spend money to make money (a hoary old maxim, but oh so true, particularly when it comes to technology.)

One of the things I constantly hear from small businesses is that they desperately want and need more help with marketing. And, yet, they are very reluctant to pay for it. Of course, I can understand, it's tough carving out the budget for the seemingly "out there" and "soft" stuff (such as web sites and advice) when you've got to pay the light bill and employees. But, it really all comes down to: Do you want to be mediocre, constantly trying to "make it up in volume" or do you do want to be great (which isn't necessarily the same as big) and have terrific margins, loyal customers and an infrastructure (people, processes and technology) that enable to anticipate new opportunities and - yes - even create them? If you think small, you'll be small. And, cheap looks cheap.

P.S. I highly recommend "Good to Great" as additional reading. One key point: Being good at something doesn't necessarily mean you can become great at it. Recognizing this hard cold reality means a company may well have to move out of its comfort zone to be great.

-----

Who Pays for Technology Failures?

I read a post (and partial rant) by Bart Cleveland over at AdAge blog this morning. The server is down, he is the feeling hostage to the IT guy, and it ain’t no fun. In fact, when technology fails, it causes a lot of waste and misery in the work place.

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We work in computer networks all day every day. Our business depends on technology. When a machine crashes, when a drive fails, when software gets a bug, time is lost. For us, that time is also money. As a small company, we're still learning how to build in the accurate level of overhead to cover these unexpected failures in software and hardware. They are a real fact of business. Yet they are not anyone's fault most of the time. So until we can say, "Computer, run diagnostic program" (and it does!), who should bear the burden of the expense?

Here's a real example that happened just this week.

Client Document Received in Corrupted Form

A client recently sent me a large Word doc with content for a new project in development. When I went to open it, my Microsoft application told me — one at a time — that every single font on my computer was corrupt and should be removed. I then had the same error when trying to open excel and powerpoint files, though not in any other non-Microsoft applications.

This indicated a bug of some sort has temporarily wrecked my Microsoft apps. Normally I would just re-install the software and get back to work with about a 30 minute detour for troubleshooting. But I am traveling, and don't have my software CD with me. For many people, that would have caused a complete work stoppage.

But being a geek girl, I was able to open the file in BBEdit, a plain text editor. Of course that meant I lost all formatting but I can handle that. The problem is I also inherited about 25 pages of gobbledy goop code that was wrapped around the real content, and that I had to strip away before I could do anything useful with the content. We're now looking at easily another hour or more of lost productivity.

So Who Pays?

Who pays for this? Do I bill the client 2 hours for a task that could have taken 15 minutes if everything were working as intended? It's probably not her fault, though it's possible her machine had a virus. However, it's not my fault either, as my Microsoft worked prior to receiving her file. If I were not working the extra two hours on her project, I could have been out walking in the mountains or swimming in the ocean.

Bill Bill?

Do I bill Bill Gates for the software failure? Although his company makes the software that crapped out on me, the file could have been corrupted in email transport. This is actually a fairly common occurrence. (Hint: zip your files before sending them via email attachments. It seems to help.)

Shane's Got It

I love my partner Shane's perspective. If we were on staff (not under contract) and software or a server goes down, we would continue to be paid while we troubleshoot the problem. Our salary is not suddenly suspended until the technical problems are solved. In fact, our greatest value comes into play when we set about making inexplicably broken things work again. That's a skill that most technology users do not possess. As Bart Cleveland said so well, people just want things to work.

Local Clues

I like to look for clues in my environment and in the here and now when I am confused. Since I am on an airplane, I immediately hear in the back of my head, "In the case of a loss of cabin pressure, please secure your oxygen mask before assisting others." Of course! I want to be sure I can take care of my needs so I can then be of help to you. We are in this together. It's my responsiblity to keep my company strong and solvent. When technology fails, most likely it's going to be our job to fix it.

Typically, No One Wants to Pay

Clients sometimes don't want to pay for this, because in most cases it is not their fault either. Inexplicable stuff happens. Considering how many points of failure there are between each user and a given web site, I am amazed the internet and software and hardware works as well as it does. But that doesn't mean I am any less desirous of technology that just works. As a fulltime technology user, I am intimately affected when it works as well as when it doesn't. However I'm of the belief that the end recipient is primarily responsible for paying when technology fails. If we're working on your job, and technology fails, we'll bill you for fixing the problem. We hope you'll be glad to have a smart technologist on your team when these unpredictable failures occur!

What's the Bottom Line for Your Business

When IT fails, everyone pays. We're on this mothership together! If we both can let that weigh in, we can get problems solved faster and cheaper for everyone.

1. If you are an IT service provider, we think it's important to build in to your overhead or directly bill for the time when IT is acting up. Otherwise, your business is not financially sustainable.
2. If you're an IT user and buyer, you'll save by having the best people on your support team. The faster they can solve your problems, the faster you can return to productivity and the less it will cost you.
3. If we see that our success is mutually interdependent, it creates an incentive to have open communication. We have found that open communication creates the best environment for preventive medicine as well as a quick return to happy machines.

Links

Bart Cleveland Perspectives of running a small ad agency.
Bose Headphones I won't travel without them!
Foti Filter Another great traveler's aide; it moisturizes the air as it filters out pollutants and germs. I find it really helps maintain my health while traveling.
Where Did The Money Go: Easy Accounting Basics for the Business Owner Who Hates Numbers
iPod Nano Yum yum! My own little world inside my own little head. Great sound scape when traveling in crowded, noisy environments.

Technorati Tags:
technology, service. roxanne darling, business, software, microsoft, podcast, videocast, videoblog, vlog, health

Technology Goes to the Dentist

I went to the dental hygenist today. I guess you can tell it’s been a long time since my last teeth cleaning. It was so “this century!”

First of all, the hygenist no longer works at the dentist's office, but instead out of a separate (read: outsourced) facility. Lots of hygenists running around using all sorts of computers and tools and technology. Lovely office; a tight ship for sure.

At first I was a little irritated. I am thinking, "This is going to take more than 20 minutes." Then I thought, "That means it is going to cost more than sixty bucks."

But the lovely Lucy wore down my objections, as she inventoried my teeth and the mm that each one is receding, logged it into my computer record, cleaned off the plaque, and zapped me with sonic something or other. Oh, and she did get around to flossing and cleaning the teeth too. It wasn't last century's teeth treatment to be sure, and some would say, "Who needs all this new-fangled stuff?"

In the process I was also mildly irritated with the specialists who spent time inventing all the little gadgets, "just because they could" though I would be stuck paying for the use of them.

But by the end I realized that better care for my teeth is a good thing for me, plus, who am I to frown on new technology?

As a postcript, I felt smugly satisfied when Lucy asked if I used a tongue scraper. "Well yes I do!" It's a very ancient piece of Ayurvedic technology that's been on the hippie health food circuit for decades. Seem modern mainstream dentistry has discovered its many benefits.

Get yours at the Bare Feet Shop.

technology
dentistry
roxanne darling
health
technology

How much does your PC REALLY cost your company?

Let’s talk about what a PC really costs your company. Not just the purchase price. I’m talking about all the hidden costs and maintenance costs and crashes and viruses and worms that you have to deal with on a daily basis if you’re using a PC as your primary work computer.

As a programmer and system administrator, I prefer to have things just work. When I write a bit of code or a small shell script it's a joy and brings great satisfaction to have it work the first time. The same holds for the computer on which I am doing the work. When I fire up one of my trusty Macs first thing in the morning, it's a very odd day when something goes awry. On the other hand, when I fire up my PC laptop, I'm thrilled if I DON'T get a message that something didn't load or there was some kind of problem or some file couldn't be found. And this is a very nice Dell laptop running the latest version of XP with a ton of RAM.

I'm in our Santa Fe office this week and we have a new color printer in the office since the last time I was here. Naturally I needed to print something and happened to be on my PC laptop at the time. So I decided to plug the printer directly into the USB port and print. Not so fast?!? First, while Windoze did recognize that I had indeed plugged in a new hardware device (congratulations Windoze on that extraordinary piece of detective work) and wanted to know if I wanted to have it automatically get the drivers and such. Well of course I did, why thank you very much for asking. Well, you know how that went. Couldn't find the software online that it needed even though it had correctly identified the printer when I plugged it in. So off I go to the big software cabinet to search for the CD that came with the printer those many months ago when it was purchased.

Yeee Hawww! I found the CD. This will make it easier. Well, you know how that went. "There was a problem installing the software from the CD. Your hardware may not function properly." My hardware? A couple minutes ago we were on a first name basis with "My hardware." Windoze knew what it was when I plugged it in and now it's just "My hardware?"

I restart the printer. I restart the PC. I repeat. Here's a guy, me, who really knows his way around computers and pretty much all devices digital, and I am now 47 minutes into what should be a simple task of getting a fancy new printer/scanner/copier working with Windoze XP. Finally something just starts to work (don't you hate it when after doing the same thing 6 times it just starts to work on the 7th time?)

After 54 minutes I'm greeted by the "Print a test page" window and we're done! Or so I thought. Once the test page is printed I have to "Please restart your computer in order to take advantage of your new hardware." What?!? I just took advantage of my new hardware. We printed a test page and the world was bright and shiny and new again. Why Windoze, why do I have to restart all the time?!?

So I thought, let's see how difficult it would be to use this printer/scanner/copier and the brand new iMac G5 I picked up last week. Well, while Windoze was restarting, yet again, I plugged the printer into the iMac, hit Apple-P (shortcut keys to Print) and lo-and-behold, the printer selected by default was the brand new printer I just plugged into the back of this brand new iMac. No drivers to install. No restarts required. IT....JUST....WORKED…

Meanwhile, Windoze is still restarting. Oh yea, and by the way, I haven't even printed my document yet. So I fired up Apple Mail on the iMac, checked my IMAP account for the message that contained the document I wanted to print, hit Apple-P, and ta-daaaa, my document is printing from the iMac at the same time Windoze is asking me for my login.

For those of you at home keeping score:

Windows time to get a new printer working: 57 minutes and I still never printed the document
iMac time to get a new printer working: 0.5 minutes

How much are PCs running Windoze really costing your company?

COMMENT:
AUTHOR: Mary Schmidt
URL: http://www.barefeestudios.com
DATE: 11/02/2005 07:51:05 AM
Shane,

I'm sure many of us can relate to this one. And it makes me feel MUCH better than even you have such issues! I'm still beating Windoze and XP into submission on a daily basis. Sometimes Windummy decides it can't find the printer to which it's been attached for going on - oh let's see - 3 1/2 years. I can only surmise they had a lovers spat during the night. If after restarting a couple of times, it still doesn't work - I take that as a sign from the Universe I'm supposed to go do something else. Come back a bit later...and it fires right up.

And, still people are trying to tell me how innovative Microstuff is...hmmm...yes, and their basic code is still - sorry - terrible. (Funny - those people touting MS are also MS resellers and "service partners"...hmmmm.)

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Microsoft and the Cost to You of Constant Patching

We tend to stay away from highly opinionated postings and prefer to offer usable tech tips in our Bare Feet Blog, but this topic is one that seems to address both: the not-so-hidden costs of working in the Microsoft platform.

Windows 2000 bug starts virus war

A new security hole in the Windows 2000 operating system was unveiled this week and now the hackers are actually competing amongst themselves to see who can cause the most damage!

Viruses and worms with Windows is certainly not a new story. But it is an ongoing — and for many unaddressed — expense for businesses large and small.

How does a company (Microsoft) increase value for itself or its customers when it is continuously distracted by products that are a) several years old and b) it no longer sells? We recently pitched a job for a Los Alamos company that has a lot of high security government contracts. They told us that a lot of the work stations at government facilities using their software are actually running Windows 95! For a moment I feel sorry for Microsoft, having to deal with these old systems they would like to pretend don't exist. Just as I feel sorry for the Los Alamos company that has to support that dinosaur too.

But it doesn't last long. Microsoft created this monster of high-priced operating systems in a monopoly marketplace with no incentive for them or their customers to explore better options.

It is clearly hurting Microsoft, as they continue to delay the release of Longhorn aka Vista aka their new and improved OS. I mean it's got to be hard to get anything done when there is constant work fixing and shoring up the current product line. I wonder when the stockholders will notice that this is not the most leveragable business model.

For small business owners, it is yet another opportunity to consider switching to the Mac platform. 99.9% virus and worm free. Networking built-in by default. Word, Excel, PowerPoint are all seamlessly usable on Mac and PC, regardless of where it was created or is being read.

For small business owners who can't afford a full-time IT staff to apply the constant security patches, it really is far more cost effective to own a Mac. They are not more expensive out of the box anymore and feature for feature are often less expensive! You don't get those flickering monitors that come with cheap PCs and you do get an amazing user experience. Yes, of course you can transfer your files to your new mac, and you can even start with a Mac Mini and continue to use your current PC monitor, keyboard, and mouse.

Aloha,

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