Tonight I attended the 90th Birthday Party of my Uncle Dan. As I entered the room I saw my aunts, my uncles, and all of my extended family. I was instantly thrown into déjà vu.
I grew up in a very peculiar environment. My father lost both of his eyes at the age of five and is completely blind. He is a brilliant man. After completely his schooling he served as the County Attorney for 36 years. If you got busted in our community you were going to jail.
My uncle was the mayor for most of the time I was growing up. I had two aunts that also lived close by and you’ve never had your ear chewed on or your arm twisted and bent until one of them got a hold of you.
I stepped into the party room and my Uncle Robert (the mayor) instantly cornered me and proceeded to tell me about a pipeline that was coming in and I remembered that I better put my A game on. You see, half of my family is extreme strong Republicans, the other half Democrats and there is no middle ground in this family. When you stepped into a dinner table in my family you had not only better have your logic lined up, but you better bring your A game with presentation. This indeed is a family of very strong opinions.
I watched with great delight as the head table, seated with all of these siblings (all of them over 85 years old) proceeded to table and espouse their views of the world. I took great joy in understanding of where I got my strong opinions.
I have two resounding thoughts that fall out of this little experience. The first is: Have opinions. Take a stand. Don’t be afraid to espouse and stand up for what you believe in. The reality is, it adds value and if you don’t do that, then you are nothing more than a flag flapping in the wind.
Here is the second. I have often stated (and many of you that have followed me, have often heard me state) “A stupid man never learns from his mistakes, a smart man learns from his mistakes, and a wise man learns from others mistakes.”
We need to pay honor to the sages in our lives. Those who have went before who have made a difference. Tonight I was able to sit around with this group of individuals and watch with great interest as they espoused their views and beliefs and indeed through my life I have been able to learn much from these great individuals. I pay respect and honor to my Uncle Dan on his 90th Birthday. I honor my Aunt Louise and for her feisty, dog-headed determination. I honor my brilliant wonderful father and my Uncle Robert and those uncles and aunts that have went before me.
We need to make sure that we honor and pay respect for those that have knowledge that we can learn from.
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Last night my wife and I had a rotten guacamole, terrible night. I had been traveling all week long doing lectures and I was dead tired. I got home at 9:30 or 10:00 p.m., spent a little time with the family, and finally made it to bed about 11:30 p.m. At midnight someone began banging at our door, the dogs started yipping, and come to find out our second son had forgotten his key and was banging on the door to get in. We painted smiles on our faces, went out to let him in, spent a few minutes talking with him, and then crawled back into bed.
At 1:00 in the morning we heard the shower running and couldn’t figure out what was going on. The dogs start barking again, and at this point I almost didn’t dare go back to sleep.
We were again woken up at 4:30 a.m. when in stomped our 3rd son, ready to go to Drivers Ed at 5:00 in the morning. Again at 7:00 a.m. the 4th son headed to school and finally at 8:00 a.m. our final son departed. By the time we get him to school, needless to say, very little sleep had actually taken place.
My wife and I did eventually get a hearty laugh out of it when we figured out who had been showering in the middle of the night. We discovered that Nathan (Drivers Ed son) had looked at the clock wrong, got up at 1:00 a.m., showered, got dressed and completely ready, and then realized that the clock had said 1:00 a.m., not 4:00 a.m. I still chuckle thinking of it now.
This pretty much sums up the counsel that I gave in three of the lectures this week. The sequence of Zigging and Zagging is critically important. There is a reason why Zig #1 is Drive to Profitability, Zag #2 is Add Resources, and Zig #3 is Add a Scale Element.
Indeed the timing is critical.
So frequently people attempt to jump directly to Zig #3, which is a scale element. This is exactly what Nathan did this morning—causing havoc to our entire family. It of course is the perfect thing to do…have a shower and get dressed…but 1:00 in the morning is not the perfect time to take the action. The same thing is true with scale and so many other aspects of your business.
You see, when you are making cookies–how you put the ingredients in, and the order in which you put them in, is as important as the ingredients themselves. The sequencing and timing of how we build our businesses and how we take action is actually the trickiest part of making a perfect batch of business cookies…or getting a good nights sleep…or getting dressed properly and appropriately.
Remember when you are zigging and zagging: Zig #1 Drive to Profitability, Zag #2 Add Resources, followed by Zig #3 which is a Scale Element. Don’t get tempted to jump directly to Zig #3. Always nail it before you scale it.
Every year at the end of the year, my wife and I sit down and prepare our goals for the next year. This year one of the major things we added to our list was cut those around us, each other, and ourselves a little more slack.
Too frequently we wind it so tight and demand such a high level of performance from of ourselves, that we miss the real, joyful opportunities around us.
The reality is no one is perfect.
Each of us makes mistakes–irrespective of trying to do our best. Sometimes we just have to live in this messy imperfect world, bungle a little bit, and accept it. I have found this in business too. I have found this in my spiritual life, and I have found this in my personal life. Often times the biggest tragedy that occurs is being too harsh, too critical, and too demanding on ourselves (and at times, on those around us).
The truth is we actually perform at a much higher level when we take the pressure off a little bit. If we cut ourselves, and those around us a little slack, the end results improve.
Now, I’m not proposing that we subscribe to a level of mediocrity either.
This week there was an event that I became aware of, and one that really drove this point home for me.
A young man that I know is having a couple of small challenges–nothing serious, but still a series of challenges. Recently this brought him to a conversation with two spiritual leaders. When I became aware of this, my heart was instantly frozen and softened simultaneously. This enigma because I know that one of those spiritual leaders is a very harsh, direct, smack-it-down kind of individual, where the other individual is kind, generous, tender, loving, building and supportive.
I was anxious about the implications on this young man’s life. I knew that the first individual would indeed buoy him up, support him, lift him, and help him reach his height, despite several small mistakes. On the other hand, I was afraid that the other individual would want to smack him down, sequester him, and destroy him.
The reality is that at some point we will be in the same position, if we haven’t already been there. Then we all need (and appreciate) people cutting us some slack.
We live in an imperfect world. There are going to be mistakes made. The challenge I give to all of us is…do your very best. The key then, is to is keep things going.
I often tell my team members, “I expect mistakes. Great! Go make mistakes, just don’t make the really big ones.”
I tell my sons the same thing, just don’t make the really big ones! That’s how we learn. If you have team members that are not making mistakes, I would argue that they are not trying hard enough. They are not pushing the envelope enough!
Again I close where I started. Cut me a break, cut yourself a break, and enjoy the moments of life a little bit more.
This past week I was invited to an early morning meeting. As I was making my way up the freeway, traffic came to an abrupt stop at a point where there shouldn’t have been any slowing at all.
Frustration set in as I spent the next 20 minutes crawling, stopping, creeping along, and barely moving. When we finally got to the point of the slowdown, I was a little surprised, but still slightly amused by the ordeal.
Right there in the middle of the road, I observed that a garbage truck had dumped its entire load and the fire department was squirting out a fire that had erupted inside the heap of trash .I know it’s not funny, but the scene did cause me to chuckle a bit.
I’ve seen the same thing multiple times in my career—even in companies that I have created. I have indeed caused fires by picking up other peoples garbage.
You see, if you create an organization and then run around rescuing, picking up everyone’s garbage, and picking up their problems–then in essence you quit being the leader and you begin being the garbage man. (This same thing can happen in your own family or in your personal life.)
This garbage service does no one any good. Indeed, it creates a co-dependency in the organization and it actually robs people of accountability. In the end, you have a very non-productive environment.
I have created businesses and made the mistake of attempting to be kind and supportive of people. Every time my misplaced generosity, actually ended up destroying productivity and fostering an environment where employees are too dependent on me. I make myself a rescue agent rather than a support agent.
The fact is, everyone needs to take out his or her own garbage. Anytime you begin mixing really awkward chemicals, like that garbage truck, you end up having to call in the fire department to put out the flames. It causes a big yucky, nasty mess. Plus you end up having to clean it up again, after the fact, which ain’t fun.
Require everyone in the organization to clean up and take care of his or her own garbage while simulations providing support. Overall–don’t become the garbage collector, remain the leader.
I just read a contrary post by a friend and associate and someone I respect greatly. This man, Greg Habstritt recently interviewed Dan Kennedy–one of the world’s most trusted authorities on direct response marketing, and copywriting. Indeed Kennedy is a brilliant individual; however, I strongly disagreed with his position in the interview.
He boldly declared that content is no longer king. Indeed, he said, we already have enough information and the game is now more about:
- Developing a deeper relationship with the individual.
- Positioning the product appropriately by presenting existing information properly.
Although I agree with those two points are important—they are ancillary. The relationship and the presentation play a big role, but I completely disagree about the status of content. Content will always be king!
Some five or ten years ago, we went through a phase called the Democratization of Media. We quit relying solely on news anchors and big media agencies for information and content. Instead, we moved toward getting it directly from the source—or the closest individual to the source, including: bloggers, eye witnesses, and individuals that are actually in the trenches reporting real, raw, relevant data. These people aren’t massaging the message, or trying to build a relationship with me, instead they are simply delivering the information.
In fact, sometimes in life there are individuals that I don’t even like (both their personality and their style) but if I recognize that they speak authoritatively and truthfully…then I listen carefully to the content–regardless of how it’s presented. I usually value people who don’t spin the message, more than those who end up positioning it for me.
This reality trend is not going to stop. In fact, this isn’t a trend. It’s a revolution and it’s going to become deeper and closer still.
People desire valid, honest information and that is precisely one power of the Internet.
Of course, I agree there’s all sorts of useless fluff and incorrect blather online. Luckily our built-in BS meters are becoming quite adept at quickly sifting through this stuff. Additionally, anyone who writes or presents content that isn’t valid is quickly dismissed and disengaged from the conversation at an ever-increasing rate. At the end of the day, the information we value is truth, honesty, and hybrid thinking.
One can ask, “Do we have all the information we seek in life?” The answer is clearly, no.
To drive this point home, simply ask anyone suffering from a disease, a challenge, or personal issue if he or she has all the information that they need to triumph over their ordeal. Or consider if someone found a cure for AIDS or cancer. How important would this new content be? Would the positioning really matter? Would a relationship be necessary? The answer is no.
I punctuate this post where I started it…content will always be king.
Eating Our Own Cooking
In our current test business, Curtis and I received a request from a client that wanted to place a large order for high end, specialty products. We went to the manufacturer of these products and were able to open an account. However, when it came time to sign the contract with the vendor, it contained language prohibiting our operating a business model that was identical to our business model. The order we were trying to fill was worth a large sum of money. And the likelihood of the vendor ever figuring out we were in violation of the contract was minimal. In our zeal to land this account, Curtis and I conveniently forgot to pay close attention to this clause in the contract. However, Koral, who is one of my trusted gatekeepers, reminded us that signing the contract would run counter to our values. As lucrative as this deal would have been to our company, we passed on the order. It just seemed that if we were going to lose sleep, it would be better to lose it over the loss of revenue rather than the violation of our code of conduct.
In a previous business Curtis and I founded, we did not follow our own guardrails. We had put a financial guardrail in place stating that we would always keep a $100,000, three-month buffer in place to protect us if the business took a downturn. We also agreed that if things went south, we would reduce expenses, rather than dip into our reserve, in order to maintain a positive cash flow.
After several years of mind-blowing success, the business did suffer a downturn. It wasn’t long before we saw ourselves dipping below the $100,000 threshold. At the time we had a team we felt loyal to, and we did not want to have to cut back. So we lowered our threshold to $50,000. In making that decision, we broke our rule and crashed through our guardrail. But we felt justified in doing so because of our previous success. Before we knew it, we had crashed through the guardrail again and spent that last $50,000. At this point, instead of cutting our losses, we decided to create another business plan. Unfortunately, our team was not a good match for our new venture. Ultimately, with no cash left, we had to lay off the entire team we had been trying to protect. We also had to terminate what had been a very productive partnership and part ways.
We would have all been so much better off if we had reduced our expenses and stayed within that first guardrail. Yes, we would have had to lay off one or two employees or cut back on expenses in some other way. As painful as that sounds, it would have been so much better than having to kill the whole business. We could have saved our most valuable employees and avoided a lot of pain and heartache.
Our blunder led to Curtis and me parting ways for almost four years. Now we are working together again and building a successful business. And we’re hoping we will have the good sense not to forget our need to stay within the guardrails we’ve established.
Summary
As you are traveling toward your beacon in the fog, you will need guardrails to keep you from heading over a cliff or wandering out into the weeds. For each of your zigs, you should establish a financial number, an allocation of time, a duration of time, and a financial target to control the resources and energy you are going to put into that particular zig. You then need to create a list of the other guardrails that will keep you out of the weeds. Finally, remember the need to establish a network of trusted associates who will keep you from heading out of bounds network or drifting toward the edge of a cliff. These guardrails will grow out of and be aligned with the values you defined in Chapter 3. They will then have the power to keep you on target as you zigzag toward your beacon in the fog.
I control the finances of my business
I have learned the hard way that every time that I do not keep my finger on the pulse on the finances of my company, it goes into the weeds. Once, I returned from a vacation in Nepal to find that my partner had obligated us to a bunch of expenses without our having the income to pay for them. To cover his commitments, he basically sold off our inventory in a fire sale. He was so proud that he had sold so much product; but he did not bother to look at the bottom line, and we took a huge loss on the items he sold. He seemed to have forgotten that sales don’t really count for much if they don’t actually make a profit.
I really do not love doing the finances, but I have learned that no one else is going to manage my money the way I manage it. I always pay my bills on time, and I always know exactly how much is in my bank account. I simply do not spend money I do not have, and if I’m not keeping track of my finances I know I could find myself in a position that would force me outside of my guardrails.
I will not make personal guarantees on things that I have no control over
Years ago, I was hired as a young CEO of a small startup company. I did not have ownership, but I was eager to impress the owners and show that I was in the game. The company needed a batch of new computers for the employees. I thought I was demonstrating my commitment by volunteering to sign for the lease on these new computers. So, I signed a personal guarantee that obligated me to a three-year lease. Needless to say, the business collapsed along with the rest of the Internet bubble. Here I was without a job, and I had to pay $800 each month toward these computers. I brought them home and lined them up in my basement. They had absolutely no value to me, other than my kids learned great computer skills. I did fulfill my obligation, but I vowed never to sign a personal guarantee on something over which I do not have complete control.
I protect my personal network
One of my guardrails is that I will protect my personal network. I’ve been offered countless opportunities to get involved in businesses that would have been dependent on tapping into my networks of family and close personal friends. At times, I would have been looking to them for capital. At other times, I would have been using them as my primary pool to market to. For me personally, I’m very protective of my family and friends because I know that they will be very hard to replace if a business goes south. And, as I consider whether to involve them, I examine the situation by asking a simple question, “What’s the worst that could happen?”
I stay focused on my values
I try to always ensure that my business life conforms to my personal beliefs and values. Obviously, I will not do anything that is illegal or unethical. For some, that line may be a bit fuzzy, but my guardrail is whether I would ever have to justify or rationalize my actions to my wife or my children (or my mother!).
Sometimes, my decisions are made by the simple measure of whether an opportunity feels right to me. Not long ago, I was approached about doing business with an individual who was manufacturing and selling diet products. The opportunity seemed promising, so I went home and told my wife about it. Given her experience as a registered nurse, she examined the product and then told me why she felt it was not safe and why she felt this venture wasn’t something I should have my name associated with. The product was perfectly legal. But it was not something my wife believed in, so I did not pursue the opportunity.
Out-of-Bounds Worksheet
List the people who will be your out of bounds network:
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List the out of bounds markers in your life:
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List four or five things of how you will know when you are out of bounds. Is it a gut feeling, panic, scarcity mindset, etc:
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List the things that you consider to be completely out of bounds in your life:
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Identify exactly where you will change your direction on each zig and zag:
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Have a direct conversation with each member of your out of bounds network. Make sure they clearly understand what your out of bounds markers are and what their responsibility is to keep you within those bounds.
The following are brief elaborations on the rules I have set for myself—the reasons behind each guardrail. Again, remember that your circumstances and needs are different from mine, just as each ski slope is different. The key is that you need to define what guardrails you need in your life.
I will not risk my family’s financial stability
Before I took the plunge into full-time entrepreneurship, my wife and I had paid off our home. This was a huge milestone for us, and it provided us with some sense of security as I undertook pursuits that involved a much higher degree of risk. I have committed that I will not jeopardize my home because I do not want to take risks with my family’s financial security.
I keep my teams small
Whether I’ve been working for an organization or running a small business, I have always preferred to keep my teams small. I know myself well enough to know that this is where I excel. I have found that if I keep my teams under fifteen employees, then I can know the needs, interests, and desires of each person. I can get to know what motivates them so I can push the right buttons to keep each person going. I have run much larger teams, but keeping them small results in the highest output for the amount of input I can give.
I avoid venture capital to start or grow a business
I have a good friend who had the courage to become an entrepreneur fifteen years ago. He and his family came close to living on wheat and water so he could create his business. He maxed out credit cards and used whatever he had to become successful. And, indeed, he did become successful and profitable. He and his business partner then decided to grow the company even bigger, and they were able to raise a couple million dollars in venture capital. They continued to work hard and became even more successful. They were the rave of all of the business magazines in our area. They won awards and were highly regarded. However, bit-by-bit, as financial challenges hit, they sought out more venture capital. But each time, they also signed away a bit more of their lives; to where the venture capitalists had diluted the ownership of a company they had sacrificed so much to build. Now my friend is at a point where he has minimal ownership in the company, and yet he is contractually obligated to run it for the venture capitalists. Of course, the venture capitalists demand that he put in the same amount of work and energy as when he started the company. After years of hard work, he still never gets to spend the time with his family that he was hoping this business would allow. He is now middle aged, and he is burned out. If he would have stayed on his initial course and built his business a little more slowly, he could have zigged and zagged his way to permanent success. He now either has to start all over or continue to work in a company he no longer controls. There are times and places for venture capital but not as frequently as people think, and it is not my desired funding method.
In the conclusion of Bootstrap Business, I told a story of a young man named Jonathon. I was deeply touched with his story because he had the support of his wife and was willing to make the sacrifice to become an entrepreneur.
This past week, I was delighted when Jonathon called and asked to come visit me. There’s no way I’m going to turn down a visit from Jonathon because he’s taken the enduring path of entrepreneurship. In deed the last three or four years have been difficult for this man.
I talk about how in the early days; my wife and I lived on potatoes and love. Jonathon had been in that phase too, where his wife had to cut out makeup and their family had reduced the budget dramatically in order to keep the entrepreneurial dream alive.
I was so delighted as I looked at a very weary, very battle haggard, very tired Jonathon. It was very evident as he walked into my office that he had arrived at the first phase of Profitability and was well on the path of a successful venture. He knew it, and I knew it!
Jonathon has turned the corner and is now in the Process Phase where he is developing processes and adding resources. He just wanted a few clarifying pointers.
During our meeting he had made the comment to me, “Rich, I didn’t have any idea that it was this hard.” Then we shared one of those moments that I call an “earning your stripes moments”.
I want to say boldly that it is hard, but that anything in life that is worth having is hard. I still stick to the statement that I know of no better way to control your emotional, your personal, and your financial life and control your destiny, than by becoming an entrepreneur.
Of course I will tell you that figuring out what it takes and figuring out those first few models is hard—even if you have and The Zig Zag Principle or even if you’ve read Bootstrap Business. It takes going into the unknown and it will make you weary, but it is worth it.
And it does become easier.
Well, maybe not easier—but you do acclimate to it, and you will learn to get through the sequences more quickly.
I’m proud of you Jonathon, and I Look forward to seeing incredible thing from you in the future. You’ve earned your stripes.
Now, the rest of you…get with it! Go start something you’re passion about. Maybe even have a couple grand-little failures. Just make sure you follow my advice and fail efficiently. And as you work toward your goal, I’d love to hear about it.
Congratulations Jonathon!
Paying it forward is a beautiful concept that I came to enjoy this holiday season. As the Christmas season rolled around I was kind of in a little bit of a bah-hum-bug mood. I hadn’t really had the Christmas spirit hit me.
One night as I was preparing to wrap up an intense week and start moving into the Christmas week and the celebration mode. I got a nail in my tire. Everyone knows that I love my Audi A6, and to top it off, I had just put new tires on the thing.
So I was a little irritated as I took the car into my local Big O Tire store. Of course, they were extremely backed up. I waited and I waited in line to drop off the car, got a ride back to the office, and then raced through the day of work. When I finally arrived back at the tire place, it was past closing time. However, they were completely delightful and kind to me.
The guy at the cash register looked at me and said, “Mr. Christiansen, I see these are beautiful new tires. I know you didn’t buy those tires here, but I know you are a great customer. I’ve met you before. This is what I’d like to do. I’m not going to charge you for the rotation. So it’s just $20 for the flat.” Then he stopped, considered a moment, and said, “You know what? It’s Christmas! Let me just do that for you. Go and pay it forward.”
Instantly that kindness softened my heart. Most of the interactions I have with people are the exact opposite. They are usually attempting to collect money, not gift it!
I of course, instantly decided to pay it forward. I since have paid it forward. I do not want to share the specifics of the interactions, but I will tell you that when the time came to pay it forward, I had an incredibly strong feeling come over me–a great feeling that doing this little act of service for someone else was definitely the right thing to do. I was sure and that the kindness would touch someone else as it had touched me that hectic day in the tire shop as the joy and happiness boiled up in my heart.
Now as the New Year kicks off, I want to challenge everyone out there to pay it forward. There is no joy greater than doing private, random acts of kindness. I took a little risk in “disclosing” the fact that I’ve been paying it forward. But I share my story with a purpose, which is to encourage all of us to carry out more service.
There is no greater joy than doing private acts and paying things forward. This how we get out of the scarcity mode. I can tell you this with confidence! Every time I get into an abundance mindset –I can tell you the acts of kindness actually end up benefiting me.
So at this time, irrespective of your financial situation, be abundant. Do kind acts. Do small things. Bake a plate of cookies and take it to someone. Pay it forward. Although I can’t explain why, I can tell you that those acts will not only bless you personally and give you joy, but they will also bless you in your business ventures.
Being abundant is one of the biggest magic secrets that there is. Now I am not one of these big subscribers to the method of sitting around, holding hands and chanting “ohm” and expecting things to fall out of the sky. Success also requires a lot of hard work. What I can say with confidence is that sharing abundance is a key part of the equation.
Go forward this year of 2012 and have wonderful joyful experiences. Building businesses, experience, and grow.
One of my favorite sayings comes from the climber Adrianne Burgess. The first time I climbed in the Himalayas it was with Adrianne. He often said, “We are spiritual beings on a physical journey, not physical beings on a spiritual journey.” I really believe that. We have much to accomplish. Be good to the people around you. Go forward. Prosper.
