Tech Business

Realities of IQ in Business

(No jimmy, not everyone can join the upper middle class)

People above 140 come up with new concepts.
People above 130 come up with new business ideas.
People above 120 exploit niches in markets with existing ideas.
People above 110 work harder than others are willing to at capturing marginal opportunities at lower profit, that better companies are unwilling to chase.
People above 100 might, if they’re lucky manage well.
People below 100 do the work of bringing others’ ideas to fruition.
People below 85 are too difficult and expensive to train to work on ideas.

(If you thought of it, and you arent’ in the 130+ category, someone thought of it already, and decided it wasn’t possible, or worth it. on the other hand, if you are willing to serve niche customers who you can empathize with that is something you can turn into money. But you must get customers, you cannot attract them.)

5.5-The Production of Goods, Services, and Information · Definitions · Tech Business

Business Terminology, Scale.

ESTABLISHMENT (small/craft) An establishment is a single physical location where business is conducted or where services or industrial operations are performed.

FIRM (regional/industry): A firm is a business organization consisting of one or more domestic establishments in the same state and industry under common ownership or control.

ENTERPRISE(National/Federation) An enterprise is a business organization consisting of one or more domestic establishments under common ownership or control.

VS

SIZE
Very small businesses Fewer than 20 employees
Small businesses 20 to 99 employees
Medium businesses 100 to 499 employees
Large businesses 500 or more employees

THEREFORE: THIS GRAPH
…………………Establishment -> Firm -> Enterprise
Large >500
^
Medium >100
^
Small >20
^
Very Small >0

WHAT DOES IT LOOK LIKE?
It looks like half of the people are employed by LARGE organizations, the majority of the rest by Small and very small.
I look at it like this:

Given Median Family Income: 50K:

500*50K=25M * 4 = 100M+
100*50K=5M * 4 = 20M+
20*50K=1M * 4 = ~5M+
1*50K=50K * 4 = 200K+

WHY?
Revenue per employee goes up with scale.
Ratio of employee to equipment costs balances out.
As an average we tend to use 30%. (Since I’ve largely been in technology, I have never run a business where it is that low).
If we use the median income, and multiply by four that seems to produce a fairly good “rule of thumb”.

WHATS THE HIGHEST PAID OCCUPATION IN AMERICA?
Management of companies and enterprises . . ..104,041
..Enterprises with fewer than 500 employees . . . 76,484
..Very small enterprises . . . . . . . . . . . . . . . . . . . 155,557
..Small enterprises . . . . . . . . . . . . . . . . . . . .. . . . 70,065
..Medium enterprises . . . . . . . . . . . . . . . . .. . . . . 74,717
..Large enterprises . . . . . . . . . . . . . . . . . . .. . . . 108,057

The organization of production distribution and trade is the highest paying sector in america. Entrepreneurship rules.

Tech Business

Executive Roles and Character (biz)

[W]e are all suited for different roles. I prefer partnerships rather than hierarchies. And this is how I usually operate.

SALES (PRESIDENT/CEO)
– I like Sales and Revenue jobs – but it’s hard to control relationships upon which sales depend. One needs to be more intuitive and ‘likeable’, gather and distribute information, rather than creative. (I have to be likeable and share information)

PROFIT AND LOSS (CTO/OPERATIONS)
– I love P&L jobs – I have control over them. One needs to be better at problem solving, and persuasive. Creativity is necessary and rewarding. (I have to be right and creative)

BALANCE SHEETS (MBA/FINANCE)
– I hate Balance Sheet jobs. – I never feel like I can control them. One needs to keep a lot of details in memory, and resort them, and report on them. And most creativity is … limited. (I have to be diligent, and not wrong.)
This is how I tell people why I prefer NOT to hold the CEO role, but the problem is finding someone not stupid enough to be the CEO. Normally I don’t like to take the CEO title, but prefer to have a ‘President’ and myself the “Chief Strategy Officer”. In a perfect world you have a three person partnership for customers (president and CEO), inside the company (CTO/Strategy), and suppliers (CFO/MBA). I don’t believe in using CPAs for CFO, and instead use MBA’s for CFO, and CPA’s for VP accounting. In my experience CPA’s cannot accurately report BOTH financial and operational accounting on the same P&L and Balance Sheet, nor do they produce rolling reports that let you see trends. Why? Because this requires a bit of extra work developing posting ‘macros’ (Processes) so that data isn’t pooled (munged), and so that it’s clear whether one is making money from operations, from capital trades, or from financialising the business.

Curt Doolittle

Tech Business

Project Management In A Nutshell

– Make a list of stuff that needs to get done.

– Use that list to make a shorter list of what you can act on today that will get something done, or get the information needed to get it done, or get the information or resources to someone else needed to get something done.

– Give those tasks to everyone that you possibly can and ask when they would like you to check back to see if it’s done. (their estimate).

– Find someone to do the tasks no one else can.

– As you get things done, cross them off your list.

– Tomorrow morning repeat the process.

In essence, project management boils down to breaking an elephant down into little bite-sized pieces, and tracking the progress of digestion every single day without fail.

There are a few ways of making lists (simple, column/state, and timeline, and timeline with dependencies)

You can work with fixed or variable pools of people.
You can work with fixed or variable amounts of money.
You can work with fixed or variable amounts of time,

But in the end, that’s the job.

What’s changed over the years is that we don’t do everything by paper. And more and more of our economy has become project and task driven – and less and less of it driven by repeatable processes.

This trend will continue. Which is one of the reasons the lower end of the spectrum is going to be forced out of the working pool permanently.

Because we are all paid by the rate at which we learn and adapt to increasingly complex information, in increasingly large volumes, in increasingly shorter time periods, with increasingly abstract formulas and rules, and increasingly complex tools to assist us.

Diary · Tech Business · Uncategorized

How To Keep Books For Management First Rather Than For Government First.

You cannot get a CPA to keep good books no matter what you do. Best advice is to hire an MBA as your CFO. Then strong director or CPA to work for him. CPA’s worry about compliance first and business second, and MBA’s about information for the business first, and compliance as a sunk cost. MBA’s are right.

— ACCOUNTING PERIODS–
13, four-week accounting periods “(months)” no matter how much work it is for accounting.
Payroll periods, within those accounting periods, preferably every one or two weeks.

— MANAGERIAL INCOME STATEMENT –
Presented in tabular form in the context of rolling 12 months.
FOR MANAGEMENT TEAM
Subtotals for Cash On Hand.
Cash Flow History and Forecast.
[details]
Subtotals for EBITDA: profit and loss from operations (cogs)
A List of cash related Action Items

FOR C-SUITE, BOARD, AND INVESTORS
(“stuff that obscures operational excellence or failure”)
(!!!includes book value, AND current liquidation value!!!)
Subtotals for asset transformation (portfolio)
Subtotals for Interest (money costs)

FOR CFO, CREDIT(banking) AND TAXES(government)
(What I call “Cost of government interference in the business”)
Subtotals for regulatory costs (staff, fees, etc)
Subtotals for depreciation, and amortization. (regulation)
Subtotals for the above: “Net”
Subtotals for taxes (taxes)

AT THIS POINT ITS NONSENSE
Totals of above: “Net/Net” (which is by now a total fabrication in most cases)

—FINANCIAL INCOME STATEMENT-
(for third parties)
Standard income statement for the month/period in question.

Tech Business

An Environmental Software Company?

In May, one of my business partners asked me to rescue a bit of software development that was a joint venture between a prominent politician’s environmental activism foundation, a very large software company, and one of our smaller businesses.

It took me until July to weed through two years of chaos and deception to understand that we were losing millions on the effort, that neither customer was being honest with us, or even with each other, and that the entire effort was a financial and political catastrophe. Besides that the software was unusable. Not for want of technical talent. It’s was because the politicians mistakenly believed that they could be product managers – skills that are incompatible.

I’ve spent the late spring and most of the summer building a new business and attempting to right the many wrongs done by these people, to our company and others, in particular, to a global organization named ICLEI, which consists of local governments working to reduce greenhouse gas emissions.

Now, I am not a climate activist, and I’m actually a skeptic. It’s not that I don’t want to reduce emissions. I do.

But the reason I got involved was because I simply cannot morally tolerate myself, my business partners, and some very good, and hard working environmental activists, who are simply trying to make the world into a better place, get walked on by denizens of the evil empire whose only real purpose seems to be giving capitalism a bad name, while in the mean time, harming their company’s brand, and all for personal ambitions.

So, my work on Capitalism 3.0 has been delayed because I’ve had to launch a new business, and right what I feel are injustices by doing so. It seems that it’s acceptable to the Green movement to have a skeptical capitalist involved as long as he’s on their side. A marriage of convenience so to speak.

All I know is that I haven’t met anyone involved in the climate issue that isn’t a good person. And I can’t say that for the people who caused me to get involved by their errant and greedy behavior – masked as activism. I find them insufferable.

So those political activists both left and right, who look at me askance when I tell them I am a major stockholder in a Green business, should understand that you have your religions and I have mine: I don’t like to see people abused, and especially under the cloak of public service.