I was in the bus today on my way home after lunch. I was reflecting upon myself again, this time on the social and private side of this person I regard as me. While the private person knows the path he attempts to pursue, the social person inevitably brings the private person on detours, much to the frustration of the former.
The social person is by default willing to share his space with anyone who wishes to hang around. He has an accommodating disposition towards propositions by others, often to an err. Harmony is prized by the social person. He refrains from judgement until all facets of a proposal are revealed to him, then and even then a negative judgement might not be passed even if such is the only option available. In the event whereby sufficient facts are gathered and a negative judgement is passed to end a particular pursuit, due to the flaky nature of this social person, the judgement will not be sticky. It thus means given time another might be once again be able to persuade that social person to that same pursuit.
To the private person, this is a horrid waste of time. The pursuit of the path is of utmost importance. Progress in any direction other than in the direction of the path is considered a detour.The private person is by default unwilling to get distracted by any other forms of pursuit other than those that falls inline with his path. Any attempts to detract the private person from his path instills annoyance.
The social and private side of this person is thus at constant conflict with one another. In my opinion, to make significant progress, it is important to resolve this internal conflict of mine. In fact, I had unknowingly encountered the answer already during my extensive readings and discussions with people around me. Ironically though, the answer only became apparent after I defined the problem as it is.
The answer came in many forms:
I encountered the answer when reading this book on team building by one of Robert Kiyosaki’s advisors two months ago.
“A team is a group with a mission, to keep the group together under times of stress, the group must first have a set core values deeply ingrained in them. Only then will the group be able to function as a team in times of good as well as in times of stress. The function of a team is to complete a mission, the function of the team is not to please everyone within or without the group.
Not everyone can fit into the team you are trying to build. Only those who understood and are willing to accept the core values of the organization can be allowed entry into the team.”
Last Sunday, I discussed with my brother on these detours I constantly faced during my operations. I further shared the difficulties I had dishing out the rejections while not messing up the relationships I have already built up. His response
“Does your organization have a set of core principles?
The founder of my company established a clear set of guidelines when he first setup his operations in Germany. When functioning as a member in the organization, a person might on occasions encounter dilemmas which he will have a hard time coming to a decision. That is when this guideline becomes useful.
Take what happened last month when our company went over to Beijing to meet up with the prospects. Sticking to the guidelines, we had to disqualify the prospect. This is due to the fact that she is not the end user. She was attempting to setup an agency to reap commission. Our guideline is was to never engage with agencies. We came to this conclusion in spite of the impressive level of entertainment we received from her and the customers she was trying to introduce during our time there.
Suppose your organization do not have a set of core principles? What then will your decision making process be based upon? Gut feeling? How then could you ensure your gut feeling produce the same decision outcome each and every time you encounter a problem of a similar nature? How then can you ensure the quality of your decisions as well as the subsequent output based upon your decisions?
Back to the question of dishing out rejections. When a rejection is based on something that is personal a.k.a a gut feeling, the other party can and will always attempt to find something to counter that rejection. To stubbornly persist on this rejection would to cause harm to the relationship.
When a rejection is based on an impersonal principle, the other party can have no way to counter that rejection. A rejection based on a principle will not offend. “
From Warren Buffet’s biography which I read last month.
“If I am to condone your request to lend you money to tide you through your debts, then I will need to do the same for each and every subsequent person that comes after you. I will also need to do the same for each and every person that came before you. So the answer to your request is no.”
From Mr Lee Kwan Yew’s memoirs which I read the past few days.
“I am a pragmatic and practical person… I am not out to impress anybody, what matters is that Singapore prospers… I am consistent, persistent and determined.”
Drawn from the lessons taught by four people each of whom have built something significant – the “rich dad” company, Bosch, Berkshire Hathaway, Singapore, it is evident that core values are what they really are – “core“ values. A principle is an axiom. An organization expressed in metaphysical terms is an equation. All equations are built upon fundamental axioms. In the event whereby an axiom is in contradiction, the equation which is built upon it cannot be consistent.
In layman terms…
In a numerical field of 10, 1+1 will always be 2. The numerical field of 10 is the axiom.
So in essence, so long as I remain part of the team within my organization, all decisions henceforth will be based on this organization’s values and guiding philosophy
After having dealt with so many software projects over the years, I have came somewhat to the conclusion that not every deal is made the same. Some deals are more profitable than others, some deals need to be avoided altogether.
While the idea of expanding my business operation is a good one, I concluded it was even more important that I be able to expand this operation of mine while maintaining the same level of profitability, the same quality in terms of work and my good reputation (aka a technological version of the McDonald’s business model). This further lead me to ponder upon the feasibility of what I am trying to achieve. I have been deliberating over this notion in one form or another with my dad, my mum, Jim, Peter and Steven during the course of the past two months.
My recent intensive dwelling into Warren Buffett’s 800+ paged biography as well as the 600+ paged literature by his mentor Benjamin Graham titled “Security Analysis” did provide very important insights as to why banks and insurance companies of strong reputation collapsed during each and every bust period after a boom. Peter and the CMO of huelabs had in fact enlightened me on the same lesson last year. One will not die immediately from starvation but one will definitely die immediately from indigestion.
During the boom period in any economy; demand will be strong; competitors will all be seeking expansion; shareholders will be expecting increasing rates of returns on capital. Businesses overcame by optimism focus on maximizing the upside potential while neglecting to curtail the downside risk of their business operations – a human behaviour pattern Johnson commonly term as “greed”. Validating of job that passes through their system become laxed, while abnormal profit level is reported in the short run, the business sustains losses in the long run.
Keeping all these in mind, I now surmised my contemplations in the following points with regards to IT industry. These points need to be taken into consideration when judging the profitability of any deal:
Face value of the deal
In layman terms, it means how much is the total likely amount of money that will change hand via the delivery of the project from customer to vendor. It is wrong to assume that the larger the face value of a project, the more lucrative it is.
The profit margin
In layman terms, it is the difference between the face value of a contract and the cost of delivery expressed as a percentage of the contract’s face value.
Payment terms
A dollar today is worth more than a dollar tomorrow. How is the payment term crafted in the contract? It is 50% up front, 50% upon delivery or is the face value amount split into intermediate portions for released during the life span of a project.
Customer credibility
A dollar today is worth more than a dollar tomorrow. How prompt is the payment by the customer.
Customer liquidity strength
What is the cash level the customer has in his coffers? What is the monthly net cash flow into the customer’s coffers? A customer who has no established infrastructure that brings him a positive cash flow on a monthly basis that is attempting to commission a concept that is somewhat close to rocket science and might potentially cost multiple times his monthly cash inflow amount, should raise some alarm in your customer qualification meter.
Grounded-ness of underlying business concept
Each project is backed by a certain business concept. A concept that deviates significantly from the usual day to day business operations of an established business might expose a vendor to a higher level of risk as compared to one that is a obvious next step in the advancement of that business.
In the event whereby no established business backs the idea, both the amount of available funding and the deviation of proposed concept from the market norm are to be considered as coefficient in the vendor risk level assessment. Lower levels of available funding and higher levels of deviation from market norm adds to the risk of the vendor in terms of default for the former and long turn around time for the latter.
Ambiguity of concept
The further away from the market norm is a concept, the higher level of ambiguity is it. The higher the level of ambiguity, the higher the level of potential risk for the vendor. The longer the potential turn around time for a project.
Technological maturity of client
The higher the level of technological maturity in a client, the less the after sales technical support is required, the more profitable the project is in terms of effort saved versus effort spent. Such negated calculation is often overlooked by vendors when evaluating potential clients.
The worst case scenario is a client with technological maturity at an infantile stage. More than average effort will be required to support client not only on system delivered by vendor, but on other technical questions that are totally out of scope of this project.
A vendor cannot hope to avoid ill feelings by client if vendor attempts to excuse himself from answering technical questions out of the project scope he delivered.
Brain pattern of client
A client with a convergent brain pattern is more profitable than a client with a divergent brain pattern. A client with a convergent brain pattern will eventually converge towards very specific tasks he would like accomplished. A client with a divergent brain pattern will inevitably expand his list indefinitely. Vendor serving this latter group of client will face potentially face issues of scope creeping and subsequent conflict.
Relationship level with client
While level of relationship between client and vendor affects the chances of sales turnover rate of a project proportionately, situation gets potentially sticky when a vendor attempts to extradite his service from a project that might potentially be costly for his operation.
Level of bureaucracy within the client organization
A client organization with a higher level of bureaucracy puts in place more red tapes that a vendor will have to maneuverer through as well as imposes more downward pressure on the profit margin of the vendor. The level of bureaucracy in a client organization has a positive relationship to the face value of a project and a negative relationship to the profit margin.
Successful handling of bureaucracy in client organization results in the retaining of profit margin while unsuccessful handling of bureaucracy in client organization results in net losses in the course of project delivery.
Throughput rate
Each project has a deadline, the definiteness of the deadline determines the throughput rate required. A more definite and tighter deadline will likely demand for a higher throughput rate. A vendor faced with a higher required throughput rate will have to expand his operations capacity and thus overhead cost. Increase in overhead cost might in the long run wipe out whatever margin, if any, he managed to gain from this project in a break even scenario. In the worst case scenario, the vendor has too much capacity that could be absorbed by the market, thus faces net losses.
Area of expertise
This factor takes into account the core capabilities of the vendor. A vendor incurs more resources per output when attempting to function outside his area of core capabilities then he would if he attempts to generate output within his area of core capabilities.
A vendor that is constantly subjected to work outside his area of expertise will thus experience a lower profit margin as compared to one that is tightly working within his area of expertise.
Underwriting Arrangements
In the event whereby the vendor is not the main party delivering the scope of work, the reliability of the supplier the vendor is underwriting on behalf of, the level of control a vendor has over the supplier as well as the margin the vendor can retain in the event of contingency are all coefficients for considerations. A supplier with a well established reputation will lower the risk faced by the vendor. A high margin level retained by the vendor will lower the potential of making losses in the event a supplier defaults.
A vendor who is able to manipulate himself out of the position of being the underwriter and exchanges instead a commission for his service thus limits his risk.
Conclusion
Applying this matrix towards the qualification of clients, a vendor should thus be able to filter off projects that are potentially loss making and instead focus his effort on projects that have a high level of profitability.
Leading back to the original question I have in mind. Can the market provide such levels of qualified customers on a consistent basis as would justify the operating capacity I have in mind?
Whilst sales leads volume has been extremely high lately, already based on the above matrix quite a few have already fallen into the risky non-lucrative category. Instead of thinking how to close the deals, I am now considering ways and means of extraditing myself from these risk. Only three of the remaining sales leads qualify as ones with high profit margin and a fast turn around time. These are the ones, I should instead focus my effort on closing.
In hindsight, I did sustain losses engaging in two projects of similar nature to the former group in 2010.
First of which had to do with a hardware procurement deal, factors contributed to the losses are as listed below:
- high level of bureaucracy within the client organization
The factors that contributed to losses in the second dealing as a sub-contractor are as listed below:
- payment terms
- customer credibility
- area of expertise
In year 2009, I sustained major losses engaging as a sub contractor in one project. The magnitude of the losses was nearly of sufficient magnitude to threaten the continued existence of my enterprise. Factors that contributed to my losses:
- customer credibility
- customer liquidity strenght
- grounded-ness of underlying business concept
- throughput rate
As of now, I am engaged in the midst of another project that belongs to this risky group too. Underwriting agreement, ambiguity of concept are two factors that contributed to these losses.
Aside from the percieving from an enterprise point of view, I learned another lesson the hard way. Business must never get mixed up with friendship. What Satheesh said is correct. As a matter of policy henceforth, “nothing personal, just business”
From a personal point of view, I conclude that while it is a nice to have, it will not be possible for me to maintain my continued good reputation in the industry if I leave my outstanding clients in the lurch while flying over to Russia to attend my Pasha’s wedding. In my opinion, I believe as a friend he understand my decision.
Looking forward
As I have discussed with my Dad over lunch a few days ago, there is a bubble forming in the IT industry at the moment that might be somewhat similar to the 2000 Dot.com bubble. Rental prices of commercial property in Singapore is rising, more and more companies have been set up in the country to cater for customer demands for mobile applications. Valuation of Dot.com companies in the Silicon valley has of late achieved significantly high levels without generating a corresponding level of profits. Venture capitalist are chasing after these “highly valued” Dot.coms with their investors’ money.
Taking this trend for granted what I will need to do, over the course of the next few months, ponder upon the effects of the forthcoming Dot.com bust. Thereafter, I will need to position myself properly in the most lucrative position possible when that happens.
It was night, Joe sat with me at the deserted cafe, each of us nursing a mug of beer. I was recounting to him my memories from the past 3 years. Joe listened, distracted for the time being from his own woes. I was somewhat confused by my own memories or rather the different versions of my own memories. I was using him as a external reference point while I jogged through all these different versions.
After a whole 30 minutes, Joe reflected that each and every version was a coherent whole and each and every version sounded true. He concluded that there might in fact just be one version of the truth, if I honestly looked within my heart I will know which one it is. Well, here is the joke. It is common for men to loss the key to the heart of women’s, while I avoided this common problem, I lost the key to my own. Or maybe I never really ever did have this key in the first place.
Hmmm… sitting in front of the computer right now with just this conscious thought itself, has activated my subconscious mind to immediately retrieve bits and pieces of my personal memories just to support this thought to make it a “fact”. How helpful the subconscious mind always is.
Sharon from years ago saying “are you sure you lost your phone, you don’t even seem to look sad?”
My response to Sharon “Yeah, I think maybe I am… Hmmm… but actually I am not very sure.”
Alena during dinner “I seriously cannot tell from you expression, what you are feeling at the moment about what you just said.”
My response to Alena “I think you are right, I am undecided on what I should be feeling about this at the moment. Or rather, I don’t know what I should be feeling about this.”
Nica saying to me “Oh my god, if I were you in that situation, I would have already broke down and started crying.” when she heard about the time I spent 2 days in a jail cell in Azerbaijan for arriving without a letter of invitation.
My response to Nica “Really. It can’t be that bad right? My mind tells me that there is no possibility of them passing a death sentence on me, neither is there a high possibility of them retaining me in the jail cell, for something that did not even amount to an minor offence, for a prolonged period of time.”
Or when my mom admonished me at the funeral of my grandmother “why are you not crying, don’t you feel a thing after all that she had done for you while you were young?”
My response to mum “I don’t know what to feel. If there is anything at all, it is definitely not something that will cause me tears.”
Enough with the side tracking, back to the main issue at hand, my conscious mind knows not what my heart really feels. Just a speculative thought, it might actually be a “psychological deformity” from my childhood. Then again, who am I to judge, the only things I remembered from my childhood are the long hours spent behind bars at the world outside, wishing to soon grow independent and no longer suffer from being caged in.
This “psychological deformity” is made worst by my dabbling in the entertainment industry over the years. There is this thing about “getting into character” when doing such entertainment gigs. Through conscious effort, the person wills himself into a certain character and thoroughly convinces himself, he is in fact feeling what he has willed himself to feel. The original set of emotions he is feeling prior to this mental exercise is thus obliterated to be replaced by the new set of “desired” emotions. This mental exercise, has in fact become somewhat of a second nature to me, that even when not performing any gigs, I am doing it. And now when I jogging through my memories, I realized that I am doing it so often and so unconsciously that I don’t even notice myself doing it anymore. The subconscious mind just sizes up the situation, automatically presents a role that will be viable to the situation to the brain and the brain just plays out the role accordingly. The only hint, that it ever happened is the fact that I feel so tired after such situations and attempt to find for myself a quiet place to sleep till the weariness wears off.
So in essence, the emotions has been so seriously subordinated by the thinking brain that it has become a mere tool to be deployed in the form and manner where appropriate. So the person is becoming somewhat of a machine then. This statement thus begs for the next question- do I actually have a soul or am I lying to myself about the existence of one?
Learning from both Steven and my brother, I limited effort on my IT works to strictly office hours only. I have came to find such a practise very productive. Each day starts with a clear set of well defined objectives. Choice of objectives are set to be manageable within my self imposed daily working hours. In fact, more often than not, I am able to accomplish all the daily objectives within the given time frame. Though I might be tempted to attempt at completing objectives for the next day if I did finish the current day’s objective much faster than anticipated, abiding by my self imposed rules, I refrained from doing so.
This is not the case in the past, when driven by desire to accomplish a project ASAP, I would unknowingly clock a 16 hour working day for weeks straight. In hindsight, such a frantic pace of work is simply not sustainable physcially and mentally in the long run. It often left me burnt out after a few months of work.
Following this new method of work, I could start each day feeling refreshed and alert. Not only that, it leaves me with plenty of free time not only to think and plan my actions ahead of time but also to pursue one of my favourite past times – to sit and read useful and insightful books by the beach. This is in fact consistant with Robert Kiyosaki’s advice “a person’s occupation should not be mistaken for his business”. Being an IT guy is my occupation, but finding ways and means of compounding my money upwards is my business. To find ways and means to compound my money means I will need to find time away from my profession to think.
Over the past few months, I have rejected around 50% of the IT projects coming my way. While there is money to be made, careful calculation shows the money is not worth the time I will potentially have to spend on completing these projects. In layman terms, I will be selling my time too cheaply, time which I could devote towards thinking about ways and means of compounding money.
Johnson did mention last year there are lots of companies trading on the SGX that were trading below their net book value, however since he considered himself stupid when it came to stocks, he was neither interested in studying about or dabbling in them. This statement from him should not be taken literally, he just could not bother himself with the task of trading with stocks. His preferences lies in real estate. It is a natural choice for him since he is already very skilled at accessing the value of real estates. To make matters even easier, he has also established relationships with a very wide network of real estate agents who are constantly working for him to sniff out all the good deals in town. The last time, he showed me his phone list, the list of real estate agents in his phone seemed to scroll on and on forever…
Just for the fun of it, I am taking on Johnson’s suggestion to me. With the newly acquired spare time, I am devoting myself towards the studying of the financial statements of all the publicly listed companies in the SGX at the pace of 10 companies per day. This is to first find out the netbook value of all the companies trading on the SGX and subsequently to determine the companies with share prices trading below their net worth. If maintained consistantly at this pace, I should have studied and gained somewhat of an understanding on most of the companies listed.
If my hypothesis on business cycles are correct, 2013 should be the next time when stock prices get hit adversely by some screw ups from Wall Street in New York. Derivatives are like dynamites that are one interlinked with the other. The fact that they are so widely traded around the world means that when shit happens in Wall Street, via the blowing up of interlinking derivatives, the shit would soon hit SGX as well.
When that time comes, I should have gathered enough data to gauge the stocks to acquire as well as the stocks to avoid.
Another chunk of my spare time will be spent of studying the newspapers, not on news but on the spending habits of my potential prospects, building up their profile over time. This latest book on Warren Buffett is most insightful. Yes, handicapping is really useful and could in fact be applied all over the place.
Mavericks are by definition unorthodox or independent-minded people [source:wikipedia]
In my opinion they are a scarcity forming a 20% of the total population.
Today on the way home, I recalled one of the first conversations I had with Johnson years ago. It happened in the car on the way to a restaurant along Bukit Timah Road when he popped me this question “what do you do with Mavericks if you are building a business system?”
“Use them?” I replied.
“No! Wrong. You fire them.” was his reply. “A business system is like any other machine, for a machine to work the way it should, each and every part within the machine should function in the manner that its been designed to be. Mavericks should never be deployed within such machines. Their existance in such machines whilst increases the potential profitability by a 100%, increases your risk by a 100% as well. Managers are different. Though they might not increase potential profitability substantially, they are predictable. If deploying them in a system consistantly generates an increased profitability of 10% on a yearly basis, so be it. Investors that park money in your business are not gamblers, what they are looking for is consistant rates of returns on investment. A business is a system that generates a consistant in flow of cash over time. For an operation to conform to the definition of being a business, the operation must first be well defined and predictable.”
I was young then and being rather rebellious, I considered myself a maverick. While I remembered his advice, I could not find real application to it.
In retrospection now, while attempting to draft up the business plan of my web consulting company, the wisedom of his words dawned on me. The backfiring I experienced recently attempting to delegate an entire project to a maverick did help with my learning of this lesson.
Yesterday, during lunch, we had roasted duck from the stall. Both my parents were commenting that today’s duck was better than usual. My dad further said that if only the quality of the duck was as good everyday, then business will be really good.
That was when this conversation between me and my dad started. Why is it that the quality of hamburgers produced in McDonalds, an international food chain, remain so consistant across geography and time, whilst the quality of ducks roasted in just one single factory vary so much on a day to day basis? Dad stated the quality of the duck roasting has a high reliance on the quality of work by the master chef.
As the conversation soon turned to my talk about the former Johnson Duck franchise in Singapore. My dad further recounted his experience with one of the staff he employed in his stall whom he treated really well, but whom ended up stealing from him. Mom further added to the conversation by stating this employee was not the first setback he experienced. There were many others before this employee. The most common case was that they leave as soon as they mastered his craft and became instead his competitor. These happened during the days when he was still roasting duck himself. My dad eventually gave up on expanding his business after experiencing multiple of such set backs. He concluded that finding capable people for the job is really based on kharmic cause and effect, something beyond his control.
This was when I shifted my focus back to Mcdonalds again. I stated to him my total disagreement. If one of the essential factors contributing to the success of a business is the need for capable people and finding capable people for the job is based on kharmic cause and effect, something beyond the control of man, then multi national giants like Mcdonalds, KFCs and Subways should not have even came into existance in the first place. I further argued stating I do not see any elites working in the Mcdonald’s restaurant I visited. In fact, most of the people working in these restaurants are semi retired people, just happy enough to get a job and an hourly salary that is close to minimum wage. Mcdonalds is in fact a business system built with zero reliance on mavericks.
I recall suddenly one of the key things taught during my days in NUS doing my technoprenuership minor then, something which David KK Kwan mentioned the other day. “Is the core activity within a business Art or Craft?”
Businesses that tend towards Art have a high reliance on mavericks, since the nature of the business has a high level of ambiguity involved. Attempting to maintain the quality and integrity of the output while scaling up the volume of such a business type will be difficult due to extensive reliance on mavericks. This is if it is possible at all to find and retain enough mavericks from the job market.
Businesses that tend towards craft have low reliance on mavericks, since a craft is essentially an activity based on a formula or recipe and all participants who follow the same directions end up with roughly the same results every time. Scaling up a craft based business will not concurrently compromise quality and integrity of output. Due to the low reliance on mavericks, human resources to fill up positions in this business system are easily available.
I started analyzing the problem that has been plaguing my dad for most parts of his career and that one similar instance I had encountered a short while ago. This time I used Robert Kiyosaki’s framework of the E/S/B/I
E – employee
S – self employed
B – Business owner
I – investors
The problem both me and my dad faced belongs to the S quadrant in Robert Kiyosaki’s framework. A self employed person in his attempt to scale up his business inevitably creates another self employed person. Ironically instead of successfully scaling up his business, he instead creates for himself another competitor in the long run. His business never scales up as a result. Instead he becomes the system. The day he stops working is the day, he stops making money.
As I verbally brought my train of thought to its logic conclusion, realization dawned on both me and my dad. “Yeah you are right son” he stated.
“Dad you spent your life time before realizing this, I learned from your experience came to this realization myself today having committed this error only once.”
“Good son, keep on pushing it. This is the true business way.”
Mmmm.. I nodded in agreement.
At the back of my mind, I was glad I had not wasted too much time training another possible self employed type.
In conclusion, all the operations aspects of the new business model must be so refined, nothing is left to art and everything depended on craft. I will no longer waste my time training mavericks into self employed. The requirements of a stable business model dictates that it should continue to function properly even in the absence of mavericks.
Ultilization of mavericks should thus only be restricted to the ideation phase of a new business venture creation. Furthermore for these mavericks to even be of use to an ideation phase of a new business venture creation they must be domain experts in fields related to the new business venture creation. When the new business venture is launched, these mavericks will not be allowed involvement in the operation aspects of the business venture unless they are themselves shareholder of the venture. In the event they have no shareholder stake in the venture, they will be only engaged periodically as external consultants.
Contrary to general perception that learning actually stops once a person graduates from the university, over the course of the past three years, I realized learning for me actually intensified as I departed further and further away from the path that was set in the system for people like me and around me. A safe and secured path that is well defined as it is travelled upon.
This departure was first born as a possible notion and alternative in my mind. As years went by it grew into a belief, later a perception, thereafter an attitude, and finally a natural disposition. This translated into its external counter part a tendency towards a certain life style. It is the life style that I am living right this moment today.
The fact that I was no longer restricted by the rigid curriculums imposed by school systems to produce workers ready to fill up job positions in our societal system, and the fact that I drop out from the natural path of search for a secured job and opt instead to take an uncharted path, meant I was free to explore all matter of subjects and topics.
Quite alot of these topics will never be taught in school. There are two main reasons. Firstly, it is not be economically viable to craft up a curriculum to officially teach these lessons. Secondly, due to the very nature of certain topics, learning is impossible without experiencing it first hand.
Knowlegdge on the first group of topics can be gleaned off books and most lately the internet. Knowledge on the second group of topics comes through a four step process, observation, contemplation, recognition and lastly acquisition.
While I do often spend time observing and there after contemplating, the recognition stage is to me a pretty tough one. This is most especially when I do not know what I do not know. However the fact that the path I am pursuing goes not in a circle, makes it is inevitable my journey brings me to realms hitherto unexplored and meet people from backgrounds I would have otherwise little chance of encoutering much less interact with.
It is precisely these random people I meet during my journey that point out my blind spots to me, done so during the course of coversations.
So in essence, what I know today is either gleaned from books, recognized and thereafter acquired or crowd sourced.
The crowd sourcing of knowledge can in fact be further intensified through what I call a master mind group. When I was young kid and watching cartoons, I had the initial understanding that a master mind was a person. Later through Lawrence and thereafter Napolean Hill, I came to the understanding that a master mind is in fact not just a person but a group of people pooling their physical resources and brain power towards the achievement of a common goal be it physical or meta physical.
The master mind as a concept is not in fact a new one, Johnson once said during one of our dinners together that said the warlords and leaders in China during the fuedal age see cultivation of personal virtue as extermely important. Such virtue in combindation with material wealth attracts around themselves men of talent. This group of men together form the mastermind group.
During military campaigns, battles are won or lost precisely due to the strength of the mastermind group which directly affect the quality of the tactics developed for war fare.
Liu Bei by his virtue attracted and acquired Guan Yu, Zhang Fei and Zhao Yun capable generals in war and thereafter Zhuge Liang a strategist capable of military deploying, thereafter generals Huang Zhong and Ma Chao. This formed the core and foundation of the Liu Bei’s mastermind group and enabled him to setup the Western Shu dynasty.
Emperor Tan Taizong in his attempt to strenghten his empire retained the service of Chancellors Wang Gui and Wei Zheng. Frequent debates between Wang Gui and Wei Zheng as well as honest critique on the emperor himself provided valuable critical insights which lead to the setup of a dynastic system that remain solid and firm for the next 500 years.
While reading this new book on the internal functioning of the Boston Consulting Group, I was not in fact surprised such a practise was adopted as well.
I have over the course of the past few years in my path been part of a few master mind groups. I am starting to have the belief that in order grow this current business I am working on to the kind of scale, it is important to start forming a master mind around the core of this business.
My binary testing result shows that there exist a critical threshold on the frequency of automated postings in Twitter which demarcates user perception on a piece of information between spamming and insignificant useful information.
Applying the Law of Entrophy to this equation, we define each hour non-activity in terms of no tweet as a 0, and each hour of activity in terms of one tweet as a 1. Our objective is to determine the minimum amount of 0s to preced a 1, before that 1 can be perceived as a significant piece of useful information and thus not a spam.
The first configuration with the pattern 001 resulted in an average follower acquisition rate of +1/week. The current rate with the patter 00000000000000000000001 (23×0 + 1×1) resulted in an increase in average follower acquisition rate of +5/day.
I will leave this second pattern for the next two weeks before reducing a 0 from the pattern. Thereafter I will measure the average follower acquisition rate.
After yesterday evening’s session with David and Gabriel, I adopted David and Gabriel’s methodology and started crafting up my own business plan too. Thus far I am already 9 pages into the document. This document when finally completed will cover all aspects of my business operations down to the finest details. Major components of this document will include company mission, marketing, sales, operations, finance, human resourcing, accounting and directions for future expansion.
I have managed to uncover quite a few forms of which format I will need to draft and redraft clearly. This will ease the delegation of specific processes within this business model out to the eventual employees that will be engaged to fulfil the various task as well as communications between employees. Also I have managed to identify specific areas of hiccups that will happen within the various processes within this business model and have already crafted counter measures to alleviate these problems.
As I progress further along in the developement of this business plan, I will be able to gain clarity on all aspects of the business. If done correctly and properly, the final picture that will be painted in the financial section will give me a clear picture of the financing requiring for the daily operation of this business model, the feasible rate of growth possible and last but not the least the ROI. The document should also provide me with a clear picture of the configurations I will need in each project team (which I will term a cell) as well as the fixed cost in sustaining a cell.
Already in the first 9 pages of my documents, I could clearly identify specific portions of my business process that could be consolidated into a clear concrete role for an employee to be delegated to a human resource located off shore.
The way I see it, the more I am able to document in details the processes that will occur within my business model, the more predictability and less ambiguity there will be. This is translate into less difficulty when it comes to the task of work delegation by me to my future employees.
From Johnson, the 3 important elements of success are as follows:
- Critical Thinking
- the ability to intellectually discern the thin fine line between factors that do and do not contribute to and success and failure of a plan. (A point illustrated clearly in the book the Outliers and partially in the book the Black Swan)
- People Management Skills
- The ability to provide clarity of direction and motivation to men on a mission towards obtaining a common goal.
- Salesmanship
- the ability to identify, through correspondance, the pains felt by a business, communicate the nature of the problem that is causing the pain to the business owner and provide a feasible solution to the rectify the cause of the problem.
From David during his talk with Gabriel, he said something important which was stressed by Robert Kiyosaki himself. It was the need to create a business system when attempting to start a business and not in the process become part of the system itself.
David provided further elaboration on this rule by stating he maintains a folder which documents his entire business model and all processes down to the finest detail. In essence, this allows him to truly turn his business into a self sustaining socio system which frees him up from its daily running.
Another important insight gained is the importance of segregating the execution phase from the planning phase. What I will need to do from here on is to continue working on my business plan document which I personally refer to as my company’s Standard Operating Procedure.
Gabriel during his two exercises, one with me and the other with another participant emphasizes the need to put heart and soul behind actions. What he forgot to mention was that, while attempting to get us to carry out certain actions to illustrate the importance of heart and soul, he also showed us the proper technique required to carry out the certain action so as to achieve in a high success rate.
David emphasized the need to avoid being overbearing (arrogant), stubborn and ignorant traits exhibited by business owners that are often caught in the cycle of busyness instead of being true business owners. It is also important to maintain a humble, open minded disposition. Wisedom is something that is strongly emphasized but nothing was mentioned about the methods of obtaining wisedom. Taking an intuitive leap, I am of the opinion that wisedom is a by product that accumulates through the constant application of humility and open mindedness in our everyday life.
The both of them mentioned 4 important questions which has often been posed to us by Venture Capitalist during our Start Up Singapore competition and by our lecturers during our Technopreneurship class in NUS.
- Can an idea be born
- Can an idea make money
- How long is the expected life expectancy of an idea
- Why am I the person to carry out the idea.
To question 4 David did provide his own answer to why he is a business coach.
- He is both left brained and right brained. The way his brain works allows him to consider problems from both angles. (This coincided with my discussion with Pasha two weeks ago on the importance of divergence and convergent intelligence )
In my own business plan, I will attempt to answer this 4 questions as well.
Unknowingly, I have recently acquired for myself a strange hobby. I have started feeling each individual venue within Singapore boring. However the island as a whole seem still a some what interesting and scenic place. Hence while it is excruciating to take in each individual spot within Singapore by itself, taking in the whole of Singapore at once still seems pleasant. As such, it is quite often I hop on to random public buses behind my house and sit in the front seats of these buses from one end of the island to the other. I would read a book during such occasions. Occasionally I would lift my eyes off these books to enjoy the passing scenery or when the passengers around me get to rowdy.
This afternoon during my reading session on board bus 196, I had the most surreal feeling. I felt as though I past through 4 different worlds during the ride.
The first world found within the book which I happened to be reading at the moment by Catherine Lim called “Miss Seetoh in the world”. This world was intermittenly disrupted by the two other worlds which past through my physical side one after the other.
The protagonist in the first world was a woman named Miss Seetoh a fictional female character living at the threshold hold between the Singapore governed by the traditional values handed down from our fore father’s country and the new values constantly being imported by our media and the government. Catherine was being satirically critical of the current reigning Singapore government in this piece of work. This was expressed in Miss Seetoh’s words, thoughts and actions.
The family from the second world soon came and occupied the seat beside mine. Their rowdiness successfully disrupted my experience of the first world. I hence put aside the world of Miss Seetoh and plunged fully into this world of the family and studied them as I would any character in a narrative story.
First and foremost, I felt really annoyed by the voice of this boy who must be on the brink of puberty. As with all boys on the brink of puberty, myself not an exception, his voice was broken in a manner that made him sound like a total transvestite. I recalled myself then, due to my impatience at my lack of ability to fully control my voice faculties, loathing to speak during this period of my life when the voice box was unstable and my voice broke often.
There was something I found really intriguing during this episode between the kid and the father. The father was trying to cajoule the kid into accepting his way of thinking while the boy was simply not interested in the least but was nevertheless read like an open book by his dad. Strangely, during my younger days, I got myself in and out all sorts of trouble behind my parents’ back never once letting them in this life I have on the outside except on a few occasions when things got somewhat out of hand, aka me returning bloody or with a grade marked in red. Why was the boy allowed neither freedom of thought nor freedom of action. 
The boy and his family soon left to be replaced by a western couple. Contrary to popular believe these guys are rich, I am starting to form the opinion lately, it is precisely due to their inability to make a proper living back at home that they are here in Asia seeking to etch out a living in foreign lands. They too soon left the bus.
In thier place now came these two women in their late twenties perhaps. Definitely single from the lack of adornments on their fingers. They fit nicely into the class called the metropolitans. One of them was recounting her time in New Jersy and her close shave with death. She was there at the airport on the exact same day one of the planes involved in the September 11 incident departed for its deadly cruise. Their conversation was intermittenly spiced with some elements of Singlish. She further recounted that some of her holiday trips were failures from the start despite having everything planned out nicely. The feel to them were wrong. She further revealed that her trips lasted on the average 5 days. I never had such problems with my personal trips since most of them last for months with nothing planned out.
Then an idea popped into my head just when I was about to get out of the bus. If the information age does correspond with the zodiac age of aquarius and the true coming to age of aquarius starts on 2012, then the current monoliths of Facebook and Google, the so called icons of the information age are less icons than forebears. If such is the case, then I should be expecting to see more information age monoliths coming into the scene past 2012. The premise of such monoliths will be determined by the fundamental changes in our social fabric. Intuition thus drew my inner eye to seek out an alternate world less powered by oil and nuclear energy than something else. One of the key links between our current world and this alternate world my inner eye sees is a technology hitherto that makes possible the transfer of energy through medium that is no solid.