I was skimming through Hacker News (it’s recently become one of my daily must reads) the other day and a comment caught my eye, someone said something along the lines of “that would require the creator to have been truly self-aware.” A few days later I read another comment where someone was lauding a Ted talk for the presenters keen sense of self-awareness .

It got me thinking do we need to become more self-aware? As web developers we often think we are incredibly self-aware. Unfortunately we are not. Ok, ok, most of us aren’t, a select few of us are happily self aware, they are known as outliers in statistics. What I mean is, the vast majority of us think we know what we can do, think we know what we’re good at, and also think we know what others are capable of. We also think that everyone around us thinks the same way we do, that has the same problems we do, that has the same needs we do.

” Most Americans do not know what their strengths are. When you ask them, they look at you with a blank stare, or they respond in terms of subject knowledge, which is the wrong answer”. Peter Drucker

Some might argue that not knowing your limits is what allows us to make incredible discoveries and break the status quo. This might be applicable in science, but I’d argue that it isn’t necessarily the case in entrepreneurship. Entrepreneurship is not a solo pursuit despite it typically being portrayed that way. Why is it ultimately not a solo activity? Well you aren’t building a business in a vacuum are you? You aren’t building a product to then sell to yourself.

Entrepreneurship is about knowing what you’re good at, what your technical, strategic, or intellectual advantages are, and profiting from it (what are your arbitrage opportunities?). Learning about yourself and defining your skills typically requires also learning about your market, which is another key skill to address in business.

Learning self-awareness is like doing market research. Test your assumptions, both about yourself and your business.

To paraphrase Peter Drucker, a famous executive “focus on your improving your weaknesses, and at best you’ll be average, focus on improving your strengths, and you’ll be remarkable.”

I’m an avid soccer fan and student of the game (20 years of playing + 3 years coaching), and just like millions of other people around the world have been watching way more soccer than I normally would recently. Along the way I realized there are a lot of similarities we as entrepreneurs can learn from watching the highest caliber soccer in the world being played.

Every startup needs to have people filling roles the same way a soccer (futbol) team does. You need a coach/or captain to set out the overall strategy (founder/ceo), you need a playmaker on the field who can distribute the ball (project manager), you need people who can defend (support team), people who can attack (programmers/developers), and people who can finish (the rockstars/head developer).

What role are you playing in your startup? (coach/field leader/supporting cast/rockstar)
I think its vitally important to know your position in a startup, and from there determine your roles. Each and every player on the field knows what their role is if they plan on being successful. Each player knows that they are responsible for certain tasks and areas of the field from both an offensive and defensive standpoint.

Are you studying game tape?
All of the top teams in any sport, football, baseball, basketball, soccer, etc. have scouts that watch what the others are doing. They analyze game tape. They study patterns. They look for holes. They build plans to adapt to these tendencies. In your startup, you might not have a distinct person for this, but whomever is in charge should be doing periodic surveys of their competition, jotting down the tactics they can readily observe. Don’t focus solely on your competition though, you need to be observing your own game play as well. Looking for ways to optimize your strategy, teamwork, and performance.

Are you changing your strategy?
A good soccer team is like a good startup in their attack. They pivot. Sloppy soccer players have tunnel vision, they see one straight line, and attack. They don’t see what’s going on in their periphery and don’t use their teammates well. A smart offense thinks both vertically (up and down the field) as well as horizontally (side to side). Smart offenses know to shift their attack, to change their gameplan on the fly. They are pivoting.

Are you finishing?
Anyone who watched the World Cup in South Africa saw that the teams who were capable of finishing were the ones who won. You might think this is common sense, but there were games were top-tier teams were getting lots of opportunities, but failing to capitalize and losing left and right. Many teams that were on the cusp of greatness were lacking someone to finish, and when it came down to it if you aren’t scoring you aren’t moving onto the next stage. In business it holds true that if you aren’t finishing, you aren’t making money. Many startups get caught up in these endless cycles of product development and miss their opportunities.

So what do you think your startup can learn from the World Cup?

As someone who is fascinated by a/b testing, metrics driven design, lean startups, and all of the things that go with smart startup design, I found it particularly interesting what I saw the other night while chatting with a friend of mine. We were talking about Vaultpress, the upcoming product from Automattic to manage blog backups. I said “it seems kind of overpriced to me, its $20/month” he tells me “what are you talking about, it’s only $10!”.

So in addition to their innovative “suggest it yourself” form they are price testing what seems to be 3 price points (their faq, my $20 price, and his $10 price). Chances are they are testing a handful of other price points as well.

See my version

and now his

This is definitely one of the most clever examples of price testing before a product launch.

What examples have you seen of price testing in the wild?

When news first broke of the oil spill, one of my first thoughts after a bout of swearing and cursing at BP was “how is this going to affect real estate prices along the gulf coast?” Then it hit me, real estate prices are a small fraction of what is going to be affected in Florida.

Tourism will be the first to take a hit, and the panhandle is already reporting drops of 30-40% in traffic over Memorial day weekend. I am betting Fourth of July travel will fare even worse along the coast as more oil is reportedly washing up every day. Now many of you may not realize that a large percentage of Florida’s tax dollars come from Tourism. These tax dollars are the same that were already squeezed after the real estate market bubble burst, and the same ones that fund our state universities, services, etc.

So we’re likely to start seeing a trickle down effect as early as this next upcoming quarter as universities get their budgets cut, as the state government cuts back on services, and those dollars that would have then in turn flowed to any number of industries throughout the state will be hurt.

Agricultural production will likely have a big impact as fisheries close, oil gets picked up in the clouds and spread across the state impacting livestock, farming, and more (Tallahasee, florida is already reporting “slick” roads from oily rain).

So is this time for us to rapidly (well as rapidly as possible) shift our state’s economy away from environmentally sensitive (note, everything is ultimately environmentally sensitive) sources of income and invest more heavily in Soft-Tech?

I read through HackerNews and tons of other blogs, am also incredibly fascinated by the proliferation of tech communities outside of silicon valley, but I keep seeing a common thread amongst all the naysayers. The argument goes that in the end it doesn’t matter what or where you build if there are no exit opportunities outside of the Valley.

This brings up an interesting question, are tech startups still too focused on the exit? What happened to the days of building a solid cash-flow-positive business? Are we eschewing sound business practices or giving up on good business ideas because we don’t see them having a giant payoff? People seem to be forgetting that the likelihood of hitting an IPO is much smaller these days and getting acquired for 9+figures is also super rare. For every Mint.com there are 100,000 other financial services sites that aren’t going to be capitalizing on an exit. There may be a large percentage of those services that are generating healthy profits and revenues for their founders/employees though. So what’s wrong with that?

Furthermore the idea that there are no exits outside of Silicon Valley may be 100% correct for all I know, but moving to Silicon Valley doesn’t give you a guarantee of an exit either. Look at tiny Octazen from Malaysia, they got snapped up by Facebook earlier this year. We don’t know much about their acquisition, but I am sure they were doing an impressive enough job in Malaysia that it made sense for Facebook to acquire them for what is a healthy sum in Malaysia.

It seems counterintuitive to build a business and be looking at the door from the start. How can you pour your heart and soul into building a business when you’re more focused on leaving it? I’m sure some VC somewhere is reading this and thinking I’m being naive, but in reality the idea of building a solid business should be one they appreciate. The lean startup movement is a great step in this direction, as it focuses on metrics (the ones that matter) and revenue (the ones that pay the bills), but I feel we’re going to need a shift in mindset to get back to sensible businesses.

So what’s my point here? Play the odds, and those odds are that you won’t get an exit, so build your company as if you weren’t going to get one. At the very least you’ll be able to hopefully support yourself and your employees, and do something interesting.

Oh man if the newspaper industry gets a bailout, I will throw a fit. Now don’t get me wrong, I love newspapers, and I love newspaper people, I just don’t respect 99% of the businesses they run. Why don’t I respect their businesses? Well they refuse to adapt and evolve. Its like if I told you your car was stuck on the tracks and a train was coming, and instead of moving your car, you decided to build a cement wall around it…

The latest ridiculousness is the report by the API, highlighted on techcrunch, suggesting that google is to blame and that they need to piece back together their shit to the same structure it was before. If it didn’t work before, why would you waste billions trying to force it to work now? Why not spend millions and make it what people want? The report argues that hyperlinking and other “new” technologies are killing them. Oh wow, people only want to read what they are interested in? They don’t want to pay for all of your day’s content when all they want is one article? I wonder why? (if you are calling the shots at a newspaper, let me clarify, that was sarcasm in case you didn’t understand).

Lets examine the facts a bit. Previously newspapers made money selling you all their content at once in one transaction. This transaction delivered not only all of their content for the issue, but all of the ads at the same time. If you are an advertiser, that isn’t the most effective means of advertising, especially in an age where you can target and track all your ads online. Advertisers had no idea if their ads were ever being read, so its money down the drain. Newspapers profited from this fact that their main revenue stream was an unmeasurable interruption marketing scheme.

Newspapers need to realize that they are in the content business and the ad sales business. You know what, I just realized I’m wasting your time and more importantly MY time writing about this. I think this hits my quota for the quarter on posts about how the newspaper industry is dead. Why bother yammering about a sinking ship if no one on the boat wants to save it. No sense beating a dead horse. I’m gonna go read a blog or watch cnn.

Using the Miami Herald as a case study, since I see them being either out of business or very near it in the next 12 months, I figure I will put forth my super basic ideas on how to revolutionize the newspaper industry.

Right now the only real asset the Miami Herald has is the real-estate it is sitting on, which happens to be prime bay front property that spans many many acres. This land and building were probably worth half a billion a few years ago during the peak of the bubble. Right now, maybe a hundred to 2 hundred million dollars. So first thing I’d do, move out, sell the space or lease it to a developer with enough cash to make something out of it. It is sitting across from a nearly billion dollar opera house. Move everyone to a cheaper location in another part of town. Or make people work from home.

Next up teach everyone in the building about blogging. Turn every reporter into a blogger covering his or her beat. Streamline the editorial process and have the editors pick the best blog posts to have printed each day. Then in turn make the main Miami Herald website into a portal for all these areas, editorializing some of the content to bump it up, and of course licensing content from big names like Carl Hiaasen and Dave Barry. Have bloggers cover things that wouldn’t have made it into the print edition, cough technology cough.

So you just slashed your operating costs by a bunch and shored up a ton of capital from the real-estate sales. What next? Look at your money makers: classifieds and local advertising. These are two fields no one can compete with you on, so time to invest money in revamping them. First off, build a self-service ad system akin to google adwords that has display ads built in. Start selling your own contextual ads across all of your content. Note this won’t be as profitable on a per cpm basis as it is for google as people aren’t reading your content to find stuff, but it will make a quick impact. Remember, google adwords works well for small businesses because they are easy to get started with, everyone can write a text-ad. Second overhaul your classifieds system. Think craigslist, but then blow them out of the water. Make it free online and only paid listings get ink too. Make each paid listing a link to their weblisting. Run ads alongside the classifieds, as those searchers are looking to buy stuff. Charge for high-ticket items (real estate, cars, etc.).

After you’ve built yourself the underpinnings of a better business model, incentivize content creation by revenue sharing with your writers. Next take your online real-estate assets (domains) and start making the most of them. There is no reason Miami.com shouldn’t be the most kick-ass site about south florida in existence. It should be the yelp, yellow pages, upcoming, craigslist, tripadvisor killer.

Now do I see this happening any time soon? Probably not, but a competing group could set this up, there are lots of talented people exiting newspapers now with sales experience, journalism experience, and more. Chances are if something like this does happen, it will be too little too late. There are too many stakeholders unwilling to accept their ship is sinking to try something this radical.

So after I posted a month ago (gosh I need to start publishing more of my thoughts more frequently) about my TADA bailout plan, I figured I should take a look at our country’s auto industry bailout. Again, let me preface this with the fact that I am not an economist, I just play one on the internet/tv/my dreams.

So if you read my last post, you know I prefer giving money to lots of people, not just a few, so as to spread the impact any stimulus can have as far as possible. So this leads me to my latest stimulus idea which was cobbled over dinner with my Dad the other day (mostly his idea btw). Lets incentivize people to get rid of their old cars.

There are 200 million cars on the road in the US (give or take a few million), a huge % of them are over 10 years old. So let’s take the 30% (60 Million cars) and find a way to turn them into sales for our domestic car companies and save jobs here in the US. Its so simple its almost ridiculous actually.

So instead of giving $50Billion or more to the car companies directly, lets earmark $25Billion annually for a “Clunker Trade In Credit”. So if your car is 10+ years old, gets under 20MPG highway, and is worth less than $5k, you can qualify for a $5k trade-up credit. Now there will be some key stipulations

1. New car must be predominantly manufactured in the USA
2. New car must get 30MPG Highway or better
3. You must have owned the car for 3+ Months
4. You must be a tax payer

So basically we would taking 5 Million clunkers off the road each year, recycling what we can of them, then boosting domestic car demand by 5 Million cars each year. So the most likely growth point in sales would be in smaller more fuel efficient vehicles.

Giving auto manufacturers money to keep building shitty cars is stupid. Giving them money when no one wants to buy their cars is also stupid. But giving consumers money to buy better cars and driving demand is smart. So congress, be smart.

Here is my modest proposal for revitalizing this country’s economy. Mind you I am not an economist (though I do sometimes wish I were one, more on that later), aside from reading Keynes and Smith, a few of their more modern counterparts, and taking 2 semesters of Econ in college, I have no economic training. I have however been an entrepreneur for half my life, which entitles me to a perspective on things that seems to be lacking from the Federal Reserve these days. My plan as you’ll see is very simple, and could definitely use some refinement, which I encourage you to submit through the comments.

Step 1 of TADA! – Cost $175,000,000,000 (175 Billion)
There were 5.8 Million employers in the United States in 2004 (probably a lot less right now) according to the US Census Bureau . Of these 5.8 Million firms, only 17,047 had more than 500 employees. Just over 100,000 had more than 99 employees. So that means this is a country of small businesses, and it is about time we started to embrace them (between 1998-2004 small businesses made up 51% of the GDP ). They are the ones driving this economy, not the titans. They are also the ones that are easiest to help. During the last year over 3.6million jobs were lost, half during the final 3 months of 2008 . Since January, nearly 600,000 jobs were lost. This has caused the unemployment rate to rise to 7.6%, the highest figures we’ve seen in ages!

So how do we fix this? Easy. We incentivize the creation of new jobs. My proposal is to give every company with 500 employees or less (could even be allocated to those with 100 employees or less), that’s over 5 Million firms, $30,000 for hiring a new employee. We’re talking about a $30,000 tax break at the end of the year if they have one new employee on their payroll who was a full time employee, earning a living wage, and receiving at the very least basic benefits (health). The company would have to have had an active payroll during the prior tax year, be actively conducting business, not delinquent on taxes, and submit proof that said employee actually performed some form of tangible tax (i.e. I cannot hire my housewife as my new employee to collect her benefits).

Sure there will be tons of abuse, but that’s why I am not a policymaker, and I think that the corporation would have to submit quarterly reports and matching bank statements (this could be automated using a computer system to verify it all).

This part of the TADA stimulus would in theory result in millions of new jobs created and hundreds of thousands of companies getting the extra help they need to improve their businesses and bottom lines.

It would probably cost $5 Billion or so to disperse these funds and create the oversights and staff needed to manage it all, but again, those are new jobs and dollars that are directly infusing our economy.

Step 2 of TADA! – Cost $50,000,000,000 ($50 Billion)
This part of the stimulus plan aims squarely at the credit crunch faced by many small businesses today. Lots and lots of small businesses that relied on lines of credit from their banks no longer have access to that credit for one reason or another. This makes it nearly impossible for them to run their businesses smoothly or at all if they have irregular cash flows. Lots of banks are trying to hedge their risk as its not as much in fashion anymore to lend money to everyone who can sign their names. This hurts the legitimate businesses, which need that money for payroll, inventory, operations, etc.

So how do we fix this? We allocate up to $50,000 in GRANTS for up to 1 million employers and small businesses. This money would be useful for shoring up lines of credit, as it could be used as collateral with banks who were not interested in lending to these companies anymore, as it would imply the government is vouching for these companies up to $50k.

So who can get these grants, and how can they use them? Well to prevent fraud on a massive scale, we would have to setup tiers. First tier would be new businesses which had not been incorporated before, they would have to first apply for up to $5k in seed funding, enough to get business licenses, incorporate, and get the ball rolling. (Realistically most of these funds would end up in the coffers of the states and local governments, thus helping them shore up their budgets a bit). There would have to be several tiers for distributing these grants based on number of employees, their taxroll, and geographic reasons. The top tier would be for existing businesses with under 2 Million in receipts who could receive up to 35k to be used for business expenses. If these companies hire a new person, they would get an additional $15k in grant money, bringing their total to $50k. So if you’re a small business you would be able to receive up to $80k in benefits from the government, which would effectively allow you to hire 2 people for only the costs of their benefits.

On a macro scale, this would make labor costs in the US much more competitive for companies who had been contemplating outsourcing or offshoring jobs.

So what are the possible negative implications of this plan?
Well there will be a logistical nightmare at first, but the government has tons of experience giving out cash (remember the stimulus checks?), but I think with the right budget that can be overcome easily. The other downside will be fraud and abuse of the system, but if we put enough checks in place and punish abuse severely, its likely to be less than we expect.

If you look at the potential numbers, this could go a long way to erasing the ridiculous job loss numbers we’ve seen in the last few years, and more recently the last few months. If a majority (51%) of these companies that can hire someone, do so, we’re talking about an aggregate growth of 2.9Million new jobs being created in 1 year, and $103 Billion in payroll being created instantly at a cost of $87 Billion. Ultimately a small business would have to be stupid not to take advantage of this plan, they could hire an entry level worker for free! Furthermore, the time it would take to recoup that via taxation is negligible in the grand scheme of things.

So what would you do to improve this admittedly simplistic stimulus plan?

I’ve had a long fascination with observing trends people follow. Fads and trends intrigue me. Not sure why, probably has some sociological reasoning behind it. However there is something inherently valuable about being able to spot a trend before it becomes a fad. This insight is something not too many people understand.

One of my favorite professors at “The University” was an economics professor by the name of Kenneth Elzinga. He once said “anything you read in print has already had its influence on the stock markets.”  The same can be said of trends. Anything you see written about a trend usually means its already too late.  So what does this have to do with anything?  Well the point I am trying to make is that it pays to follow changes and observe them early on. Those who see the changes early enough can react to them and extract the most amount of revenue from them before the competition gets there.

Look at any early stage web business, if you see the risk takers who gambled on changes early on, when they were smart about it, they tend to have capitalized big time off these bets.  A venture capitalist is effectively betting on these changes hoping to bet on the right team that will sow the seeds of change in their respective industries.

So how do you keep a finger on the pulse of change? Sign up for trendwatching services (though if you believe the first argument, you are already too late, but you would be ahead of the mainstream press) such as trendwatching.com, trendhunter, springwise, and i’m sure there are tons of smaller ones throughout the web.  You can also monitor the media to see when something you thought was hot, was already on the cooling cycle (when you hear a 75 year old say he plurked you, then plurk has effectively jumped the shark ).

I like to keep my eye on lots of different sites as I see crossovers in trends that lots may be missing. Jason Fried of 37signals once told me years ago that he looked at architectural trends for inspiration in web design. So if you are looking for what the next big thing is, you better start scouring everywhere, even unlikely places, because I’m sure your competitor or future competitor is doing the same thing.