As discussed in the X-Factor Blog, I attended and spoke at the Nerve Conference in Atlanta just over a week ago and had a great time! We listened to some interesting speakers and had a fun spending time with our EO friends and meeting some young aspiring entrepreneurs. The breakout went well! The X-Factor content leads to such powerful discussions and opens us up to the possibilities of creating breakthrough opportunities for our businesses.

The conference theme “Dream, Challenge, and Lead” was inspiring. They kicked it off with video of Martin Luther King, Jr. Then a gentleman came up on stage looking like a young Dr. King and orated the “I Have a Dream” speech. What a powerful experience!

We later listened to the three young international workers that had been captured and held hostage for over a year because they had been hiking near Iran. It was seriously challenging to listen to them share their stories, let alone be in their situation for that amount of time. They spent much of the time in solitary confinement, and they spoke in depth about how incredibly difficult that was for them. Their stories on this hit me hard and reinforced how social a species we really are. When we don’t have human contact, we are driven to a psychological breaking point.

The natural instincts we have to be social would explain the success of social networking and the intrigue we have around the success of Facebook. So when we were told the Winklevoss Brothers were speaking, we packed the conference room. They came up with the idea of a social website and asked Mark Zuckerburg to try and build it, and then he went off and built one himself. The twins talked about their work habits and the challenges of being Olympic caliber rowers. They did a great job comparing Olympic sport to the business world and what they are doing today.

They didn’t really break out into the issue we all wanted to hear about and what really happened with the Facebook before Q&A. However, we jumped right in and asked when they took questions. They shared that they felt it was pure fraud, and they were very disturbed by his actions. I would say they don’t have much to complain about with Facebook stock getting ready to go public, and they also got rich while training for the Olympics. They have new ideas (shhh it’s a secret) that they are exploring with all that money they have now.

I find it very beneficial to be at these conferences (being social) and to gain exposure to the experiences of proven and successful people, whether they are the speakers or the members attending. I was excited to meet a couple of young entrepreneurs with that look in their eyes that says they’re ready to go after something big and create something from nothing. Quinn and Michelle go out and make the world a better place with your budding entrepreneurial spirit!

What are you doing to let that inner entrepreneur to come out?

Something exciting has happened in the entrepreneurial world, and I want to share it with everyone. The JOBS Act, passed by both houses of Congress in March and signed into law on April 5th, will generate big changes for the growth of small and mid-sized businesses. One of the major amendments in this bill would allow crowdfunding. I see this evolving into a significant means for companies to access increased funding, and it is a great way for small investors to find more opportunities to devote their money to companies with which they are more closely involved. Given how connected we are through social media and the internet, this is ripe for the times!

So what is crowdfunding? It is the opportunity for your business to use a website and social media to allow others with an interest and small sums of money to invest. Prior to this bill, the Securities and Exchange Commission (SEC) would only let a small number of people invest in one business, but once your business passed that limit, other investors were required to have a large income or net worth, or you would have to register as a security with the SEC. Crowdfunding will eliminate all this red tape and provide the opportunity to truly democratize the investment process.

This can be compared to a New York law which passed in 1811, changing the liability requirements for corporations and making it easier to establish one with minimal requirements. This allowed investors to hold a diversified portfolio of stocks without regard to the debts of the companies in which they invested. This freed up money to move in areas it was needed, which at the time included textile mills due to our challenges with Britain (War of 1812) reducing trade.

That timely law allowed money to flow where it was needed. Today, we have a similar environment where businesses can’t get the funding they need to grow because of all the bank problems. Banks withhold lending because they fear the bad economy, have experienced many losses already, and must hold more money in reserves due to increased government regulation. This starves the entrepreneur from the funding needed to take advantage of various opportunities.

Given my history with investments as well as the historical results when we democratize people, government, business, and investments, I see the start of a new era. Investing in a portfolio of startups will become as common as mutual fund investments! Does your business need capital to grow and could crowdfunding be the advantage you have been looking for to explore new opportunities?

Theophylline

I have been working on putting together some content for a breakout session I’ll be doing at the EO Nerve Conference in Atlanta next week. This content was created for Insignia and Quantum leap EO programs to help Forums engage in more stimulating discussions around your businesses with the other business owners. I really enjoy these events, catching up, and sharing with my existing EO friends and meeting new ones.

The topic has to do with discovering your X-Factor, which is not an easy task. Your X-Factor is a decision or strategy that solves an industry bottleneck and gives you 10 to 30 times the competitive advantage. This is something that is not visible to your customers. In fact, you don’t want to share it with anyone outside your organization. Treat your X-Factor like your company’s top secret magic ingredient, which will greatly increase your profitability compared to your competitors.

What are some of the industry bottlenecks? Bottlenecks can come from delivery, largest cost, innovation, process flow, customer retention, employee retention, selection, or people reduction. There are so many options, the ones listed and some that may not be thought of right now. That’s the beauty of it! Seize the opportunity to seek out and develop your X-Factor.

Now, what are a few examples of X-Factors? Outback Steakhouse created a compensation plan to retain restaurant managers (an industry bottleneck), keeping them for 5 years or longer when the average was around 6 months. AutoNation offered all the brands of the various cars to break the bottleneck of customers not returning four out of five times. Starbucks focused on higher prices, giving them unbelievable margins.

So, what process can you follow to help discover your X-Factor? This takes some analysis and digging. Sometimes, you discover it at the industry trade shows. Looking at all the breakouts, you will see the problems they are trying to solve, and that may be just the clue you need. You can brainstorm around these questions: What is the biggest cost in my industry? What are the people problems? Where is innovation not happening? And how do I keep my customers and employees happy? Once you think you have a handle on it, then ask yourself, “Why?” five times and watch the onion open up and reveal itself.

When you latch onto your X-Factor, you will be ready to jump on and ride the rocket, so be prepared to hang on. What are you doing to discover your X-Factor?

Anti Herpes

On my entrepreneurial path, I have realized many things come down to a few key decisions. Sometimes they are very tough decisions that can have a significant impact on people’s lives. This is what being an entrepreneur and leader of a company is all about. It is about making the big decisions that will either lead you to your success or demise. The demise part comes by not acting and putting off these tough decisions that need to be made.

These decisions can come in the form of people that should or shouldn’t be with your company, products or services that you should or shouldn’t have, or in the strategic direction of your company.

We have been having a challenge with our solutions sales manager in generating results. When he started, we worked hard to help him gain understanding of the marketplace, CRM, leads source, and messaging. We invested significant time and resources before he even started to make calls or send emails. Then after the calls and e-mails started, the volume of activity didn’t produce the needed appointments to create sales.

This left me with lots of discussions with my partners on what to do. You hate to make a change when you have made a large investment of time or money into something. You listen to the excuses that are made for why the results aren‘t there. You want to go with it, but your gut tells you something is still wrong. We even offered a commission only option as the last attempt to keep a relationship because a very small part of me said he may just need more time. Finally, my partners and I faced the writing on the wall and said enough is enough.

This is never an easy thing to do, and only a sadist would enjoy it. Afterwards, you often realize that your gut was right, and you wonder why you didn’t take this action before, especially when all this evidence surfaces supporting your decision when you finally make it.

I’ve had to do this more times in my career than I would like to admit. When I have to let someone go, I feel like I’ve failed, like I didn’t do a good enough job in the hiring process, which should have prevented this. Efficience has a very stringent hiring process, but it isn’t foolproof, so these things happen.

Whenever you have a parting of the ways, it seems to be inevitably in the best interest of all involved. The person let go learns from the situation and moves on to seek an opportunity better suited for them, and the company also learns from the circumstances and refocuses to find someone better suited for their needs. Obviously, some people deny responsibility and blame the employer, but typically I have seen people move on to positions in which they were able to excel and advance their careers.

We all have strengths, and we just need to be freed up to find them sometimes. Are you holding back and avoiding making a decision that would be in the best interest of all involved?

Let’s continue our discussion from last week’s blog. How does Abundance solve the future problems that seem to loom before us like population growth, water needs, hunger, and power?

Abundance Thinking holds the understanding that we have the capability to solve our pains with the technologies we have already created. Those technologies are at such a level that the continued connectivity of each of them creates exponential opportunities for solving all the issues of the day and the problems out ahead of us.

Click Image below for TED Talk.

When I talk about technologies, I am referring to ubiquitous broadband networks, nanomaterials, digital manufacturing, synthetic biology, artificial intelligence, robotics, and infinite computing. These areas of exploration are a game changer for the world in which we live. For those skeptics out there, let’s look at a few examples.

Consider the issue of water needs, which is a major one. Dean Kamen was working to get sterilized water to dialysis patients, when he realized he could solve a problem of clean water for billions of people by creating the Slingshot. This device is the size of a dorm room refrigerator and has an intake hose and an outflow hose, so you could stick it into anything wet, and out would come pure pharmaceutical grade injectable water for dialysis. Great for drinking also! Anything wet includes salt water, arsenic-laden water, and even the latrine. Can you imagine that?

This ultimately translates into helping to solve the population explosion. How? Most people that have large families are rural farmers that need more people to work their farms. They have more children because they tend to have a higher mortality rate in rural areas without clean drinking water. Solve the water problem, and you take huge steps toward the over-population problem.

Next, let’s tackle food. Vertical farms will change the game here. This would consist of utilizing buildings that would be immune to weather changes, so crops could be grown year round. It would take ten to twenty soil-based acres to produce the same amount of crops as one acre of skyscraper or vertical farm. This also means no pesticides or herbicides to runoff and effect the environment.

Now, we will take a look at the power issue. An updated version of the stirling engine can burn almost anything, and it is being used to power things like cell phones and lights. This engine can also power the Slingshot. Guess what powered it during a six month trial in a Bangladesh village? Cow dung!

All these examples prove that we really can solve huge problems and realize how abundance will raise the living standards, save resources, and provide ecological benefit to all on the planet.

If you are wanting to explore this more or still not convinced check out the TED Talk by Peter Diamandis or read the book.

The pervasive worldview today suggests limitations and scarcity, and this restricted perspective seems to be spreading with all the negative feedback we are continually inundated with at every turn. When human civilization and technology repeatedly prove the limited and scarcity thinking wrong, why do we let it consume our consciousness?

If this scarcity mindset was accurate, we would have mostly starved to death by now after all the cries in the ‘70s that insisted the exploding population would consume all the food. Have you been to a grocery store lately? What about how we were scheduled to run out of oil a decade ago? We should all be walking now and burning our furniture to heat our homes.

This is scarcity thinking, and it gets the best of us because our minds were built to think this way in order to save us when we lived in a day of surviving off the land and running from predators. However, we really live in a world of abundance! A little more awareness and understanding of this could take a lot of stress off our shoulders.

In previous blogs, I have discussed how an abundant mindset opens people up to achieving the success and goals they desire. It also prevents us from getting so depressed by the world’s problems and issues, which Peter Diamandis and Steven Kotler explain in their new book “Abundance: The Future is Better Thank You Think.” In this book, they discuss that resources are open to the benefits of technology. Few are truly scarce; they are mainly inaccessible. They show this by the analogy of an orange tree. If I pluck all the ones I can reach from the lower branches, then I am out of usable fruit until technology kicks in, and someone builds a ladder.

Diamandis and Kotler say “humanity is now entering a period of radical transformation in which technology has the potential to significantly raise the basic standards of living for every man, woman and child on the planet. Within a generation, we will be able to provide goods and services once reserved for the wealthy few to any and all who need them.”

Are you letting the negative messages get to you, or are you looking at the world with all the abundant opportunities?

Next week we will explore how abundance will make this happen!

What is the opportunity that you find yourself in today? What people did you meet to get here? What are you going to do to create more such opportunities?

I am on my way to Ft. Lauderdale to meet with my EO Insignia Forum. My close friend Joe has a place there, so we are going to spend some time at his condo. I really enjoy going to meet up with my EO friends and spending time with them. It is always a very stimulating and worthwhile experience.

I come away with a greater connection and understanding for their struggles and successes, as each one walks their own path. It opens me up to what life has to offer and awakens me to my limited perspective when the diversity of these successful entrepreneurs come together to share their minds, experiences, and visions.

You rarely understand the true power of these interactions in those specific moments. I have witnessed not only the financial but also the immense emotional impact of these exchanges. The emotional benefits of not feeling alone when leading a company is very comforting, and I look forward to spending time with these dynamic people.

Last week, my local EO Forum participated in a Forum boost. We brought in a forum trainer who exposed ways to share and go deeper with your forum mates. Sharing very personal things, like those that you may not even tell your spouse, is very powerful and humbling to the participants.

I once read that the two things that will impact your life the most are the books you read and the people you meet. My life experiences allow me to see the power and reality of that statement in action.

Think about this example. Joe has hired a personal trainer, Jess, to be with him for a month to focus on healthy habits in nutrition, cardio, weight training, and overall healthy balance. Jess lives in New Jersey. A mutual friend introduced her to Joe, and because of this new connection with him, she made a decision to leave her home and travel with us. This will have her meeting new people, experiencing new situations, making new connections, and opening doors to new opportunities. Who knows what this one connection and one decision could mean for the many forks that will appear in her life and where they will take her?

Do you seek situations to meet, learn, and grow with other people? What are the opportunities there?

Being an entrepreneur, I have a mind set to create something better and to “maximize” the future. One of the things that I like to maximize is time. The problem with that is time is not scalable; it cannot be expanded with increased use. What do we do then? Since you and I can’t change the fact that we all have 24 hours to utilize in a day, we need to approach it differently.

From the perspective of the majority, we all go to work and put out a certain number of hours. If you want more money, then you work more hours, right? This is because you are paid for being at work, either by the amount of time worked or by the project or production. For example, when we are building a custom software project, we receive payment for the hours we work on the project or, if we quote a fixed price, for the completion of the project itself.

When you work this way, you must ramp up each project and exert the time and energy into understanding each client situation, becoming familiar with the client’s environment, solving the problems, writing the code , testing the code, getting it stable, and then you do it all again. In order to grow and expand your profits, you need to acquire more time, more resources, or both.

We have the opportunity to build one software project and sell it over and over again. You build it once, but you can sell, lease, or give the software to a couple or even a few billion people at minimal to no additional cost to the company. This would be the same as a contractor building an apartment complex with 5 units but leasing the same space to thousands of users.

We are building software tools such as Sluice, which we are able to lease, thus multiplying the revenue as more people use them. This only works if you create real value for people by solving a big pain that is so troubling that they will spend money to get rid of that pain.

To be scalable outside of software may take some creativity, but even with fixed assets it is possible. For example, think of turning a condo unit into a time share unit. You can sell the unit to one person for lower revenue or to 52 people buying a week for more revenue.

What are you doing to make your time scalable?

Do you have a great Big Hairy Audacious Goal (BHAG), core purpose, core values, painted picture, and hedgehog strategy? These key aspects of a company’s vision drive it to become everything it is striving to be. Do you have yours? In my experience, most do not. Why? Because it’s hard! After many years, we at Efficience are solid in all of them except the hedgehog, which we constantly struggle to pin down. However, that is the way it’s suppose to work; it takes time and an iterative process to get it done.

How fast you progress depends on how fast you continue the iterative process. The more time you spend bringing the key stakeholders who share your vision together, the more often you will cycle through a process of discussion that allows you to ask questions, debate the answers, make decisions, and then, with experience, decide if you’re going in the right direction.

In his book “Good to Great,” Jim Collins discusses this and refers to the stakeholders as “the Council.” He shows a circular flow, starting at the top with the questions guided by the three circles followed by dialogue and debate, then executive decisions, and finally ending with autopsies and analysis. This is for the hedgehog strategy, but it can be used for any areas of your vision or values. We all know that a circle can have many revolutions to ensure you are rock solid in your decision.

Verne Harnish coaches and exposes midsized growth companies through his very successful consulting firm. He states that page 114 and 115 in Collins’ book are the two most important pages in any business book out there. That is a pretty strong statement, but I agree with him. Your company’s success will come from the decisions your council will make, and if they have a process like Collins describes in the book, then you will get better decisions. This is especially true if you make more turns of the circle at a faster pace.

Some companies may get their council together annually, some quarterly, and others monthly. The ones pushing to speed things up meet on a weekly basis. Even when you push to get these answers, sometimes it just takes time. On average, it took the great companies about 4 years to come up with their hedgehog concept, which took them from good to great.

Do you have a process that vets out your vision? If you are looking to put together your council, then page 115 in “Good to Great” will give you the characteristics of a great council to help as you pull yours together. From my experience, getting the vision that feels right is not easy, so keep the wheel spinning and good luck!

Check out this picture from my trip to India. This is my office manager Mukesh and his family.

Umm . . . are you thinking, “Whoa, my car doesn’t seem quite so small anymore?”

Now look at this picture:

You may speculate, “Wow! This family must have had an emergency! They all had to jump on the bike and race off to the hospital or wherever on an impromptu moment!” Well, that is not the case. In fact, this is the way most of my team and their families get around all the time. They all load up on the bike and ride off to whatever activity, school, or work commitments they have.

I have contemplated this often as I travel the world and have reflected on how we perceive our lives, our work, our homes, our incomes, our appearance, and the world around us in general. It comes down to a simple thought: It’s all relative!

I will venture to guess that when you saw that picture, your judgment hat flipped on, and, as I did, you thought, “You mean they let their kids drive around on those bikes without helmets? That is crazy!” Well, yes they do, and in their world it is commonplace. Therefore, it isn’t crazy to them relative to their world.

We define the poor in America as individuals or families whose income is under some threshold determined by the government’s Department of Health & Human Services. In 2012, for a family of four, that threshold is $23,050. Is it really poverty when, even at this level, you have a phone, washing machine, TV, stove, refrigerator, and a car? I repeatedly hear that over 2.5 billion people in the world live on less than $2 per day, which would be the equivalent of approximately $730 per year. That is over one-third of the world population. Isn’t what we call “poor” in America VERY relative to what others experience and consider being poor?

During my trip I visited Kalki, a center that Efficience and my team support in Pondicherry near our office. Kalki takes care of girls that have been abandoned because they may have been abused in some way. In this culture, when a girl has been abused, she is often discarded in the streets. At Kalki, they are not only provided shelter but are also educated and given entry level jobs, due to arrangements with community businesses. Many have excelled.

Relative to the joy and passion I having in starting a company and having a team in India that works to make us all money, the feeling of helping out those that really don’t have anyone else is fulfilling beyond measure.

Capitalism is improving living standards in India. Being an entrepreneur is allowing me and my team to help change the lives of over 200 people along with the ability to share our success with Kalki, and that is a purpose beyond words.

Looking at the world and realizing that most all things good and bad are relative to something better and worse help me keep perspective as I live my life. How do you see things being relative in your world?