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?

As an entrepreneur, you are never very far from your business.  No matter where you are or what you’re doing, it’s always with you, slipping into your consciousness.  You might be in the shower, lounging on the deck, on an airplane with everyone around you snoozing or out on the lake….your mind will still be spinning on the latest issue or the next big opportunity.  When you’re passionate about what you do, you have an advantage because you’re energized and motivated to give it the extra thought that helps keep you ahead of the game.

This weekend I spent time out on the lake with a few fellow entrepreneurs and some young up and coming entrepreneurs.   It was only natural in this environment for conversations to take place around what drives a successful business and person.

We gathered on a long time friend and fellow entrepreneur’s boat, Scott Brown.  Scott is a very successful chiropractor, due primarily to the fact that he broke his back when he was young and was told by the doctors that he would never again be able to do all of the physical activities in life that he loves so much.  He went to see a chiropractor and it changed his life, so he decided to go to school and become one himself.  From there he started his own practice, and he did so with a passion.

My son Tony’s friend Steven was another entrepreneur that joined us.  He is in the business of putting breathalyzer devices in cars that are occasionally ordered by the courts.  He’s facing issues in some states due to laws that have yet to be passed, which led Scott and I to discussing with him how it takes passion to push a business through the tough times and excel to higher levels.  We asked Steven, “Are you passionate about your business?”

Steven said he was passionate about boats, and was thoroughly enjoying the 60 foot one he was on.   Steven might very well find success without finding passion in his business, but he’ll not likely reach the level that he could unless he can find a way to connect to it and build passion around it. 

Scott suggested finding something in his past or through a friend where an effect of drunk driving could invoke some emotion.  Another option could be to talk with members of MADD (mothers against drunk driving), and connect with moms who’ve lost kids to drunk driving.  Having options like these to dig in and pull out the things that can fire up a passion help people to develop a conviction that supersedes money alone.  If this doesn’t work, experience tells me to move to where the passion is.

I have met a lot of people who are in that position of having a job serves only the purpose of providing a paycheck.  You can see the lack of enthusiasm and dread in their time at work.  I went after what I loved, starting as a young boy, which was to have my own business and the freedom to create value for others, letting the money follow.

Are you passionate about what you do?  If you’re not, are you doing anything to get there?  We deserve to be happy, and we are when we live our passion.

This week when I was reading about all the trouble that Netflix is experiencing with their pricing, it got me thinking about all of their success and how they got their start.  Did you know that back in 2000, Netflix founder Reed Hastings went to Blockbuster and proposed running an online brand for them?  They laughed at him, so he went out on his own.  Now look at all that has transpired.  Blockbuster is going sneakers up, while Netflix has become the single largest source of web traffic in North America this year.

How the tables turn, wouldn’t you say?!  It’s fun to see the little guy with the big idea get brushed off by the big corporation, then go on to dominate or even wipe out that very corporation that blew him off.   Repeatedly in my career I’ve seen changes in technology push out the well established businesses that wouldn’t evolve with the new technology.  Consider for a moment the evolution of music: from the LP to the 8 Track Tape, then on to the cassette, the CD and now the mp3.  Take a look around, it’s everywhere.  When was the last time you had to use a pay phone?  How many books did you download on Amazon instead of buying from Borders?

So why is it that these well established businesses can’t (or won’t) grasp this and get on board with new age technology?  Technology is a game changer and they’re simply not playing?  Do they lack the competency, the strategy, are they blind, complacent or just plain unaware?  Do you think you’re immune to it?

Back in my investment days I thought about this often as businesses described by those same adjectives failed to progress into the new age. Surprisingly, however, it was also happening to businesses filled with smart, competent, strategic and visionary people. 

In the late 90’s Clayton Christensen published a a book called The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.  He talked about how even good business practices, like focusing on the best customers and investing in technology, can’t prevent new technology entrants from sneaking up on you.  The reason is that new technologies are rejected from your best customers, and if you’re listening to them, you reject them, too.

In addition, when you’re a big guy in the market, in order to grow your business you have to have things that are meaningful in real dollars.  If a new location can make you $20M in new revenue, it won’t make that big of a difference if you’re already doing $20B in annual revenue.

So how do we prevent it from happening to us?

To begin with, listening to your customer’s is good, but excessive customer focus distracts a company from looking at new markets and products/services of the future.  Unless becoming the next Blockbuster or Borders is the objective, paying attention to where all the attention is going is something to consider.

In my next blog I will get into more detail on the rules that Christensen discussed on how managers can know when to listen to customers and when to invest in what might be a low payoff technology now, but could potentially turn into your core business.

A few weeks back when we were visiting our office in India, we took a few days and flew on over to Bangalore to attend the EO India regional event called RIE.  The India EO events are always a great time, as they’re known for bringing in fascinating speakers and holding dinner events in extraordinary places such as castles, old forts or roof top venues.  This year, staying true to their reputation, they brought in Praful Patel, the Minister of State for Civil Aviation, Vijay Mallya, the Chairman of Kingfisher Airlines and Rasmus Ankersen, a self proclaimed high performance anthropologist.

The latter, Mr. Ankersen, was especially intriguing to me.  He has done some very unorthodox research around the world to back up his hypothesis of determining how to spot potential in someone when it may not be presently visible.  Ankersen is a native of Denmark, has written 3 bestselling books and has been in training camps in Moscow, Jamaica, Africa and Brazil (to name a few) to train with and help produce some of the most successful athletes worldwide.

Ankersen traveled to Moscow to study the training of the top tennis players in the world.  He went to Jamaica to study the best sprinters in the world, to Kenya for the best long distance athletes, and Korea for the best female golfers in the world.

Checkout this video of Ankersen discussing his theory.

His research thus far has resulted in some key factors in spotting potential:

1) Always look behind a performance.

To determine what caused a performance, you have to see what was behind the performance itself.  Was it raw talent that can be coached, or was it pure technique and heart without much raw talent?

2) Magnify what you can see.

Look at what you have and don’t let it be static. A vision of what is possible with someone is important to see where the future is with them.

3) Know Yourself.

Know your capabilities, and know the difference between what you can improve and what you can’t change.  If you are gifted at growing managers of people on a business team and have a candidate with amazing analytical skills, but low people skills, you could develop their people skills, but couldn’t contribute much to the growth of their analytical skills.

4) Give hunger greater priority than ability.

Hunger is something that you can’t teach, and is much harder to pull out of someone than the skills necessary to be the best.  If two people have the same basic skills, the one that demonstrates the hunger is the one you should be watching.

5) Stay Open Minded.

In order to do this, it requires that you not judge a candidate that may take more time to mature.  Keep people curious about their potential and don’t feed them negatives that can hold them back.

6)  Have the courage to believe in potential.

It requires courage to believe that you can take someone that is not yet there and ripen them to reach their potential, even if it will take time.  In our India office, we seek the candidates that are hungry to grow and learn, even if they possess less experience in software skills, and bring them along to blossom into their full potential.

Listening to Ankersen’s talk made me see the similarities between being a coach and being a manager.  If you have a camp that consistantly leads with medals, then it says something about the opportunity to grow the talent that is around you.  What are you doing to pull out the best in the people around you? 

Here’s another video of one of Ankersen’s interviews.