Being involved in a startup, sometimes you need tools that are “just good enough”.  There is no reason to go out and spend hundreds of dollars on software licences so that you can be like the corporate guys – there is an open source alternative for almost every tool you might need out there.  Here is a great reference (open source alternatives) for searching for said tools.

So, Mom, if you are reading this there are two default settings changes that I want you to make to Thunderbird so that it performs in a manner similar to the accepted norm.

First, I want you to make the following change so that  when you reply to a thread, it places your reply at the top of the thread as opposed to the bottom:

Thunderbird Reply Above Quote

Step 1. Open Thunderbird and select “Tools”

Step 2. Select “Account Settings…”

Step 3. Under your email account select “Composition & Addressing”

Step 4. Under composition, make sure that “automatically quote the original message when replying ” is selected

Step 5. Most importantly, below that, change the drop down so that – Then, “start my reply above the quote” is selected.

Step 6. Click “Ok”.

While we are at it, we are going to fix another pet peeve that Thunderbird does by default which is forwarding messages as attachments instead of inline text – as a default behavior.  To make this change:

Step1. With Thunderbird open select “Tools”

Step 2. Select “Options…”

Step 3. Select “Composition”

Step 4. Change the drop down for Forward messages: to “Inline”.

Step 5. Click “Ok”.

Thunderbird Forward Messages Inline

I love you mom.

• I’ve installed and built out 3 WordPress sites and have become quite proficient at the inner workings of WP.
• I’ve installed and built out 2 bbPress sites and have similarly become quite proficient at the inner workings of bbPress.
• I’ve integrated 2 bbPress and WordPress sites.
• I’ve styled 3 WordPress and 2 bbPress sites utilizing CSS, a language I knew NOTHING about three months ago.
• I’ve learned to leave graphic art up to graphic artists.
• I’ve learned that Google Chrome needs to develop a tool as useful as Firebug to win over the developer world.
• I’ve learned how fast Chrome is, and how slow Firefox is becoming.
• I knew IE6 was shit – nothing new there.
• I’ve styled (from a comp) a WordPress site and a bbPress site to look like one and the same.
• I’ve fixed countless WP theme bugs and while I’m not a proficient PHP developer quite yet, I’ve learned to back track to the source of the bug.
• I’ve learned the only real frustration I have with WordPress is the “open source nature” of plugins and themes and the compatibility issues with upgrades.
• I’ve learned that the quality code/hours of coding ratio is a factor of 10+X  greater with a team of 2 when compared to a team of 10.
• I’ve learned that a team of 3, maybe 4 is probably ideal.
• I’ve been reminded of how much fun it is to build something.
• I’ve been reminded of how nice it is to not visit an airport every week.
• I’ve learned that most people aren’t motivated by the end of year bonus, rather a work environment where they are appreciated and can make a difference.
• I’ve grasped how debilitating chaos, confusion, and lack of leadership can be to a company.  Luckily it’s been from an arms length.
• I’ve realized how foolish you would be to start a corporate/personal website from scratch – the blogging and CMS tools are evolved – unless you are doing it for job security purposes.
• I’ve been reminded of how easy it is to come up with great business ideas – and how hard it is to execute.
• I’ve been reminded that execution wins.

I’ve neglected this site more than I should have over the past few months, partially due to the amount of time I have spent building out other sites.  The good news is that they are approaching public release and I can soon finally start talking about them.  Amidst all of this, my business partner and I have started Praxis, LLC and are working hard on our first application, HouseFly (which will go into private beta in the next 10 days).  More on that later, this post was really just aimed at reminding myself how much I’ve enjoyed the last three months.

the Texas Longhorns?

Only the BCS could be dumb enough to open their annual bowl selection show by displaying advanced mathematical equations on a chalk board.  We get it, your solution has nothing to do with a football field, but rather uses a bunch of crazy algorithms averaged with human pollsters to determine the best team in the land.  Ari Fleischer, what ever the BCS is paying you, keep up the good work on the WMD like propaganda – dare I say “a playoff system will never work in college football”!

Back in early November I suggested that the nightmare scenario might hit the BCS if TCU and BSU were to run the table and complete undefeated seasons.  Little did I know the perfect storm would actually be averted by Texas winning the Big XII Championship thanks to 1 second being added back to an expired clock after an officials review (after a very bone headed and lackadaisical decision to run one last play by Brown/McCoy, et al.).  None the less, my two predictions have come true.  The BCS in all their arrogance believe they have the best two teams playing in the championship game, and maybe they do, but tell that to the other three undefeated teams that don’t get a chance to prove it on the field.  Secondly, the BCS has elected to match BSU and TCU up in the Fiesta Bowl (dubbed the separate but equal bowl), robbing these teams and the fans  a chance to measure up against the BCS’s chosen ones.

This was an interesting decision by the BCS, they could have pitted TCU and BSU against the so called powerhouse conferences to show the world how undeserving they are.  But, given the performance of non-AQ conferences in the past, the BCS has learned their lesson and they don’t want to risk both TCU and BSU going undefeated on the year.  So the safe move was to ensure only one other undefeated team, assuming Cincinatti were to lose to Florida, and rest on the fact that since they beat another non-AQ team, the winner of the Texas/Alabama game will be the national champion in everyones eyes.  This is the most chicken sh!t move I’ve seen to date from the BCS.

A good article (and hopefully book to follow) was presented by Dan Wetzel of Yahoo Sports debunking the absolute crap that the BCS spews out via their propaganda machine regarding the inability of a playoff system to work.  I agree with him that someday this problem will be fixed, because greed and nonsense usually lose out.  I suspect that one of the best bowl games of the year will be BSU and TCU in the Fiesta Bowl.  I also suspect that the BCS will face this very issue again next year when BSU (who lose 1 starter to graduation) and TCU (who lose 6 starters to graduation) return to the field to once again be treated as second class citizens to the BCS conferences – but this time they will not have to climb from #18 and #20 respectively in the pre-season polls to get their just dues.

1. Fans of NCAA college football will feel cheated by the BCS’s cartel like assignment of the teams worthy of playing in “their” bowl games.
2. The BCS will once again claim victory and success in getting the two best teams into the National Championship game.

History will repeat itself, guaranteed, like it has year after year.  The odds say it will repeat this year, but if not then next.  Rarely has there been a year that the stars aligned for the BCS and they have had a real argument that their system really worked.  And usually that argument is after the fact when undefeated teams that don’t get a chance to play for the championship lose their bowl game.  The BCS should be concerned with getting it right after the games are done in November, not January.

The BCS (Bowl Championship Series) is a coalition, self-appointed coalition mind you, that states the purpose of:

“match[ing] the two top-rated teams in a national championship game and to create exciting and competitive matchups between eight other highly regarded teams in four other games.” – BCSfootball.org

If I read that mission statement without knowing anything about the BCS I would think, ahh, the BCS runs the March Madness equivalent of college football.  Hardly, you must pay closer attention to what the BCS is, note the “highly regarded teams”.  It’s all about money, the haves and have-nots, and by controlling the money in college football keeping it in the desired conferences, you can also control the lack of parity.  One of the keys to college football is recruiting, and don’t think for a second that money (facilities, equipment, staff, tutors, etc.) doesn’t play a huge role.  The problem for the BCS is there have been two flies in their ointment, the Western Athletic Conference (WAC) and the Mountain West Conference (MWC) placing undefeated teams into BCS games (not the national championship) in four of the past five years (winning three of the four games played) and with a month of football left to play they each have undefeated teams that could once again join the party.  The nightmare scenario for the BCS this year is if both TCU and Boise State end the year undefeated and both likely ranked in the top 8 in the BCS polls, we shall see how things unfold.

The BCS has self promoted propaganda that is laughable at best, one argument is that the entire season is a playoff to the National Championship (BCS Doesn’t Need Intervention).  In the past 5 years there have been 4 teams that finished the year undefeated and didn’t get the chance to play for the national championship – don’t tell me the system works.

Excuses can be made why any system doesn’t work, but I find it ironic that NCAA DII and DIII have a very successful playoff system in choosing a national champion.   And yes there is history and tradition of the bowls themselves, but make them part of the solution and let them host the playoffs.  The money isn’t going to dry up and go away if the NCAA moves to a playoff system, the problem is that the cartel would lose control of where that money goes.

It’s time to break the ties between conferences and bowl games, it’s time to end the OPEC like control of college football, it’s time to institute a college football playoff system that allows the argument to be settled on the field.  Greed will eventually kill the BCS, but probably not until after many more years of failure.  The BCS could do what’s right and adopt a system that gives every team the chance to win the National Championship and divide the money fairly.  That’s right, give the George Mason’s of the world the chance to have a dream run to the final four – because in today’s arrangement Cinderella doesn’t even get an invite to the ball.

The man that once stated “I am Enron” is back in the news.  The US Supreme Court today announced that they have decided to hear Jeffrey Skilling’s appeal based on two things, “honest services” and area of venue.  Jeffrey Skilling is currently serving a 24 year prison term for his 2006 fraud conviction.  I am eager to hear why our supreme court has picked this one case to review when there are so many issues out there that they could look at.  I for one am not overly excited to hear that my tax money is going to be spent once again on a guy that ruined tens of thousands of employee’s lives, duked investors out of billions, and already has had considerable tax money spent on him.  My hope is that the $23 million lifetime retainer that Skilling paid his lawyers, money that should have probably been returned to employees and shareholders, was not influential in getting it to this point but it has no doubt helped.

For being Enron, Skilling certainly developed one hell of a case of amnesia in August of 2001 when he seemingly ”forgot” everything and anything that might be taking place in the company he helped build – and suddenly stepped away from.  Skilling had joked that the difference between the Titanic and California is that one of them sunk with the lights on.  Jeffrey Skilling captained the ship (the self proclaimed “world’s leading company”) that went from billions in assets to zero in less than a month, but in his case he was the rat that tried to bail early.

If you have an hour and a half to kill someday, and you haven’t seen the documentary “Enron: The Smartest Guys in the Room” I would highly suggest the history lesson.  There are a couple other great documentaries out there as well, but this one does a very good job of covering the “culture of Enron”.  One of my favorite parts is when Skilling participates in an Enron internal video mocking the mark-to-market accounting technique that he demanded Enron use.  What a sad chapter in America’s history these clowns provided…

The Rise and Fall

What is Your Pain

Being an entrepreneur we sometimes get wrapped up in solving what we perceive to be problems that others have.  Sometimes this works, however many times entrepreneurs either don’t fully understand the problem, don’t have the domain knowledge to effectively solve the problem, or they have incorrectly identified  something as an issue that really was not.

I have talked before about the goal of an entrepreneur is getting someone to open their wallet and take out a hard earned dollar bill in exchange for a product or service.  Obviously, most people will not hand over a dollar bill unless you can provide something of value to them.  Paraphrasing a great B-School lecturer that I greatly respect:

You have to first identify someone’s pain, you then have to validate that others have the same pain, finally you go about fixing the pain in exchange for that proverbial dollar bill. – John Doggett

Adam McFarland writes one of the better blogs I’ve seen covering many practical entrepreneurial subjects, sharing real life issues and examples that he deals with in his company.  He recently wrote a great post about being your own target market.  I couldn’t agree more with this approach for an entrepreneur.  Ask yourself what some of your daily pains are, and focus on the business of fixing them.  In addition to what Adam covers, below are a few of my thoughts on the many benefits of this approach:

• Most importantly, you have first hand knowledge about the issue,
• If you are a “common Joe”, there is a very good chance that the other common Joe’s around the world have the same issue,
• Because you understand the problem so well, you know what a good solution looks like
• You know the common characteristics or interests of the other common Joe’s with the same pain, and how to reach them,
  • This is beneficial in that you can discuss the pain and possible solutions with others like you,
  • Once you have a solution or product you probably have a good idea as how to reach your market.
• As Adam suggests, because you know the pain you are a good candidate to test the functionality and quality of the solution,
• Finally, because you too have the pain, you know what you would be willing (or not willing) to pay for a solution to that problem.

So, once again, what is your pain?  I’ve spent the last few days thinking about a few of mine, stay tuned.

In my former life as a VP of software development for a development/consulting company, we estimated that we had to carry 25%-30% extra developers, because of IE6.  That means out of every 1o developers we had, 25%-30% of those man hours went into “dealing with” IE6.  We had a number of screens that we replicated in our applications, one screen utilized by IE6 and the other version utilized by the rest of the browsers.  Granted, the company was 100% focused on large enterprise customers as the user base, which has been slow to adopt IE7 and IE8 as their corporate browser of choice.

For those not familiar with software development, the vast majority of developers develop software using the Firefox browser.  The browser has a number of developer tools (mainly 3rd party add-ons) that substantially increase the productivity of the developer.  And by now you’ve probably deduced that not all browsers are equal. IE6 has a lot of known bugs that were just never fixed by Microsoft and it just wasn’t built to utilize many of today’s technology like off-line capability, CSS/Layouts, and a good JavaScript engine.  So, over time, developers hacked their way around IE6 (and to some degree IE7 & IE8) as it couldn’t be ignored even though it should have been put to bed.

Did you know?

IE6 was released in August 2001, here are a few major events that have taken place since then:

• 9/11 happened two weeks after the release of IE6
• Terminator 2: Judgement Day was the top grossing movie of the year
• Life House – Hanging by a Moment was the top song of 2001
• Enron scandal starts to unfold
• 13 months later Firefox 0.1 released (most importantly they are now at version 3.5.3)
• I’m 8 years older than I used to be

Introducing a smack down, corporate America style.  Google has release a beta version of Google Chrome Frame, an application that has to be installed on the computer.  But what it does, via a single meta-tag in the code, is serve up the application inside of IE6, IE7, or IE8 utilizing Google’s Chrome engine.  So in essence, Google has made Microsoft’s browsers work.

I gave it a quick test drive and it seems to work quite well, granted it wasn’t thorough testing.  The image below is an image of my Wyoming Road Trip site in native IE6 with all of the IE6 “hacks” removed.  What you can’t tell is that I’m attempting to mouse over the CSS driven menu bar.

Native IE6 Mouse Over CSS Driven Menu Bar

You may have to click on the images to see them full size to see the quality differences.  Notice the quality of the images in native IE6, the blue “shading” or whatever it is above the menu bar, and the twitter image without legs.

Now lets look at the same image also in IE6, running Google’s Chrome Frame.

IE6 Using Google Chrome Frame

Notice a few things, the first is that the IE logo on the top left corner of the screen is replaced by Chrome’s logo – very nice touch.  Also notice how much more crisp the images look, no more blue “shading” above the menu bar, the menu bar actually works when you mouse over it, and the twitter bird has legs!

I can’t even begin to express how cool this is, and the impact it COULD have.  I fear however, that it will not have the impact that one would hope for.  The only reason that IE6 has even 1% market share let alone the 20+% it does have, is once again, because many enterprises have not moved to IE7 or IE8 for various reasons.  They usually state security and training issues, I call BS on both of those excuses.  But the problem is that there are still a lot of enterprise users that don’t have access on their desktop or laptop to install software – hell if they could they would be running IE8, Chrome, or Firefox in the first place.  So while Google has successfully slapped Microsoft in the face, will the adoption of this frame really make a substantial difference, or just be another distraction for developers to worry about?  I hope the former, what do you think?

I assumed that if my product could sell it for X and I could build it for Y, and X > Y, then I had it made.  At the time I didn’t give the first thought to distribution and sales, I guess I figured that would take care of itself.  It was also prior to public availability to the internet which changes the discussion, but for now we will live in the brick and mortar world.

Let’s say that you are an entreprenuer and you have developed a “better mousetrap” that you want to sell on the shelf of hardware stores across the nation.  You are able to manufacture and produce the product, but you don’t have the ability to get it in stores across the country.  So, you take your product to a wholesaler and ask them to distribute (or carry) your product.  Sounds like a great idea, what price are you going to sell it at?

Now let me ask a couple questions:

1. Presuming the wholesaler agrees to carry the product why would she be more inclined to sell your better mouse trap over the standard trap?
2. When she does sell it to the retailer (hardware stores) what is to get the store manager to place your product on the top shelf near the front of the store as opposed to the dusty bottom shelf in the back of the store?

Incentive

The answer to these questions is INCENTIVE, and in the retail world incentive is a close relative to margin.  What’s In It For Me…

The liquor industry is probably one of the more prominent industries, or the one that drives the expressions around pricing.  You’ve heard of “Top Shelf Liquor” and “Well Liquor”.  One product sits behind the bar on the top shelf in a shiny bottle for the world to see and purchase, the other product sits underneath the bar hidden away.  Similarly in the liquor store, look at the brands that sit on the top shelf versus the bottom shelf.  Additionaly look that the store displays that you see when you walk in enticing you to purchase, are they ever for the bottom shelf product?  The price, and in most cases the distributor/retailer margin vary substantially for the two different products (just because it’s a higher price doesn’t necesserily mean its a higher margin but most likely).  I’ll avoid a thorough discussion on product placement other than to say that one of the underlying themes is to place your higher margin and higher volume items in the front of the store near the cash register – as almost everyone walks by that area.

So, back to your mousetrap.  You now understand that you want your mousetrap near the front of the store on the top shelf, and you would like your wholesaler from time to time promoting your product with store displays, right?  Hopefully you answered yes, thus you must price your product accordingly so that there is incentive (margin) for your wholesaler and retailers.  Now that isn’t always easy, as there is probably a sweet spot that the product must retail at to maximize revenue, additionaly you must consider where your competition is priced at.  In Pricing, Markups, Margins and Mass Confusion I talk about how to work backwards from retail price to get to retail markup, wholesale markup, to eventually your markup.  Go in and talk to some retailers and find out what their average margin is for your competitors product and likewise do the same with the wholesaler.  It then becomes a business decisions to see if you can give them a little larger slice of the pie (and how much of a slice does it take to make a difference) to help move your product.

I was recently talking to some local business owners about what it would take to put a product on their shelf, a product that I’ve developed and would like to take to market.  After talking to a couple businesses, working in the exact same industry, it became apparent to me that when I asked what their typical retail margins were for a product such as mine, we weren’t always speaking the same language.  I was given a few answers that were close to being in-line, and then I got a couple fliers.  So I dug deeper to determine how they calculated their “margin”, and found that “markup” and “margin” were being used interchangeably.

Why does it matter, well product pricing is a very important aspect of entrepreneurship and running a business, and probably a subject that a lot of people don’t fully understand?

That said, the concepts are actually quite simple.

• Markup is based on the cost one purchases a product for
• Margin is based on the sales price one sells the product for

The following equations are used in the examples below:

Margin (%) = (The price you sell at – The cost you buy at) / The price you sell at

The price you sell at = The cost you buy at / (100% – Margin (%))

Markup = (The price you sell at – The cost you buy at)

Markup (%) = (The price you sell at – The cost you buy at) / The cost you buy at

Markup = The cost you buy at * Markup (%)

The price you sell at = The cost you buy at + Markup

The price you sell at = (The cost you buy at * Markup (%)) + The cost you buy at

It is probably easiest to use two examples to show the concept.

Example 1.

The first is the case where you develop a new widget and want to sell it at all of the local hardware stores in the country.  Let’s assume that you are able to manufacture the item, and you will sell the widgets to a wholesaler, whom will take care of distributing your product to all the retailers across the country.

Your Pricing

Your cost to manufacture and package your widget is $10/unit.  You want this to make you rich over night, so you decide that you will sell the product to your wholesaler for $19/unit.  You have marked-up the product $9, which will cover your operating expenses and provide for a nice profit.

Your Cost = $10

Your Markup = $9

Price You Get = Wholesale Cost = Your Cost + Your Markup = $10 + $9 = $19

Markups and Margins

We can now calculate what your percentage markup and margin are:

Markup (%) = Your Markup / Your Cost = $9 / $10 = 90%

Margin (%) = Your Markup / Price You Get = $9 / $ 19 = 47.4%

We are already starting to see a markedly different set of values for terms that are sometimes used interchangeably.  If I were to ask you what your margin is and you replied 90%, that would be drastically different than the actual 47.4%.

Wholesale Pricing

Let’s continue, when you work out a deal with your distributor they tell you that they require a 25% margin to move your product.

Wholesale Cost = $19

Wholesale Margin (%) = 25%

Price Wholesale Gets = Retail Cost = Wholesale Cost / (100% – Wholesale Margin (%)) = $19 / (100% – 25%) = $25.33

From this we can now calculate the actual and percentage markup.

Wholesale Markup = Price Wholesale Gets – Wholesale Cost = $25.33 – $ 19 = $6.33

Wholesale Markup (%) = Wholesale Markup / Wholesale Cost = $6.33 / $19 = 33.3%

Retail Pricing

And finally the wholesaler is able to sell the product to the retailer.  In this industry we’ll assume that it is standard that products of this type are marked-up 50%.

Retail Cost = $25.33

Retail Markup (%) = 50%

Retail Markup = Retail Cost * Retail Markup (%) = $25.33 * 50% = $12.67

Retail Price = Retail Cost + Retail Markup = $25.33 + $12.67 = $38

So we can now determine the Retail Margin.

Retail Margin (%) = Retail Markup / Retail Price = $12.67 / $38 = 33.3%

In summary, the product that you developed for $10, after your markup, wholesale markup and retail markup is now selling at hardware stores for $38.

Example 2.

Now, lets work backwards.  You have developed your new widget and you know that your competitions product retails for $23 in hardware stores.  You know yours is slightly better, but will not be able to sell for $38.  You are pretty sure that your product will sell for $27.

Squeezing Margins

We’ll assume that (the same as in example 1):

Retail Margin (%) = 33.3%

Wholesale Margin (%) = 25%

Retail Pricing

So, if the suggested retail price of the item is $27, then:

Retail Markup = Retail Price * Retail Margin (%) = $27 * 33.3% = $9

Retail Cost = Wholesale Price = Retail Price – Retail Markup = $27 – $9 = $18

Wholesale Pricing

Now to determine the wholesale markup and cost:

Wholesale Price = $18

Wholesale Markup = Wholesale Price * Wholesale Margin (%) = $18 * 25% = $4.50

Wholesale Cost = Your Price = Wholesale Price – Wholesale markup = $18 – $4.50 = 13.50

Your Pricing

In this scenario, it costs you $10 to produce your widget and you are only able to sell it to wholesale for $13.50.

Your Margin (%) = Your Markup / Your Price = $3.50 / $13.50 = 25.9%

This is substantially less than the 47.4% margin that you received in the first example, but you can see how it allows you to make a business decision.  If the product must sell for $27, it costs you $10 to produce, then you have to decide if a 25.9% margin per widget is acceptable to pursue the opportunity, remember that the 25.9% must cover your operating expenses, marketing, with something left over in the form of profit.

It is perplexing to me how Apple could allow the most advanced phone in the world – dating back for a couple years now – to still not have a feature as common as MMS.  Much like the Google Voice Issue that AT&T has perpetuated we sit today with an iPhone that can not send media via text messages.  MMS is not exactly a new technology, first used in 2002.  I see a few enterprising individuals have built morse code applications for the iPhone – that should be right down AT&T’s sweet spot?  Here’s an entreprenuerial idea.  An iPhone Application that takes an image, renders it into ASCII art, so that it can be text messaged on the iPhone.  I presume AT&T can handle this?

                              |\
                              | |
                              | |
                              | |
                              | |
                ))))))))      | |
              ((((    \       | |
               \\\.=<#-<#     | |
                \C     7      | |
  ,              \    -)      | |
  \\__         __.) (.__      | |
   \\\\ _    /'         `\    | |
    \_ '/   /  ,       .  \   | |
      \ \  /  /| '   ' |\  \  | |
       \ \/  / |       | \  \ | |
        \  /'  |       |  `\ \| |
         `'    |       |    \ | |
               |   .   |     \| |
               >-------<      | |\
              [~~~~~~~~~]     | | )
              [    L    ]     | \/
              [    |    ]     | |
              [____|____]     | |
               | /   \ |      | |
               ()     ()      | |
               ||     ||      | |-._
               ||     ||      | |_  `.
          jgs  )(     )(      | | `-. `.
              /==\   /==\     | |    `.;
             ooooO} {Ooooo    | |      `
             ~^^^~   ~^^^~    |/ ascii art

Should I not expect more from the American Telephone & Telegraph Company – my monthly bill would make me think so?

Remedy Alas?

The end of summer is approaching quickly and as sure as fall will bring color to the leaves, will AT&T finally be ready to flip their switch, thus turning basic functionality on to the iPhone in the US?  Hopefully Apple will release in conjunction OS 3.1, leaving me only Google Voice and Total Cost of Ownership to complain about?

In the meantime, I’m going to start researching this ascii art converter idea…