Vlad Mazek – Vladville Blog

Break out your competitive knife set, start the grinder, it’s going to get interesting. Here is what Cisco is up to:

Cisco’s diversification into the server market is fraught with risk. Cisco boasts gross profit margins of close to 65 percent, while companies selling basic servers tend toward gross margins closer to 25 percent on those products.

…. 

However, Cisco may have little choice other than to invade its rivals’ turf. Its core business is slowing, and for the company to meet Wall Street’s demands for growth, it must look to new lines of business.

Cisco needs to grow because investors demand rise in growth. Growth is not enough, it also has to come at a hefty profit margin in order to pay great CSCO dividends.

This is the ugly side of competition. When everything is on the up and up folks refer to one another and try to bring all the solution from a bunch of people. But when things turn a little south it’s all rats to themselves running for the high ground.

In this case, HP has it’s own switching gear. Ditto for routing. So, in order to get deeper into the data center and deliver the data center in a box, Cisco wants to bring in a server and the entire DC in a box. HP too. So they will butter up their plastic knifes, posture for a little while, and then bam….

Whenever companies in established partnerships go at it they not just screw themselves but their customers as well.

Today was the supposed half-day at OWN Atomic Tangerine office. Or so we planned.

Things I’ve learned:

1) Don’t do a half day by saying “Let’s start early..” because by the time noon comes along you won’t want to do anything.

2) Don’t fall back 5+ years in terms of organizing yourself. I’ve literally gone through documents and papers that have been addressed to OWN in Miami, Gainesville and way before I moved to Orlando. I even found my original incorporation paperwork from 1998!

3) Get a secretary.

One thing I’ve really mastered in my years in business is how to hire really good technical and business people.

One thing I am not confident about is my ability to shovel the amount of manure required to find me an executive assistant. Even if I did my finest to gloss it up the job description would be:

“Follow me around and figure out what I do (poorly) and tell people to “email me” about. Figure out a logical layout to my missteps so I can automate them and put you out of work gradually.”

How do you sell someone on that kind of a mouse trap without a six figure salary?

If I die, you’ll have enough knowledge to help manage this company and your promotion path is from administrative assistant straight to VP.

Now, assuming they are really stupid they will fail. Assuming they are really smart, they will kill me at the first plausibly deniable opportunity. If they are mildly intelligent, I fully intend to fake my own death and make them answer the phone as “Vlad”

I know a lot of big CxO’s read this blog so if you’d like to drop me a tip I really would appreciate it. If you’d like to fake your identity, use the Contact Vlad form on the web page 🙂

What I am particularly concerned about:

• What are the critical skills of a good administrative assistant?
• What do you look for as far as relevant job experience?
• What do you offer in terms of perks? (Geeks and Bus people have different motivating factors)
• What do you offer as the sales pitch for the role so they are motivated to learn and help move the company forward?

Put in a full day today. Barely on my two feet.

Tomorrow morning we’re starting early and likely making it a half day, spending the remainder of the day with the family. I’m planning to use the morning to organize a few more things, set the schedule for this week and fit everyone in my schedule.

This week I will be asking two questions: 1) How is business and 2) What are you doing to grow it and why?

Our numbers for January are way ahead of expectations so people are definitely spending money. Now, whether the folks that are doing so well are willing to talk about what they are doing that is so right is a different question but you know the old saying… if you want something, you have to ask.

I however feel this cycle is going to play out for at least 24 months if not longer – people are looking for more affordable and more efficient technology. Whether we’re helping them get a nicer inbox environment with ExchangeDefender or not worry about tapes thanks to our Offsite Backup, the opportunity here is to replace expensive labor with relatively inexpensive services and I’m betting my business plan on the fact that at least for the moment it’s all about reliability and affordability.

When (or rather if) we get out of the doom and gloom people will return to custom deployments and may again become concerned about security, control and deep business integration. For the time being, it’s all about getting the technology out of the way of doing business and that means big money for infrastructure management, projects for modernizing and updating aging IT relic systems and cost saving measures.

I’m very interested to hear what my partners think. The response and amount of data I can gather is going to be the beef of V… #2 (Vladville Newsletter, sign up. If you think you signed up and didn’t get it, odds are removed because you didn’t fill out the form completely; If I didn’t want your address, I wouldn’t have put a form field for it there, don’t waste my time, serious folks only.)

Spending a week remarkably focused on the agenda has really left me in the dark about the apocalypse of capitalism that is going on outside my atomic tangerine walls:

Circuit City, after 60 years in business, is going out of business shutting all 567 stores and leaving 34,000 people to find a new job. Retail figures for December, which were expected to be terrible, were twice as bad as expected. Tradeshows are either dead or dying. Even Google, where dreams are made, is killing projects.

Oh my.

So here is some good news:

I spent close to an hour recording the first OWN Talk Show. Not sure yet what it’s going to be called but I can tell you that it will be available for our partners to download on Monday. Mark Crall, Stuart Selbst and I talked about the stuff that happened last week. Windows 7 impact on Small Business, Google Apps Reseller Program, Cloud Services, Kaseya NOC, Autotask and then some. While I do some business with these guys, they are friends first. And the show is all about just that, chatting with friends about our industry (and will be featuring my other buddies, Erick Simpson, Karl Palachuk, Dave Sobel) in a Friday mashup of the threads we bounce back and forth as they come up throughout the week.

Ok, so what?

Well, the bigger and more diverse my business becomes the less I am in tune with every single thing and every single interaction that business has. I need friends that I know aren’t going to blow smoke up my butt and since I don’t have the luxury of researching and considering every single development from every possible angle it’s nice to know I can talk to folks that do.

We all talk to a lot of people. But have you ever noticed how few people are into podcasting, blogging, etc? It’s like learning is treasure hunting and whoever dies with the biggest pile wins?

Which brings me back to the apocalypse. How many of the retail segment employees saw the writing on the wall and changed their jobs. Circuit City has been under Chapter 11 bankruptcy for a while, how many of their “associates” took the benefits to earn a certification or start training/volunteering for a new gig?

How many of those retail personnel who are still employed are right now thinking about where their income will come from 12 months down the road? Or would you bet that they are out on the town, partying, thinking everything will be alright? Maybe they are just not going to participate in the down economy, eh?

Point is, change is happening.

You can ignore it, you can question it, you can resist it…… but you will be affected by it.

The only question remaining is if you’ll be the one to spot and take advantage of the opportunities that are presenting themselves when everyone else slows down, or if you succumb to fear and ignorance until you run out of clients/employment.

Boy am I beat.

Ever seen a lizard that got it’s tail chopped off and still continued to twitch. I’m that tail right now. My foot is twitching and I’m blogging but aside from my ability to breathe and move my fingers I don’t think I have anything left in me.

And I have to tell you, the one thing I really look forward to is going back to work on Sunday to tighten up the ship, scrub the floor and reply to 5 billion email messages.

This week, for the first time ever, I didn’t let other people’s agenda interfere with mine.

In the last Vladcast I spoke about schedule partitioning and prioritizing tasks. I only have a set number of hours to do support activities. I don’t have a secretary (I know I need one, I just can’t help but feel like I’m interviewing a babysitter for a grown man) and I have a huge company to run and manage and sometimes that means my day gets swallowed up by stupid tasks.

For example, last Tuesday I got to pay for 3 parking tickets. Today I sent a check for an event sponsorship / booth and added our conference room to the IVR. These are what I like to call “other peoples jobs” but for one reason or another shit had to get done and I either delegated and waited or got it done and moved on.

This week….

I was motivated to stay on point and stick to the schedule and check off every task that has been meticulously planned and allocated so that the high end big picture things got done.

Here is the only thing I’ve learned in my entire business and technical life:

Shit happens every day. Generally, not something you can control.

Your job as the leader is to enable those around you to do their job.

This year my focus is to make sure I am not falling behind in my overall obligations to the company and to our customers. If there ever was a fault in our execution method, that was it – we’d stop the train, jump off, fix the little stuff and then try to restart the train by pushing it along the rail.

Not anymore. We have big plans in 2009. Little things will go wrong. Little things went wrong when I sat on top of everything and everyone 24/7. Hoping this new stuff brings forward some change.

Feeling Good

If you hate your job, you can’t wait for the weekend so you can do what you love.

If you love your job, you can’t wait for the weekend so you can get better at it.

This week, for the first time ever, I got every checkbox on the wall checked and I made sure that we delivered the stuff that 99.999% of our partners and clients will be better off with. While this comes at a cost of Vlad ™ Realtime Response System, I believe it will make everyone a lot better off.

Most of all, I loved every minute of it!

All stupid business books are either titled _The/A/An_ _Noun_ _Principle/Rule/Law_ or something that couldn’t even get into a fortune cookie: Blue Balled Roosters Don’t Fly Planes. This is one of them. But hey, it’s free!

The Karl Principle

You should only work with the people you like.

{ Two hundred pages of fodder to follow, justifying a $29.99 price for a single idea }

We used to work with a company out of Los Angeles that we just hated. I’m sure they tried their best but I think everyone on my team thought they were out to get us. Not only has that company gone out of business through the years but their building no longer even stands in Downtown Los Angeles. We couldn’t count on them for crap and oh did we let the frustration show. It was agony from the moment we signed up and the only positive thing that came out of it was the day we ripped out equipment out and moved it a few blocks down the street. I am sure they were glad to see us go.

Most businesses, when they are hurt, rarely try to work together towards the same goal. It’s the sad truth that we’re all busy and most of us would rather just go on with our bitter day till the clock hits 5 than take some extra time to smoke the peace pipe.

It’s just business. Money for service, service for money, wham bam thank you ma’am.

Yet, there is a far different reality to this which brings many a joy to do business. Beyond money.

I’ve widely blogged about OWN’s growth pains. We really f’ed up some billing mid-2006 that took towards the end of 2008 to resolve. The person that won that “brown lasso” challenge shot out the correct invoices to clients all over the world. Earlier tonight I got an email from a guy I frequently work with:

Heya there Vlad,

I just wanted to let you know that I got your letter today and saw the amount of how much I owe…

Forgive the frankness but “FUCK!”.   A bit of a surprise there…  It shouldn’t be, it’s my bad that I am running at 150% all the time to not even consider it (after all, I’ve set up the services).

It’s a bit of a fright and a panic – but I will sort out with you what I can as soon as I can.

…..

I’ll square with OWN.

Want to guess what my response to that was? It might surprise you:

Considering that you are our cheerleader in UK you can feel free to ignore that letter.

Friends are hard to find and we can all use some in this market. Consider this a small token towards that.

-Vlad

Yep, debt wiped clean.

Why? First, because this person has brought in 10x the business to OWN than he owed us. Second, because this is my investment in someone that has invested in me.

This is where The Karl Principle really changed how I go about our partnerships. I learned that there are two kinds of businesses out there. Those that are just looking for a service and little else, and those that are fully invested in building my company because the growth of my company is going to make them better off.

In case you are wondering, this is how we decide which services to roll out. Yes, there is demand for everything and anything under the sun to make a buck. But we look at what our core partner base that we are very close to is looking to fit in their portfolio. Why is ExchangeDefender LiveArchive going to Australia before Europe and Canada even though the two combine for more revenue-wise than Australia? Because it’s the right thing to do – our partners in Australia are recruiting for us, demoing our products and constantly treating us like gold. Why is it that there is an entire continent of people where I only know one asshole? Outspoken my ass. Yet on the other side of the planet I have to keep a list of people whom only one engineer is willing to work with because every support request is laced with insults and taunting?

Seriously, who do you think gets a better rate? Someone that is always promoting us and always polite and courteous to the staff? Or the highest tier account that is a perpetual dick that everyone on the support portal dodges requests from because they know they are about to be smacked around?

Our goal in 2009 is to work closer with our partners and help improve them. We want to be better friends than we’ve been over the years. Future of this company is in software, so we’re going to do our best to be nice to the actual people that work with us.

The Karl Principle taught me to fire people that did not want to treat my staff with respect. The Karl Principle taught me to fire accounts that were unprofitable and showed no hope of ever being satisfied. In 2008 I took it a step further, if I knew I had a loser on my hands I politely told them to go to Postini or MX Logic or MessageLabs or anyone else, please!

Did that make me the Public Enemy #1 when I told a bunch of people to suck it? You bet. But man, I wouldn’t wish them on my worst enemy. We’ve all had clients like that, where their new provider asked for a reference and you nearly bit your tongue in half wondering just how hard you’d be sued if you were completely honest?

The Karl Principle: Make your business partners people you’d enjoy going out to lunch with.

There are times when I am just astounded to hear the bullshit that comes out of my peers mouth. Now this is a serious topic so allow some poetic justice, I’m going to make it funny:

For some, I have to accept it because their business model is the B.S. delivery vehicle, it’s their business to move it.

For others, it’s all I can do not to punch myself in the face to check if I still have any brains left are the wave of dumbass just washed up in front of me.

“I will not participate in a down economy!”

Oh yeah? Well, why stop there? How about: “I will not pay any income or corporate taxes this year!” leading to jail time or “I will no longer stop at red lights!” leading to death.

Here is the truth: You do not get to decide whether or not you are exposed to macroeconomic factors. End of discussion.

But let’s for a second all be ignorant and consider the possible outcomes. How can you possibly respond to economic conditions your clients are experiencing and still increase your revenues:

1) Reduce costs. Good luck with that one, everything has gone up in cost. So your options in reducing costs involve providing a worse level of service.

Pro: Temporary increase in profit margin.

Con: Long term loss of clients, reputation and leads.

2) Increase revenues. You can’t increase your rates because your clients are already touchy about ongoing service fees and increasing them will make them more welcoming of an alternative. You can’t sell more because people are in a budget slashing mode, not adding to expenses. I suppose you can start a meth lab or clean out your data center and replace it with a weed growing lab. You’re already at a $600 power bill, so the power surge from your garden will not throw red flags at the telco company. But let’s suppose you do a fire sale. Managed workplace. We’ll clean your SPAM as well as your floors!

Pro: Temporary increase in revenues at cost of a profit margin.

Con: Loss of focus and possible loss of insurance.

3) Change your business model. If you don’t have the funds to advertise your current business model and can’t see the light at the end of the tunnel, change your business model.

Pro: Dreams can be so sweet.

Con: You lose all your revenues in an uncertain marketplace. Risky, suicidal…

What else can I do to fail miserably:

1. Show your clients you are really desperate: Beg or incentivise them to recruit people for you.
2. Make your antisocial techs into sales people. Antagonize both your clients and your employees with one swift decision.
3. Donald Trump’s School Of Going Broke BIG TIME. Leverage your current credit to buy things in bulk and assume a huge debt, hoping that you can eventually move it.
4. Go dark. Start installing spyware on your existing client bases computer and leverage your AdWords account to fill in on the loss of managed services revenues.
5. Blackmail as a service. You know all that porn you’ve been deleting from your clients computers for years? Start archiving it. When the client threatens to cancel, offer them a free training class on SharePoint. “This is your picture gallery. It can have all the things your wife doesn’t know you’re into. Now, let’s review that agreement, shall we?”

So what do I do?

If what you are doing is not successful and didn’t work when the economy was good, change your business plan. If your customers are canceling services, change your business plan.

If what you have works, push it harder and further.

But for the love of god, don’t lie to yourself. Running a business is not simply a factor of your effort and intensity, it requires consideration of others too.