Culture and Profit

The following is an edited internal memo I sent out to the SmallBox team last week. 

"Brand is a lagging indicator of Culture" - Tony Hsieh

I talk a lot about the importance of culture, but what is culture and what connection, if any, does it have to our bottom line? 

-- For me culture is our collective sense of humor, how we talk, how we collaborate, how we make each other feel, what we find fascinating, how we talk about SmallBox with others, where we work, what gear and gadgets we use, how we dress, what we do with our free time, what music we listen to, books we read, food we eat, bars we go to. It's almost like a smell or taste. Something you know when you see it. It's what makes us different from other companies. --

On a high level I see the connection between Culture and Profit as follows:

Culture informs Brand which informs Marketing which creates Sales which generates Profit.  

Surrounding all of this is Experience. We are looking to create an experience for our clients and their customers. Experience is a very human thing. It can be augmented by technology but underneath it there is a very human element. There is no way to really fake it. This is why culture matters to our bottom line. If we don't have a team that works well together, has fun, is excited about projects and exudes confidence and creativity then we will not have the opportunities we need to be a successful and profitable company. 

We cannot create the right client experiences without the right culture. Amazing experiences lead to clients that can't wait to tell everyone they know about us. It leads to long relationships where we can bring real value to a client. If we bring real value then they will have no problem writing checks.

Everyone here is in the people business first and technology second. Technology is just a platform, like paper. It's our native platform and we have excellent tools and a good deal of experience on that platform but our focus needs to be on the humans not the computers. Computers, at least any I've met, don't write checks.

Additional Thought: to be a crass capitalist, a company with a good culture can attract and retain talent at a lower cost since improved quality of life offsets pay.

SXSW 2011 so far... Jared Spool, Super, Indy Crew and GroupMe

Today marks the end of Interactive and beginning of Music. I feel like I've aged a year in the last 5 days. But it's been well worth it. 

The sessions (panels, duels, solos, keynotes) have been solid- overall. In general the trend that I noticed last year remains- the more people involved with a session the less likely it is to be very good. So I find the solos and keynotes to hold the most goodies. Jared Spool made me laugh and then cry a little as he challenged my ideas and preconceptions around Design during his incredible "Anatomy of a Design Decision" solo. Here's a video of him from a couple years ago. One of my favorite presenters, ever.

I could go on and on about the other sessions I attended, I will try to post a more thoughtful, cohesive blog later about some of the other sessions I attended. Probably on the SmallBox blog. 

Got to attend the premiere of Super with Rainn Wilson and Ellen Page in attendance along with the director James Gunn. Great film- funny, violent and touching. Ellen and Rainn are exceptional. Catch it when it comes out. It may shock you a little but it has a good heart. 

The Indy tech/start-up/marketing crew has been a real highlight, as it was last year. From Kristian Andersen's Craw Fish Boil on Friday night to the Verge meetup last night. Indy should be proud of the showing here at SXSW. I love hanging out with the Indy crew, maybe a little too much. I probably could have broke off from the pack more and networked but we have had a lot of fun. Matt Hunckler and Kristian really served as informal group leaders throughout the week. I was happy to follow.

Speaking of groups.

The big thing this year is group texting.

GroupMe has come out of nowhere and taken over SXSW. It's drop dead simple and you can start using it without creating an account or downloading the app. In fact many of us didn't even know what it was when James Paden set it up and we were using it to communicate back on Thursday. That seems so long ago now. GroupMe has become my go to app for coordinating between my friends. I predict it will blow up in short order. It has everything a social app needs to succeed. It solves a problem (group texting), almost no barrer to entry (a cell phone- not even a smart phone is required) and a killer app with lots of additional features like conference calling within groups. I have barely looked at Facebook since I've been here. Maybe that's because GroupMe thrives in an event environment but I think it will prove to be invaluable for many other applications- personal and business. 

The events in Japan have cast something of a shadow over SXSW but not as much as you might expect, or even hope. People aren't really talking about it but they are riveted to the CNN screens set up around town showing the devastation. It has certainly weighed heavily on my mind and my heart goes out to Japan. 

Ok, that's it for now.

I'm switching to Music mode and will be sitting on a panel tomorrow "The Virtual Music Scene". Hopefully I can catch some great bands as well.

http://schedule.sxsw.com/events/event_MP7946

Beginners Guide To Buying & Collecting Vintage Vinyl

Over the years I've gained some notoriety for my love of vinyl records. Since I'm often approached for advice about buying vinyl, where to get record players, etc, I thought I should compile some of my advice into a post. This is by no-means a complete guide to buying vintage vinyl. If anyone is interested in some tips for buying new vinyl or turntables/vintage gear, let me know and I can put together a separate post on that topic.

Condition

My buddy Jason Yoder, who is probably the world's biggest collector of Indiana 45s- see www.indiana45s.com, has a good saying about vinyl condition which goes something like- "Condition is to vinyl like location is to real estate." An extremely rare record can be worth anywhere from $1 to $10,000 depending on condition. There are two main condition considerations for condition- vinyl and jacket. 

Vinyl- when inspecting vinyl look for scratches that break the surface. Most vintage vinyl will have some surface marks but it's the deeper scratches that will add real noise. Another thing to look for is dirty vinyl. Unless you have a VPI vacuum cleaner, or know someone that has one, then I recommend avoiding dirty vinyl. A dirty record can have no scratches and still have tons of noise. It's amazing how different vinyl can sound after a proper cleaning so find someone with a VPI if you don't want to make that investment (about $400).

Jacket- things to look for are ring wear- when the jacket starts to visibly wear around the vinyl inside, mold- usually from being stored in a damp basement for years, seam splits- when the seams, uh, split, and general wear and tear including anything from water damage to writing (usually the original owner's name). The good news, for the beginning collector, is that a record with clean vinyl and a damaged jacket will often sell for much less than an all around very good to near mint record. Which brings us to...

Grading- if you start buying records you will start to encounter grading. This can be especially important if you are buying online. Since you can't inspect the record in person, and condition is critical in determining what you will pay for a record, you will have to rely on trusted sellers that adhere to standardized grading. Most sellers follow the Goldmine grading standards which you can find here. In general I would recommend only buying records with a VG+ or better grade for the vinyl and then relying on the pictures and description for the jacket. Still, always assume what you are buying is probably a grade lower than what is listed. VG+ means the vinyl looks and plays well. Not like new but pretty close.

Price

This can be a real problem for the beginning buyer- how much should I pay for that Beatles record I want? To some degree the only real answer is- whatever it's worth to you. But here's an equation to consider: price= (scarcity + demand + pressing) * condition. I realize there is no way to really plug numbers into that equation but it's roughly how I look at it when I inspect a record and consider its value. Some helpful examples- expect to pay $5-25 for most vintage Neil Young, Led Zeppelin, Rolling Stones (expect original 60s pressings in great condition) records, $10-50 for Beatles vinyl that is 60s or early 70s pressings in VG+ or better condition, $1-10 for really common and/or low demand artists (not that they aren't worth having) like James Gang, Yes, Aerosmith, Genesis, Fleetwood Mac, etc. There are many exceptions even to these rough guidelines. I recommend you use PopSike.com or Discogs.com whenever possible, they are a great resource for finding out what a record is worth. Discogs is a great place to buy, sell and catalog your collection. I am in the process of uploading my collection to Discogs. You can see it here if you are curious. I'm almost into the "Ds" as of January 2016.

Also, it is important to make sure you are comparing apples to apples in terms of pressing and condition. So on to pressings...

Pressings

You will spend years collecting vinyl and still have trouble determining a true "first" press. But over time you will build a sense for pressings. If the album is originally from the 60s then the original vinyl was pretty thick, the record label looks nicely dated, might even have a street address, the jacket is thicker cardboard (unless UK/Europe then it will be really thin and glossy), the sleeve will show albums from the same time period (if the sleeve has stuff from the 70s then chances are it's a re-press from the 70s). If it is mono then it is almost always an original or early pressing. Mono wasn't regularly pressed except for AM radio after 1968 or so. One really simple rule of thumb is- vintage pressings (pre late 70s) will NEVER have a bar code on the jacket. 

Earlier pressings are generally more valuable for a few reasons. They sound better, they "feel" better (the heavy vinyl, etc) and they often have details to the artwork that later pressings dropped for reasons of expense, etc. For instance, the original pressings of Neil Young's "Harvest" and "Tonight's The Night" albums have jackets that are soft and almost furry and have a big inside lyric sheet (as do many of his original vinyl releases). Later pressings are shiny and don't always have that big lyric sheet. When you compare those two records, visually and sonically, you can really appreciate the original and that's why it costs more. The further you get from the source, generally speaking, the less authentic the experience. 

Sometimes the original can be cost prohibitive. Just do a search for Blue Note lp on eBay and you will see what I mean. An original Blue Note (jazz) album from the 1950s can go for hundreds up to thousands of dollars. A later pressing, still sounds pretty great, will go for $10-50. Same with The Beatles and many other really high demand labels and artists. The original pressings can be crazy money. I suggest you start with a later (more recent) pressing and work your way backwards (to earlier pressings) as you upgrade your collection.

Where To Buy Vinyl

There are roughly 5 ways to buy vinyl and sometimes a 6th option appears. The first is your local record store. Chances are you are going to pay a little more to buy from a local store. But the trade off is that you can inspect the vinyl, possibly return it and most importantly, build a relationship with the store. This way you might get early access to new inventory and they are almost always interesting people worth knowing. Also, having a local store that goes out it's way to buy and stock quality vinyl should be rewarded for their efforts, regularly and repeatedly. You can use the website/app Vinyl Hunt or Yelp to find local record stores. The second way is thrift stores- Goodwill, etc. There was a time in the 1990s when you could regularly find pretty good records at thrifts stores. I've found Neil Young, Beatles and even the Stone Roses at thrift stores. I know people that have found killer records at thrift stores. But most of the time it's total crap. The third is Half Price Books. They usually a very nice selection of vinyl at good prices. The forth is online, there are many good sites out there including eBay, InSound, GEMM, Discogs, Amazon and others. On eBay I like to save searches for wish list records and then I will usually let a few pass me by before I start to be more aggressive. I find this way you get stuff at the right price or a little below. In general most collectors think of eBay prices as equivalent to what "book" prices were 10+ years ago. As I mentioned above there is a great site, popsike.com, that is a searchable database of all vinyl sold on eBay over the last 10 years. Recently I've relied more on Discogs for online buying. The fifth is garage sales. You can find some amazing stuff at garage sales. Just head out on a beautiful weekend and hit 4-5 garage sales. I would be surprised if you don't come across some decent vinyl at some point. The sixth way is buying collections. This is my favorite way. Sometimes you will hear of a family member that has a collection, or a friend is moving, etc. Once people know you are collecting it's surprising how many opportunities can come your way. Pick the stuff you want and sell the rest to friends or a record store or throw it in a garage sale. Sometimes you can get some absolutely amazing records in a collection as long as you deal with a bunch of Dean Martin records as well. If you have a collection and want to sell it please let me know.

Some more tips and tricks

Listen before you buy if possible. A badly pressed record is a real drag, especially if you paid a lot of money for it. Some of the pressing issues to look for include low volume pressings (usually when the original "mother" is cut at too low of volume, this leads to a record that has noise issues more quickly than a "loud" pressing), weaves (when the spindle hole in the middle isn't really in the middle and the record "weaves" which leads to modulation- frequency of the music going up and down), warps (usually from the record not being stored properly, a warped record can be rough on a needle and when badly warped, simply unplayable) and factory errors (this covers issues with the vinyl and all kinds of things that can go wrong when it comes to pressing vinyl, normally this will show up as noise or distortion. I've seen this issue repeatedly on newer releases where the quality doesn't  always match vintage vinyl pressings). This is part of the reason I started the website www.recordgeeks.com so I could give new vinyl users feedback on pressings. But, as I mentioned above, new vinyl is a whole other story.

Thanks for reading! 

Beware The Heroic Worker!

One of the most interesting parts of my job is working with a great variety of businesses and organizations. Over time I have started to notice trends and types. One type of worker that I have run into many times is the heroic worker. The heroic worker is the one who comes to the rescue when things fall apart, working 20 hour days if needed to patch together a project. They usually wear several hats, sometimes a few at once. I used to admire these heroic workers, standing in awe of their accomplishments. No more.

So what's wrong with a hard working employee that can leap tall buildings in a single bound? Isn't that a good thing? 

Having a heroic worker around can seem like a good thing but really it's more like business heroin. The company gets hooked and keep going back to the heroic worker to bail them out without addressing the underlying issues. 

Heroic workers thrive in chaos. They feel a sense of accomplishment when they single-handedly slice through the chaos of a project. 

Effective systems are at the core of every healthy business. Systems are the enemy of chaos. So heroic workers usually resist systems. Systems remove the organizational need for regular heroism. Whether the heroic worker is conscious of it or not they are often working to undermine chaos-fighting systems that threaten their sense of worth. 

Here's some tips for spotting heroic workers:

• They claim that the system doesn't work for them, or they don't have time to learn it, or they are "old dogs" unable to learn new tricks.  All complete BS.
• They hate to delegate. When they do delegate they micro-manage the project until they get it back since "no-one can do it right but me".
• They brag of their hard work, lack of sleep and general suffering.
• They keep several key areas of the business in lockdown, unwilling to share their "secrets" with others claiming that it would be too complicated to explain what they do.
• They regularly send emails late at night reminding everyone else that they are still working.
• They don't laugh very much on account of having little rest and being continually stressed out. 
• They speak negatively about everyone they work with since no-one works as hard as them.
• They sincerely believe that the company would go out of business without them.
• They rarely take real vacations.

So what to do when you spot a heroic worker?

Chances are they have no clue that they are doing damage to the organization. I recommend you start with raising their awareness- "hey, we really appreciate all the hard work you are doing but I can tell you are exhausted so let's discuss some changes that should help out." Their need for being valued isn't a bad thing, it just needs to be redirected. But if you can't get them on board and working within your system then they need to go, no matter how indispensable they might seem. In a healthy company with an effective system everyone can be replaced. I've learned that myself, the hard way. And yes, I probably was one of these "heroic workers" at times in the past and still have to fight the urge to roll around in the addictive chaos.

note: thanks for Dave Meeks (aka Stat) for inspiring this post based on his comment referencing heroic efforts during chaotic projects on my recent "Hourly vs Fixed" post. Also thanks to my amazing wife, Jenny, who brought some of her HR experience into my thinking. 

Hourly vs Fixed

To quote hourly or fixed, that is the question...

When we started SmallBox we quoted everything fixed- "we will design and build this roughly sketched idea of yours for $5000!". This led to many long, painful baths. Not the client's fault really, we agreed to do something that wasn't well defined and we had no real process for executing. Wishful thinking abounded on all sides.

This wasn't working well so a couple years in we did a 180 and started refusing to do fixed bids. Everything was hourly with an estimate of hours per task. This helped us stabilize our cash flow and better manage expectations. But we still had some projects going over budget and clients frustrated that the original projected budget was no longer valid. 

Then it occurred to me that the real problem, with fixed or hourly, was that we didn't have mastery of our process. When you don't have mastery of your process for your leading products then how can you predict with any kind of certainty what they will cost? 

Ideally you want to charge for value not time, right? If something is worth $1000 and takes an hour to do, it's still worth $1000. Our team, over the last 5+ years, has been able to plan, design and build custom websites in record time (and even in 24 hours a couple times). There is little waste now in our system. It's not perfect but it's efficient and effective.

So we have come full circle- foolish fixed bidding as a start up, rigid hourly quotes and billing during our grow-up years and now back to fixed bids as we more narrowly define our products and master the related processes. 

Do we still bill hourly at times? Sure. For some projects and engagements we still bill hourly since the work is custom or exploratory and not part of an existing process. We feel this is fair for us and the client.