Fonality blogs

Work harder, play harderest

chris — Fri, 06 Nov 2009 22:05:09 +0000

Fonality, like so many of your firms out there, is a deadly serious company. As much as it would be a gas to make video games or holiday gag jokes like our long-time Fonality customer, JibJab, that's *just* not what we do here. We make mission critical business phone systems. Our product, akin to my last company which provided commercial web hosting, is as core to a business as is their electricity or internet service. If your phone system is not working right, your business is not working right.

And, we get that. We have worked every day for the past six years to make our product more feature-rich, our support more helpful, our fulfillment faster, etc. All good stuff and all stuff we will continue to do for years to come. But, during that time, I have tried to always remind my company: "Whilst we work harder, we may play harderest." By this I mean: mission critical businesses can become employee churn heaven if you forget that it is OK to both work hard AND have fun at the same time.

So many companies stifle all the fun out of their firm — I guess they have to in order to not offend anybody. But, if done right, you can still have fun and not be too offensive. Mulling through a few of the random fun things we have done over the years:

As a benign starter, we all dressed up pretty big for Halloween this year. I was impressed by how few "store bought" outfits there were.

Some of the Fonality Crew

Click for larger picture

SVP Operations, Dir of Engineering,
L1 Support, and...err..me.
(I'll let you guess who is who....)

Click for larger picture

Earlier this year, we did the Fonality Fight Club. See what the Wall Street Journal had to say about that.

Yep, we all got in the ring and punched each other in the face for free vacation time. Sounds crazy...but we all think it was one of the coolest things ever done in corporate culture history. See who won and who lost.

Then, there is "The Love Machine" — a little piece of Perl code written by yours truly (I stole the concept from my friend and long-time Fonality customer, Philipe Rosdale, founder of Linden Lab / Second Life, and then adapted it for Fonality). The Love Machine is an Intranet gadget that lets any employee of Fonality express gratitude publicly to any other employee. Not only does this make people feel good for going that extra mile, but you also get some money each quarter for the number of loves you have earned. Contrary to popular opinion, money *can* buy you love! Here is a snapshot of today's Fonality Love Machine:

Let's see. We also have "Little Red Wagon Wednesdays". Every Wednesday a different exec pushes around a wagon full of fruits and candies — employees are limited to grabbing any 3 items. Seems expensive...but its actually not. And it really has become something that people look forward too. Sometimes it's the little things...

Oh, oh I know one! A while back, our VP of Marketing "Rickrolled" me. Rickroll is a crazy internet meme from a couple years back (Rickroll for charity now!) Whelp, he shouldn't mess with the CTO — I paid him back by force Rickrolling him in two ways:

He is perma-coded on our management page as the teen idol himself. This makes it awkward when he has to hire someone in Marketing and they show up for the interview expecting a teenager from the 80s.
We hard-coded him into our HUD Photo Caller-ID feature as Rick. This means that every time this VP calls anyone in the company, much to his chagrin, he appears like this on our screens:

Running out of time and there are so many really funny things to choose from (like the time Joel, one of our engineers, drank blue food coloring on a bet about what it *would* or *would not* do to certain organs. It was sorta safe and there are pictures, and they are really really funny. Probably best not to post them here tho.)

If I had more time I would explain Fonality's hilarious substitute for inter-office bets (no money betting around here, just humiliation betting).

What sort of fun things do you do around your office? Leave me a comment, and if you have pics/video send those here.

Fight Club :: AfterMath

chris — Wed, 07 Oct 2009 21:10:13 +0000

I had intended to get this blog back on the business bandwagon. There are a myriad of external topics to choose from: the economy, the future of communications, our health care situation, and more. Then, there are a bevy of internal business topics I could write about: our incredible growth rate (recession?), the fact that we are finally a profitable business (yes, putting money in the bank) -- no small feat for a venture backed startup that still has 50% of its lifetime capital raised in the bank!

But, noooooo. People don't wanna hear about these things, do they? Despite my best efforts to move on, I continue to receive a plethora of pesky inquiries about our Fight Club results. It seems like rubber necking has finally made its way into Telecom! What exactly is Fight Club? What does the Wall Street Journal think of it?

So, I have tried to ignore these queries. But now even the blogosphere is demanding a follow-up.

Well, here goes: in a nutshell, it was a smashing success. Most people called me crazy for thinking of this idea. Even our investors had some nerves to quell on the issue -- meaning there was at least one uncomfortable board meeting in the run-up to the event. I get it. Who the heck would envision a fight club as a corporate team building event? Whelp....me. See, I am a fan of the fight game. And, over the years I have consistently noticed that even though it seems like a violent aggressive hate-filled sport, 8 times out of 10 the fighters, no matter how much crap they spew before the fight, are hugging at the end of it. In an odd way, the primordial act of "leaving it all in the ring" is an intimate experience.

I have this theory that we human beings are really 95% the same. We all have bodies that function the same. We all have similar feelings about wanting to be accepted and loved. We all experience family pain and joy and deal with the seven deadly sins during the course of our life. But, the funny thing is: we *choose* to define ourselves by the 5% that is different (nationality, skin color, financial status, sports team, appearance, etc). This is sort of tragic -- because by relating via our DIFFERENCES we miss the much greater opportunity to relate via our SIMILARITIES. The only car you ever wave to on the road is the one that is the same make/model as yours. Why?

But, once you step in the ring, it just doesn't matter what car you drive, or who the boss is, or what you look like. Everyone looks the same when they are getting punched in the face. And everyone feels the same when they are *done* getting punched in the face -- relief, joy, and a bit of unexpected love for the person that was punching them. Weird, I know. But, that's just how it works.

So, folks, it was a brilliant experience. I can safely say that for each of the 11 fighters that walked into that ring, it is a day we will never forget. And, a number of fighters have told me it was one of the best days of their lives. Even Carlo, one of our system administrators, who got stitches from a well timed knee from Andre, in engineering, said to me as he returned from getting stitched up: "Chris, my only regret is should this scar not last the rest of my life."

So, who won? Who lost? Did anyone go to the hospital? All good questions. They say a picture is worth a thousand words. So a video must be worth a million? Well, we have both. As promised to each fighter in our fighter contract:

"The winner of each weight division will get two weeks paid vacation, and a 5 minute video produced by the Fonality Art Department depicting their illustrious rise through the MMA ranks and their crushing victories over their paltry opponents".

"The losers will have to grow moustaches of a duration commensurate to how long they lasted in the tournament - between 2 and 8 weeks. Moustaches must be cut at the lip and not resemble any acceptable/contemporary dating styles (beard, goatee, etc). Straight 70's porn stache only".

Loser Mustache Photos:

Winner Videos:

Middleweight Champ:

Lightweight Champ:

A fun video collage with really high production value:

OK, that was exhausting, fun, team-building, terrifying, and all that. Time to get back to work. :)

--
Chris Lyman
Lightweight Champion of the Corporate World, lol!

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And you think the economy is tough...

chris — Fri, 24 Apr 2009 23:55:12 +0000

So, it's been a pretty crappy economy. And, at Fonality we have felt some of this pain. Our primary product is a phone system and companies tend to buy less of these when they are firing their staff. 2009 hasn't been devastating but this certainly doesn't look like the first half of 2008. Has it been all bad news? No. We have used this time to: make ourselves more efficient, invest heavily in R&D, and analyze areas of the business that don't get noticed when you are doubling in size every single year.

But, sometimes when things are down, you just really need to hit someone. So, why not hit your boss? As such, the Fonality employees have decided to have some fun...at each other's expense. They have launched their own official FIGHT CLUB. Our first rule of FIGHT CLUB is: tell everyone about FIGHT CLUB!

So, what does this all mean? Well, it means that in six weeks a bunch of tech geeks, with no previous fighting experience, will be getting into a ring and attempting to knock out or submit each other in a UFC-style MMA tournament. Six weeks isn't a lot of time to get in shape, start eating right, learn how to fight, and learn how to not get hurt. But, six weeks it is.

While risque, the whole endeavor has been hilarious and has notably improved the office morale. I walked out of my office the other day and saw 10 support folks all hanging around an ab roller, seeing who could do more ab rolls. When is the last time you saw a bunch of geeks competing on stomach crunches? :)

NEW Official FFC site	http://www.fonality.com/ffc
Watch the Video!	http://www.youtube.com/watch?v=MepAFPdUzes
View the Flyer	http://app.fonality.com/ffc/aff2.jpg
FFC Smack Talk	http://app.fonality.com/ffc
How it Works	http://app.fonality.com/ffc/how.htm
Twitter!	http://twitter.com/fon_FIGHT_CLUB

So far 17 fighters, including myself, have signed up. It's gonna be wild! Just yesterday a support engineer signed up...in MY weight class. He has 3 years of extensive Karate and Boxing experience. Compare that to my 3 days and..well...I'm not only reaching for the stars but I will likely end up seeing a few in June.

Sincerely,

Chris 'The CEOMFG STFU' Lyman
Class: Lightweight
Fighting Style: Peek 'a BOOM

There is no such thing as good hiring, only good firing

chris — Sat, 11 Apr 2009 02:42:09 +0000

I realize that the title of this article:

Contradicts a legacy of hiring books with titles such as Hiring the Best and Stop Hiring Failures. Amazon has 17 pages of such while Barnes & Noble clocks in with 224 titles.
Potentially puts a gaggle of managerial consultants straight out of work.
Makes me look like the grim reaper of CEOs.

...but bear with. What I am about to say has been learned, on the job, in a 15 year career of hiring...and firing...the better part of 1,000 people. Ugh, that made me feel old.

What I have learned is, despite all the cute tricks of the interviewing process (which I will blog about later and which only slightly improve your odds) your chances of hiring a great employee in a couple of interviews are about the same as your chances of getting a great spouse from a couple of dates. In other words, unless you're into the dowry thing, forget about it. Now, I realize that larger companies have longer interview cycles and a host of vetting mechanisms to winnow wheat from chaff. But in startups, where you hire fast and loose, you just can't get good results enough of the time.

Yes, long ago I accepted that hiring a new employee possessed a high variable of risk. I've had interview bombs turn out to be rock-stars, and interview stars never show up mentally for work.. My years of experience have taught me, as it relates to the hiring process, that you can’t presuppose anything. First judgments can be way off, and, while you shouldn't hire the guy that walks in one hour late, and didn’t notice a Cheerio stuck on his lip, anything else is fair game. It takes time to glean an employee's pithy attributes: work ethic, intelligence, attention to detail, enthusiasm, even personal hygiene. And lord do I have some stories on the hygiene front.

Thus, what I have come to is that the hiring process is not nearly as important as the firing process. By this I mean: your skill as a manager is not based on your ability to get good people into your group, but on getting bad people out. The sooner you cull weaker players, the sooner you can replace them with stronger players (for relatively the same salary) and improve the human composite of your firm.

Seems obvious, don't it?

Boy oh boy, it ain't. Managers just *hate* to fire people. They will endure a bad employee for months, even years, to avoid the pain of firing them and the headache of re-hiring the position. It amazes me to watch the capacity of the human spirit for suffering the lack of spirit in the ones that work for them.

Why managers hang on to sub-par players:

They would rather have bad than none.
Any intelligent boss will always let you replace bad with good.
You have never fired and are scared of the process.
Yeah, it sucks. But, get over it.
They are too nice.
Consider a career change. This is business.
They have an overdeveloped belief in the value of institutional knowledge.
Nature not nurture people! The very definition of an "A" player is someone who comes up to speed quickly. In fact, if you are too scared of losing institutional knowledge that might be a clue that you don't know what your people do and therefore are not that useful yourself.
They aren't good enough to know who on their team is bad.
Fire them.
Stockholm syndrome.
Break free. You can do it!
Firing people ruins the culture.
No, firing bad people improves the culture because it sets standards, and proves consequences.
One bad apple does ruin the bunch.

What managers don't realize about the firing process:

That employee was probably unhappy anyway.
Most fired employees are actually miserable and trundling along just waiting for that push.
A-players make you look better.
And, they allow you to take a worry free vacation.
Your team thinks you suck if you don't have the chutzpah to fire.
You are not the only one that knows they suck. Earn their respect by making the tough call.
You are hurting your own career by not becoming an effective firing manager
This is a lose/lose for you:
Best case: your boss doesn't notice the weak link, but does notice that your overall team isn't very effective. Worst case: they notice that you don't have the nerve to make the call and skip you at promotion time.

I leave you with this thought: in 15 years of firing, while I have *long* pre-labored over the pain of having to fire, I have *never not even once* come to work the day after a firing and regretted it. 99% of the time my feeling is: what the frick too me so long.

So, what's taking you so long?

A.I.Gee Whiz!

chris — Thu, 26 Mar 2009 04:57:34 +0000

Things really suck out here. Them on Wall Street suckered us good. We on main street let ourselves be suckered. And, now our hard-earned tax dollars have to pay for the privilege of being sucker punched. Yah, it sucks.

But, I really think the populous is getting a bit too nutty. This latest AIG witch hunt is just nonsense. And, if people would stop waving the smoldering torch in each other's eyes for a moment, the rest of the lynch mob might be able to realize that what they are doing is counter-productive.

Let's do a quick analysis of our go to market plan:

We, the taxpayer, loaned AIG $170B. Like it or not, that's what we did.
You and I now own 80% of AIG. We are the new majority shareholders. Woohoo!
Now, we (as taxpayers) have begun a witchunt against our (as AIG owners) executives in effort to reclaim $168M of the $170B loaned. FYI, this is 1/10th of 1%! So, for every $100 loaned, we are trying to recoup less than 1 dime!
As part of our hunt, the "we" (as taxpayers) are trying to get the "we" (as AIG owners) to break our pre-existing employment contracts with our executives. This is illegal and creates a liability for us. Oh, we are also scaring the devil out of our remaining execs and putting the other...oh...$169.832B of our investment at risk.
Now, our duly elected politicians are using the taxcode to punish these execs -- besides being arguably unconstitutional, this puts all of our (as taxpayers now) liberties at risk. Oh, some politicians are even calling for them to kill themselves!

OK, now put down your war drum for just a second longer and let me elaborate. First off, yes, I know that 52% of AIG execs aren't even there anymore. And, I further realize that any remaining ones (that were in any way associated with the credit default mess) do *not* deserve a dime. But, damnit, a contract is a contract. If you sign a contract with me that says that you will pay me $100 for every $5 of yours that I lose. Then, doggone it, when I roll up a big wad of $50 and smoke it with my feet on your desk while looking you dead in the eye, I expect my $1,000 bonus.

Ask me if I think we should have bailed out AIG? Hell no. As I already wrote, I am pissed that big companies can't fail, but little honorable companies can.

Ask me if I am pro Wall Street? Far from it. I believe in making money by making stuff, not by trading bits of electronic data. Plus, the lack of oversight has always terrified me.

But, I do believe that as a society, we should honor our contracts. Without rule of law, we have anarchy. By making law on the fly, we trend toward totalitarianism.

I say, let's stop the cries for the public stockade for these execs. We already bought them a shovel. Let them dig their way out of their mess with it. That seems a far better endgame than us using that shovel to dig them a row of shallow graves.

Kisses,

Chris Lyman
Fonality CEO & Janitor
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P.S. For those of you that got this far without breaking out the anthrax, you may find this letter today from an AIG exec in the New York Times interesting.

Giving it back

chris — Wed, 25 Feb 2009 00:49:45 +0000

(For most of my readers who come here for general business topics, skip this blog. For the few that come here for Open Source or telephony information, you may find this open letter (verbatim below) I wrote to my employees last week interesting)

Yesterday, as I was making my way to the microwave, Nathan, in our bad ass support group, stopped me and asked me "why Fonality does not give back to the Asterisk community?"

This is old-school FUD created by Digium and its employees (and propagated to the media), but I was surprised to hear it coming from our own. "Give back to the community" always makes me chuckle at the power of propaganda.

Thus, I thought should quickly explain Fonality's stance on Open Source and Asterisk, since some of you are new. You are welcome to share what I write with anyone including our customers, our competitors, and the media. There is nothing secretive about our position now, in the past, nor hopefully in the future. In fact, I am proud of our position on this subject.

SHORT ANSWER

Digium forces any contributor to Asterisk to sign their commercial license, which gives them the perpetual right to sell your contribution back, in commercial binary form to anybody. This is not in the spirit of Open Source, so we won't sign. Thus, our changes do not get included in Asterisk. Many other contributors balk at this license which is why Asterisk has so many forks and offshoots (such as trixbox CE)
Every fonality customer gets full access to our Asterisk enhancements. We either put them in /usr/src directory (PBXtra) or available at: http://yum.trixbox.com/centos/4/fonality/SRPMS/ (trixbox Pro). We have always done this and will continue to.
We continue to maintain a fully free and 100% Open project in trixbox CE, which we give to the community under a 100% GPL. No commercial license funny games with trixbox CE.

LONGER ANSWER

As we all know, Digium is the original author of Asterisk. They also maintain the official source code tree, effectively acting as sole authority over *what* goes into the next version of Asterisk and *what does not*. Fonality and the general trixbox or Asterisk communities have no say in this matter.

This is not unusual. There are a number of OS projects that have a commercial company acting as the sluicegate for community contributions. But, here is where Digium gets sneaky. Before accepting any enhancement code from the community, they require said contributor to sign what they call a "Submission Agreement". This submission, while seemingly benign, is actually a wolf in sheep's clothing.

Among the most troublesome passages in this Agreement are this:

“You hereby grant Digium a perpetual, worldwide, royalty-free, irrevocable, non-exclusive, and transferable license to use, reproduce, prepare derivative works of, publicly display, publicly perform, distribute the Submissions, and to sublicense such rights to others.”

...and then this, which compounds the problem:

“The rights granted may be exercised in any form or format, and Digium may distribute and sublicense to others on any licensing terms, including without limitation: ...(b) binary, proprietary, or commercial licenses.”

(you can find the entire Submission Agreement here: http://bugs.digium.com/view_license_agreement.php)

To paraphrase, what this Submission Agreement states is: In order to have your enhancements accepted into Asterisk, you have to first agree to give Digium the right to perpetually sell your enhancements to any other company under a commercial, binary, or proprietary license.

So, what does that mean? This effectively means that Digium can sell your enhancements to another commercial company under a non-GPL license and that company is not bound to give enhancements back to you or the community. This means you do the work and they profit from it

Does that sound Open Source to you? I didn't think so.

So, I will *not* allow Fonality to sign this masqueraded commercial license. Instead, when we do improve Asterisk, we choose to give it back to the community *but* not Digium. This means that our code can be used by anyone, but can never be built into a commercial license and sold. PBXtra customers can find our source code in /usr/src and trixbox Pro customers (where we don't have enough room) are provided this link in their welcome email: http://yum.trixbox.com/centos/4/fonality/SRPMS/

On top of all of this, we maintain the trixbox CE project. This project is 100% GPL and therefore 100% Open Source. Contrast that to Digium, who maintains Asterisk under a dual-license (one GPL and one 100% commercial), you will see that Fonality's treatment of Asterisk is more in the spirit of true open source than even Digium! lol!

But, Chris, Digium wrote all of Asterisk and Fonality has benefited from it, so shouldn't we give back?
Digium did not write Asterisk for the betterment of mankind. They wrote it to fund their own for-profit hardware business. The more people that use Asterisk the more hardware they sell. Asterisk was, quite simply, a means-to-an-end for them. Digium is funded by Matrix Partners and Matrix is not there for altruistic purposes.

To summate, I don't get religious about this stuff. Open Source is a mechanism to provide standards-based software at a lower cost. It is not a holy war and there are very few prophets on the battlefield. Most of the really successful Open Source companies that you know and love (Apache being an exception) have a for-profit business behind them and a board room full of venture capitalists behind them demanding an ROI. Digium is no exception and neither is Fonality. The only difference is we sell software out of the front of the truck and they do it out of the back while pretending that companies like Fonality have done something wrong.

Which type of company would you rather work at?

Budgeting is BS

chris — Sat, 10 Jan 2009 00:26:45 +0000

It's that time of the year again - budgeting. <apply thumb to windpipe of nearest exec and make them commit to ridic numbers>

*groan* *whimper* *gag*

Budgeting in a venture-backed company is a little different than an owner-funded one. In an owner-funded company, you make some expenditure decisions based on two things: areas of the business that need investment (scale, R&D, etc.) and sales/marketing risk-expenditures in areas you think have growth potential. It's a pretty simple process. No BS. And these are generally "game day" decisions; you don't spend a lot of time looking 2, 4 or 8 quarters out. Not with payroll to make this week.

But in a venture backed company it's totally different. Most of your budgeting is based on massive growth predictions. Your investors expect you to deliver outsized performance to deliver outsized returns to their investors. And, of course, most VCs invest in disruptive companies with the potential to do just that.

So at budget time, you have to commit to these numbers with an air of confidence even though you have no idea if or how you're going to get there. And, of course, you have to build a very formal budget based on those ASSumptions. It all looks very neat on paper -- a big bottom's up model fed by appropriate input drivers and reasonable cost modeling, built up and then back down to each department.

Only its all BS.

Why exactly is it bovine excrement? Well, for starters, there is no way anybody knows if they are really going to grow annually by 25%, 50%, much less 200% in a year. Sure, one can predict modest growth with modest accuracy. But, reliably predicting venture-desired astronomogrowth requires a heady mix of hyperbole, cognitive dissonance, and a pressure-based stool sample. Goes great on a bed of basmati with a Santa Barbara red, btw.

That's all the "how big we will grow to part". But this takes for granted the "how the hell we are going to do it" part. Its true that, for a short time and for a select, fortunate group of companies, they can J-curve a single product in a single market (Google is still doing this, $10b later...), but most companies and markets are more complicated than that. And then you know, those pesky competitors keep "helping" you throw last year's plan into the compost heap. So the reality is usually way more complicated than the plan.

Let's cut to the chase -- nobody knows how they are going to pull off such huge growth in a single year. Sure, you know you are going to launch some new products, and of course you can wrap those in some expectations. And, yes, you understand that you are going to re-invest in other areas of the business, and, well, of course you can make some geustimates about what that might yield. But, the problem lies in the accuracy. See, once you keep stacking all of these "ifs" on top of each other, each replete with their own armada of assumptions, you end up with what I call the "stackable ifs" problem. Translation: you have no forking clue.

Add to that today's real-time business cycle and wildly compressed development times and you can really be in the world of make believe. Its not divulging too much to tell you that, in each of the past three years, our biggest growth drivers weren't even on the roadmap at budgeting time. Combine that with that fact that Fonality's worst annual growth year in its five year history has been 45% and you can see that huge growth and the accompanying budgetary predictions of such are rarely lifting hem in the same pew.

But that doesn't stop the ball from rolling. And, lord, the time all of this takes. Meeting after meeting wading through numbers and predictions and side conversations and re-meetings and on and on and on. It all feels very real but peeeeeple come on, its really all very very grey. And, this precipitously dive-bombing economy doesn't help. Heck if Intel can't predict their revenue how the heck can I predict ours?

Now, before you think I've gone rogue, I'll have you know: I *have* been being a very good boy and I *am* having all my perfunctory BS budgeting meetings. And, yes, I have been stroking my proverbial beard and sorting through the stackable ifs. And, the more I do it, the less confident I am in the *how* part.

However, through the exercise, I have stumbled across a number of really interesting things that DO benefit my business. I have been forced to deep dive on issues like close rate, competitive analysis, internal sales automation and lead sourcing -- all of these areas have been illuminated during these extensive personal caudal appendage perusals.

Then it struck me - maybe THAT is the point! Maybe this is not so much about actually predicting the future. This is an exercise of the present. One cannot elegantly step into the future unless their back foot rests on a solid present. This digging certainly has gotten me thinking about ways to do some things better in the here and now.

Whelp, I better get back to it. I have to present this BS, err budget, to my board tomorrow. I sure hope they don't know how to use the Google or they may stumble on this blog and my expense line may, err, suddenly be reduced by a notably babbling head count. o.O

Let it Burn

chris — Wed, 01 Oct 2008 17:07:16 +0000

I say let it burn, people. While at first glance this may sound like the cavalier ramblings of a free market zealot. Actually, it's not.

Instead, I think there is a sickness in America and this mess from Wall Street to Main Street (I am so tired of that term) is just an indicator of how ill we, as a nation, truly are.

Folks, we are a debtor society. We exist in indentured servitude. We are serfs to our credit. We serve Lord Bank and Queen APR and we use our credit card to buy stock hoping to pay off our credit card.

IT IS MADNESS. And, it has gone on for far too long.

I recently found out that my mother, my incredibly smart, well read, world-traveled, pragmatic mother, lives with $30,000 credit card debt. Ug. She just corrected me on the phone. It’s up to $50K now.

"Why?????" I asked with astonishment (I have never had a dollar of credit card debt in my life, even when sleeping on a floor because I couldn’t afford a mattress 10 years ago).

"Because I don't feel like living poor."

Everybody in this country lives beyond their means. They drive a Mercedes when they should drive a Honda. They live in a million dollar home when they should live in a $250K one. They shop when they should save. We are all out of our minds. The New York Times reported in 2005 that 20% of all Americans have a net worth of zero or less. This means they don't have a positive $1 to their name.

Living with no money is fine. It could actually induce happiness if you were free to roam the world with a knapsack, a head full of windy hair, and a tune that needs a’whistlin. But, living without $1 when you work your ass off every day…is…tragic.

And, our system supports this tragedy: some credit card companies may actually penalize you for paying OFF your credit cards. From Yahoo answers: "GE Rewards MasterCard holders who pay off their entire balance in a timely manner are actually penalized $25 per year." Heck, I abstained from getting a credit card during my stint in college and my credit suffered for years because of it!

Now, I realize that this current Wall Street mess may seem to be more home debt than consumer debt. But, it’s all the same problem. And, it is time we stopped pointing fingers. This is isn’t the politican’s fault. This isn’t the bank’s fault. This is OUR FAULT. We are the idiots that live beyond our means. We are the people that confuse happiness with possession. We are the people that think a mountain of debt is something we are supposed to live with.

Everybody is claiming that this is going to be the worst economic period since the great depression. Yah, it probably will be. But the problem is much simpler than we all think: Americans now spend more money each year than they earn, by a full 1%. This has only happened four times in our nation's history. 1932 and 1933 during the Great Depression, when we had unemployment rates of 25%. And, yep, you guessed it: 2005 and 2006 (probably 2007, but I haven't found the study).

So, folks, it's not *just* about this housing crisis, or about the lending institutions, or the naughty politicians, or the faux populism of overpaid CEOs. This problem is about you, yes, overleveraged you. What were you thinking? Didn't you know this charade had to end? Everyone keeps saying this all about "confidence". Yah, it is. As long as you have confidence in negative math, maybe nobody will notice we are all broke, and broken.

So, I say, let the bitch burn. It's a colossal credit correction and we have been due it for a long time. No other country in the world lives with the staggering amount of consumer debt that this nation does. And, eventually it all has to come crashing down.

Who am I kidding, though? They won’t just let it burn. Those panicked lemmings on the Hill (the same geniuses that invaded another country because of some photos of a grain factory) are *surely* going to come up with *some* type of bail-out bill. So, instead of railing against the concept, let's spend that energy crafting a more effective bail-out proposal.

It seems to me that the bail-out is happening on the wrong end. Why are we providing liquidity to the banks -- the holders of these toxic loans -- when the problem stems from the unstable loans themselves? It seems to me that if we helped more people pay off their loans, then the loans wouldn't be poisonous, and the banks would have capital to continue operations. Fix the root and the leaves grow green.

But, I dunno how to really “fix” this, and I don’t think it can really be “fixed”. Nor, do I mean to take this lightly when I say “let it burn”. I get it. I get that this is gonna be a hard row to hoe, people. But at least, while hoeing, we will finally know the reality of what real dirt feels like in our hands again -- instead of this crazy glass floor we have been tap-dancing on for decades.

America vs. Small Business (1-0)

chris — Sun, 21 Sep 2008 00:45:48 +0000

OK, this is a bit off my usual business bent, but I am, well, bent. What’s got me all bendy? It stems from the fact that I now live in a country with socialized insurance. Heck, I can't even get socialized medicine for my workforce, lol.

Actually, it’s not the insurance bail-out in particular I care about. It’s *all* of these damn bail-outs. I know, I know… many of you had AIG insurance so you avoided [insert personal crisis].

I know, I know…if we didn’t bail out the airlines after 9/11 [insert portend of doom and gloom].

I know, I know… if we didn't bail these behemoths out, our economy would have [picture of Chinese army pouring down Main Street, USA].

I get it, people.

I get that these bail-outs are great short term fixes to prevent nasty slumps on the “Street” and to protect our “Nation’s Interest”. (BTW, is there a secret room somewhere where a council of wizened druids decide exactly what our nation finds “interesting?”)

So, yah, something about all of this has been bugging me for a few days and, finally, while at lunch with some of my beloved engineers the other day; I was able to put my finger on it. The convo went something like this:

Chris to engineer: “So, what do you think of the bail-outs this week?”

Engineer: “I dunno, when can we get bailed out?”

Me: “When we get to $10B in sales.”

Then it struck me. These bail-outs are so ANTI-innovation and so pro-corporatism. Anyone will tell you that the strength of the American economy was founded on the innovation, guts, and entrepreneurialism of the small business owner. Look at Microsoft and Google - they were both small businesses not too long ago. But, by bailing out these big guys it provides a strong incentive for them to take stupid risks and have the government carry the note on the downside. If your smaller, more nimble, more innovative companies (that’s you, Dear Reader) can’t take those same risks, then well, tough noogies. Score a competitive advantage for the big boys — upside with no downside. Whoopee!

I realize that not every huge company gets bailed out. Lehman Brothers, for instance, has gone the way of the dodo bird. The truth is: you have to be both huge *and* considered of strategic import (infrastructure/economy/etc). But the innovation-stifling point holds:

You can bet they would bail out AT&T and not Vonage. Vonage is the innovator here.

They did bail out the airlines after 9/11. But, my buddy’s small airline went bankrupt recently. He was an innovator, with a great concept of affordable business-class non-stops from NYC to London. *poof* gone.

Isn’t innovation the pith of American DNA and shouldn’t our government stimulate and not squelch it?

What exactly *does* it say to our supposedly beloved SMB (small and medium sized business) when our government bails out only the humongous companies? It doesn’t say anything. Instead it gives them the finger. Well, three fingers:

It provides a safety net for just the big boys. As stated earlier, this allows them to take greater risks because daddy will be there to bail them out.
It rewards bad behavior by removing the consequences for poor planning. This will always create broken systems.
It makes small business tax payer dollars cover their bigger competitors while they get no same coverage on their own business. Huh?

As an advocate of small business innovation, it just stinks. So, I ask the small business owner, besides SBA loans and the like, what other things could our gov’t due to bail you out and level this tilting playing field?

Leadership is never given, it's taken.

chris — Tue, 24 Jun 2008 21:06:26 +0000

Hey, Freud, roll over dude. Help me understand this one: How is it that people can sit at work all day and allow their conscious selves to have a robust internal dialogue about how many great ideas they have to improve the business they are employed at, while their unconscious selves leave them entirely powerless to speak up? How is it that instead of speaking up, they somehow justify their silence as a requisite of station and then go home that night, snuggle into their couch, fist remote into hand, and blast entertainment into both oracular sockets until the workday is long forgotten? Freud? Hello? Mother?

People can just be so weird at work. I find this dichotomy all the time after some work crisis – usually a customer getting screwed over by ineffective or missing process. During my forensic examination, I end up querying all involved employees about their role in the disaster. After narrowing it down to a single employee who made a crucial decision to *not* speak up, I almost always hear one of the same four lines after questioning them:

“That’s always been the rule, since before I got here.”
“That came from my boss. I don’t agree with it, but I don’t make the rules.”
“I brought that up to my manager, but they didn’t listen.”
…or…my absolute favorite: “I always knew that was wrong, but what can I do?”

For some reason, people assume that leadership is *given* in business. The typical mindset is:

“If only I were given the right to lead, then this place would run so much better.”

But, of course, since they *have not* been hand-delivered this right on a silver platter they feel that they are powerless to truly affect change in their workplace. Hence, they just keep their mouth shut and let all the idiot managers around them fuck the place up.

Huh?

What makes you think leadership is given to anyone? Did it ever occur to you that the people “leading” earned it as a result of NOT sitting on their hands and NOT letting everyone else hurtle the Titanic toward that particularly ominous looking shard of ice?

Let me ask you a question, Mr. Employee-who-is-so-ready-to-kick-ass, if only UPS would drop off a box of “ass-kicking-certification plaques” at your doorstep and say: “Look what brown just did for you today”…was leadership GIVEN to you in your personal life? Did you go to high school and get to sit in the leadership desk? When you hung out after school were your friends like: “Hey, what should we do today? Let’s ask Jim, he is our natural born leader.” Or, when you go to the bar, does the whole place mill around sheepishly slurping their vodka cranberries waiting for you to stand up and tell a joke that rocked the house?

Hell no. In personal life, the leaders are the ones that TAKE it. They are the ones that have the charisma and the chutzpah to make a joke – or to make a decision about WHAT BAR to go to, or rise to the occasion during that horrible crisis.

They TOOK leadership.

So, when the opportunity arises – or, especially, when it doesn’t – take leadership. Got an idea that you think your managers are missing? Tell them. They don’t like it? Tell their bosses. They don’t like it? Tell the CEO! Stand on his or her desk if you have to – shout your reasoning, advocate for your customers, do what you have to do. Think you are gonna get fired? Maybe. Think your wax-eared bosses are gonna do it their way anyway? Probably. Think it’s gonna build your leadership skills so next time YOU are the boss? Definitely.

So, take off your glasses. Wipe them clean. Now put them back on. See all those managers around you? You know, those idiots that have all the power, but don’t make any smart decisions. Guess how they got that job?

They took it.