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Archives for March 2007

Is Yahoo Preparing For A Takeover?

Cash For WhatWhen Shoemoney first predicted that Yahoo would be acquired by Microsoft in 2007, I thought he was right on the money (no pun intended … okay, maybe a little).

Since then, there’s been a fair amount of chatter about how Yahoo is selling paid inclusion into it’s organic search results. There’s the odd person that defends this, but most people see it as a bad idea. Rob Watts over at Yack Yack spells out a lot of the reasons why it’s a bad idea.

Here’s a few of those reasons:

  • Is it a search engine or a business directory?
  • Nobody who has done it got anything but bad mojo for doing it
  • How authoritive is ranking and authority … if you buy it?
  • One word. Transparency.
  • One more word. Integrity.

So Why Do It?

There are so many reasons not to allow paid inclusion and there’s only one benefit. Cash. Cold hard cash.

And all the reasons against it make it a short term benefit, not a long term business model.

One More Time … So Why Do It?

The only reason to do something you really shouldn’t do just to make a quick buck, is because you have to. You absolutely have to. Junkies steal DVDs at the local video store. Search engines sponsor paid inclusion in their search results.

Every War Needs A War Chest

Whether a company is trying to prevent a takeover bid or sees one as inevitable, raising cash is job one. Cash allows a company to fight a hostile takeover. And if they can’t stop a takeover or don’t want to, they can squeeze a lot more value out of the sale.

Threats that come sooner always take precedent over threats that come later. The threat of a takeover is the one reason why a company would sacrifice it’s long-term value and reputation to raise cash.

Of course, there are a couple of other reasons why they might do this. One doesn’t make sense. The other is too ugly to contemplate.

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From Bourne Identity To Leadership Ultimatum

The Bourne UltimatumThe Bourne Ultimatum is coming to theaters this summer. There’s a sneak-peek trailer on firstshowing for this third episode of the Jason Bourne series starring Matt Damon. It looks good.

At first, I thought I should post this in the Whatsis category of Zoomstart which is just an archive for cool stuff. And then I figured, since I’m a big fan (of the first movie, not so much the second), I’d take some lessons from the Bourne Identity and turn them into a mini ultimatum … er … ultimate guide to leadership. Sort of like what I did with Frank Miller’s 300.

So “Sit down, strap in, and turn on all you got”.

Jason Bourne On Kick Butt Leadership

  1. If you lose your identity, go find it. It happens to every leader. You might lose faith in your own ability. People might question or challenge or lose confidence in you as a leader. Take the time. Reach out. Go find that person that was you again.
  2. Maintain balance. You’ve got your good guys, your bad guys, your love interest. All play an important part in maintaining a healthy balance. Balance gives you a diverse network of resources to draw on. Balance changes things up and prevents you from getting tunnel vision by focusing too much on one thing.
  3. Make the most of what you have. Maybe you brought a ballpoint pen to a gunfight, or a Mini Cooper to a car chase. Whether you’re under cost controls or you just got caught short-handed, you’ve got what you got. Get creative and make the most of it.
  4. Take the fight to them. The best defence is a good offence. You can sit around and let whatever happens happen. Or you can take the initiative and make things happen. Do that, and your actions are the driving force that decides WHAT happens. And when.
  5. There’s always another chapter. The story’s never over. No matter what happens, the worst thing that can happen is that you learn something and you do better next time. Leadership is not a destination, it’s a journey. And there’s always another adventure around the next bend.

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The Art Of Negotiation

The BattleNegotiation is a cornerstone of success in business.

Let’s start with the understanding that business is simply buying and selling. In order to successfully buy low and sell high to generate a profit, you need to be a good negotiator.

If you have a small business, negotiation skill is what enables you to get the pricing you need to compete with larger companies that have considerable purchasing power. Negotiation is what gets you in the game and helps to even the odds.

There are 2 things you have to do before walking into a negotiation:

1. Define The Negotiation

Define the difference. Each side has different goals. List the goals for both sides and attach motivations to them. When you understand the motivation behind something, you can gauge how important it really is.

Define the new ideal. The ideal outcome for both parties exists. If you can find it, you can build a strategy to move towards it. Keep it dynamic. Unforseen things are going to cause it to evolve.

Define your options. List the other options for all parties in the event negotiations fail. Options provide the leverage to move negotiation forward by defining how exclusion from the new ideal affects everybody, and how the new ideal is the best option.

Options also prevent a forced solution. If the negotiations fail, you can channel your differences in new directions, maintain the relationships, and take another path. Without options, there is no negotiation.

2. Prepare For The Negotiation

Secure the relationships. The conflict of negotiation will test them. Relationships are the connections built over time. They’re credibility. Spend time initiating and securing them. And take time out to sustain them throughout the negotiation.

Build authoritive knowledge. Create solutions to the problems you expect to run into. Understand the technical details and the logistics. Know what has worked before and what won’t work. And know the costs and the savings for everyone involved.

Take possession of the arena. Wherever it is, the negotiating arena is owned by being comfortable and confident in the setting. Be well traveled, scout the territory, and have amenities accessible.

Start Negotiating

There are a lot of different negotiating styles. In a future post I’m going to talk about something I call ‘Akido Negotiation’ that outlines different strategies. But whatever style or strategies you use, being prepared is job one.

A successful negotiation is a brawl. But it’s not between enemies. Look at it like this …

When Micky Ward and Arturo Gatti stepped into the boxing ring together for the first time, it was thought that the fight would be a good candidate for ‘fight of the year’. Before it was over, they were calling it the fight of the century. These two guys beat the living hell out of each other.

They were on opposite sides but they both won because the ideal outcome was not about winning the fight. It was about giving boxing fans a show they would never forget.

Ward and Gatti became good friends. And they had two more spectacular bouts just like the first.

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Smart Topics Around The Web

ClickOn business, the net and whatever, here are some posts around the web I enjoyed in the last couple days. They’re worth checking out …

Garr Reynolds has a post with great tips for increasing the signal and reducing the noise of your powerpoint presentations at Presentation Zen. The before and after pics really illustrate the difference between a great pp slide and noise.

Steve Roesler talks about turning your weaknesses into strengths by asking yourself “What is it you can’t not do”? The next question you should be asking is “How can I not make money if I do what I can’t not do”?

Mitchell Harper presents some tips for adding a forum to your blog. I got an email a couple weeks ago that sparked a big idea for future development. In the meantime I need to learn everything I can about forums.

Mark Shead provides some helpful links to help you deal with email overload. I always love it when people have to “deal” with a technology that’s supposed to make life easier. Fight back! Don’t be a slave to your email.

Bes Zain helps you with your verbal judo. Go. Become wise grasshopper.

Scrivs weighs in on blogging by the second with Twitter. A blog post or three a day just isn’t enough if you want to be famous for being famous.

And Jonathan Phillips at Smart Wealthy Rich will help you rediscover communication. Real communication. Just in case you don’t want to be famous for being famous.

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Cats, Rats, And Stocks

Little Man The CatIf you have a sick pet right now, you don’t want to hear this. And I don’t blame you one bit. But the truth is, there’s opportunity in adversity, and this story illustrates that. The world is tough.

It’s even a little mean sometimes.

A good friend of mine has been dabbling in online stock trading. He bought a stock on Thursday, sold it Friday, and made 25% on several thousand dollars. The stock … yep … Menu Foods.

Menu Foods’ stock price dropped like a rock after they announced a major recall of cat and dog food on March 16th. The news kept going from bad to worse. And the news spread like wildfire. I have a lot of friends with pets and they were all scrambling to get answers to find out what they should do and what brands were tainted.

Not the kind of situation that makes your stock go up. But the markets over-reacted. Considerably.

Menu Foods lost half it’s value in about a week. That’s a lot. That’s a helluva lot. So my buddy jumped in and bought at $3.90. The next day he unloaded it at $4.89 and made a nice profit. A lot of traders made a nice profit on Friday.

What Brought The Stock Back Up

There are a number of factors that you have to consider when you invest in an ugly situation. Here are some of the factors that helped the stock price go back up.

  • Paul Henderson stepped up to the plate. He promised that Menu Foods would take responsibility and compensate expenses to pet owners incurred as a result of the food. On the surface, this looks like a big bundle of cash is going out the door in the future. But restoring confidence in consumers is the only way to bring a company back from the brink in a situation as bad as this.
  • Menu Foods isn’t just Menu Foods. Dozens of brands were affected because MF is a contract manufacturer. They make pet food for dozens of different brands. All these brands are going to invest a lot of time and money to get the positive word out there once the mayhem dies down.
  • There’s someone else to sue. Class action lawsuits are already being filed against MF, but the toxic chemical aminopterin (used in rat poison) appears to have originated from an ingredient supplier overseas. Depending on how big this supplier is, Menu Foods could recoup most or all the costs related to this recall and impending suits.

My buddies next stock pick? Maybe Vonage. He’s not sure yet. They just lost a court case with Verizon to the tune of a $58 million dollar cash payout plus a 5.5% monthly royalty rate. Adversity’s knocking.

The cat in the photo is Little Man. He’s well and fine.

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Bigger Than Life. The Flavor Flav Factor

Flavor FlavLeaders, stand out. If they didn’t, they wouldn’t be leaders.

Leaders need to have a strength of character that goes beyond normal boundaries. A character that’s bigger than life. A character that is not embarassed or fearful, but dynamic and apart from the crowd.

Gregg Hawkins talks about tactical blogging. It’s a great post with some key insight on why it’s important to write a blog for people first and search engines second. One point he made really caught my eye. Here’s what he said:

Be unique and stand out above the rest by adding a little “flavor flav” to your site. Bad metaphor at attempted humor, but moving on! For those of you who don’t get it don’t worry, just add more flavor to your site.

Now hang on a second …

I know Gregg was just joking but this really isn’t a bad metaphor at all. In fact it’s a great metaphor for understanding the mechanics of leadership. The under-the-hood stuff.

Flavor Flav is outrageous. He doesn’t make any apologies. People know him for his music, his tv series, that crazy viking helmet and his ever-present clock pendent. He’s got the kind of character that makes people wonder ‘What’s this guy going to do next’?

The Mechanics Of Leadership

There are two things that make leadership happen:

  1. Leaders don’t follow the crowd. They head off in their own direction. This is something that’s ingrained in them to the core. But … if no one follows, then you’re not a leader at all. You’re just all by yourself.
  2. Leaders have electricity. They have magnetic character. This is what draws people towards them when they take off in their own direction. It might be how they look, how they act, what they say; the key is, they make people curious, inspire them, motivate them and compel them to navigate into uncharted territory. To follow the trail they blaze.

There are a lot of important character traits that define great leadership, but without the mechanics of leadership, without both these moving parts, it can’t happen.

The Chicken And The Egg

The question has to be asked. Are some billionaires and notable figures eccentric because they can afford to be, or are they successful because they stand apart from the crowd?

It’s fair to say that one fuels the other, but the latter is true for the most part. At least when you look at the mechanics of it.

The next time you’re building something great. Something that leads the way, make sure to stop and ask “Where’s the Flavor Flav Factor? What makes this bigger than life”?

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Isolate Your Business Deals Or They Might Get Away On You

Golden EggYou know when a salesperson has got a sale locked down and then they keep talking when they shouldn’t and say something that loses the sale?

This is sort of like that.

When you have an important, complicated, or multi-party business deal in the works, it’s best to keep it isolated. Control over who’s talking to who, both internally and externally, is critical to making the deal go smoothly.

A Good Deal Gone Horribly Wrong

There are a lot of different scenarios that can arise when a Business deal isn’t properly isolated. This is one:

My neighbor was recently negotiating to sell his company to one of his competitors. The deal was taking longer than it should which is never good. Word started to get around about the deal.

All of a sudden, some of his top salespeople jumped ship and went to work for the competitor and the deal completely collapsed. Without his top salespeople, business has been spiraling down and he’s had to lay off some people and try to rebuild.

Companies buy other companies mostly to gain that company’s customer base. Since the competitior got all the salespeople who know all the customers, they didn’t need to buy the whole company. The competitor has rocketed ahead of my neighbors company simply because he didn’t incubate the deal.

Tips On How To Isolate A Deal

  • Get an NDA. Have the company you’re dealing with sign a non-disclosure agreement before you start wheeling and dealing. An anti-compete clause in the NDA that prohibited my neighbors competitor from hiring his employees might have prevented the deal from going sour the way it did. Clauses like this are usually in effect for 1 year and the clause could be declared null and void in the final sale agreement.
  • Keep the negotiating team small. Your negotiating team should consist of a limited number of people. If the negotiations require special reports or analysis from other people in your company, it’s the negotiating team’s job to get that information and present it to the other company in an organized and contained manner. Don’t give the company unfettered access to your talent. Don’t let someone who’s not familiar with the details of the deal bury it by saying the wrong things.
  • Separate your business deals. If you’re working on multiple deals such as breaking up a block of assets to sell to different parties, keep those parties away from each other. The reason for this is that if they’re all on the buying side of the fence and you’re on the selling side, they could potentially get together and beat you up at the negotiating table. Schedule your various meetings with different players in well spaced intervals.

Cash might be king but knowledge is power. Stray information in the wrong hands causes many business deals to fall to pieces. Isolate your business deals.

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It’s All About The Beautiful Girls

The Beautiful GirlsRecipe for a good time: Get a bunch of friends together, find a beach, start a bonfire. Invite everyone who passes by to join the party. Groove with The Beautiful Girls.

Mat McHugh, Clay McDonald and Bruce Braybrooke are The Beautiful Girls. And while you’re missing Sublime and waiting for a new album from Slightly Stoopid, The Beautiful Girls will be the soundtrack to your life this summer.

Water is a compilation album of their coolest stuff. The band is from Australia and Water was released as sort of an introduction to North America. Nice intro. The band is a fusion of rock, reggae, ska, jazz and anything else they feel like throwing in. Lots of acoustic. Classic surf music.

They’ve been around for a while, but if you haven’t heard them, give Water a listen on the online jukebox.

I can smell the salt air and feel the breeze already.

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The Art Of Bootstrapping. Properly.

BootstrappingThere’s a right way to cut costs. And a wrong way.

The technical definition of bootstrapping has a lot of history behind it. Today, the popular definition simply means to cut costs and leverage your assets to the max. Most companies go into bootstrapping mode for one of two reasons; Either they’re a new startup with little cash, or they’re in financial trouble.

In both cases, the main effort is focused on three main activities:

  1. Cut, cut, cut. Anywhere and everywhere. Get rid of all the frills and anything you don’t absolutely need. Beg, borrow or steal (okay maybe not steal) anything you can.
  2. Do more in-house. Utilize your own people and assets. Replace the cost in cash with a cost of time.
  3. Defer expenses. Not a great way to make friends, but critical to bootstrapping.

Put A Plan Together. Don’t Slash and Burn

It’s critical to remember that most businesses die because they simply don’t get sales. A much smaller number of businesses fail because they fail to control costs. With this in mind, most businesses simply can’t cut their way to profitablility.

If you’re in trouble and you cut your sales and marketing budget recklessly, you’re probably going to be in bigger trouble. Soon. The more resources you can funnel away from other things and into sales and marketing, the better. Do whatever you can with whatever you have to get sales. Concentrate your effort on selling rather than just cutting.

I look at Detroit and just shiver. The big auto manufacturers cut and cut and cut. And they still struggle to tread water because they’re not out selling. Or they’re not making cars that more people want to buy. People are more willing to buy imports AND pay higher prices for them. Bad bootstrapping just makes for a slower death.

Action Items For Bootstrapping

  • Get Everybody on Board: There are a number of reasons you have to do this. You don’t want people jumping ship. You don’t want ugly rumors getting out. Get people involved. Get their ideas on how to lower costs. You’re all on the life raft together. Stick together, work together, you’ll get through the storm and be stronger for it.
  • Do More. Sooner: There’s a tendency to phase in cuts to lessen the negative blowback and ease people into the changes. You need a war chest full of gold and you need it now. The more you can cut up front (while you’ve still got something) and funnel into increasing sales, the better shot you’ve got at turning a bad situation around.
  • Freeze Accounts Payable: This can get really ugly but it’s the absolute first thing that experienced corporate restructurers do. Defer payments to your suppliers as long as you can. But as soon as they start calling, it’s time to start talking and get them on board. Renegotiate your deals. Make smaller payments to show good faith. Give them the straight story and a timeline to get back on track. Most importantly, get them on board to keep this confidential and quell their fears. If the word starts spreading that you’re having difficulty, they need to understand that’s not something that’s going to help them get paid.
  • Sell. Bang on doors. Find new income streams. Bootstrapping alone is rarely enough to turn around a bad situation. It helps. It’s just not the final answer because business is about buying AND selling.

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Floating Through Cyberspace

Canon Pixma ip1700 Photo PrinterThe last few weeks I’ve been floating through cyberspace and visiting many different blogs. It’s amazing how much great stuff people are writing and how many new insights I’ve gotten on a lot of things.

So I started compiling a list of bookmarks of blogs that I want to check in on regularly. At the rate I’m finding great stuff, I’m going to have to pick an RSS system soon so I can subscribe to some of these sites.

Since I enjoy finding blogs though other blogs I thought I’d share some links to posts from people who have come across Zoomstart and taken the time to leave a comment. Yep, all five of them! (plus an email)

Network, And Get A Chance To Win A Color Photo Printer

I got an email from Broc at Existential Ventures. He’s holding a contest to give away a Canon Pixma iP1700 Photo Printer. All you have to do to enter the draw is join his MyBlogLog community. Check it out, join, and do some networking. It’s a win-win situation.

Great Pages From Zoomstart Commenters

I’d say check out Willy Rocker, but Willy didn’t leave a URL. I’m starting to get the sneaking suspicion that Willy Rocker is not even his real name … dya’ think? Thanks for commenting WR. I’m glad you liked the post.

Need career help? The must-check-out site is Career Ramblings. Jane and John will help you get on the right track with experienced advice and discussion. I’ve got a couple of posts planned on business negotiation in the near future. To help you negotiate with your employer, check out Career Ramblings.

Okay, Aniela’s Style Tips 101 isn’t on my must-read list. But it should be if you’re a girl. And come to think of it, if you’re looking for a great gift for your girl … hmm, maybe I should get edumacated on yummy fragrances.

Derrich recently finished holding the 2007 Bloggers Tournament. He pitted some top bloggers against smaller bloggers with a reader voting system. It was a great idea for promoting his blog. Go see who won. Was it the mighty and powerful, or was it the underdog?

I really liked Gregg’s post about The World. The World is a world class artificial island development currently under construction off the coast of Dubai. Very cool. You have to see it to believe it. Check it out.

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