We had a sunny fall day in Cambridge yesterday for the Festival of Ideas. The day was really too nice to spend much time indoors listening to lectures though. The fall colors only come once a year and last for about a week.
Archives for October 2010
The wisdom of Sahlman
- More cash is better than less cash.
- Cash sooner is better than cash later.
- Less-risky cash is better than more-risky cash.
- NEVER run out of cash.
Back in Cambridge for a few days, autumn settling in (above). Its the usual whirl of meetings before headed back to the Netherlands at the weekend. I’ve pinned the future on the success of two deals, one financing a business, the other leveraging one, and both are taking longer than expected. This puts a cash flow squeeze onto the contracted payments through my Dutch company, so I’m entering the Winter of Living Frugally. It’s teaching a few lessons (in addition to hammering home the truth of Dr.Sahlman’s words for entrepreneurs, above):
- The practical consequences of never selling myself short.
Conventional wisdom holds that you should either give your services away or sell them at full value: never at a discount. When a client runs into financial squeeze, the logic is to keep billing full-rate, but be flexible on repayment.
I’ve learned to be flexible on the method (cash, stock, in-kind services) but not the timing. Payment deferred is payment denied: invoices risk getting written off or converted at the deal’s close. Make an arrangement and stick to the schedule.
- A customer is a customer when you sell a service.
Reduced to its essentials, there’s not much difference between being an employee and being a consultant, contactor, or service provider. I sell my time, abilities, network, and efforts; I am paid to meet customer specifications and expectations.
I had thought that this would be different outside the corporation, but it’s still all about satisfying the customer, which still means yielding control. On the plus side, I can take the jobs that I want and keep what I bring in: I enjoy the creative and business freedom. On the minus side, if my recommendations aren’t; accepted, I abandon them; if the report isn’t complete, I redo it.
There is no escape from this reality as long as I sell services to others. The transition only comes when the business owns assets that others want. The biggest change that I need to make in my business is to create asset-value rather than just reputation-value, creating and owning a product or process that stands independent of me.
- Knowing the limits of confidence and persistence.
In the beginning, I said that I would never fly this business into the ground, succumbing to the gambler’s sin of betting that the next roll will be the winner. Instead, I’ve always believed that in sane times I should know my limit and I should know when to quit.
New businesses are built on confidence and persistence, belief in the vision and recovery after a setback. So far, I’ve done that well. But, as resources shrink and the finish line stays tantalizingly out of reach, I’ve begun to question the limits of both. There’s the conviction that holding out one more month, calling in one more favor, giving one last push will be enough; that the sunk costs justify the incremental expenditure.
It’s a seductive call, and it seems to me that this is the time that you need someone watching your back. I’ve put a trusted and uninvolved friend into position to keep an eye on things, someone who can suggest when it’s time to let go, if I can’t see it.
Indiana Jones photo credit
Seeing the sights at Schiphol
‘A new-record 24 hours on flights from the US to Heathrow this week. 50 mph winds in the midwest forced flight cancellations and delays: the ticket agents advised me to hit the phones to Delta and see if I could get more help than they could give. A routing through Canada and the Netherlands turned out to be the solution, long way around, but avoided paying an extra hotel night and racked up a few more moles (currently 111K towards the 125K I need for Diamond status).
I dropped into Schiphol bone-weary and jet-lagged; rather than head for the lounge, I decided to check out the sights along Holland Boulevard, the new Dutch Tourist area set up between concourses D and F. Unfortunately, it’s too early for the annual Christmas light display, but there are lots of new features along the moving walkway that can really help pass time (inexpensively) during a layover.
The Rijksmuseum art display is still a popular stop. Tucked between the first and second floors, it has a small rotating collection of works gathered around a theme. Generally, the displayed works are high quality and feature recognizable Dutch names (Rembrandt is always there somewhere).
The new Airport Library is a sprawling collection of books about Holland’s history and culture. Books can be checked out or read at worktables; there is a small set of computer workstations also available. Books can be checked out and I imagine the collection will grow as passengers leave their travel reading as donations.
Adjacent to the library is a ‘living room’ – dimly lit comfy-seating with backlit wall art. More books and magazines, although this seems to be a favored place for napping, replacing the Quiet Area with lounge chairs and nature sounds that was formerly
located directly upstairs. My favorite bit is the simulated fireplace, flickering red against the blowing blue background. There is a Delft theme along the walls, along with pictures of Dutch scenery, that make this a nice retreat from the bustle elsewhere.
The restaurant, located beyond the living room, has a variety of typical Dutch fare. For an expat, the offerings are unremarkable, although they will charm visitors looking for an escape from the fast food along the concourses. I like the tulip-tables and Delft-cup booths; the whole Boulevard is a little slice of Netherlands hyperreality.
There is also a massage area, the Holland Casino, and numerous opportunities to sign up for a tour or buy a local souvenir. It’s all good for about an hour between flights, and beats the average Chamber of Commerce display by a mile.
Then it was on to Heathrow, then a meandering bus ride across East Anglia towards Cambridge. My luggage, unfortunately did not arrive alongside: despite the traveler’s maxim that bags never transfer on-time at Schipol, the problem was US-based. Somehow, it was headed to New York as I winged over the Atlantic, another 30 hours before it, too, arrived home.