Monday, June 9, 2008

How To Tell When You're Being Lied To

If you've ever watched more than 30 seconds of a late-night infomercial for a real estate selling "system" you've seen some version of the exact same pitch. "Do what I tell you on the tapes and you'll be rich." But the only people making money are the ones selling the tapes. No one ever gets rich actually following the advice on the tapes.

It doesn't matter what the tapes are about: real estate, home cleaning products, debt consolidation. They're all a scam, because the real money is in selling the system, not in using the system.

The new wrinkle in this is that the scammers have gone "meta". The system they're selling now is the infomercial. Instead of claiming their system will tell you how to sell real estate, they claim their system will tell you how to make your own infomercial. Which can be about real estate, or it can be about ... well, making more infomercials. And making them on the web. See, it's different!

You would think that eventually someone has to get something of value out of the whole arrangement. With the real estate scam someone allegedly gets a house out of it. But with the new racket the only thing that ever comes out of it is a "business" of selling more ads.

If you're too young to know about it, they have a name for this arrangement: Ponzi Scheme. The only people who make money are the people who know that's what they're doing.

So here's how to tell when you're being lied to. If what you're doing is a Ponzi Scheme, are you the one doing it on purpose? If not, then you're being lied to.

Do You Demand Flowers From Your Staff?

What are you supposed to buy for your wife for Valentine's Day? Quick, first thing that pops into your mind ...

Right: flowers. A dozen long-stemmed red roses. Because decades of consistent marketing has worked its magic on you. You could debate that it should be a box of chocolates, or jewelry, and I'd say that's because those two industries have been advertising just as hard.

But have you noticed the hidden assumption? That you're "supposed to" buy something at all. No matter how aggressively the flower, candy and jewelry industries market against each other, none of them will ever contradict this fundamental belief: That extravagant purchases are the approved way to demonstrate commitment.

Most modern American corporations expect you to demonstrate your commitment, too. But instead of flowers the symbol of your commitment is time. Time above and beyond the forty hours you're supposed to work. Time eating at your desk instead of going out to lunch. Time on call via the Blackberry they gave you.

Doing good, steady work is better for the company. But late-night marathons of work get noticed. If you plan well and execute, you don't need late nights, but then there's never a clear moment for the boss to look at and say, "That moment really showed commitment."

In a perfect world, the boss would take the extra effort to recognize good, steady performance. And that's exactly what it takes: extra effort. Which is why it happens so rarely. Even if you're doing things on time, it seems that sometimes you have to put in the late night to get noticed. Because this isn't a perfect world.

But you may be in a position to make the world a little better. If you are the boss, make the extra effort. Publicly recognize employees who reach their goals during normal working hours. Make it clear that late nights are a symptom of poor planning. Demand extra work because it needs to be done, not just to show commitment.

It may be less exciting, and less obvious, but in the long run it's much more productive.

How To Stop Turning Down Work

It's your sixth birthday and your grandfather has just handed you a ridiculously heavy package the size of a shoebox. You open it up to see that yes, it is a shoebox. A shoebox full of pennies.

"I've been dropping all my pennies in there each night since you were born," he says. "I planned to give it to you when it's full, and it's getting close. There's probably more than $200 in there. All you have to do is count them out into stacks of fifty and roll them in those little paper sleeves." This was before the automatic coin counters appeared in grocery stores.

Your six-year-old mind reels at this windfall. You count and wrap until your hands are cramped. You beg you mother to take you to the bank to turn the pennies into "real money," then straight to the toy store to get Frogger for your Atari. (Any similarities to the author's life are purely coincidental.)

Flash forward to today. Someone offers you a box of pennies. All you have to do is count them by hand. You might still take it, but it's not going to be such an obvious choice. How long will it take? What could I be doing instead?

Thinking small

For the mid-career freelancer, this is the calculation that dooms you to punching a clock. You could build that website for the local restaurant, but they want you to keep it up-to-date with their specials. You're not interested in doing maintenance, and they can't afford to keep paying your development rate. So you don't take the work.

You just turned down a lucrative contract because you're thinking like an employee. No, you don't have a boss, but you still think that any hour you're not working is an hour you're not getting paid. To break this mindset, you need to start delegating. You need people working for you.

You're making it as a freelancer because you solve people's problems. When someone wants a site and ongoing support, they have two problems. You can solve the first by building the site, and the second by finding a qualified support person. There are plenty of online resources for finding contract technical workers. Don't make your client go to these sites and try to evaluate people, do it for them.

Thinking big

Instead of selling a Content Management System that will allow a small business owner to update his own site, offer a one-stop service, where your employees will keep the site updated for a monthly fee. Do this enough times and your "passive income" could exceed your new development work.

But even if you don't take a cut of the support fees, having the capability means you can bid on a whole new type of contract: the large kind.

Monday, June 2, 2008

How many Danny DeVitos does the world need?

Seth Godin is absolutely brilliant at questioning the assumptions and "conventional wisdom" that we all rely on when promoting our products or services. He doesn't offer step-by-step recipes "Guaranteed to triple your sales!" In fact he rarely talks about specific numbers at all.

And if his recent post Thinking about Danny Devito is representative, then it's a good thing he doesn't. Because he completely missed the point that "a few" is a whole different thing than "one."

If you haven't read it -- and you really should, it's only 152 words -- the point is that there are a lot more people competing for the George Clooney-type roles than there are competing for the Danny DeVito-type roles. Seth phrases this pseudo-mathematically:

(number of people resembling George Clooney)/(jobs for people resembling George Clooney) is a much bigger number than the ratio available to Danny. For the math challenged: Because everyone in Hollywood is trying to be George, there are a lot more opportunities for the few Dannys willing to show up.
Since his breakout role in Taxi in the early 80s, DeVito has 76 acting credits. During that time he's also had: 33 producing credits, 13 directing, 6 soundtracks, and 76 appearances as himself. It's fair to say he's prolific. And as long as he's able to maintain his pace, he will remain the first choice for anyone who wants someone resembling Danny DeVito.

Think about that phrase, "resembling Danny DeVito." Then consider this chestnut about the career of a movie star:

  1. Who's Brad Pitt?
  2. Get me Brad Pitt.
  3. Get me a Brad Pitt type.
  4. Get me a younger Brad Pitt.
  5. Who's Brad Pitt?

Now try to come up with a list of actors who you would describe as "a Danny DeVito type." Or "a younger Danny DeVito." I'll wait ...

Yeah, I can't come up with any, either. So it seems that, for now, the important formula is (jobs Danny is able to take)/(jobs for people resembling Danny). And for now that ratio seems to be "one." And "one" is really not at all close to "a few."