Fixed Overhead

Every project that we do has some fixed overhead. It remains about the same regardless of project value.  We can’t reduce it, and ‘larger’ projects don’t generally require more:

  • Gathering assets
  • Kick Off Call (Project Planning)
  • Script writing.
  • Timelines
  • Editing Sound and Music (mostly fixed)
  • uploading a file
  • Rendering a file.

None of these take a long time, they are all things that take 1-2 hours per project.  There are about 20 of them.  For a developer it might be “creating a local environment”.  For a sound engineer it might be something else.

It’s not stuff that can currently exactly be automated.

The problem is that it eats into margins quickly. Having 20 hours of “overhead” on project acceptance means that each project must be able to support that.

Each of these touchpoints represents risk, doing them wrong means that we are risking our relationship with our client.

This is the problem with doing discounted work: there’s still a fixed cost associated with putting time and effort into a project.  Yes, often the ‘system’ can absorb this. Often it cannot.

Nobody wants to be project managing most of the time.  The solution for a boutique is, then to get the people and skills we need to be at the top of the market. That way each of the projects is 90% “output” and 10% “management.”

Tolerating the bureaucracy that comes from management is tough.

The Foundation

If, in the morning, you wake up (and have to shake off a hangover, wondering what you said and to whom), behind schedule (so you can’t go to the gym), and you have to search for your socks (because you haven’t taken care of the basics), and your first thought is money …you’re in fight or flight before your feet hit the floor.

You’re fucked.

If I’m honest with myself, and if I look back over the last 2 years, I’ve done about everything possible to perform poorly and to slide into oblivion. Slide I have.

That it wasn’t worse was a miracle.

My relationship with my wife was rocky. I had unfathomable financial pressure. That led to isolation. My mental narrative was: I can’t maintain friendships if I have to make payroll and meet my obligations. Isolation led to an erosion of my sanity and social skills. Being lost in my own issues meant that it was tougher to have enough empathy for others.

The lack of empathy lead to self absorption which always leads to entitlement, depression.

A death spiral. All fixable.


I hesitate to write this. I fear the smothering sympathy from the concern trolls, “bro you’re really struggling.”  We mustn’t always be killing it.

When the trolls come, I have engaged.  Instead of having the efficacy to ignore, I rail at people: “I’ve had an exit motherfucker. I can bench 250, bitch, I’ll kick your ass.” What problems do those delusions-with-metrics prove?

It’s all too easy to slide into delusion, embellishment, fantasy.

If you’re reading this, let it be. I’m good now, and when things were dark I was still functional.

I talked about the virtue and the practice recently.

These are things I believe in, still. Things that sustain us when we don’t ‘feel it.’

But what more is there?

A lot.

So much energy was lost because I was so frayed around the edges. I had to fight for everything. I fired my bullets fighting for survival, not on anything meaningful. This means you play small. When you’re frayed, any little thing hurts.

When you’re operating in fight/flight you aren’t thinking clearly. Anything can agitate you.

You come off as insincere.  Your energy was used on small beer issues.

The comumute kicked my ass. I couldn’t bear to be in traffic in the mornings. From Troutdale to my office was 14 miles. But on certain days, that would take 90 minutes. There was tension there. So I moved into an apartment. After all, I’m worth much more than just sitting in a car, commuting.

This meant I was isolated from my family. On a self-important mission.

Yes, I made more money. Because I had more time.  And it did lead to good things, a great house we love to live in.  But…

I lost the grace to let things go. I was right, of course, the people around me were being unkind. They didn’t love me. I had to put every sigh on trial.

Live with someone like that, will you?

There was joy around me. And most of my life was spent in an alarmed, overwhelmed state. In fight-or-flight.

My kids loved me.

My wife had the patience and grace to stand up to my demons.

My business, when you really consider it, was remarkable. Started-from-nothing, serving hundreds, millions of people watched our videos, and I was paid to work with the likes of Brad Feld, Arianna Huffington, Seth Godin, Ryan Holiday, Mark Echo and many more.  But there were issues, man.

Why so miserable?

I lacked a Foundation. How important it is to set up your life for success.

I realized this, in part, when I read Miracle Mornings by Hal Elrod.

I realized this in other parts by working with my mentor, Kevin Nations. He calls it the “four F’s. Faith, Fitness, Finances, Family. It’s an excellent starting point.  But for me, a starting point.

Running on sand is much harder than running on solid ground. The loose sand saps your energy with every step. The sand takes it away, blunts your rebound. Having a life with no Foundation is exactly the same thing.

Even the Nazarene said to build on a rock.

If, in the morning, you wake up (and have to shake off a hangover, wondering what you said and to whom), behind schedule (so you can’t go to the gym), and you have to search for your socks (because you haven’t taken care of the basics), and your first thought is money – will you have enough?

You’re fucked. You’re in fight or flight before your feet hit the bed.

How can you be kind, connected, gracious? How can you perform at a high level?

A foundation is what you need. This is my *current* definition:

*The beliefs and practices that you have set up for yourself to be able to make your best contribution*.

I’ve thought a lot about this. And I think that you need to mentally check off the boxes. When some area is out of whack that’s your priority. That’s what you have to go out and do.

It will be very difficult to succeed when there’s not a firm Foundation. And even success may feel fleeting, may come and go. Becuase

**Faith**: What, actually, do you believe in? What will you die for? Where, exactly, are your limits? What are your values?

**Focus**: Do you currently have the ability in your life to do deep work, to sustain concentration on tasks for a long time? To solve problems? To work patiently towards both short goals and long? To slog through tasks with determination and confidence?

**Family**: Do you have a reserve of people that you love, and that love you? Have you got people that can pick you up, that can forgive you, who you can forgive? Who will be there till the end, bail you out of jail? Do you have

**Routine**: Do you have a schedule that works for you, that allows you to think, to work, to live? Have you established what you’ll be doing with yourself?

**Health** (Fitness): Are you phsyically healthy? Fit? Are you eeating Healthy?

**Habits**: Do you have habits that sustain a relaxed calm life? Are you practicing excellence, currently?

**Friends**: Do you have: someone to bail you out of jail, someone to go to lunch with someone to see a movie with, someone to cry with.

**Sex**: Do you know where you’re gonna get it next? Do you have a relationship that’s healthy, that’s expressive, that’s fun, and that you feel good about?

**Environment**: Is your environment clean, distraction free? Your car? Do you have things that give you pleasure, and remind you that things are good? Can you recal everything?

**Finances**: Do you know what direction you’re going? Do you have an idea of your overhead, your variable costs? How much do you have in obligations? Do you have a balance sheet that you know of?


This builds a foundation.

Your Foundation is where you are. What you’re capable of doing.

Your Practice is what you do.  It’s about preparation.

Your Virtue is who you want to be.  It’s about your legacy.

When you work hard on all three you are in position to have a life of meaning and connection and value.

When one leg of a stool is missing, however…

Overhead

I’ll be talking – at some point soon- about How The Mighty Fall. It’s the greatest business book I’ve read since The Hard Thing About Hard Things.

One of the things I have done wrong is to have a high amount of overhead.

My ego wanted me to really have something big, lots of people, office parties, all of that stuff.  So I got the big space, with the brick walls and the “modern industrial tech” look.  An expensive conference table and all that.

But it adds up.  It was $30,000 a year.  Plus another $15,000 in equipment.  You can get a good brain working for you for $45,000 a year.

The other part of overhead was that it also creates duplication.  You need more equipment (more desks). You need to manage multiple places.  Insurance.  All of that.  And you have to commute.

So you have your energy get used on maintaining overhead rather than focusing on what works and what doesn’t. Your first dollars are spent.  And 5% is a lot.

When you have that cut – not to the point of ridiculousness, but to the point of rigorous honesty – you then have choices available.

This is the point of frugality. It’s to make sure that everything is proportional.

You Can’t Take The Money

…and mock them, too.

Otherwise, what kind of whore are you?

When you accept the fee from a client – any client – they get your best. The best you can do in the time and budget allowable.

Sometimes clients are difficult, or boring.  Such is life.

More often, they lack the vocabulary to describe what they need.  They think in terms of results, and not in terms of steps, or queries or deliverables.

They don’t know any better. They are looking for you to help, and to treat their lack of decisions with contempt is the hallmark of a failure.

When they can’t decide, charge to help them. Doctors get paid to diagnose and deliver.  It is malpractice to deliver without a diagnosis.  The “discovery” portion of what they need should be on the other side of the “free line.”

Ultimately, you can remember where to be when you realize:

The responsibility for the spec rests with the guy that took the check.

You have the qualifications to diagnose and to help. In order to be a person of value, you have to own that responsibility, embrace it and deliver on it.

A WordPress Guy Tries Squarespace

I tried SquareSpace for a while.

It won’t be a long term fit for me, but it’s a good platform, and I don’t regret the decision.

I was feeling overwhelmed with the “always updating” nature of WordPress.

I like it, mostly.  But it’s really a layout engine. It’s not really a blogging platform like WordPress is.  It seemed cumbersome, by comparison to “create a blog, then add a page.”

That seemed like a kludge.

Plus, you can’t use popular tools like Mars Edit to publish on SquareSpace.  The offline tools are limited, and limited to IOS.

Navigating “drafts” via the blog interface stunk.  It felt like a mess.  More loops.

If I was starting from the very beginning, and if a blog wasn’t going to be a major part of my strategy (and in 2016, that’s valid) then SquareSpace has merit.

Reconnecting

I’d gotten away from working out and writing.

And I’m connecting back with it and it’s slow going right now.

Is it slow going because I’m older, and my body and mind aren’t as sharp?

Or is it slow going because it’s just rust, and it’ll take a moment to shake off?

Do I even want the answer?

The Practice and The Virtues

My (new) friend Jeff Goins wrote a sentence that stuck with me.  I’ve said it a million times since I read it, and I believe that he lent me the vocabulary to put into action the stuff I’m working towards. 

When the passion goes away, it’s the practice that sustains us.

— Jeff Goins

The practice is a wonderful thing.  My definition is different, than Jeff’s.  His ideas (laid out in The Art of Work) are more kindred to Gladwell’s 10,000 hours, and talk about mastery of a craft.

Mine idea of “the practice’ is more similar James Altucher’s Daily Practice.  Neither are incorrect.

The Practice: A set of habits, rituals and plans that are scheduled  to support the pursuit of a goal.

One may be a practicing Catholic, a practicing Attorney, CrossFitter, whatever. It’s measured in one’s actions.  

But to what end are we practicing?  If the practice is defined as habits, and it’s agnostic towards the value of those habits, I suppose we could be a practicing drug addict, alcoholic.  

We all are practicing something.

I spent 3 years seeking growth.  

This was, largely, a vanity thing. I wasn’t profitable, I wasn’t doing things the right way.  My health was wrecked, my social life was put to the side. My family life cracked. All of this happened because I was chasing something that has always great but I never really care about.

I wanted a 7 figure business.  That was all.  The limit of my creativity.  My ego had to be fed.

Reading the breathless posts on TechCrunch, VentureBeat, it seemed that everyone was getting their 7 figure check.  Reading the exploits of my internet marketing friends, I was like the last guy to NOT have a pajama wearing seven figure side business that just made Paypal buzz with every launch.  

The truth is, there are *literally* more 7 figure lottery winners every year than funded companies.

With that, I felt like I’d be whole,  Loved. That my parents would finally care about me.   That all of my high school friends would genuflect at my greatness, and I’d get a pony on my birthday.

Naturally, it made sense to become a workaholic. Because I was pursuing a 7 figure business that would mean that I had meaning.

More so than I was already inclined.  2013 and 2014 felt  – the whole time – that I was 2 weeks away from turning the corner.  That the checkerboard would present itself to me in time for one finishing leap and ‘voila’ I’d be healed, and I’d take my place.  Never mind that I’m uncool.  I was meant to join some pantheon.

The truth was that I loved the apprenticeship that Simplifilm brought me.  And I missed out on so many lessons because I was obsessed with comparing myself to the huge exceptions that are out there.

I was working for true masters.  I had collaboration withtop flight teams at places like Insight.ly, Yesware, Foundry Group, 500 Startups, more. I got to serve Ryan Holiday, Robert Greene and Seth Freakin’ Godin.  I loved, loved, loved that part of my business. It was such fun working with my partner Jason.  

But because I was in the pursuit of a something that sounded good but I didn’t care about, I was missing the lessons. I was anxious.

For all that we did, I was judging myself based on a number.   I was a failure unless I made…

The zenith of my creativity, circa 2013. 

The zenith of my creativity, circa 2013. 

That was it. That was the point.  That was my practice.  And it led to misery, misalignment, anxiety and hell.  Without that – first in revenue – then in cash – I was nobody.

If the practice isn’t in alignment with what you want, misery ensues.   Most people, I suspect, are pursuing things like consumer goods that have limited value.

And you might chase a goal – for years – that never mattered because people thought it was cool, it was socially acceptable or whatever. 

The Virtues

The practice is meaningless without The Virtues.

The Virtues are the exact things we’re pursuing and valuing.  Where we spend our time.

Just pursuing some goal that society wants is the trite stuff that Fight Club rails against.

We seek to be people of virtue.  The more I thought about The Practice, the more it needed a a steering wheel. 

Something that was more than mere professional development, monetary gain. A connection to meaning. Why practice something that doesn’t mean anything?

The Virtues: The Identification and Realization of A life That Matters.

I’m miserable because I’m chasing something that isn’t truly any fun. I had a company that was fun, joyful, moving in a great direction.  And I sucked the joy right out of it by measuring myself against something that didn’t matter.  

But I was anxious. So of course I came off jumpy, salesy and insincere.

If I had a practice that was in alignment with what I want…my life would have looked different. Calm. And, I realize now, that our odds of gaining something like that increase.

Setting Virtues That Matter 

What makes a meaningful life?

What are the outcomes we want? 

For me, after thinking about it for (literally) years, I know what makes me happy. What moves me and connects me to the world. There are other things that are nice to do.  But I identified 8 things that make me really feel great.

The order, here, is more or less in the order each day I want to do things.The idea is to begin the day going out on a journey and coming back each day to those who love me, and who I love.

  1.  Health: I’m at my best when I’m healthy and fit. The last 2 years have gone backwards.  Creating a system that supports that (diet and exercise) works. This looks like getting to the gym early in the morning even on the days where you don’t sleep.  Sleeping on purpose at a specific time.  Staying in and winding down.   Prepping meals.  Training, physically for events.
  2. Study: I am at my best when I read and have a deliberate curriculum of study, reading and hard practice.   This looks like: reading hard books & following a plan for a while.  Practicing skills (I.e. Languages)
  3. Creation: I want to create bigger, better work. For my self, for others, I don’t care. I used to write  often and well.  I’m out of the habit. I have been in “management” and, with a few exceptions it’s a long process .  I want to make: videos, books, blogs, all of it. More than scripts-for-clients, I want to create great & lasting things. I don’t know exactly what this looks like.
  4. Hustle: I am great at ginning up opportunity. Closing it.  I love the rush.  I feel great when I put a deal together. Electric. Powerful. This is something I do well, and often.  I have a pattern and it works awesomely.  I’ll be putting this into the world, as creation soon.
  5. Service: I love serving my clients.  I want to directly serve my clients and ensure that everything is working really great.  This means daily time blocked, headphones on client work.  Either interviewing them.
  6. Systems: There are both business and personal systems that require a little work each day.  I like doing everything from “having a place for my keys” to “automating our sales process.”   This means an hour or so a week to identify our areas and putting things in place that support us, and doing that work for 4-5 hours a week.
  7. Family: I love my family so much.  They are what will outlast me and investing daily in my family is the best way to have hope for the future.  Preparing them to think, to do whatever comes next.  This looks like sharing meals, doing things. 
  8. Community: I fell far off the wagon socially. This means (to me) that I wasn’t connected very well with what I’m supposed to do.  I lost community.  In 2008-2011 I had a great connection to a lot of people.  It still pays dividends, but I’m missing it.  This means deliberate social interactions, invitations over to my house and the development of non business friends.

This is what I want. I love every thing above. That’s what life is about.

Back To The Practice

The Practice drives what we do – the habits and hygiene to reduce the friction so we spend our times in pursuit of the kind of life we want to live (The Virtues).

Once we identify some things we want in our life on a daily basis, we want to figure out a way to build a durable (Antifragile) routine that supports our goals without bearing friction.

That’s what the next few entries are about.  I have finally committed to understanding what I love to do each day, then it’s about building a life on purpose that includes the right dose of the 8 things I love to do.

The first thing I’ll do is to create an amount of time I want to invest in each area: most things (study, fitness, hustle) will be about 90 minutes daily.  Some things (systems, community) could be a couple hours a week. All of that will be doable as long as I get a dose of everything.

The next few posts will put me on that path and figure out what each thing looks like.

[This was inspired what a few people wrote – Jeff Goins, Wil Wheaton, Charlie Hoehn.]

Professional Freelancers

The old joke about lawyers goes that 99% of the lawyers ruin it for the 1%.

That can be said about freelancers (and vendors in general).  In a mastermind group, a friend said “98% of vendors do crap work late.”

Too true.

So when I began to recruit I got a little jaded.  A lot of freelancers are amateurs.  They may be able to, with a load of direction, do great work.  But it comes with business baggage.  Cruft and debris from bad gigs, misunderstandings and the Artist’s Temperament.

They can’t get out of their own way (by and large.)  There are exceptions.

Stereotyping.

Stereotyping saves time.  I approached someone as if they were a freelancer-who-can’t get out of their own way.  Truth was, this man was a pro.  We had a needlessly contentious conversation because I didn’t spend time looking through his communications/work (he was asking super specific questions from the moment we talked, I was looking to have a more general conversation.)

Worked poorly in this case. Had a type I error, and that is always a bummer.  In this case we will re-do our intake and approach.

Ethics And The Online Inforproduct Space

My (Facebook) friend Craig Swanson asked a very interesting, and fairly complicated question the other day (you can find it here), but the gist:

I have a broad question about business integrity in the educational space for anyone willing to weigh in on this Saturday morning.

Here is the challenge I see in building an education business around helping people pursue entrepreneurial dreams:

1. The majority of the buyers in the education market is wantrepreneurs — (someone who “is gonna” start a business but never does)

2. The market of successful business owners is much much smaller, and don’t invest as much time into training as the broader wantrepreneur audience.

I can’t say that this is something I’ve specifically validated with market research. But it holds up to antidotal experience and talking with many people in the online education space.

I’d postulate that in general terms, less than 10% of online educational purchases actually gets translated into tangible results in people’s lives. There are amazing results being created by people every day in that 10%, but the majority of online education doesn’t get used.

(emphasis mine) So, how does one approach building a profitable educational business when a majority of our potential revenue comes from purchases that will not be used to create the level of results we’d be selling as possible?

Interesting question, inn’t it?

Let’s take it in a different direction. 

First: what percentage of college grads are successful & working in their field. 

The Washington Post says 27%.   Barrons says the ROI isn’t great. 

All this – a 73% “failure” rate for 4 years of (sometimes) intense training to be something specific in the most socially important.  We have an industry that is keenly aware that they are not producing results and yet…

Compare to traditional college an online course costs $50-$5000.  And it can help people learn what they are equipped for (and what they’re not).  It doesn’t (usually) take 4 years. And the contacts can be invaluable.   Contacts?  Let’s get to that in a moment.

Now, let’s talk about Craig’s “wantrepreneur” question.  Yes, a lot of successful people don’t make time to ‘invest in themselves.’

First, people that want to start businesses have a sacred desire. They are trying to render a service to humanity, and calling someone a “wantreprenuer” seems dismissive.  It’s not likely Craig’s intent, but we see signs up “no wantreprenuers allowed.”  Let’s call them “aspiring entrepreneurs.” 

Here’s the rub:  entrepreneur content is nothing – at all – without community.  Content and community are necessary components to a successful education business.  There are many platforms and ways to create community (Khan Academy is different than Copyblogger.)

But both content and community are epoxy of sorts. Nothing takes without both being present.

 Seeing examples of peers crushing it sparks something. A competitive desire, a sense of possibility.

It’s why group fitness works for a lot of people (see: crossfit).  It’s not that what the actions they take are perfect, it’s that the results are compelling and so we work towards something great together. And do it full out.   

A course alone – one that’s been vetted, or one that’s represented with a high degree of honesty is an ethical deliverable, as in you’re not “lying”.  But if you’re being honest with yourself, you’re going to want to take some pretty strong measures to create community.

My friends at Fizzle have this nailed. Best anywhere.  people of all levels are there and I think it’s $35/month or something stupidly cheap.  To connect with people that are trying and winning.

So does the famous Ramit Sethi. 

My own mentor Kevin Nations  goes to extraordinary lengths to build community (spending $1,000 on all of us to wander Vegas for a few hours on a recent trip).  

Without successfully building a community, you stunt your student’s chances.  Most courses don’t build much for community, and they don’t know what powerful results they could be getting.  They are great at funnels, they are even great at content building.

The reason masterminds are popular is because they work so well (the are community without necessarily having content which is a fine choice).

Getting to Craig’s original question: is it ethical to embark on a journey where 90% of your paying customers won’t get the result they wanted.

I guess, sure.  When you present information and 10% +/- people take them up you’ve reached the standard of “not fraud.”  It’s fine. 

For something like a $15.00 ebook, or an intro product, or whatever, no judgements.  Someone that makes or organizes information can charge. 

Where it gets tricky is when you get into taking money that’s dear to people.  Spending someone’s “last dollar” has a way different moral obligation than just “providing access to an opportunity for disposable income.”  

With high prices comes great responsibility.  

Stay Ahead

Right now, at my job, I’m behind.  Far behind.

We will need about 4 solid days to catch up to par.  4 days away from my family, 4 days where I don’t get to really live.

Then, i’ll be tired when I’m on the other side of it.  Mistakes could get made.

It’s my fault – entirely -that I’m behind.  And it’s hurt clients, it’s been a domino thing.  Things bleed into one another until you get paralyzed by anxiety.

The real key isn’t to catch up, pull all nighters and be a hero.  The real key is to manage your life in such a way that heroics are not necessary.  To force yourself to do the work even on days where it’s easy to be distracted by shiny things.

That’s a lesson not easily acquired or learned, but it’s the real stuff.