There’s Nothing Wrong With Being a Vendor

What’s wrong with being a vendor?

Sometime during my working life every business that sells to other businesses decided they wanted to be partners, not vendors.

Being in partnership with the companies you sell to is a great idea. Partners exert much greater influence than vendors. They also stand to reap great rewards.

What partners incur that vendor do not is risk. Shared risk.

Vendors get paid for specified services and deliverables. Period. “You want five generators? They’ll be there on the 16th. Two million dollars.”

Partners get paid based on the the success of the project. If the project fails, the partners all suffer. If the project meets expectations, partners all profit. If the project goes parabolic, partners rake in windfalls.

Partnership is risky. Partners do work that might end up being free. They provoke their partners. They bet their reputation and their future revenue on their expertise. Partners take a stand.

Vendors take orders.

There’s nothing wrong with being a vendor, and there’s nothing wrong with being a partner. But it’s wrong to call yourself a partner and preach partnership if you’re not willing share the risk.

By the same token it’s wrong to demand vendors take on risks of partnership if you’re not willing to share the profits as you would in a partnership.

Call yourself what you are, and be proud.

Image credits: NY Post

I Wish Drucker Never Said It

Who doesn’t have a dozen favorite Drucker quotes?

“Drucker” is, of course, Peter Drucker the legendary management guru who lives on in quotes.

And that’s the problem.

A lot of business people know all the great Drucker quotes, but they’ve never read the books. Or they read the books years ago and forgot the points, remembering only the quotes.

What’s worse, people actually run companies and departments and government agencies by Drucker quotes. Not Drucker concepts, which work, but Drucker quotes—misremembered, out of context, and incomplete.

If Drucker had known how some of his quotes would be abused, even reversed to defend bad management, he would have never said them.

For the sake of American business, I propose we banish one famous Drucker quote from the language and from the practice of management.

“What gets measured gets managed.”

This is the most evil and destructive Drucker quote of all time. I hear it at least once a month, usually to justify elimination of tasks that cannot easily be measured using the kinds of simple yardsticks executives fancy. Ya know, unmeasurable work like ingenuity, coaching, innovation, creativity, and, Drucker’s favorite, imagination.

Yet, Drucker’s own work, if anyone bothered to read the books, counters the popular misunderstanding of the quote. For example, Drucker’s praise of knowledge workers includes this caveat:

Working on the right things is what makes knowledge work effective. This is not capable of being measured by any of the yardsticks for manual work.


Moreover, because knowledge work cannot be measured the way manual work can, one cannot tell a knowledge worker in a few simple words whether he is doing the right job and how well he is doing it.

How often do executives push down responsibility for profits to the lowest levels of the company? And each time, these executives use Drucker’s bastardized quote to justify the proliferation of P&L down to call center reps. Again, if these executives bothered to read Drucker, they would quickly learn how wrong they are:

He saw to it that the yardsticks throughout the system by which managers and their operations were judged, measured service fulfillment rather than profit performance. Managers are responsible for service results. It is then the job of top management to organize and finance the company so as to make the best service also result in optimal financial rewards.

And the effective executive, as Drucker called them, are diligent about what to measure:

The automobile companies measured only by the conventional averages of number of accidents per passenger mile or per car. Had they gone out and looked, they would have seen the need to measure also the severity of bodily injuries resulting from accidents. And this would soon have highlighted the need to supplement their safety campaigns by measures aimed at making the accident less dangerous; that is, by automotive design.
Finding the appropriate measurement is thus not a mathematical exercise. It is a risk-taking judgment.

But finding the appropriate measurement is hard work, so most executives simply tell the lowest-level employee to make more money and cut costs.

Yes, the world would be better off if Drucker had never said “what gets measured gets managed.” He must have assumed that the people who read it, executives, would execute the idea in the context of Drucker’s entire work. But executives do not. Instead, they use the quote to defend bad decisions—decisions often in direct violation of Drucker’s philosophy.

The good news: Drucker never said it.

Those who apochriphally attribute the quote to Drucker might actually be referring to William Thomson, Lord Kelvin: “If you can not measure it, you can not improve it.”

Even better news: the original quote, by V. F. Ridgway, was not recommendation of measurement, but a warning against the practice. From The Guardian in 2008:

The full proposition is: ‘What gets measured gets managed – even when it’s pointless to measure and manage it, and even if it harms the purpose of the organisation to do so.’

Got that, American business executives? Be very, very careful what you measure and what importance you place on the numbers. As Ridgway explains in his paper, “Dysfunctional Consequences of Performance Management” (pdf available here, and I highly recommend it):

Quantitative measures of performance are tools, and are undoubtedly useful. But research indicates that indiscriminate use and undue confidence and reliance in them result from insufficient knowledge of the full effects and consequences. Judicious use of a tool requires awareness of possible side effects and reactions. Otherwise, indiscriminate use may result in side effects and reactions outweighing the benefits, as was the case when penicillin was first hailed as a wonder drug. The cure is sometimes worse than the disease.

Being a Drucker fan, I’m happy to learn and pass along the fact that Peter Drucker never said the thing I wish Drucker never said.

Now, if business executives would unlearn it, we’d all be better off.

(Note: All Drucker quotes are taken from his book, The Effective Executive. Read it.)

These 9 Principles Will Help You Avoid Lenovo’s Error

Slate calls the Lenovo hack one of the worst customer betrayals ever.

The PC manufacturer Lenovo sold hackers the keys to your checking account for a few dollars. Put another way. Lenovo installed code that effectively disabled every form of security, anti-virus, or encryption you could possible put on your computer. Lenovo installed this malware on every computer it produced for several years.

And they did it for a little profit.

I’m sure Lenovo’s marketing collateral talks about its customers and how much customers matter. It’s all lies, like the lies so many companies print in marketing collateral and annual reports and CEO speeches. The only thing Lenovo cares about is taking money from customers. If the customer dies, so what? There’s another one born every minute.

Lenovo’s Not Alone

I overheard a business conversation a few weeks ago that went something like this:

Employee: I’m just looking out for my customer’s best interest.

Boss: Well, I’d hope you’re looking out for our best interest.

In one sentence, that boss obliterated any hope of customer-centricity in her company. She exposed herself as liar for all the times she stood on a stage and talked about how much she cares about her customers.

Like Lenovo, this boss’s concern for customers begins and ends with her customer’s money. Once she’s taken a customer’s money, the customer can go to hell.

Putting your company’s profit interests above the well-being of your customers will lead you to decisions like Lenovo’s. You’ll eventually give hackers the keys to customers’ checking accounts for a share of the ill-gotten gains.

You are too good a person to fall into that trap. But how do you avoid it?

9 Principles to Avoid Evil and Promote Purpose

If you want to avoid doing evil, here are eight principles your company should live by. Most of these principles are not mine. I got them from smart people like Derek Sivers and Peter Drucker. And I admit that I do not always live by these principles. I try to, but it isn’t easy.

  1. “Never forget that everything you do is for your customers. Make every decision—even decisions about whether to expand the business, raise money, or promote someone—according to what’s best for your customers.” – Derek Sivers
  2. There is only one valid definition of business purpose: to create a customer. . . . It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. . . . The customer is the foundation of a business and keeps it in existence.” – Peter Drucker
  3. “Operate like you don’t want the money—people will be happy to pay you.”—Derek Sivers
  4. “Don’t punish everyone for one person’s mistake.”  —Derek Sivers
  5. Be crystal clear about everything you say or write. Avoid jargon, buzzwords, and clichés. Practice using real words like Project Change Agreement and Statement of Work. Identify precisely the things you reference. Don’t assume “SOW” means the same the thing to you as it does to the person who hears you say it, especially if you’re talking to a hog farmer.
  6. Know what the customer wants or needs. What the customer wants to buy might be different from what you think you’re selling.
  7. Eliminate every possible task. Eliminate before optimizing or you’ll end up doing the wrong thing faster.
  8. Customers pay you to get things done, not for the time it takes you to do them. If a new web page is worth $50,000, it doesn’t matter to the customer whether it takes you one hour or 1,000 hours to build it.
  9. Understand that urgent matters are not necessarily important. Champions do the important stuff. Plenty of also-rans scramble over the urgent.

If profit is your only purpose, you might augh at these nine principles. But it won’t be so funny when the press calls your company “the next Lenovo.”

How to Handle Critics Like Don Draper

“A critic is someone who enters the battlefield after the war is over and shoots the wounded.”

― Murray Kempton

Ever been tempted to respond to your critics? To explain yourself? To educate the public on the real story, the thorny details your critic left out?

I know how tempting response can be. We want to set the record straight, clear our good name, put them in their place. Calling it “vengeance” would be to sell short almighty truth!

But no one ever listens to the respondent. I know Voltaire (or somebody like him) said a charge unanswered is charged agreed to (or something like that).

I say a charge ignored is charge unworthy of our attention.

If it makes you feel any better, Don Draper agrees with me. And this clip from the AMC original series Mad Men empowers us with the perfect attitude toward critics.

“I don’t think about you at all.” Brilliant.

In the series, Ginsberg, the critic, ends up in an insane asylum.

So here’s to you, oh critic of the Internets as you point out my many obvious flaws: I don’t think about you at all, but I’m flattered by all the attention.

Are You The Best Person For The Job?

Your 22-year-old daughter asks you where she should take her car to get the brakes fixed.

If you’re a father or mother, you probably just felt your pulse quicken. Your eyes opened a bit wider. Those are natural physiological responses to danger, and bad brakes in your daughter’s car are certainly a threat.

How do you go about answering her?

You know she doesn’t have much disposable income. She’s been working part-time since graduating college in May. You also know she doesn’t know much about cars or service stations. You’ve always handled that for her.

Now, she’s a grown-up and wants to take control of her life. But she wants your advice because she trusts you.

Do you tell her to save money by taking it to a guy who does brake jobs and lawn mower repair on the side? Or do you give her the number to the best shop in the area, which is a little expensive, but has a reputation as the best in the business?

Even if you have to help her out financially, you insist she takes her car to the best garage in town, don’t you?

Next question: when a client asks you if you’d like to bid on a project that’s a little outside your typical work, do you hold yourself to the same standard as you hold your mechanic?

In other words, if you know you’re the equivalent of the guy who does brake jobs on the side, would you recommend yourself to a valued client?

In business, it’s tempting to chase every dollar. It’s also tempting to believe you can do anything. So when a client asks about some new business, it’s tempting jump at the chance and hope you can pull it off. Protect yourself with contract language. Manage the client’s expectations.

What if that client was your daughter’s company? What if she were the manager responsible for this major purchase?

If your company isn’t the best in the business of what your daughter needs, would you risk your reputation and her career just to get this deal?

I’ve adopted a new standard when considering requests from clients: “Am I the best person in the world to deliver this project for this company?”

If the answer is “no,” then thank the client for considering your firm and offer to help them select the best. At least let them know you don’t think you’re the best company for this particular work. Let them know you’d love to work with them on the project, but advise your client that you’ll need their close support and maybe a little patience. “If that scares you, I’ll help you find a better supplier.”

If you feel it’s too hard to walk away from the money, pretend the client is your son or daughter and ask again. Unless you’re a psychopath, you’ll do the right thing.


P.S. If you find yourself consistently sending business elsewhere, maybe it’s time you improved your product and services. You’ve got to be the best in the world at something.

All Sucks That Ends Sucky

Shakespeare was sort of right. All’s well that ends well.

But the opposite is true, too. If the ending sucks, it all sucked.

At least, that’s how everyone will remember it. Sucky.

Remember this rule when you’re putting together a presentation, a pitch, or a meeting with a client. The whole event, minute by minute, needs to be good and attention-worthy. But you MUST stick the landing if you want to be remembered well.

It’s called the Peak-End Rule, and, as far as I know, Nobel laureate Daniel Kahneman invented it. Well, he didn’t invent it–it’s evolutionary. Kahneman named it. Kahneman also gave a great example, which I’ll recount best I can.

Better yet, I’ll just copy and past it from his book, Thinking, Fast and SlowSpeaking of a friend, Kahneman writes:

He told of listening raptly to a long symphony on a disc that was scratched near the end, producing a shocking sound, and he reported that the bad ending “ruined the whole experience.” But the experience was not actually ruined, only the memory of it. The experiencing self had had an experience that was almost entirely good, and the bad end could not undo it, because it had already happened. My questioner had assigned the entire episode a failing grade because it had ended very badly, but that grade effectively ignored 40 minutes of musical bliss. Does the actual experience count for nothing?

How often we ignore this basic fact. How often assume that we’ll be graded on the whole of our performance when, in fact, the final few seconds of our show will determine how the audience remembers the experience.

Fair? Hell no!  But it’s the way people are wired.

I’ll be honest: I screw this up all the time. I don’t put enough effort into sticking the landing. I usually start of strong. That’s important, because you don’t want to lose the audience or your prospect early. And the middle parts are good. But I don’t always put hard effort into a killer close.

Here’s a formula for changing all that.

  1. Before you plan anything, decide how you want the audience to feel when they leave.

  2. Think of experiences that left you feeling that way. Do you want your audience scared? How does Stephen King drive people to sleep with the lights on? Want them to leave curious? How does Malcolm Gladwell drive people to dig deeper and deeper into arcane subjects? Want them to leave laughing? How did George Carlin use callbacks to close leave his audiences in stitches?

  3. Plot the emotional rollarcoaster that will end with that emotion. It’s very difficult (and risky) to jolt your audience from passive relaxation to sheer, heart-stopping terror in one second. Whatever your closing emotion and intensity might be, you need lead the audience there. If you want to end with curiosity and intensity of 8 on a 10 scale, you need to start them at about 3 and build up over a few minutes.

By now, you’re probably convinced that you gotta leave ’em laughing. Or feeling something. Writing a good closing line isn’t enough, so pay attention to number 3.

Have you ever been in a bad mood and had someone try to cheer you up? Does it work? No. When someone tries to be all giggly at you, you just add that person to the list of things pissing you off.

So you can’t have a static close. Well, you can, but you need to read the audiences mood before you deliver it. If you’re shooting for laughing with an intensity of 8 and the audience’s mood is angry with an intensity of 10, you need bring down their intensity (try self-deprecation), then shift the mood (try a story with a happy ending), then start building up to your ROFLOL climax.

And if all else fails, offer to buy everybody a new car. It works for Oprah.


14 Steps to a Purpse-Driven Company

This story is about big companies who provide services to other businesses. If your business is different, you might still learning something.

Everyone wants to have a purpose. We want our work to advance that purpose. As Jan Bruce of meQuilibrium writes at

The way to excel in your field and in your businessis the degree to which you are purpose driven. Yourwhy, in other words, matters more than just your what.

The Scenario

Maybe this has happened to you.

You’re on the phone with a client. The client asks you to perform some fairly basic task, like replacing a couple of images on a website with new images the client just emailed.

“When can you have this ready for us to look at and approve,” he asks.

You say, “Uh, let me get back to you on that.”

“Seriously?” he says. “We sent these pictures to three other vendors, and they had it done the same day.”

The difference is, of course, those other three vendors are small agencies. The person your client talked to is probably the person who maintains the web site. They probably made the change during the call.

You, however, work for Big Inc. Your data security rules prohibit you from making changes to a web site. You have to fill out an online form, attach the new images, explain exactly how and where the images go, and provide a project number.

Then, your request goes to a security queue. Even though the entire site and its contents are legally the property of the client, your security team has given itself final say on what the client can post.

After the security team’s review, the request goes to a project management queue. A project manager will look over the request and email you with a bunch of questions. You don’t know what her questions will be, but you know from experience that the questions will come.

Next, the project manager will send the task to a work queue. A developer will get the assignment and call you with more questions. Again, you don’t know in advance what his questions will be. If you knew, you would have included the answers in the “Other Information” box of the form before you submitted it.

Once the developer’s done making the changes, your request goes to a quality assurance queue to wait for a QA tester to look. You will get an email from the QA tester asking more questions about the simple change. If you’re lucky. If you’re not lucky, the QA tester will simply reject the change because the initial request did not tell him the load times and memory size of the images. You have no idea what those numbers are, and you know the client won’t, either. So you email the developer to ask what they should be. But the developer won’t have time until the next day.

And so on.

You know other stuff from experience, too. For example, you know that your company promises to complete tickets like this one within 5 working days. But that service level agreement is void if the initial work fails QA. Or if your company finds a flaw in the materials provided by the client. Or if any one of a million other things goes wrong.

You also know your client will rip into you if you tell him “five days.” He expects your big company to respond almost as quickly as the other agencies he works with. “No one else works like that anymore,” he’s told you a thousand times.

If you tell the client, “It’ll be a week,” he’ll ask “why?” If you recite your company’s process, he’ll say, “I don’t want to hear that. Your competition gets this stuff done in an hour.”

If you tell him, “it’ll be done tomorrow,” you’ll have to call him tomorrow and tell him the job was delayed.

And so on.

If you’ve been at this job awhile, you’re pretty good at dodging the hard conversations with clients. For instance, you can say, “Bob, I’ll put in the request as soon as we get off the phone, and I’ll email you the ETA from the developer when I get it.” Then you change the subject. “By the way, I’ll be in New York next week if you’d like to grab lunch Tuesday or Wednesday.”

If he takes the bait, you’re home free. You have no intention of emailing him the ETA from the developer, of course, because a) the developer won’t give you an ETA, and b) the request won’t get to the developer for at least another day. Cross that bridge when you get to it.

If he doesn’t take the bait, impress him with your multi-tasking skills. “I just forwarded the request to the developer. It usually takes him about 15 minutes to make a change like this.”

You’re not lying, really. Swapping out images will take the developer far less than 15 minutes of actual work. In fact, the combined activity time of all five people involved will total less than 15 minutes. Those short sprints of activity, however, will occur over a period of five days no matter what you do. It’s the elapsed time that makes clients hate you.

“That’s great,” says the client. “My legal people are all over this change, so let me know as soon as it’s ready for them to test. There’s something wrong with the images that are up now.”

You say “of course,” hang up, and realize you’ve just deceived your best client. Again.

 The Problem

I see this scenario play out all the time, and not always involving web sites. It happens with print media, with dimensional products, with simple estimates and contract changes. To the client, the fault is not your company’s. It’s yours. You look shiftless and lazy and dishonest. Your company destroys your personal brand.

But you didn’t devise this system. You don’t even know who did. Some committee? Some long forgotten manager? No idea. But it’s the system, and it’s documented, and it’s your job to follow it.

By following the system, though, you cannot commit to anything a client requests. You cannot even give an honest estimate. You have no control over the data security analyst’s schedule. Or the project manager’s. Or the developer’s. Or the QA tester’s. To a large degree, you don’t even have control over your own schedule.

If you’ve ever worked in or with a small agency, you envy the nimble flexibility of your counterpart there. She can open the client’s email, download the two images, go to the web page, upload the images, and she’s done. Her agency uses an open source content management system for client sites, so no developers need to touch simple requests like this one. The client approves the changes while you’re on the phone.

Most of my adult life, I’ve worked in small agencies and software startups. For the past eight years, I’ve worked inside a big company. I’ve seen what works and what doesn’t, and I can assure you the big company way doesn’t work. Big companies produce low quality, expensive stuff that’s obsolete before it hits the market. Big companies survive because of a psychological quirk of evolution: the brain associates mass with quality. No one ever got fired for buying IBM, the saying goes. But they did get laid off, along with everybody else, when IBM’s bloated, slow, and relatively ancient system got smoked by some startup’s software.

The Solution

You’d think, having worked in companies big and small, that I’d be the perfect person to fix my big company’s problems. But I’m not. I don’t know how to fix a company that doesn’t want to be fixed. If I were in charge, though, this is what I would try.

  1. Know your company’s purpose. Would the world be worse off if your company closed tomorrow? How do you make life better? Your company must have a purpose, and its purpose must inspire outsiders to root for your company. If your purpose is just to make money, no one will help you. If your true purpose is something bigger, you’ll win fans.
  2. Measure every decision against your purpose. Every decision must advance your company’s purpose. At Anheuser Busch, I was told over and over, “everything you do must help us make more beer or sell more beer. If you’re doing something that doesn’t seem to support one of those two goals, stop doing it and ask someone to help you figure it out.” Whatever your purpose, every activity by every employee must be perfectly aligned to that purpose.
  3. Everything you do must benefit the customer. Every decision you make, from who to hire or promote, how to organize your management, how much to pay, which benefits to offer, and what color to paint your lobby, must help the customer. If it doesn’t, don’t do it.
  4. Empower front line people to do as much as reasonably possible themselves. Front line empowerment shouldn’t be limited to call center agents and floor clerks. Anyone who faces a customer should be empowered to do everything possible to satisfy the customer while he waits. If that means your firm needs new systems, get them. If that means massive cross-training, do it. Stop dividing a single task, like changing images, into five illogical steps.
  5. Make change easy. Face it, if customers stop asking for changes, you’re out of business. You get paid to create change on behalf of customers. Your systems and processes and training should drive people to look forward to change requests. Whether you’re a marketing agency or a software shop or a dry goods store, your survival depends on changing a customer’s life for the better. Get good at it, and eliminate everything that gets in the way.
  6. Stop paying people for time; start paying them for results. If you bill clients by the hour, you have a strong incentive to be inefficient. If you get paid by the result, you have an incentive to get stuff done fast. Most big companies I work with like the lazy way of charging by the hour. They increase revenue by padding everything and by adding complexity. Eventually, all their customers will fire them and take business to someone who delivers results instead of mere activity.
  7. Work with small, nimble agencies to see how they operate, and steal idea you can. Most companies measure their performance against two standards: themselves (or their recent past), and companies bigger than themselves. The first standard is necessary. You have to know where you’ve been to figure out if you’re getting better. But the second measure will kill you. Don’t look up—look across and down. What do fast-growing, small companies do? How do they thrive without all your heft?
  8. Eliminate layers of management ruthlessly. Every worker pays the salary of his or her managers, all the way up to the CEO. A call center agent must generate enough revenue to pay her salary and benefits and resources, like phone lines and computer systems and utilities and rent. Then she must generate more revenue to cover all those things for her supervisor. And for her supervisor’s manager. And the manager’s executive. And the executive’s assistant. And the CEO. Management is always a burden on workers and on customers, so eliminate every layer of management you can.Then eliminate one more layer.
  9. Sell by not selling. Don’t try to sell something that your customer doesn’t want or need just because you want to make more money. Some people take spaghetti approach to uncovering unarticulated needs. They throw everything at the customer and see if he buys something. That doesn’t work. You have to know your customer intimately, and know the industry they’re in. Then craft a solution for the problem the customer didn’t know he had. That takes risk, work, and creativity—exactly what customers pay you for.
  10. Make your entire company read Anything You Want by Derek Sivers. Avoid the trap he describes:

    But even well-meaning companies accidentally get trapped in survival mode. A business is started to solve a problem. But if the problem was truly solved, that business would no longer be needed! So the business accidentally or unconsciously keeps the problem around so that they can keep solving it for a fee.

    Sivers, Derek (2011-06-29). Anything You Want (pp. 31-32). AmazonEncore. Kindle Edition.

  11. Act small. You are a big company. Stop trying to impress people with your size. When you think about how big and mighty you are, you don’t just look arrogant, you become arrogant. When you think and act little, you become humble and nimble. Don’t ask, “what would Coca-Cola do?” Ask “What would a Hubspot do?” (If you don’t know what Hubspot is, learn.) Your customers know you’re big. They’ve heard of you. If they care, they’ve checked you out on Glassdoor and LinkedIn. If you’re big, they’re impressed. If you act like a startup when the meet you, they’ll be more impressed. If you act like a giant, they’ll lose confidence.
  12. Ruthlessly eliminate work that customers don’t value. In the scenario, the customer wanted two images replaced in a reasonable amount of time—reasonableness set by the market. He wasn’t willing to pay for anything else. Eliminate what customers won’t pay for.
  13. Isolate niche activities. If you have many customers, some might value an activity that most do not. Instead of bloating all your accounts with this niche activity, isolate it.
  14. Take all the medicine you prescribe. If you sell incentive programs, your company better have the best incentive programs in the world. If you sell training, your employees better be the best trained in the world. If you sell technology, your technology better be cutting edge and excellent. Too many big companies refuse to use their own products. What does is it say to customers when your products aren’t good enough for you?

All fourteen points revolve around the first: know your purpose. Without purpose, you’ll end up just ripping people off.

Here’s Exactly How Much to Spend Protecting Your iPhone

Ever wonder how much you should pay for iPhone protection? There’s formula for that.

If you don’t want to read this whole post, here’s the shortcut: just multiply the cost to replace your phone by 30%. I’ll explain later.

Risky or Phonophobe?

For years, I used the slimmest, most minimal case I could find for my iPhone 4. The only time that bit me was when my phone fell out of my pocket as I was getting into my car at a mall. It was raining. I didn’t realize the phone was gone until I got home.

I drove back in a panic. The lot was dark, rain drizzled. I was mad. I drove carefully down the lane I’d parked in. Only a few cars were on the lot. At least this part of the lot. I took that as a good sign. Maybe nobody’s run over it.

I’d parked right next to a cart bin. I pulled in the spot on the opposite side of same bin to avoid running over my own phone.

I got out of the car, walked around the cart bin, and there was my phone, face down, glistening with rain.

I bent over and picked it up. The home button had died long before, so I pressed the top power button.

Home Screen!

No broken screen. No cracks. And it worked.


Clearly, the water had done some damage. So I turned it off.

I went through all the standard dewatering hacks–rice, dry space, leaving it off for 4 days, etc. When I pulled it out, it worked.

Over time, the 30-pin connector got a little salt build-up. I’d clean it with 95% alcohol, and it would work. I had to do that about every two months.

But the phone worked. I was lucky.

My wife, on the other hand, is a phonaphobic. She insists on encasing her phones in huge, water-tight, bomb-proof, radiation-resistant cases that quadruple the size of the device. And she lectures me to do the same.

“If anything happens, you’re s.o.l., buddy.”

The Phone Protection Formula

Here’s the thing: you can figure out exactly how much to spend on iPhone protection using simple statistics. I’ll show you how with this formula:

P = rc(p), where P = amount of protect, rc = replacement cost, and p = probability of total damage.

To figure out how much you should spend on protection, you’ll need to know how much you’d pay for a new phone based on your plan’s terms, the phone you’d buy, etc. And the amount of protect should include insurance, Apple Care, and protective cases.

Say a new phone would cost me $650, since I recently upgraded my device. According to  SquareTrade®, a leading technology protection plan provider, about 30 percent of Americans destroy their iPhones every year. (I don’t have statistics for other phones, but assume it’s about the same.) That means the probability of damaging your phone is 30 percent a year.

So my P value is $650*.3, or $195 in the first year of a contract. I didn’t buy Apple Care, but I did buy AT&T’s full replacement insurance for $5 a month that I can cancel anytime. So I’ve already spent $60 on insurance. That means I could spent up to $135 on cases and other protection and come out ahead.

Yielding to my wife, I bought a Lifeproof Fré for $92, tax included. But it sucked. People couldn’t hear me talk. Yeah, the case was waterproof. It was also soundproof.

So I downgraded to slim case that offered drop protection That case was only $16. That was great until I came within an eyelash of dropping the phone into a urinal. (Don’t ask.)  So I started eyeballing waterproof cases again.

I’d heard that the Lifeproof Nuud is thinner and works better than the Fré. The problem was the Nuud retails for $90, which would put me over my insurance budget. I’d already spent $60 on insurance and $108 on cases. If I spend more than $28 on a new case, I’d have paid more for protection than the probable cost of damage.

Then, I was walking through a Marshall’s and saw Nuuds for $29. I bought one, and I love it. With taxes, I was a couple of dollars over my limit, but the peace of mind is worth it.

So if you’re thinking of upgrading to the awesome new iPhone 6, you should apply my simple formula when deciding how much protection to get. And don’t forget to include insurance and cases in your total protection budget.

Here’s SquareTrade’s infogrpahic on iPhone damage

Squaretrade Iphone infographic

4 Incredibly Simple Questions To Make Any Company Successful

Derek Sivers of CD Baby. And life.
CD Baby founder and brilliant business strategist Derek Sivers. Clipped from

Here’s my favorite story from Derek Sivers‘s brilliant tiny book Anything You Want. Sivers was in Las Vegas talking to his cab driver. The cabbie told Sivers he misses the mob. Sivers asked why:

“When the mafia ran this town, it was fun. There were only two numbers that mattered: how much was coming in, and how much was going out. As long as there was more in than out, everyone was happy. But then the whole town was bought up by these damn corporations full of MBA weasels micro-managing, trying to maximize the profit from every square foot of floor space. Now the place that used to put ketchup on my hotdog tells me it’ll be an extra twenty-five cents for ketchup! It sucked all the fun out of this town! Yeah… I miss the mob.”

(Sure, we could bring up other issues with the mob, but let’s just leave it as a metaphor and a lesson.)

I told this story a lot at CD Baby.

Sometimes MBA types would ask me, “What’s your growth rate? What’s your retained earnings rate as a percentage of gross? What are your projections?”

I’d just say, “I have no idea. I don’t even know what some of that means. I started this as a hobby to help my friends, and that’s the only reason it exists. There’s money in the bank and I’m doing fine, so no worries.”

They’d tell me that if I analyzed the business better, I could maximize profitability. Then I’d tell them about the taxi driver in Vegas.

Never forget why you’re really doing what you’re doing.

Are you helping people? Are they happy? Are you happy? Are you profitable? Isn’t that enough?

Sivers, Derek (2011-06-29). Anything You Want (pp. 28-29). AmazonEncore. Kindle Edition.

Four questions that define the only just reason for any business to exist. This should be a consultant’s checklist:

  1. Are you helping people? If not, you should figure out a way to help or shut down the business. Companies that aren’t helping are hurting, and that’s evil.

  2. Are they happy? This goes beyond merely helping. Helping is the bare minimum. If they’re not happy, you’re doing it right.

  3. Are you happy? This might be the most important question of all. If making people happy by helping them doesn’t delight you, find something that does.

  4. Are you profitable? Yes, you have a responsibility to make a profit, but only if you answered “yes” to the first three questions. If you’re not helping, or if they’re not happy, or if you’re not happy, then you have no right making money doing what you’re doing.

I read business journals and blogs every day that talk about companies squeezing another nickel out of unhappy customers they’re killing before the CEO jumps off the roof of his 128-story tower.  What a waste of lives and money.

I know business schools don’t teach helping, happy, happy, profit, but they should. And if they don’t, why would anyone go?

Later, Sivers sums up the Tao of Business beautifully:

But even well-meaning companies accidentally get trapped in survival mode. A business is started to solve a problem. But if the problem was truly solved, that business would no longer be needed! So the business accidentally or unconsciously keeps the problem around so that they can keep solving it for a fee.

(I don’t want to pick on anyone’s favorite pharmaceutical company or online productivity subscription tools, so let’s just say that any business that’s in business to sell you a cure is motivated not to focus on prevention.)

It’s kind of like the grand tales, in which the hero needs to be prepared to die to save the day. Your company should be willing to die for your customers.

That’s the Tao of business: Care about your customers more than about yourself, and you’ll do well.


Help people, make them happy, have fun, and make a profit. That’s all it takes to run a successful business.

Here’s a Vintage Coke Commercial That I Always Think Of This Time of Year

My wife teaches kids with special needs.

She started back to school this week, getting her room ready for the little ones who arrive next week.

Until I got to 8th grade and discovered girls, I hated the end of summer. That’s why this vintage Coke commercial depressed me.

Then, once I started looking forward to fall, Coke stopped playing the commercial.

If you’re sweltering in the August heat, remember: fall is just around the corner.

Glad I found it. Hope you like it.