Slow to Credit

by Sean Hull – January 1, 2009

Anyone with a bank account has experienced this curious phenomenon. When you go to deposit money, your bank is very quick to credit your account with a deposit. Whereas with a debit, it generally takes a few days. In other words they are quick to take-in cash, but slow to let go of it.

In business as with consulting, we’ve all experienced this phenomenon. Some clients are quick to pay an invoice, others may be slow by policy such as “we never pay invoices sooner than net 90 days” or something to that affect. Then still others are slow because they are having cash flow problems in accounting vernacular so-called “aged payables”. And for anyone who has been paying even slight interest to the recent bank failures should know what cash flow problems can mean.

One noteworthy experience comes to mind. A client had an emergency in early Spring and called us to help resolve the issue. We discussed the needs on the phone, the situation, and availability to respond. We were able to attend to the problems and troubleshoot the issue. The only issue was the client had a company policy of only paying invoices net ninety days. It seemed absurd from our perspective to expect immediate response and attention from the consultant, while the company would not compensate a penny until mid-Summer! Suffice it to say we were able to find some creative ways to get a payment out earlier, but the company-wide policy made the whole process difficult, and furthermore weakened our resolve!

Setting a precedent

At the start of an assignment, it’s important to set a precedent. Whether you know it or not, both the client and the consultant are doing this by their actions. For the consultant, do you show up on time, respond to questions and concerns, solve the problem at hand, work well with the team, and overall communicate well? These are all keys to success for the engagement. And for the client, do you respond to requests about and follow through on dotting the i’s and crossing the t’s of billing and paying invoices? Is there a document or contract that needs to be signed before payment can be made? Getting those taken care of well upfront shows you’re not waiting until the last minute to fulfill the other half of your business agreement.

Providing incentives and disincentives

Incentives can be a great way to grease the wheels so to speak. We generally offer our clients a 10% discount for full fee up front. For some clients this is a great option, and they take advantage of it. We also generally abide by the net thirty payment turnaround time. As we are a small vendor, getting paid net sixty or net ninety can sometimes create cashflow problems for us. As a disincentive to that, but to continue to be compatible, we’ve offered a 5% additional fee for net sixty and 10% additional fee for net ninety. This provides the flexibility for everyone to be happy.

As a final and concluding word, let’s all remember a golden rule in business. Two parties come to the table, discuss the problem, agree on measures to fix it and timeframe. The consultant provides said services within a given timeframe, and as promised, and the client then pays the consultant the agreed upon amount in the timeframe they agreed to. All parties make due on their promises, and everyone is happy!

Review: The Global Consultant

by Weiss & Khan

Alan Weiss is at it again, this time teaming up with Omar Khan. Khan himself is an author and consultant with global reach and brings and interesting match to Weiss’ writing with an equal flair for story telling.

The key topics of relationship building, branding, fee structures, billing and contracts all become more complicated in the global context. Cultural differences and expectations, distance, and variance of business practices in remote locations pose challenges as well as rewards.

What keeps readers coming back for more is Weiss’ no nonsense style, focusing on pragmatic questions and using great real-world stories to illustrate with. I especially loved the “straw baskets” story, where getting currency out of a particular country became so troublesome that using the money to buy straw baskets and shipping them out became the easier solution!

View The Global Consultant on Amazon

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Context

by Sean Hull – December 1, 2009

Context is important. Looking at a problem from a different context will have you seeing different problems, and different solutions. What’s obvious when you’re in the lab, programming an interface, or designing a product or service for your customer may end up being unworkable in the day-to-day context in which it is used. It may be cumbersome and confusing to folks with a different perspective or different way of working.

Example One: iPhone OS v1.0 – The SMS Application

When the iPhone first came out, it strangely had quite limited SMS capabilities. Despite the incessant clamoring from iPhone owners, it took time for Apple to add some very basic features. To look at Apple’s site, the support forums, and so on you’d think SMS was some obscure technology from Mars that people used in the old days, but no longer. From Apple’s context the priorities were clearly iPod & music playing functionality, safari, and apps.

Well we all know they were visionary when it came to applications. The simplicity of the App Store, and the explosion of the apps industry proves that clearly. But it’s also clear that they weren’t totally in tune with day-to-day users. When it comes to mobile phones, the lowest common denominator wins. And all mobile phones support basic SMS. So without knowing what type of phone friend has, or what they may or may not use, you know you can SMS message them. And people do, in huge volume. Want to send four friends the address of the restaurant to meet at tonight? You certainly don’t want to type that in four times, but that is what you needed to do with iPhone OS 1.0’s SMS application.

When I first tried the SMS application, it was clear that the developers or UI designers do not actively send a lot of SMS messages. It was immediately clear from my context because I *do* send a lot so I know what the features are and why they’re important.

Example 2: Building Suites and Apartments Numbering

In Ken Auletta’s new book Googled, he tells a story of how Sergey Brin was dissatisfied with the numbering system of the computer science buildings. Being an engineer and a problem solver, he devised a new scheme which would have fewer digits and also tell you distances between buildings.

In New York sometimes you walk into an apartment building, and the apartment numbers don’t even locate floors. What might make sense from an architects perspective or context, looking at blueprints, is often very different when you’re walking around a place and living in it.

Conclusion

The context is always important in business and consulting. One must consider how your customer or client sees things, what words mean for them, and from their perspective. It’s also important in building products and services. Without understanding how a technology will live and breath when it’s rolled out to customers, it will be difficult to provide the winning solutions, the ones that last, the ones that customers talk about. And the same goes for consulting, and services.

Review: Googled – The End of the World As We Know It

by Ken Auletta

The title sounds vaguely fatalistic, the end of the world is nigh, that kind of thing. It turns out though that Auletta is a journalist having reported over the years a lot on old media. So when he says “as we know it” he’s speaking as much to old media as he is to the tech vanguard.

But what makes his book superb isn’t just his phenomenal journalistic skills, in digging up all the facts and serving up a fair and accurate presentation of things. I think it’s important that he’s not a cheerleader at all, and approaches the topic with a critical eye as much to old media who ignored many of the warning signs in early 2000’s as to google who he emphasizes has been hubristic, at times arrogant, and has struggled with issues of privacy and copyright as they’ve built their technology.

What makes this book even more important though is to step back and think of it as a case study in how the internet has become such a disruptive force. And in that light, google is a business which has rode that wave as much as it has defined it. Interestingly Google was not afraid to bring him to Mountain View to speak in their AtGoogleTalks series, and that video is now up on YouTube.

Take a listen – Ken Auletta – Authors @ Google

View Googled on Amazon

Medicine of Austerity

by Sean Hull – November 1, 2009

Nowadays, everywhere you turn, pundits and economists are talking about the medicine of austerity. Especially in regards to government spending that is crucial in the short term (or so says Keynes) but unsustainable in the long term. My favorite analogy I’ve yet heard is “when the tide goes out, you can quickly see who was swimming naked”.

Austerity is another way of saying tightening your belt, reigning in debt or paying the piper. It is in effect the other side – perhaps the painful side, of the credit coin.

For businesses it means paying off debts, while at the same time having more difficulty securing credit to grow. So it means taking a long hard look at spending, sifting through budgets, and deciding what is essential and what can be trimmed. The punch bowl is indeed a distant memory, and we’re still climbing out of our hangover looking for lessons and rules of thumb to keep us out of this situation in the future.

We think this all means there’s never been a better time to engage in open source technologies. And here are three really compelling business reasons:

Reason One: Less restrictive licensing Install the software in your development environment as quickly as your production environment, and rollout new servers that can contribute to the whole enterprise, without licensing headaches and restrictions. That does lower costs in the end because red tape and licensing headaches can mean time, and in the end money.

Reason Two: Peer under the hood This is perhaps a less obvious, or perhaps invisible advantage to open source. But for developers, programmers, and administrators working on and solving problems day-to-day, having the ability to peer under the hood can be invaluable. It means you’re not constrained by the speed at which your vendor can solve a problem and get a patch or more importantly their interest in doing so. Sometimes problems and issues come up which are not a problem for a majority of customers, so will take a back seat to more pressing issues. With open source technologies your engineers have the option to find, fix, and apply their own patch on their own time.

Reason Three: Lower overall costs This is the reason most easily itemized on your bottom line. Yes with open source technologies you still have the costs of expertise and implementation, but with lower cost commodity hardware, and license costs at or near zero, that is sure to reduce your overall costs.

We think now more than ever it’s time to take the medicine of austerity, and look at your computing costs with a mind to where and how open source technologies can be stirred into the mix. Mixing them into the pot on the periphery first, can allow you to test the waters, taste and blend and find the right flavor for your enterprise.

Review: Nudges

by Richard H. Thaler & Cass R. Sunstein

I always enjoy books full of unconventional wisdom about how to influence the world around us. Levitt & Dubner’s Freakonomics and Gladwell’s The Tipping Point fall firmly in that category.

In a time when better decisions and choices are exactly what we need, and when they remain perhaps as elusive as ever, this book contains plenty of medicine worth taking.

View Nudge on Amazon

The Business

A website aggregating twitter feeds for celebrities, with sophisticated search functionality.

The Problem

Having been recently acquired by a large media and entertainment conglomerate, their traffic had already tripled.  What’s more they expected their unique pageviews to grow by 20 to 30 times in the coming six months.

Our Process

We worked closely with the lead architect and designer of the site to understand some of the technical difficulties they were encountering.  We discussed key areas of the site, and where performance was most lacking.

Next we reviewed the underlying infrastructure with an eye for misconfigurations, misuse of or badly allocated resources, and general configuration best practices.  They used Amazon EC2 cloud hosted servers for the database, webserver, and other components of the application.

The Solution

Our first round of reviews spanned a couple of days.  We found many issues with the configuration which could dramatically affect performance.  We adjusted settings in both the webserver, and the database to optimally maximize the platform upon which they were hosted.  These initial changes reduced the load average on the server from a steady level of 10.0 to an average of 2.0.

Our second round of review involved a serious look at the application.  We worked closely with the developer to understand what the application was doing.  We identified those areas of the application causing the heaviest footprint on the server, and worked with the developer to tune those specific areas.  In addition we examined the underlying database structures, tables and looked for relevant indexes, adding those as necessary to support the specific requirements of the application.

After this second round of changes, tweaks, adjustments, and rearchitecting, the load average on the server was reduced dramatically, to a mere 0.10.  The overall affect was dramatic.  With 100 times reduction in the load on the server, the websites performance was snappy, and very responsive.  The end user experience was noticeably changed.  A smile comes on your face when you visit your favorite site, to find it working fast and furious!

Results

The results to the business were dramatic.  Not only were their short term troubles addressed, as the site was handling the new traffic without a hick up.  What’s more they had the confidence and peace of mind now to go forward with new advertising campaigns, secure in the knowledge that the site really could perform, and handle a 20 to 30 times increase in traffic with ease.

Principal Agent

by Sean Hull

The principal agent problem is a dilemma in economics. It occurs when a principal hires an agent to provide a service while both their interests are not aligned. It is further compounded when there is so-called asymmetric information.

For example, when you go to a car mechanic because your car is behaving strangely, you may know very little about automobiles other than how to drive them. In this case the mechanic has asymmetric information, ie he or she understands much better what’s happening under the hood. The interests being misaligned comes in because your interest is to pay the lowest price, while his interest is to sell the most hours of labor, and parts.

These days we’re digging through the rubble of the financial meltdown of last fall, and economists are talking about this principal agent problem. Agents hawking funds invariably have better information about what funds are good and which ones not so good, and their interests are not often aligned with their clients.

The Economist spoke with Adair Turner, head of the UK Financial Services Authority who referred to some banking activities as “socially useless” while others were “socially useful”. Indeed it’s an interesting way to look at the question.

Hopefully we can then make a small jump to discussing IT consulting, and professional services. We see the principal agent problem often. Economists suggest applying such things as profit sharing, higher compensation for efficiency and performance measurement. All of these are fine and good and may well go some way towards resolving the problem.

However I would argue there are two fundamentals that are worth pursuing. One is to up the information asymmetry, ie do your homework to learn more about the services being rendered, and the details of what tasks are being performed. Ask questions, perform due diligence, and ask other providers for their take on the problem.

Secondly I would argue that trust is important. You want to build up some trust with a provider, and that means relationship building. That’s the age-old balm for good business. Have an open mind, keep your interests and that of your provider in the front of your mind, be aware how they align, and when and if they don’t and continue to discuss those issues. Through that type of dialog you can better come to a common ground. Also as time passes, the relationship and history of good will can bring confidence to both parties.

So to conclude, I would suggest that the principal agent problem remains in many areas of business, and that correcting the asymmetric information problem will go some way towards resolving it, but that a good relationship built on trust from both parties is in the end the best medicine for business.

Review: The 50th Law

by 50 Cent & Robert Greene

Robert Greene is the acclaimed author of 48 Laws of Power, and 33 Strategies of War. His new book chronicles 50 Cent’s rise to fame through adversity and against all odds.

He mixes many of the themes from his previous works, with real life illustrations from 50 Cent’s life. I found it to be a good read, full of excellent lessons on personal and career development, focus, strength and perseverance.

View The 50th Law

Invisibility of Skills

by Sean Hull

I’ve spent some time over the last ten years getting more and more into fitness and training. Back around when I hit thirty, I was a little bit overweight, and out of shape compared to my twenties. I decided I needed a change, so I signed up for a martial arts class called Capoeira, which is a Brazilian tradition, filled with inversions, handstands, cartwheels, and all manner of crafty movements. While practicing, you’re immersed in a circular field, where two opponents make faux movements, and pretend to be fighting, all within inches of each other.

There were two things that struck me as very surprising. One was that before seeing someone in the ring, you might not have *any* idea of his or her skill. Some guys were tall and skinny and lacked any skill, but looked like they were muscular enough to be good. Others were a little soft and didn’t look particularly powerful, but in the ring their movements were fluid, and precise. I realized I could not tell or judge someone’s skill until I saw them perform.

The second thing I noticed was how getting in the ring and “performing” brought out aspects of each persons personality in ways that words could not reveal. One person was provocative in the ring, starting trouble, and stirring things up, while another tended to be bashful, preferring to lean back and avoid close contact.

You might guess where I’m going with this, as I think there are real and valuable lessons from this which happen everyday. We’ve all heard the term “looks good on paper” and we have that phrase because we know how many times something – a deal, contract, engagement, or someone – resource, consultant or service provider – has looked good on paper, only to find performance to be lacking in some important way. Another phrase that comes to mind is “talk is cheap”.

So what is the take-away from all of this? Well what it means is that what I’ll call “in-action” skills are quite different from “test-taking” skills. So beware giving too much weight to tests that don’t actually demonstrate in-action or in-the-field performance. Also beware the hype filled resumes, and try to get at real-world experiences, drawing out those with stories, and examples. Service providers, consider giving clients and prospects a *sample* of your services. This can come in a lot of forms, be-it a free analysis or survey, or half day of un-billed time.

Companies looking to hire a provider need to keep in mind that in these tight budgetary times, you can put more conditions on your service providers. So even if they don’t suggest it, you might do so. Ask if the provider might demonstrate in some way, how they can solve real-world problems. Be mindful of and reassure the service provider your intentions, that you’d like to have a clear idea of what level of service you’ll be getting before buying, but that your intention is not to somehow get some free services. It’s the push-and-pull back and forth of this phase of the relationship that provider and client suss each other out, and where the invisible skills materialize.

Review: Mind Tricks

by Steven Saunders

I picked up this book the other day while browsing in a local bookstore in the neighborhood. In business we talk about “getting out of the box” or “expanding the envelope”, and that in a nutshell is exactly what this book is about. From looking at language patterns, reframing how we see ourselves and others, to new methods to improve our memory and much more.

The book is dense and full of great information, but also short, only 58 pages, so for those of us short on time, it’s easy to finish, or thumb through during those little gaps in our schedule. Each pair of pages is a short few paragraphs matched with some quirky and fun drawings illustrating those points on the facing page. It’s a lighthearted book easy to pickup and flip through, but full of big ideas!

View Mind Tricks: Ancient and Modern

Ownership

by Sean Hull

After reading about the Brooklyn Brew Shop in TimeOut New York recently, I decided to take a little trip to Brooklyn to visit their store at the Brooklyn Flea. The Brew Shop folks don’t make beer or that is it’s not what they sell. What they sell are kits to make beer yourself. Their website proclaims that it’s not difficult, saves you money, doesn’t require a lot of space and tastes better than what you find in stores. A ha, I thought, now here are some enthusiasts.

When I met them at their small kiosk at the Brooklyn Flea they were very friendly. I arrived during a long winded discussion about various flavors of beer, and the intricacies of the equipment, racking canes, tubing, thermometers, sanitizers and so on. The gentlemen I spoke with had an air of intensity and excitement about what he was talking about. As though somehow he had discovered something special, something he was excited about, something he knew a lot about, and something he owned.

It occurred to me that this kind of attention to detail, this home-brew, do-it-yourself, self-taught ethos is what built the computer revolution, and continues to this day in areas like open-source software, web startups, and now mobile phone startups. It is that ownership of something, that mastery of it from top to bottom which excites and inspires these folks.

What I also noticed was how much in common these enthusiasts had with the home-brew computer folks and open-source software developers. They are both excited and passionate about what they’re doing, they pay very close attention to details because those details excite them, they have knowledge of each part and each moving piece. Both groups seem somewhat quirky, but in a good way, dedicated, and really willing to go that extra mile when it comes to getting it right. And that boils down to ownership and the result of which is quality.

Now granted there are some downsides to passionate people. They tend to have strong views and opinions, and because of their great knowledge and expertise might disparage contradicting views at times.

None-the-less these are the folks who you want to be web-mechanics, your database gurus, and your systems administrators. These are the consultants you want to trust reviewing your security, and checking your backups. Keep this in mind when reviewing resumes, certifications, degrees, and what big-name companies a candidate has worked for in the past. You might instead ask offhandedly if they build servers in their garage with their spare time, or hack their mobile phone, or tend take things apart to see how they work. These are all great indicators of that ownership of something, that mastery, that do-it-yourself enthusiasm that you find in the best and brightest.

Review: Animal Spirits

by Akerlof & Shiller

Robert Shiller is one of the lone economists who raised a red flag two years ago analyzing the housing market and observing that something was wrong. If that doesn’t get your attention, he’s also the author of the famous “Irrational Exuberance” the famous economics title that hints at his later theme.

Animal Spirits takes a radical step, not for the lay person you and me, but for an economist. He poses the idea that markets are ultimately driven by something above and beyond, or more powerful than the fundamental economic drivers, but rather emotions such as fairness, confidence, stories, at time corruption, and the illusion of money. The new area of behavioral economics has gotten a lot more attention of late, and for good reason. This book is an excellent introductory book on the topic for those of us not schooled in the “dismal science”.

View Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism on Amazon.

The Business

A location based nightlife and entertainment company built on mobile smartphone platforms.

The Problem

The website was sluggish, and performance of the mobile applications were running slowly.

Process

We worked closely with the CTO and development team, discussed sticking points focusing on relevant areas of application and infrastructure.  We drilled down to the different components of the application, such as the network, cloud hosting (amazon EC2), webservers, load balancers, and backend database.

We identified that the heaviest components were the complex mechanisms and code used to calculate location itself.  Since this was an integral part of the service, users’ mobile devices would use GPS, identify their locations, and search the database for relevant venues and information around them.

Solution Options

We identified two possible solutions, one short term and one long term.

1. Apply an advanced database indexing strategy which specifically addresses location based information.  By utilizing this technology, we would eliminate and vastly simplify the code being used to search for venues and information based on location.  Being the central component to the application, this would provide a dramatic boost in performance.
2. Build a completely new and streamlined solution to the location searching functionality, by using square location areas, instead of the more intuitive circular location area.  Since users really just want information about venues around them, they likely don’t have a specific, precise, or mathematical idea of what “around” means.  Therefore a more loose definition can lend itself much better to computer database storage, and subsequent indexing of information.

Results

By implementing the short term plan, and performing further benchmarks, the business was able to release it’s new mobile application on the blackberry carousel store.  They were featured in the carousel store, highlighted as a new business bursting with exciting features and technology.  As a featured application, they received huge spike in volume of ten times their previous average.

With the changes put in place, they sailed through this challenging period smoothly, and with confidence that their application was performing beautifully.

Their long term rollout of the more general high speed solution has been an even greater success, ironing out remaining bottlenecks, and allowing the application to scale and grow rapidly as their mobile user and customer base  expands.

Logic Alone?

by Sean Hull

I was watching an episode of the classic Star Trek series recently where Bones and Spock were having one of their usual debates. Spock was emphasizing rational & logical analysis, while Bones was explaining that there was “just something I don’t like” about that man. Spock responds asking for specifics, without which he cannot make a logical conclusion about the man. Bones’ response “Spock, you can’t evaluate a man by logic alone”.

If only we could keep this in mind when we interview candidates for positions be they great and small, we’ll go a long way towards hiring the best people.

Certifications and Resumes

Extending this argument a bit, one might say that reviewing someone’s certifications, resume, and line items of job experience we’ll have a good picture of what they have done, and what they can do. What we’re saying implicitly is that we can use “logic alone” to determine who is the best candidate.

I’ve discussed certifications in the past as sometimes misleading indicators of and measures of quality in the IT industry. One might generalize that with respect to degrees completed and colleges attended. Not to say that these are irrelevant factors, but that they can be misleading if they’re all that one looks at.

In issue 17 of the newsletter we quoted Anthony Bourdain on hiring people. It was such a good quote, I’ll repeat it again here. Note “Bigfoot” is the codename for some famous restauranteur he doesn’t want to name specifically:

“Bigfoot understood — as I came to understand — that character is far more important than skills or employment history. And he recognized character — good and bad — brilliantly. He understood, and taught me, that a guy who shows up every day on time, never calls in sick and does what he said he was going to do is less likely to f**k you in the end than a guy who has an incredible resume but is less than reliable about arrival time. Skills can be taught. Character you either have or don’t have. Bigfoot understood that there are two types of people in the world: those who do what they say they’re going to do — and everyone else.”

Experience and Track Record

So given all of that what about ones experience and track record. Well References are often requested, but rarely followed up on. These can be a treasure trove of anecdotal evidence of a persons real-world successes. They can speak to how the person performs in real situations, and what they have brought to the table. These are why we find testimonials so valuable. But one of course should apply a critical ear to these, and even request references from specific key people that would have a complete picture of the individual being hired.

In terms of track record, what has and has not happened under the person’s watch? What successes have they brought to the business? What revenue could be attributed to their decisions and actions. Sometimes doing less is more.

Conclusion I think when most people watch Star Trek they certainly identify with what Spock is saying, they want to be impartial, and judge fairly. But when they hear Bones words “you cannot evaluate a man by logic alone” it resonates with most of us at a deep level. We know it’s true, but have a hard time applying it. It’s not easy to go with your gut, and trust your instincts. But as Bourdain points out above, skills can be taught, but character you either have or you don’t. Don’t throw logic out the window obviously, but also don’t evaluate on logic alone.

Review: Spark

by John J. Ratey MD

Although not immediately and obviously about business, this book is a must read for anyone looking to be more productive. Whether it be to stay young and agile, perform better at work, get more hours in a day, or feel more energetic, Ratey’s book explains that more and more studies are pointing squarely at exercise as a key.

In concluding paragraph he notes “The point I’ve tried to make — that exercise is the single most powerful tool you have to optimize your brain function — is based on evidence I’ve gathered from hundreds and hundreds of research papers…” That’s not just to say that it provides all the physical benefits, along with lifting your mood and boosting motivation, but it actually also fosters cells to grow in your brain which we’re otherwise losing. That powerful stuff indeed.

View Spark: The Revolutionary New Science Of Exercise And The Brain on Amazon.