Thursday 7 November 2013

Grow Your Business - Control Is for Beginners

Control Is for Beginners

My daughter’s voice teacher recently told another student to stop practicing.  ”What?!” I almost yelled.  ”What happened to the theory of 10,000 hours of practice for mastery?”  But she explained that, at times, over-practicing can stifle music, just like over-training can stifle athletes and over-engineering can create products too complex to use.  There is a time to stop rehearsing, stop waiting for perfection, stop waiting for control and just go for it.
We need to balance grabbing opportunities as they present themselves — even if we’re not ready and have to ramp up as best and as fast we can — and practicing a lot so that when the opportunity appears, we’re prepared.   At Bell Labs, we were all about practicing; we called it experimenting.  We experimented, learned, applied, and iterated until it was flawless; AT&T wouldn’t release anything into the market until it was absolutely perfect.  When I was designing the system for which I received a patent, I wanted to get prototypes in front of potential customers for feedback before we got too far down the road. How naïve of me! Of course we couldn’t show customers something that wasn’t perfect — it would affect their expectations and maybe (horreur!) negatively impact the brand.  Needless to say, by the time the system was perfect enough to get into the market, we had lost most of our competitive advantage.
In its quest for perfection, for example, AT&T acquiesced creating and leading the cellular industry.  Even though Bell Labs invented cellular telephone technology in 1946, received the patents for it, and piloted mobile telephone service from the 1940’s through 1980’s, AT&T didn’t offer it on a broad commercial basis because, among other things, it didn’t meet the same “perfect” quality standards as wired telephone service. In 1994, AT&T bought McCaw Cellular, getting back into the cellular telephone industry, 50 years after having created the technology. As my daughter says, “Sometimes, perfection is the enemy of accomplishment.”
So how do you get it right? That depends on what you mean by “right.”  Maybe we can learn from musicians who practice spontaneity: jazz musicians.  My daughter’s voice teacher, Kim Nazarian, has taught me a lot. One of the founders of the Grammy-winning jazz vocal group The New York Voices, Kim   teaches her students to be in the flow, the conversation of the music.  Yes, she sometimes practices not practicing, but that doesn’t mean she isn’t a gifted and successful jazz singer. This isn’t a paradox — if you know what you’re doing and you’re competent, spontaneity becomes its own skill.
Another musician I’ve learned from is Carl Størmer, founder of Jazzcode.  Carl was a fellow-storyteller at this year’s BIF-9 conference. As he shows us by jamming with two people he’d never practiced with before, sometimes you just need to let go.  A Jazz musician needs to stop controlling and start trusting his band members’ competency and artistry.  This trust, the willingness to let go and allow for space, lets band members take risk (that’s what a jazz solo is!) and try something new and different — while being supported by their band-mates. Without that support, you get a chaos of sound. With too much control, you don’t get jazz. Carl’s wife, Ane, sums up this attitude with her own adage: “Control is for beginners.”
When we don’t give our people the space to take calculated risks, learn, apply, and iterate, we are really risking our future.  While there is a risk to improvising and spontaneity, control brings its own insidious dangers. In our push for perfection, we over-engineer. We add so many bells and whistles that it takes a Ph.D. to use the product. Just because we can doesn’t mean we should.  Just because we can practice to perfection doesn’t mean that’s best.
Spontaneity and relinquishing control provide enormous advantages, even if it takes a certain kind of non-practice to feel comfortable with it.  Jazz musicians know that.  Innovators should learn that as well… because sometimes, control really is for beginners.

by Deborah Mills-Scofield 

Twitter's IPO, Feathering its nest

Twitter's IPO

Feathering its nest

JUST a few days ahead of its planned initial public offering on the New York Stock Exchange, Twitter has raised the price range for its shares to $23 to $25, up from the original target of $17 to $20. The microblogging service and its bankers have hinted that strong demand for its stock justifies the increase. But the move, which could value the company at up to $13.6 billion, means that investors should be even more wary of taking a flutter on the firm’s stock.
True, the IPO market is hot right now, with quite a number of firms raising their initial price targets. True, too, Twitter has increased fast both the size of its audience (some 230m people visit it on average at least once a month) and its revenues. But, as we noted in last week’s issue, there are good reasons to think the firm’s shares will be overpriced.
At a valuation of $13.6 billion, Twitter would have a market capitalisation-to-trailing-12-month sales ratio of roughly 26, which is higher even than those of Facebook and LinkedIn when they went public. Yet Twitter has been coy about how exactly its advertising machine will be able to generate the billions of dollars of future revenues to justify such a lofty multiple. Rett Wallace of Triton Research, which analyses private companies, points out that Twitter has provided far less granular information about its sales activities in its regulatory filings than, say, LinkedIn did when it went public in 2011.
Those who think Twitter’s share price will soar over the long term point out that it hasn’t increased the number of shares it intends to offer and that its existing owners with big stakes aren’t cashing out en masse in the IPO. Both of these things, they say, should reassure nervous punters who fear a re-run of Facebook's IPO. The giant social network's share price plummeted following its debut on the stockmarket and it was many months before it rose above the initial $38 offer price again.
But one thoughful estimate published on the same day that Twitter increased its price range concluded that the firm is in fact worth no more than $17 to $18 a share. BIA Kelsey, which analyses advertising markets and firms operating in them, says that Twitter faces some very big challenges just to get to the $5 billion of revenue a year it will need to generate by 2020 to justify a share price today of $17. Among other things, it notes that Twitter’s growth in America is slowing and that it is generating far less revenue from foreign users, who account for about four-fifths of its audience. Perhaps the hype around the IPO market right now will still make Twitter’s shares fly in the short-term. But they are unlikely to stay aloft for long.

by M.G.

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