Found this postcard at the Letterpress Fair this weekend. It’s made by Dead Feminists and I agree with the sentiment whole-heartedly.
Since I haven’t been so great about writing up my own escapades of late, I figured I’d start writing about some of the great things other people are doing so that I can get back in the blogging habit. So here are five things you should take a look at. There’s no particular order beyond not being able to get these ideas out of my head.
Scaling Up a Business
I’m lucky enough to hang out with entrepreneurs pretty much constantly. Two of my friends are in the process of scaling up their businesses, in two very different ways.
Audrey Eschright, the publisher of The Recompiler, is running an experiment: she’s asking for funding to support offering a free online edition of the third issue of the magazine. She’s broken down exactly why — the magazine’s sustainability requires additional revenue. At the time I’m writing this, by the way, Audrey’s just $450 shy of her goal. I not only subscribe to the print edition of The Recompiler, but I also write for it occasionally, so I’m looking forward to the online release of Issue 3.
Kronda Adair is taking a different approach — which makes sense given that she founded a very different type of company. Earlier this month, Kronda wrote a post cataloging the list of changes she’s making at Karvel Digital, including exactly what sort of web design and marketing services she’s offering clients. Given that websites really aren’t ‘set it and forget it’ tools, Kronda is adapting her business to provide the support that keeps her clients getting value out of their website long after the web design process is over. What I find really fascinating, though, is that Kronda is creating a program for people who will never hire her directly. She’s creating Websites that Work, a course that guides individuals and organizations through creating successful websites on their own. The course is geared towards small businesses that can’t afford to spend thousands of dollars on a website. Kronda is funding the course through an IndieGoGo campaign ending in 8 days.
A ‘Now’ Page
I spend a lot of time staring at other people’s websites, whether I’m looking for an interviewee, a speaker, or someone to rope into whatever escapade I’ve come up with lately. Mike Vardy wrote up a trend that I would like all of us to adopt: the ‘now’ page. Sort of like a more specific ‘about’ page, the ‘now’ page is just a quick run down of what you’re actually working on these days. I’ve started writing up my own ‘now’ page.
Spreadsheets, But Better!
I get excited about spreadsheets in a way that probably concerns normal folks. (This XKCD comic hits a little close to home.) On the plus side, the folks over at Airtable also seem to get emotional about good spreadsheets, and they’ve created a spreadsheet tool so fantastic that I’ve been bringing it up in every spreadsheet-related conversation I can. It’s got a lovely user-experience and is easy to work with, and in perhaps the smartest move since selling pre-sliced bread, Airtable makes all your spreadsheets available via APIs. I have a referral link you’re welcome to use (I get credit to support my insane spreadsheet habits!). You can get most of the functionality you’ll want out of Airtable on a free account, by the way.
— social interaction (@brianwisti) October 10, 2015
We spent over a year planning PyDX. From my perspective, the result was worth every bit of stress. I’ve been thinking about what I want to say about the conference now that it’s over. I’ve stopped and started this post a dozen times so far. Several versions have been downright sappy.
Instead, here’s the top five things that stuck out for me during PyDX.
1. Bake Diversity in from the Start; It’s Not Something to Add Later
I have no shame when it comes to talking about diversity numbers in order to drum up sponsors, but I actually feel good about how we PyDX organizers handled questions of how to make our conference more diverse. We focused on what real people needed to feel comfortable showing up to a conference — providing a safe environment, offering child care, even small group opportunities.
- We came within four tickets of selling out.
- We provided full scholarships to more than 90 percent of applicants, and were able to offer free tickets to the rest through our volunteer program.
- We didn’t keep official numbers on diversity, but I made some informal counts. About half our attendees and speakers were diverse on some axis.
We didn’t have to focus on creating diversity when we already had a space that welcomed diversity in — and we responded directly to what people told us they needed to be able to attend. Remember, you can’t assume you know what anyone else needs.
Given that I attended a conference earlier this year that was exceedingly proud that 15 percent of attendees were women, I feel great about PyDX on this front.
2. Technical Talks Don’t Get All That Much Love, Surprisingly
I was obnoxiously proud of our speaker line-up, but I was surprised by what attendees responded to most enthusiastically. Looking at social media during the conference and talking to attendees afterwards, everyone was excited by talks that focused less on code — talks about topics like how to learn and how to build culture did really well.
The exceptions — the technical talks that got rave reviews — all had one of two key characteristics. Either they were workshops, where attendees participated and left with code of their own, or they were doing something far outside of typical Python projects, like making music,
Just about all of the talks went well, by the way. I’m not critiquing any of our speakers here. I’m speaking solely about what attendees were most excited by.
3. Not Screwing Up Codes of Conduct Requires Planning
I strongly believe that having a code of conduct is a minimum requirement for a conference (as well as smaller events and even occasional meetups). Having one sets expectations and creates a safer environment for every single attendee.
Organizing PyDX has only solidified my belief. The experience also highlighted some areas where we can make setting up and enforcing codes of conduct much easier — PyDX was a learning experience, because I’ve usually only been in a position to think about codes of conduct for smaller events.
These are my key takeaways:
- Create an incident response plan in advance. You never want to be trying to figure out how to deal with a specific issue in the moment, especially when you’re already stressed out of your mind about whether the keynote speaker’s laptop is going to work properly with the A/V equipment.
- Talk to an expert when creating your incident response plan. We actually didn’t write our own plan — instead, Audrey Eschright sat down with us and went over potential issues and how we wanted to handle them. She put that information together into a document we could refer to during the conference and that had enough detail that we could hand it to a volunteer if need be. Budget the money for that sort of expertise; it’s far cheaper than a lawyer after the fact.
- Every single organizer and volunteer is on duty for code of conduct issues. You should absolutely have a point person, but any attendee facing a problem will talk first with the staff member they most trust who they can catch alone. And those conversations are going to come up unexpectedly — no matter the events I’ve attended, restrooms are de facto meeting rooms because most people feel they can safely talk about anything there.
4. Venues Control So Many Things and They Could Use Their Power for Good
Our venue was our single largest expense. Our venue was also the most constraining factor in planning PyDX. Until we’d found a venue, we couldn’t figure out food, childcare, or even the actual dates of the conference.
First off, the UO White Stag Block was a great venue to work with. They were able to meet most of our requirements right away and there was really only one request we made that couldn’t be met, due to the classes that were in session in the building during our conference.
That said, any venue winds up controlling a lot of how a given conference runs. We had to work within our venue’s constraints:
- We could only use specific tape for hanging anything on the walls.
- We could only use catering that had already been approved by the building.
- We had to have insurance for the event.
That last constraint has kept me thinking: Insurance is required in order to fix any problem that occurs during the conference, including legal dilemmas. Why don’t venues have similar expectations for tools that mitigate risk, like codes of conduct? Isn’t requiring events to do more work to avoid any problems or negative attention more cost effective for venues?
5. The Amount of Help People Offer is Amazing
PyDX is truly a community conference. We had two larger sponsors: MailChimp and Anaconda, both of whom made a major difference in our ability to put on the conference. But around 80 percent of our funding came either directly from ticket sales or from local companies supporting the conference (including a lot of consultants and other small businesses!).
I feel like everyone I spoke to in the weeks leading up to PyDX offered to help in some way. The whole experience has been an important lesson in gratitude for me — a reminder that people will help if you just remember to ask. A few will even go out of their way to help without the request.
Thank you to everyone who made PyDX a reality.
And for those inquiring minds who want to know, we were four tickets short of selling out, so I’m not getting the tattoo. At least, I’m not getting it this year.
I’ve been working on PyDX for over a year. So have my phenomenal co-organizers, Rachel Kelly, Georgia Reh, Melissa Chavez, and Christopher Swenson. This weekend — October 10th and 11th — all of that hard work is going to pay off.
PyDX, by the way, is a community conference for Python programmers in the Pacific Northwest.
Our Schedule Rocks
I’ve already said that I sort of wish I wasn’t organizing PyDX, because I want to attend it. We’re filming all of the talks, in part because I would cry if I didn’t get to hear at least a few. Here are the talks that I’m particularly thrilled about:
- Melissa Lewis’ keynote (Saturday AM) — I’ve had the pleasure of hearing Meli speak at PyLadies events and she is going to blow away the PyDX crowd.
- Terian Koscik’s Build a Bot workshop (Saturday AM) — Terian has an impressive array of Twitter bots that do some cool tricks. She inspired me to start working on my own Twitter bot, but I need some help (I’ll probably watch the video of this talk repeatedly).
- Evan Palmer’s Making MIDI Music with Python talk — I admit that I actually got to hear Evan practice this talk, but I’m still excited for the final version. He’s making music programmatically!
You can see the whole schedule here as a PDF. I’m biased, of course, but I think we’ve got a great line up across the board.
I’m incredibly grateful to our speakers for putting in proposals and agreeing to speak at PyDX. Many are traveling to Portland on their own dime to do so and I’m a little in awe of the group of people we’re bringing together.
A Conference for Everyone
One of our commitments from the start of organizing this thing was to create a welcoming conference where everyone feels comfortable. Every PyDX organizer has been to tech conferences where we’ve felt like we don’t belong and we’re willing to go to extreme lengths to avoid anyone feeling that way this weekend. A lot of these decisions, by the way, didn’t take all that much time or money to implement.
A Dry Conference: Tech conferences tend to be boozefests, even though many people either don’t drink at all or would prefer not to drink around people they know professionally. So we’re not providing alcohol as part of the conference (though attendees are welcome to meet up after hours for drinks if that’s their thing).
A Code of Conduct: I’ve reached the point where I just won’t deal with events and organizations that don’t have a code of conduct (as well as a way to enforce their CoC). It’s a matter of safety.
Scholarships: Our tickets are priced at $100, which isn’t cheap. The value is more than there (especially when you consider we’re providing food, childcare, great speakers, and more) but we are aware that it’s out of reach for many of the people who might benefit from attending PyDX.
So we’re offering scholarships. And if you want to sponsor someone else’s scholarship, you can sponsor for any amount through this payment form . A full scholarship costs us $200 to provide, because we offer stipends for travel and other expenses, depending on the recipient’s need.
We had a good business case for diversity, by the way, which helped us explain the importance of these steps when fundraising and marketing. PyCon North America is taking place in Portland in 2016. We’re making sure that anyone who is considering learning Python before that point has an easy way to get started and to join the local community (which desperately needs more programmers).
Plenty of Pythonic Personality
Community conferences are great because they have more personality. When a conference hosts several thousand attendees, everything has to run like a well-oiled machine. But since PyDX is a smaller community conference, we can have a little fun.
Our entire vibe is a weird mix of hipster jokes and Monty Python references. I’m still not sure I’ve found all the jokes on our website, but I did have a great time writing our sponsorship prospectus (I did have to spend some time researching synonyms for ‘artisanal’).
And I’ve dared the community to help us sell out. If we sell out of tickets (and yes, scholarships count), I’m going to get the PyDX logo (the snake at the top of this post!) as a tattoo. I was originally threatening to get that tattoo on my butt. However, since I want to be able to show it off without violating the code of conduct, I’m thinking my leg is a better bet. Last time I checked, we still needed to sell about 40 tickets for me to get that tattoo. Want to make it happen?
Buy a ticket (use FRIENDOFPYDX for 10% off) or sponsor a scholarship (same payment form as before). You know you want to see me all inked up.
Speculative work is a bad bet, both from the point of view of a creative and from that of an entrepreneur. Asking people to do free work (or doing that work yourself) is rarely the most effective way to move a project forward — and yet I keep seeing calls for spec work.
I would like to think most people understand that spec work isn’t an effective option, but that’s clearly not the case. The best I can do is to continue to refuse to do spec work and to try to convince you to take the same stand.
My Time is My Money
As a creative, a request to submit spec work is disheartening. Your ability to land paying work is based on your ability to win a contest. It’s like hearing that every piece of work in your portfolio is worthless: that your body of past work doesn’t actually prove you’re capable of completing a project. Personally, I find such requests irritating at best. I prefer to assume that suggestions I work on spec are attempts to get me to work for free, because I’d rather be angry than to think that a prospective client doesn’t believe I’m capable of the project in question.
Either way, though, spec work is a clear indicator that a prospective client doesn’t value my time. That worries me because my income is directly tied to the number of hours I can spend on paying work. Despite what these clients seem to think, I’m not working just to have something to do during the day — I need to earn a living. There’s a price tag on every hour in my day.
That lack of respect for my time is worse when a prospective client asks you in person or on the phone. I’ll admit to occasionally ignoring emails asking for a trial post or some examples on spec — ignoring an email is easy. But when someone asks me for a trial post during a phone call, the question trips me up: I’ve set aside time out of my day to talk to this person (time I’m not being paid for), and they want even more of that scarce resource? It gets worse when you consider the amount of unpaid work that can go into pitching a project before you can guess whether you’ll get the gig, like writing proposals and query letters.
A request for spec work in the moment forces me to keep my cool on an issue that actually makes me pretty angry, while talking to someone I hope to impress. Worse, it puts me in a position where I look like I don’t want to work on a project right off the bat. I’m willing to dig in my heels now, but there have been times in the past where I needed the work badly enough to back down.
I’ve always regretted those times, though: perhaps one spec project out of every ten has turned into paying work. And that number is only as high as it is because I’m counting those articles I wrote for publications that refused them, but that I was able to sell elsewhere. Stock article sites will take anything, it turns out, but they pay a fraction of what I would have earned if I had spent that time pitching projects that wouldn’t be done on spec.
Spec Work Means Useless Effort From Everyone
As bad as spec work is from a creative’s perspective, though, it’s a bad business practice for clients as well. It’s time-intensive and requires far more coordination than any other approach to handing out client work.
The source of this particular rant was a conversation with a prospective client, where the individual on the other end of the phone made it clear that they were talking to quite a few different bloggers at this point, implying more than ten. The phone call was being used to winnow down the numbers of respondents. That information is irritating, if only because I’m a big believer in the value of time (I categorize more than five interviews for a contract like this as “doing it wrong”). But then the interviewer said that they were asking allthe bloggers they were considering to provided a trial post.
I can understand asking for two or three bloggers to put together trial posts, so that you can tell the real differences between a few really good writers. I don’t agree with that approach, but I can understand it. But asking ten or more potential contractors to put together free work is ridiculous on multiple levels:
- On a purely selfish level, asking for that much work means that you have to go through the results. Even ten short blog posts work out to a lot of reading.
- Your network will likely suffer. You’re going to irritate people who you might want to work with in the future by asking them for free work and then turning them down for the overall project.
- You’re taking advantage of people who you need to continue to do their best for you long after they turn in that first post. You’re not exactly starting your relationship off with your best foot forward.
Even when a creative will do spec work, a client probably won’t get the ideal end result. Most spec work projects aren’t perfect because there’s no way to get the sort of back-and-forth collaboration that ensures a client gets what they want. Writing a creative brief that addresses every nuance of a project is impossible — but so is answering project questions from a dozen different creatives. As a result, spec work is more like a sketch than a finished project, even though many people will request spec work with the expectation that they’ll get something they can use right away.
What’s the Practical Alternative?
Running a business is always a question of deciding how to most effectively spend your time. If you’re not careful, a creative project can be a crazy time suck that doesn’t get you the results you need (whether you’re doing the work or commissioning it). So, how can creatives and clients work together without wasting time?
The Client Side of the Equation: There are three factors that will tell you whether you’ll get the results you want far more effectively than asking a creative to do the work on spec.
- Communication skills
- Past work
Seeing a creative’s portfolio should tell you whether that creative is capable of the level and style of work you need. From there, you need to know whether that creative can do the work in a professional manner in terms of timeliness and responsiveness to criticism. You can get that information from talking to the creative’s past clients — send ten quick emails, rather than trying to go through ten speculative projects. Here, I’ll even give you a template to copy:
So and so,
Creative X has a piece of work in her portfolio that she did for your company. I’m considering hiring her for a project of my own and I was hoping to get your opinion of Creative X’s work. Could you answer a few questions for me?
How was Creative X to work with?
Did Creative X complete the project in a timely fashion?
Would you work with Creative X again?
You can usually find the email addresses you need on websites or LinkedIn. You don’t even need to go through the creative you’re checking up on.
The Creative Side of the Equation: Give prospective clients your portfolio. It should stand on its own. If your portfolio isn’t effective, invest the time you would otherwise spend on spec work into improving your portfolio. Given how inexpensive it is to put work up online, consider just launching some projects of your own. Write your own blog, launch your own web app, or design your own line of motivational posters. If that scares you, here are a few other options:
- Do pro bono work for a cause you believe in.
- Create stock work for the many marketplaces online (most have lists of types of work that are most in demand).
- Offer yourself as an intern or apprentice (paid) to a creative already working in the industry who does a high volume of work.
Avoid Spec Work, Please
Spec work is bad for business, whether you’re a creative or a client (or both). Tempting as the idea may be, either as a way to get in with a new client or as a way to see a bunch of work from different creatives, just say ‘no.’ There are always better ways to get what you want.
Over the weekend, my husband and I put together FriendshipAPI.com. He did all the coding, while I wrote copy, designed a logo, and did a little bit of marketing. Christopher wrote up the technical side of launching an app in one weekend, so I figured a rundown of how I spent my time would be useful as well.
The Overall Goal
I saw a contest last week for creating apps based on Context.io’s API (which is especially good at analyzing big chunks of email). We decided to see what we could come up with on short notice; luckily, we already had a few ideas in the pipeline. Christopher and I have talked about how to stay in better touch with some of our friends, especially since we’ve moved cross-country a few times.
Because we were building Friendship API as a contest entry, rather than a business that we expect to be quickly self-sustaining, our goals were:
- create an app that functions correctly
- make an attractive site that showcases the app
- get a little traffic to the site (mostly to get people to test out the app)
Getting more traffic might be nice, because the contest does have an award specifically for whoever grows their traffic the most. But, honestly, too much traffic would be a pain in the posterior for us because the app is running on Heroku’s free plan. If we actually got a serious number of visitors, we’d have to pay for a better plan.
A Full-Fledged Web App
Building a web app requires a fair amount of work, but just writing code is not enough. This is a big pet peeve of mine: hackathons, school projects, and all the other various quickie apps you might write have the same crappy look.
And before anyone tries to tell me that a weekend is too short a period of time to put together a design, let me tell you what we did: we bought a design from ThemeForest — this one, in fact. Starting from scratch on a design is tough in this short a timespan (although not impossible if you actually have access to a designer). But modifying an existing design is pretty doable.
If you do have some design skills and trying to move fast, I always recommend putting together three creative assets first off:
- A color palette
- A set of typefaces
- A logo
You can polish up an existing design quickly if you know what colors and typefaces you want to use and if you have a logo to add to the design. Super short on time? Use a typeface you don’t plan to use anywhere else on your website to make a text-only logo of your app’s name.
Friendship API is done in blues and gray; I used the blue built into the design already and added a darker shade for the logo and some design elements.
The logo is set in Unica One, which is available under an open license through Google Web Fonts.
A Quick Bit of Marketing
The real goal of our marketing Friendship API was to get some feedback on what we were doing: a weekend isn’t long enough to do real UX testing, but you can get people to tell you what they don’t like about your app through Twitter.
We were specifically looking for the sorts of people who will be judging the contest: startup nerds. That informed where we put our energy.
Our marketing plan broke down like this:
Twitter: I created a Twitter account for the site (mostly for tracking purposes on Twitter) and tweeted about the launch on the day of. I retweeted that tweet, along with writing a couple of original tweets for my account and my husband’s.
Blog: We launched with two blog posts — one on my husband’s site and one on Medium. I was able to write tweets about the blog posts, as well as share them on sites like Hacker News.
Private Channels: I wrote a couple of short messages to post on a few different private channels I have access to (Facebook groups, Slack teams, and the like).
We got about 100 visitors in the first day. Just like every other time I’ve launched a project, private channels brought us the most traffic — over two-thirds. Twitter came in a distant second.
We also got quite a bit of feedback, which is exactly what we were hoping for. We were able to make a couple of crucial adjustments before sending in our contest entry.
Offline, I spend a lot of time helping friends with their resumes. I’ve even given a couple of workshops about technical resumes.
This is the template I use in helping someone get started in creating a technical resume:
You can also access the document here. You may notice a lot of comments in this particular document — I’ve laid out the logic and options for each section in the file so that anyone using it doesn’t have to refer to anywhere else. With that in mind, I strongly recommend copying the file to your own Google Drive and then editing that copy.
Last week, I flew up to Montreal for PyCon. I’m now home, without any new international incidents to add to my record. It was my first PyCon, but it won’t be my last.
If Python (or open source development in general) is your thing, all of the talks from this weekend appear to already be on YouTube. Since I mostly stuck to the hallway track, I’ll be watching a lot of these videos myself and don’t feel qualified to offer a review. However, the hallway track was fantastic and I would recommend it in future years.
I can review the swag I gathered at PyCon, though. Based on t-shirts alone, I’m pretty pleased. I found not one, not two, but three ladies tees that I liked enough to take home. Considering that booths at most other tech conferences only offer men’s shirts, the availability of ladies’ tees is a good indicator of an inclusive community.
Even better, though, there was plenty of non-shirt swag. Since I’m trying to make sure my wardrobe doesn’t entirely look like it came from a trade show hall, I’m always excited to see other swag that I’m actually interested in. I’m now stocked up on small notebooks for quite awhile, including a few that have a variety of pages for sketching different types of wireframes. I’m also up a beer glass, breath mints in reusable tins, and some pretty cool fake tattoos that I’ll actually wear.
I’d like to note that I’m totally cool with the booths that didn’t offer a whole lot of swag (or any at all) — I’m just as thrilled to just talk about cool products that I didn’t know about in advance and see some demos. I don’t have to have swag, but if it’s on offer, I like to see a variety that’s appealing to all sorts of conference attendees, rather than just to stereotypes.
And, as an added bonus, next year’s PyCon is here in Portland. If you’re interested in attending, keep an eye on the PyCon website. Just a head’s up, though: my couch is already booked for PyCon 2016 and tickets are guaranteed to sell out.
Investing in an amazing startup is like buying the hot new gadget that’s just come on the market. Just being able to lay down your cash, either for an investment or a gadget is a good social signal, telling the rest of the herd that you’re cool.
But sometimes you get the iPod and sometimes you get the Microsoft Zune. (Here’s a Wikipedia link in case you don’t remember the Zune, the necessity of which may just drive home this particular point.) One tells the world that you have taste and money and one of them tells the world that, well, you bought a gadget that turned out to be not nearly as cool as something else on the market.
Venture Capital Works the Same Way
There’s not really a good way to predict precisely what investment opportunities are going to do better than others: putting your money into a company that has barely an idea of what they may offer customers, let alone any source of revenue, is risky. If it wasn’t risky, after all, we’d all be startup billionaires.
But that means that investors still have to make a decision to invest in this opportunity but to pass on that one.
Investors can weed out some of the options on the table. Details like potential audience size and the relative spending power of that audience can help an investor exclude anyone that can’t make the risk worthwhile. But there’s still far more startups looking for capital than there are investors ready to put money on the line.
That leaves gut instinct to guide an investor through choosing where to invest. Gut instinct, more often than not, takes you to the company you want to see in the world — the seriously cool offer.
The Cool Factor Minimizes Diversity
Choosing companies to invest in based mostly on what seems cool — on what will signal to your friends that you are awesome — limits investments dramatically. What’s cool right now? Well, that depends on your friends. If your friends each have their own bucket load of money and they all live in San Francisco, though, they’re going to define ‘cool’ very specifically. Buying things online is cool, hence all the Bitcoin startups. Being able to pay someone else to deal with the sucky parts of life is cool, hence the appeal of getting things done by Magic. Wine, beer, and whiskey are all cool, hence more startups around those beverages than non-alcoholic drinks.
What’s not cool? How many apps have you seen get funding for simplfying divorces? What about effective logistics management? What about anything for the unexotic underclass?
The lack of diversity isn’t just a question of picking startups with ideas that seem cool to the right people, either. What people are most likely to have ideas that you think are cool? People who are very similar to you across a spectrum of characteristics.
Is There a Solution?
The venture capital system is based, ultimately, on gut instinct. There’s no real way to predict that one startup will succeed or another will fail, which means that investors have to decide based on whatever criteria they choose. Coolness is no better and no worse than any other decision-making tool, especially when someone is deciding how to invest their own money.
Want to see a dramatic uptick in diversity among venture-backed startups? Get investors with a much wider collective definition of cool — more women, more people of color, more parents, more military veterans, and so on. Of coures, there’s a chicken and an egg problem that people who do not already match investors’ ideas of good founders are less likely to have money to invest. That’s a harder problem, though I can see some options (though all come with their own particular problems):
- Figure out a way to encourage more people to bundle small investments together into startups
- Add more diverse decision makers at investment firms
- Use governments and non-profits to come up with investment capital
A more practical option may be to look for more opportunities to opt out of the venture capital system in general. There are plenty of arguments for other strategies: venture capital is likely creating another bubble, it’s creating businesses focused only on exits, and it’s definitely driving price wars.
Bootstrapping, or taking only a small round of investment from friends and family, is the fastest route away from venture capital. It won’t work for all companies — anything needing a big upfront investment in research or equipment is out — but bootstrapping is always worth considering. And the number of ideas that can be bootstrapped today is surprising; 3D printers, marketplaces offering time on expensive equipment, and amazingly cheap software tools have brought down the cost of building anything.
Image by Flickr user Got Credit
The 2014 Annual Report from Berkshire Hathaway came out recently. I always look forward to reading Warren Buffett’s letter to shareholders, but I found this year’s report especially worth reading.
2015 is the fiftieth anniversary of Buffett Partnership Ltd. taking control Berkshire Hathaway (then a faltering textile manufacturer). The textile manufacturing part of the business has been gone since the 1980s, but Buffett seems to be doing just fine.
A few points specifically stood out while I was reading.
- Buffet doesn’t like a lot of the standard numbers used to calculate a company’s worth (even though the companies owned by Berkshire Hathaway tend to be successful by those metrics). He’s clearly comfortable with all sorts of financial metrics, but keeps score by his own numbers. That’s a set of characteristics well worth copying.
- Berkshire Hathaway owns nine companies that, if those companies were independent, would be members of the Fortune 500. Berkshire Hathaway also owns BNSF, which transports about 15 percent of all intercity freight in the U.S. (more than any other company in the country).
- Airbnb got a mention as a viable option for travelers to Omaha for Berkshire Hathaway’s annual meeting, which drew 39,000 people last year. I wonder just how much that mention is worth to Airbnb — and how many of Berkshire Hathaway’s shareholders were willing to use Airbnb before that subtle endorsement.
- Berkshire Hathaway’s federal income tax return runs 24,100 pages. The company files an additional 3,400 state income tax returns. Even more impressive? Those documents are prepared by the Berkshire Hathaway office in Omaha, which has a staff of 25. The same 25 people are responsible for setting up an annual meeting for 39,000 attendees and a few other minor matters.
- That huge stack of paperwork, however, would be far larger if all of Berkshire Hathaway’s subsidiaries operated independently. Buffett’s approach to running companies is as bare bones as possible. I expect that sort of lean leadership to be a major trend in years to come.
In honor of the 50th anniversary, Buffett wrote a more extended look at Berkshire Hathaway’s past then he normally does in these letters. He admitted a few crucial mistakes that he learned from, making this letter perhaps more valuable to read than most years. Berkshire Hathaway’s annual report from 1964 is also included at the end of this year’s.
If you’re an entrepreneur who hopes to grow your business beyond just covering your own expenses, read this year’s report — and maybe check into some of the past reports.