pjfitzpatrick

Build a huge company, when it's small

A few months ago I had an opportunity to have dinner with a consultant that worked with Lululemon when the company was in its early stages. One of the things we talked about is building a company to be many times larger than you actually expect it to be. I’ve been thinking about this idea and want to share my initial thoughts.

What does it mean to build the company to be much larger than you plan it to be?

It means to build processes, attitudes, and a culture that would support your company even if it was many, many times larger than it is.

Why is this a good idea?

  • If you are constantly planning to be much bigger than you are, you might actually end up getting there.
  • Processes that would support a much bigger company than yours are processes that can operate without your involvement.
  • If your processes are like those of a much bigger organization then maybe your CEO will be more like those of larger organizations too.
  • Lastly, when you hit your stride and your team finds major success nothing slows you down because you have tons of capacity for more sales, more hires, more products etc.
Why iOS is winning the smart phone race, and so is Android

I noticed a post today on Facebook that said Android has taken the top spot for market share in the smart phone market. One of the comments on the post was “The power of open-source. iOS can’t compete.“ While this person is correct in some senses, it is likely they miss the point: iOS isn’t competing.

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They are right, iOS couldn’t compete with Android for market share. Instead, they are competing on margin. Apple collects the highest margin in the smart phone business, Google collects the least. The important difference to understand is the respective goals of Apple and Google.

Google doesn’t earn anything when an Android phone is purchased, they give their operating system away. Instead, Android protects their only significant source of revenue: online advertising. When a person owns a smart phone, they are connected to the internet almost all of the time. Google owns the largest ad network on the internet, both mobile and traditional. So, the more time people spend on the internet, the more Google ads they see, and the more money Google earns.

Google also wants to protect their spot as the top search engine. With Bing trying to steal users away from Google, it is important they ensure the default search engine on a any device’s browser is Google. The best way to make sure Google is the default, is to own the user’s browser.

On the other hand, Apple makes money selling computers and smart phones. Their computers are the most expensive, and earn the highest margin. While they make the most money in the smart phone business, their product is too expensive for many people - limiting their market share.

Few people argue that Android offers a better experience than Apple does. Their app market isn’t as good and they don’t benefit from the intimate relationship between Apple’s software and hardware. Apple rules the premium market, while Google owns most of the rest.

Photo's of Nigeria and New York

This is a photograph from an airplane of Lagos, Nigeria.

Look at their living conditions. The state of their neighbourhood, their available forms of transportation. 

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Now a photo of New York, New York.

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Can you imagine what their opinion of the Western World is?

There is a vast difference between the way we live and the way they live. I think this type of discrepancy is unsustainable. Their wealth has no where to go but up, and in turn, ours has no where to go but down. Over the next couple hundred years we are going to see a drastic shift in wealth from our part of the world to their’s.  

Comparing yourself to others isn't a good idea. Play your own game.

I have been struck by how poisonous the act of comparing our actions and results to those of others is. When we compare our actions and successes to those around us, we are forced off our own path, strategy, or strengths, and we begin to walk the path of others.

If you have a carefully thought out strategy, it is what will bring you success. You should only waiver from it after careful consideration and thought. But it’s easy to begin to take action outside your strategy when you see others doing something else, especially if they are initially successful. Warren Buffett calls this the institutional imperative.

Those following their own strategy-or one they have borrowed from others-are doing so for reasons you cannot understand and for reasons unrelated to your objective, strategy, and strengths. Therefore, their actions are almost certainly not best for you.

This may seem like it isn’t a major problem. After all, most people are competent enough to follow someone else’s formula and be successful. But the reason it is often a problem, is that we don’t compare ourselves to just one person. We compare ourselves against many people.

When we compare ourselves to others we stop thinking about how we can be the best and begin to think about how we can beat those we are comparing ourselves to. Others have become our yard post, constantly moving. We are constantly trying to be better than everyone, often (though we may not realize) at different things.

When put that way, it’s easy to understand how this can lead to failure. Trying to be the best at everyone else’s game takes your concentration off being the best at your own.

Why are you entering that career path? How did you make that decision?

Its common at university to have conversations with students who are planning their career. They ask everyone they can about potential occupations, how much each earns, what kind of work they do - trying to decide if they can get there, and if they want to. At Sauder most students dream of entering investment banking or management consulting. They ask questions like “How do I get there?”, “What skills do I need?”, “Who else from Sauder got a job there?”, “How much do they make?”. These questions are good to ask, but I think there are far more important things you need to know.

Questions I don’t often hear are “How do I figure out what I will enjoy?”, “Am I doing this for me, or my parents?”, “Do the values of that industry or company align with mine?”. These questions are different. They are about you, not the job. The most important questions are ones that reveal if the job fits you, not if you fit the job.

Many students become fixated on a specific job but don’t really think about why they want that position. Is it because your friends, professor, or parents think it’s the best job? Why do they think that? Do you feel comfortable choosing a profession chosen for you by someone else?

It doesn’t matter what your answers are to those questions, as long as you’ve answered them honestly and it makes you happy. If you enter a profession for someone else, its ok as long as you recognize you’re doing so. Remember, it doesn’t matter what your parents, friends, or spouse want you to do - you’ll have to live it for the next 40 years, they won’t.

Learnings from the BC Chamber of Commerce AGM (Part 1)

I returned from the BC Chamber of Commerce’s Annual General Meeting in Prince George on Wednesday. I spent time with directors of a few of BC’s biggest companies, a previous coach of Team Canada’s olympic mens hockey team, and many leaders of BC’s business community. I learned a lot from this trip and wanted to share some of that learning here. I’ll list the learnings over the next few days, so stay tuned.

1. Collect business cards aggressively, reference them often

At conferences you meet a lots of people in a small period of time. Keeping track of everyone’s name and story is difficult. Collecting business cards helps you keep track of the people you’ve met. Business cards come in handy for two reasons. The first, is when you see them later at the conference but don’t remember their name: reference their card to remind yourself before getting close and saying hello. The second is when you return home. Its a good to follow up any meaningful or potentially meaningful relationship you have made. To do so, you’ll need the information on their business cards to get in contact.

2. Go to social events and after parties.

Parties are where you build relationships. At dinner, over drinks, on the dance floor, you learn about people, their hometown, their interests, where ever the conversation takes you. These conversations lead to mentors, sales, business partners, and friendships. Alcohol and fun lubricate the conversation and calm your nerves. You might even find yourself swinging a Director of Telus around the dance floor or spending an hour speaking with the keynote speaker.