Trade Off

Just finished a great book called Trade-Off by Kevin Maney. The basic idea of this book is summed up in the convenience/fidelity graph.

All products fit in one of three categories:

1. The Fidelity Belly. These are most mainstream products that are ordinary. Medium fidelity/medium convenience.

2. High Fidelity. These are products that have high performance but may not be convenient or cheap. These are high end products -- think of Tiffany.

3. High Convenience. These are very convenient and are cheaper and/or lower performance than the high fidelity products. Think of Walmart.

Where do you want your product to be. You would think that you would want to be high convenience/high fidelity (The Fidelity Mirage). Turns out that is not possible. You do not want to be in the belly either. To stand out you want to be high fidelity/low convenience or low fidelity/high convenience. Of course with the rapid change of technology, the landscape changes rapidly so it is hard to stay in either of these areas for long.

Thinking Inside the Box

After reading an excellent book by Kirk Cheyfitz this weekend I wanted to keep a list of his 12 planks for future reference. If you have not read this book - I highly recommend it. Kirk is an excellent writer and his information is gathered from personal experiences in the business world.

1. Some Things Never Change - The basic rules of business have not changed for hundreds of years.
2. Profits - You have to make money in a business.
3. Cash is King - Accountants can fake every number on the balance sheet but cash.
4. Know What You can Control - You can control costs. You cannot control revenue.
5. Customer is King - No customers = No business.
6. Marketing - You need to be selling and marketing all the time.
7. Growing - It is easier to buy a business than start one to grow your business.
8. Hire Smart - You need good people to be successful.
9. Assets - Make maximum use of all of you business assets.
10. Results - The end result is what counts not how you got there.
11. Renew - Be prepared to change your business as the world changes.
12. Exit Strategy - Have a plan to get your money out of the business.

These are all excellent points for any business large or small.