Holiday Wishes

The following is adapted from the year-end wishes that I shared with the outstanding small company that I am part of. It speaks to the values and culture within our startup.

As we conclude the year, I commend each one of you for helping to make 2012 another great year at ZTEC Instruments. Economic uncertainty has made 2012 more difficult than we expected. The year was challenging, partly due to market conditions, and partly due to our choice to aggressively invest in the wireless test market.

Success in the Future

Today's business environment is more competitive than ever before. Goods and services can be produced anywhere and sold worldwide via the internet. Enabling technology is pervasive and inexpensive, allowing low-capital startups to spring up everywhere. Education, hard work, and creativity are being adopted by cultures across the globe. On average these trends are lifting the world's standard of living, and there are winners and losers. Developing economies are extending prosperity and opportunity to more, and developed countries are under pressure to become more competitive or risk falling back. This is especially important for populous nations such as the United States that must employ many citizens in this highly competitive world marketplace.

Celebrating Opportunity and Those Who Pursue It

After watching the last two week's political conventions, I am left feeling more encouraged and optimistic than ever. It was not the soaring rhetoric, and certainly not the partisan attacks by each side. Rather, it was the speakers and their compelling life stories that uplifted me. Both political parties showcased examples of what makes America great. We saw impressive individuals from both parties, who took advantage of opportunities to make significant contributions.

Think about the common thread that we saw within both conventions. We saw examples of a great society that helps people to help themselves. Both parties celebrated the pursuit of a better life for ourselves and for our children. With assistance from families, from communities, and from government, ordinary people accomplished extraordinary things through scholarship, merit, hard work, and character.

Outliers

In statistics, an outlier is an unusual occurrence that falls outside of the normal statistical distribution. These random and rare occurrences often seem inexplicable. Consider rolling dice and getting snake eyes 100 times in a row.

Malcolm Gladwell's book by the same name, Outliers discusses unusual patterns of achievement and success. In the book, Gladwell identifies logical causes for what would otherwise be considered statistically impossible events. He identifies cause and effect relationships for statistical outliers.

Collaboration, Innovation and 5G WiFi

The IEEE standards association is a fantastic model of collaboration that brings together competing organizations, ideas and interests to advance technology and the framework for innovation. Companies from all over the world send highly talented engineers and scientists to develop standards within IEEE working groups. Competing companies collaborate to develop the standards that enable interoperability, innovation, and ultimately competition between those same companies. The consumer is the biggest winner of this cooperation and standardization. With a common and open standard, the marketplace creates the competitive environment that leads to innovative new products and drives prices down over time.

A standard that you will likely hear more about is the IEEE 802.11 Wireless LAN (a.k.a. WiFi) standard. A new 5th generation (5G) WiFi standard, designated 802.11ac will deliver multi-Gbps data rates. This is significant because 802.11ac will enable faster wireless data rates than most of us now have with our wired 100 Mbps connections. The 802.11ac standard is still in draft form and not expected to be completed until later this year, but already there are 5G WiFi products available. This shows the pace of market-driven innovation. 

Your Strengths Are Your Weaknesses

Those things that we do well can also be our greatest liabilities. Like a double-edged sword, a strength is also a weakness. The greater the strength, the greater the potential weakness and liability. Consider that....

• Physical strength can limit your flexibility
• Determination can become stubbornness
• Confidence can become arrogance
• Discipline can make you narrow-minded
• Analytical thinking can lead to over-thinking
• Focus can close you off to new opportunities
• Enthusiasm can make you act without thinking
• Spontaneity can lead to undisciplined action
• Meticulousness may become perfectionism
• Resolve can lead to ruthlessness
• Passion can become zeal and obsession

The list goes on...there is a counterbalance to everything. What personal traits are you most proud of? To what do these traits leave you vulnerable?

How The Mighty Fall

Last week, I went to select a book for a short trip that I could easily carry and read quickly. Two books in my need-to-read pile fit this criteria: "Only The Paranoid Survive" by Andy Groves, and "How The Mighty Fall" by Jim Collins. At the time, I did not consider that these two books addressed the same topic. Both discuss challenges facing companies, and explain that some companies rise to the occasion while others falter. Andy Groves describes how Intel transitioned from memory to microprocessor, dealt with a Pentium flaw in 1994, and managed through the explosive growth of PCs. Intel overcame these potentially catastrophic events thorough disciplined pursuit of its core business philosophies. Jim Collins studies great companies that stumbled or failed in an attempt to understand the underlying causes of business decline.

The Discipline of Market Leaders

I recently gave a colleague this classic book on business strategy by Treacy & Wiersema. Although I will not go into detail about the book's content, I do recommend it to anyone involved in defining business strategy. In brief summary, the authors provide compelling evidence that market-leading companies have single-minded focus on one of three value propositions:

1. Product Leadership
2. Operational Excellence
3. Customer Intimacy

Fair and Equal are Not the Same

Fair and Equal are not the same thing. When individuals are given equal opportunities, their accomplishments are rarely equivalent. Individuals perform differently due to a number of factors including effort, initiative, aptitude, and training. It is not unfair that everyone does not receives the same rewards. It is a fact of life. Not everyone deserves the same rewards. It is more fair to reward people differently for different levels or effort, skill or accomplishment. This is especially true in business.

Made in America

We hear much talk about the decline of manufacturing in America. Some argue that America has lost its manufacturing capacity. The data from the most recent year available (2010) paints a somewhat different picture. Not only is the U.S. by far the largest economy with 23.1% of the world's GDP (China is second with 9.3% of the world's GDP), the U.S. is the second largest manufacturer. In 2010, America's manufacturing output was $1.952 trillion, just behind China's $1.995 trillion. Yes, in 2010 the U.S. lost the title as the world's largest manufacturer that it held for more than a century, but America is far from having lost its manufacturing capacity. America still manufacturers19.4% of the world's goods.

Your Unfair Advantage

In his recent blog post on pitching to potential investors, Guy Kawasaki argues that a startup needs an unfair competitive advantage. He states "That’s why they are called unfair advantages...If everyone had them, the field was level, and everyone was created equal, then they would be called fair advantages, which is an oxymoron." Whereas pitching to investors is important, it is vastly more important for a startup to actually execute its unfair advantage. Unfulfilled promises to investors do not leave anyone very happy.

My experience has convinced me that the primary unfair advantage of any  startup is an ability for rapid decision making. I am not just referring to the early days when a startup must be opportunistic and meet the needs of any customers that it finds. Later, as a startup attempts to break out to become a successful mid-size company, it must also leverage its ability to quickly make correct decisions. Success requires an organization that combines three essential elements:
1) the right team,
2) clear objectives,
3) and a constant focus on rapid execution.

We Are Living in Exponential Times

The world is changing more rapidly than ever before and that rate of change is accelerating.

This YouTube video about the rapid progression of information technology was shown at a Sony executive conference last year. Here are some excepts:

• The first text message was sent in 1992. Today, the number of messages sent every day exceeds the number of people on Earth.
• It took radio 38 years to reach 50 million people, TV 13 years, the Internet 4 years, the iPod 3 years, and Facebook 2 years.
• The number of internet devices in 1984 was one thousand, in 1992 one million, in 2008 one billion.
• 4 exabytes (4 x 10^19) of unique information will be generated this year: more that the previous 5,000 years combined.
• The amount of technical information is doubling every year.
• The most in-demand jobs of 2010 did not exist in 2004.