Our "Why" at ZTEC Instruments

Simon Sinek's book "Start With Why" argues that we are driven by "why". Decision-making is emotional and we use reason to justify our emotional decisions. Sinek supports his theory with a biological argument that decision-making is centered in the limbic system at the core of the human brain. The limbic brain is the most primal part of the brain and is responsible for emotion, behavior & long-term memory. Language and reason occur in the more developed part of the brain called the neocortex. We use reason to justify and rationalize our emotional decisions, but all decisions are based upon emotion.

Great companies start with a "why", and this "why" emotionally connects with customers and workers alike. We purchase products that resonate with our identity and values. We purchase products from companies that are aligned with our beliefs. Sinek states "People do not buy what you do, they buy why you do it." In regards to work, we all want to be part of something greater than ourselves. If you hire people who believe what you believe, work takes on true meaning and purpose. An organization aligned in its "why" provides the passion and drive to accomplish great things.

And, this is our "why" at  ZTEC Instruments.  We believe in individual contribution, contribution to our customers, to our industry, to our community, and especially contribution to the professional development of a superior workforce. We believe that a talented and highly-motivated group of people can change the world. We have the passion and drive to do extraordinary things. How we do this is through rapid and focused innovation. What we do is manufacture wireless test equipment.

Is Albuquerque a Great Place to Live?

Not long ago while traveling, when I told some people who I had just met that I live in Albuquerque, one of them responded with the knee-jerk response "Albuquerque is a pit." At the time, I was startled because I could not reconcile his opinion with the city that I love. I believe that Albuquerque, with its cultural diversity, its long history, its awe-inspiring landscapes, its access to numerous outdoor activities, its down-to-earth people, and what is arguably the best climate anywhere, is one of the most desirable places for my family and me to live. After some introspection, I realize that much of the world may not see my city in this same way, and I further realize that there are aspects that need vast improvement.

How Big Companies Lose Their Way

I recently refinanced my home with a large bank, one that is publicly announcing that it wants to grow its market share to 40%. This lender currently controls 1 in 3 U.S. mortgages, and states that this is a result of doing a better job than its rivals. If my refinance experience is an example of doing a better job, this bank is sorely mistaken. This nationwide bank treated me as if they were doing me a favor by accepting my business, and either through neglect or bad faith, at three different times tried to extract thousands of dollars in additional fees. This episode demonstrates how a large organization can lose its way and cause its own downfall.

This leading nationwide mortgage lender attempted to raise fees at the very end of a 90-day refinance process, hoping that either I would not notice or would be so far along that I would cave in. I found out about the fee changes from the legal disclosure documents in the last days before closing. Three times, I was verbally assured that their original fee structure would be honored and then later received written documentation to the contrary. Each time, I had to make numerous phone calls to confront and resolve the undisclosed fee changes.

What Government Can Learn From A Startup

While our government continues to struggle with dysfunction and  ineffectiveness, the private sector is slowly and steadily rebuilding the economy and jobs that were destroyed when the real-estate bubble burst in 2008. The contrast is striking as I consider how we, as a startup company, have dealt with the challenges of the past 4 years, compared to the self-imposed struggles of the federal government. While we have accomplished more with less, the government continues to stagnate even as it consumes 27% more of our limited resources (U.S. government spending has grown from $3.0T to $3.8T between 2008 and 2012).

21st Century Infrastructure

Recently, there has been much discussion about the need for more government investment in our infrastructure. Most of us think about bridges and roads when we hear infrastructure. The world is changing rapidly and our infrastructure investments need to keep pace with those changes. Instead of building transportation infrastructure to connect us physically, why not build 21st century infrastructure to connect us electronically?

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.

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?

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.

Don't Lose Perspective on What Truly Matters

When my oldest son Luke was born almost 9 years ago, it should have been one of the happiest days of my life. Instead, that day was fraught with fear and concern because Luke was born 2 months premature after a very difficult pregnancy. He was delivered by C-section and had to be rushed into the NICU because he could not breathe on his own.

While my wife recovered from surgery, I was alone with my tiny son who was connected to all sorts of sophisticated machines to keep him alive and monitor his vital signs. As I sat there in the NICU, I remember reflecting on my life and had a momentous, life-changing realization.

Optimism and A Can-Do Attitude

I have been accused of being an eternal optimist. This may be an accurate observation. Recently after returning from a funeral, I found myself commenting that "funerals are great because we get to see family and friends who we haven't seen in years." It all depends upon your perspective...

I do not know if optimism is learned or genetic, but I find it mostly to be a useful trait. I suspect that I am naturally wired for my glass-half-full perspective. I enjoy just about everything in life. Also, I believe optimism to be the foundation for my can-do attitude. I do not let pessimism and naysayers keep me from taking on new challenges and achieving my best. I remember being told that I could not do any number of things. Fortunately, I did not listen and found that I could accomplish most anything that I set my mind to. 

In this Economy, It Sucks to be Small

Recently, Bank of America (BofA) announced plans to lay off 3,500 workers and perhaps as many as 10,000 over the coming months. While I feel very bad for the newly unemployed BofA workers, it is hard to feel any sympathy for BofA as an institution. BofA received taxpayer-funded bailouts totaling $45B in TARP funds and $118B in loan guarantees. BofA was heavily exposed during the mortgage crisis due to its own bad loans and those that it acquired from Countrywide Financial & Merrill Lynch. According to those who make such decisions, BofA was too big to fail.

Being an Entrepreneur is Hard (or is it?)

I recently met a friend for lunch who is interested in launching a new technology business. He is finishing up his MBA and works as a middle manager in a medium-size division of a large company. He is itching to try out his new-found business and management skills within a startup environment. He plans to partner with a technologist who has been part of a successful startup. His would-be partner helped launch a company that grew to $12 million revenue in 3 short years and achieved liquidity through acquisition. My friend plans to work nights and weekends to get their new company launched and then quit his day job when the company achieves some level of cash flow through revenues or government grants.

Marketing: Value or Pain?

Every time I discuss our value proposition with a serial entrepreneur friend of mine, he stops me to ask "where is the pain?" And, he is absolutely correct. His point is that alleviating customer pain is a much more effective strategy than just offering value. Think about it. You will act immediately to avoid pain, but may put off something that adds value. Value can be a nice-to-have whereas relieving pain in an immediate need-to-have. Pain will absolutely cause customers to buy your products or services.

The Need for Vacation

As I vacation with my family on the island of Kauai, I reflect on the importance of vacation. I realize that these moments away from work have great importance in life. Too often we get caught up in the day-to-day and lose sight of the larger perspective. What are most important and memorable things that we do in our short lifetimes?

Restore the American Dream

Like most people, I am worried about the current economy and the fiscal burden that we are leaving to our children. I pray that we are not the last generation in America to be more prosperous than our parents. I have followed the ongoing debate about our fiscal problems and both options seem short-sighted to me. One party wants to add more stimulus through government spending. The other party wants to provide tax breaks to spur business spending. Both solutions are politically difficult because both would exacerbate the record debt load imposed upon our children. But even worse, both solutions are unlikely to cause any real long-term prosperity in America.

5 Things a VC Can Do for You

I am sure that you have heard stories of heartless Venture Capital firms taking advantage of heroic entrepreneurs. I certainly have heard my share of depressing tales from colleagues. In stark contrast, my experience with VC financing has been very positive. Over the past few years, I have raised capital three times  to accelerate ZTEC's growth into new markets. In retrospect, I was very lucky to team up with an excellent VC. Our partnership works well because our goals and interests are aligned. We are dedicated to building stakeholder value through the creation of a great, highly successful, lasting company.