A Treatise on the Power of Nothing
On a deceivingly cold day on the Kennedy Expressway,
I had the pleasure of inadvertently sharing a ride to the airport with an entrepreneur that had just sold her business. Despite the fact that the collapse of the technology bubble was in full-swing, this founder had just sold her company to a multinational conglomerate for a ripe eight-figure sum.
As the taxi wound its way on an elevated potion of the expressway, the founder looked down upon a seemingly endless tract of mid-sixties-vintage Chicagoland homes. Steam rising from their roofs, she paused and stated “It feels like yesterday I had to take out a second mortgage on my house to make payroll”.
While I never managed to get more of an explanation, the point was abundantly clear. That founder, for whatever reason, reached a point in her business where she had to mortgage her home in order to keep her business afloat.
In retrospect, that was clearly a wise investment.
What she ever did with the eight-figure sum she pocketed, I’ll never know. It doesn’t matter. The only reason I remember that otherwise forgetful trip to O’Hare was the unique opportunity to speak with someone that despite just selling their company for an impressive sum, had the presence of mind to remind herself (and educate me) on the power of nothing.
The power of nothing.
Definition: The exercise of forcing one’s self to re-think their business from the ground-up.
In any other context, the story of the founder mortgaging her house to make payroll would have likely been written-up as a classic example of “what not to do”. Right up there with cashing your paycheck at the horse track, throwing your car keys in the middle of a poker table, and spending your tax refund on lottery tickets, mortgaging one’s Chicagoland home in exchange for the ability to pay the employees of (what I can only assume was) a cash-flow-negative-business nears the top of any list of poor life choices.
But in this case, it wasn’t. The founder went on to explain that the period of time subsequent to mortgaging her home made her work harder and place more focus on figuring out what her business did best. After all, her business, her livelihood and her house were on the line. Losing any of those was unacceptable. The founder buckled down, focused on improving the profitable core of her business, and grew her startup into a sizable, profitable operation.
Embrace the power of nothing. Re-imagine your business from the ground-up.
While no business owner wants to be in the unenviable position of mortgaging her house to make payroll, there is a certain power in giving yourself the opportunity to re-think the very foundation of your business. Doing so can enable business owners to rediscover profitable opportunities that would otherwise be lost in a sea of emails, deadlines, meetings, and other routine tasks.
Start with the following exercise
Sometimes I ask clients to tell me the one thing they would change about their business, if given the chance to rewind the clock and start over from scratch. Often, their answers surprise me. Many business owners wind up identifying opportunities that question some of the fundamental tenants of their business model. Sometimes, the exercise allows business owners to re-focus their efforts on a core product or offering that takes their company to new heights.
Doubt the power of nothing? Think again.
In December 2007, Netflix was a mere moments away from releasing a set-top box that many thought would revolutionize the entertainment industry. Since most eyes were focused on the Company’s propensity to suck the last breath of oxygen from the lungs of Blockbuster Video, the concept of releasing a box seemed like the logical next step. After-all, with Blockbuster and Hollywood Video having one foot in the grave, Netflix had a lot of swagger. The only question seemed to be what companies would be on the list of future annihilation.
To the astonishment of some, and the long term benefit of the Company’s investors, Netflix literally pulled the plug on a shiny red box that would have likely landed on the top of millions of televisions across the country.
The rationale was simple. Netflix embraced the power of nothing. They re-thought the fundamental principles of their business and pulled the plug on a seemingly-compelling product. They didn’t take what many believed to be the logical next step in the Company’s evolution.
To become a hardware company would have been a declaration of war on the very companies that Netflix hoped to eventually partner. What is the likelihood that Netflix would be available on hardware designed by Apple and Samsung in 2016 had the Company entered the hardware game back in 2007?
No. The company ditched the project (actually – they gave it to Roku) and focused on what they did best. Content.
Content is King.
In the hallway behind an unacceptably overcrowded conference room at an investment research conference, I had the opportunity to speak with a very talented media analyst. At the time, I worked for a bank, so I was keen on understanding how this seasoned analyst looked at an industry then-dominated by AOL Time Warner, Viacom, AT&T, Disney, General Electric (NBC) & Gannett.
My conversation lasted less than two minutes, but the analyst said one thing that I remember to this day. Having covered the industry for years-and-years, the analyst said that no matter what people focused on — no matter how much companies trumped technology, distribution, mergers, etc — only one thing mattered in the world of tech-media-and-telecom.
Content is king.
It doesn’t matter who you are, what you do, or how good your technology is. If you develop (or own) great content, your company has staying power.
In retrospect, he was right. He was totally right. Netflix was in its infancy at the time that conversation took place. Nonetheless, the analyst foretold the fate of the company. To be engrossed in hardware, distribution, or other technologies would be to the detriment of the company. To be the owner of quality content would be synonymous with being king.
Just ask Disney and Netflix how that strategy works. You’ll get about $200 billion dollars in answers.
What does this mean for my business?
The message is clear. Next time you sit down to review your numbers, close your eyes and re-imagine your business from the ground up. Go back to day one. What would you change? What would that look like? The answer might surprise you.
In fact, the answer might give rise to a product, service, or project that ultimately ended up on the proverbial back burner.
In a world where the economy appears to be slowing, and the status quo is likely to to prove transient, creative thinking can lead to some compelling business strategy. Learn not to take your current business for granted. What would you do if a third of your revenues disappeared? What would you do if the phone suddenly stopped ringing?
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I immediately ask myself, is there a better word? After all, words matter. The words we chose carry deep significance, not just because of their inherent meaning, but because they give insight into our actions. They cast light on our motivations.
So when people tell me they’re going to manage something (or even worse, manage-through something), I immediately try and discern whether they’re setting themselves up for failure.
After all, ownership breeds success. Management reeks of passivity.read more
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Our culture is fixated on it. Everywhere you turn you see diet books, commercials for weight loss products. There are entire television series devoted to it. It seems like everyone at Trader Joe’s is infatuated with kale.
Even Weight Watchers can’t seem to go wrong. Call it the Oprah effect.read more
Because in the end, that’s all that really matters . . .read more
Walking along Ocean Beach, I couldn’t help but gaze at the jaw dropping distance between where surf hit the sand and the waterline marking high tide from the night before.
A mere nine hours earlier, waves were crashing at a distance that would take a full 90 seconds to walk. To think that the gravitational pull of the moon and the sun are entirely responsible for these changes is astounding.read more
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