Jan 10

Loving what you do.

I spend quite some time these days coaching friends, former colleagues or fellow entrepreneurs about “what should I do next“. There are some interesting parallels in these discussions. Strikingly, the self-imposed limitations of what people feel they can do constrain people’s choices in an amazing way. And this is true for any income group. Despite the fact that single mom with a low wage job has fewer choices than the millionaire several times over.

I found over time that many people can not simply tell you what they love best. But when you ask people why they are unhappy in their job, it is rarely because they don’t love what they do, but  more often because they feel they can not do things the way they want, or because the someone as a boss who does not value them and their achievements.

In this context, stumbling upon this very inspirational blog post from Cal Newport, author of a study guide, (thanks, Dave Ambrose for the link) has structured my thinking on career achievement amazingly.

Newport quotes work from Edward Deci who found that

“To be happy, your work must fulfill three universal psychological needs: autonomy,competence, and relatedness.

  • Autonomy refers to control over how you fill your time. As Deci puts it, if you have a high degree of autonomy, then “you endorse [your] actions at the highest level of reflection.”
  • Competence refers to mastering unambiguously useful things. As the psychologist Robert White opines, in the wonderfully formal speak of the 1950s academic, humans have a “propensity to have an effect on the environment as well as to attain valued outcomes within it.”
  • Relatedness refers to a feeling of connection to others. As Deci pithily summarizes: “to love and care, and to be loved and cared for.”

So for students, Newport argues that they should find something the really like and then become excellent at it. This will nearly always enable people to find a work environment where they can achieve a great sense of autonomy, competence and relatedness. Newport:

Your love of a subject will grow with your level of competence and autonomy

This also explains why many CEOs are unhappy in their jobs. Even if they are competent, the often suffer from a lack of autonomy. And if you encounter an entrepreneur who is unhappy, you can check with him whether his level of autonomy is where it should be.

Mar 09

What does your company do better?

Whenever I work with web entrepreneurs, the discussion quickly goes onto one point:

What is it that your company does better than anybody else?

In an era with unprecedented low barriers to entry, and where competition is absolutely global, answering this question correctly and then executing on it becomes more important than ever. And it is surprising how easily we are all being drawn away from that.

Take Qype for example: Qype is successful because it only focuses on local reviews. We had to develop a local search for each market, just to make reviewing simple. Qype reviews are easy to find via Google, on your mobile phone. That is what Qype does really well. Whenever we ventured out of this area, for example with local Groups, we found that we just could not focus the same amount of energy into this.

Nearly every great company stands for one thing they do exceptionally well.

  • Doodle.ch is a fantastic example of this. It does one thing extremely well and is being used for just this: Agree on something, mostly a convenient time for a meeting.
  • Facebook is (and will be) successful in essence, because it will continuosly strive to deliver the best product to connect with your friends. Whatever form this may take. And they have the resources to do so.
  • While a BMW is a car like any other, BMW make the experience for people who like driving just better.
  • Ryanair is fantastic at lowering their costs for flights. Even to the point that they seem to only buy new planes in an economic downturn.
  • Many German Mittelstand companies simply turn out the one product and do that better than everyone else, legions of books have been written about this phenomenon.

You know if a company stands for something if it does one thing really well. And here I find too many startups trying to do too many things at the same time, becoming mediocre in each one.

In the old marketing days, this was called a USP, a unique selling proposition. But today you have to live up to it. And that means focusing all your efforts on this one thing.

Sep 07

Cars versus Homes…

If you spend a lot talking to people from other countries, you discover how odd certain things are in your own country.

Statistics always show that fewer Germans live in their own home, as in comparable nations. However, many visitors are amazed by the number of shiny new cars in front of rental appartment buildings.

Now this all may come from German’s inexplicable love of cars and a disintirest in owning the place they live in. This is what I thought until recently. That was when I thought about way the consecutive German governments have handled subsidies and taxes on cars and homes.

The reader from abroad may be excused for believing that governments should not discourage home ownership, and car ownership should at least not be subsidised as we all know about their external costs, that is the negative impact on others, be it noise, traffic or emissions.

However, in Germany things are different:

If you want to buy a home, you have to pay 3,5% tax on the value of the property, this will soon rise to 4,5%. You need to add another (in other markets unheard of) 1,5 % for notarisation and public registry. This 5-6 % cost for every transaction dramatically increases the switching cost. If an employee needs to move for a better job, she can easily lose a year’s salary on these costs. (So much for the often cited lack of flexibility of labour). In costs for maintaining a flat, it is well accepted practise, that if you buy a flat to let, it is much more tax efficient than buying it for yourself.

In cars however, everyone who gets a car as part of his salary package, will need to pay monthly income tax on 1% of it’s list price, so maybe 0,4%. This is usually way less as running your car costs you. In particular, as an employee, your monthly burden is totally independent from the price of gas. One of my friends recently bought a Cayenne with the small gas guzzling engine, because it would have been more expensive for him to pay the higher price of a more efficient diesel car.

The tax is on the list price and will always remain the same, no matter how old the car. You are therefore discouraged to drive a company car for longer than 3 years.
We can therefore call this tax break the German New Car Subsidy. I have several entrepreneur friends, who say that their tax adviser advised them to buy company cars in order to not have to give too much of their profit to the tax man.

In conclusion, it might be that the average German might behave in a totally rational way living in a rented flat and driving a huge car.

Aug 07

How green is your startup?

Although I am part of the web 2.0 startup circus, I have never really come across a discussion on the ethical implications of business. In Germany, there has been B.A.U.M (German Environmental Management Association) for a long time, but not sure where this has made an impact on startups.

Of course, in a startup, you are first and foremost concerned with a very different sustainability: financial sustainability.

But on the way, why not do a quick check. Here is my take on Qype, my company.

I. The good

Our product
Qype enables people to discover what is good in their area, and to connect with people who share similar interests. We do not ship anything, we do not require that you upgrade your hardware every year. it is a service, not a product, therefore we consider ourselves lucky in this aspect. Furthermore, you could say that we do not need to create articifal demand for our service, that we potentially could reduce the need to travel as Qype is a great help to navigate your environment. And, hopefully, we do our share help the local community to reconnect.

Location and style of our office:
We are located in walking distance to Jungfernstieg in Hamburg, which is the cities main hub for public transport. We deliberately chose an office in an old office, which stays cool in the summer without any form of air conditioning. This may mean a bit less insulated in the winter, but I am not even sure about that.

II. Some things we can influence:

  • We now separate paper in our office from the rest of our rubbish
  • In process of switching our electricity provider to a green provider
  • In our kitchen, we changed the lightbulbs to energy saving ones
  • Our fruit (Bananas, the staple for web development) is now being bought from the organic corner of the super market. Drinks have always come in return bottles, which is no special achievement in Germany.
  • We will probably switch our coffee to fair trade, but I still need to ask our local provider about it. At least, providing our own cappucino to our people dramatically reduces the need for paper cups from Coffee shops.
  • Standby Power: This is still an issue with all of us, but maybe blogging about it helps.
  • Office lighting. I need to publish some fotos of this. Here we have the classic dilemma: We have very ugly neon lamps on the ceiling and in an attempt to improve this, we bought uplights last year, which obviously consume much more energy and I suspect the dimmers do so as well. At least we changed the light bulbs in our kitchen to energy saving ones.

III. The ugly

Air Travel
Trying to establish a website with a European footprint, our biggest eco-sin is travel. Air travel between London and Hamburg, mostly. When you want to recruit people and set up business relationships, there is no other way.

Also, our specialist for web concept and design travels from Munich every week.

In both cases, we are trying to reduce air miles by extending the lenght of stay and reducing the frequency.

Our investors insist on monthly board meetings. Having had very frustrating attempts in phone conferences this will to remain issue.

Does any one know of a decent and affordable web based video conference solution? – Should be able to handle 5 participants.