Thursday, February 02, 2017
Never Start a "Tiger Tank" Company
I have a friend who runs an international business. A real one. One with employees, divisions, departments, and multiple offices. It is indeed international with clients in the US and production in China. And he is indeed successful, enjoying the finer things in life that the 99% will never work up the work ethic to enjoy.
The company is also the bane of his existence.
If it's not shipping, it's customs.
If it's not customs, it's some critical employee who put in his notice.
If it's not an employee, it's a customer who didn't pay in time.
And if it's not the customer, it's his fledgling subsidiary with a never ending litany of growing pains.
On a GOOD DAY 40% of his time is spent actually managing. The remainder of it is merely putting out fires and dealing with problems.
Thus are the problems of starting a "Tiger Tank Company."
If you don't know what the Tiger Tank was, it was the "premiere" tank that debuted in WWII. Virtually unstoppable, superior in nearly every regard, if you pit any other tank against it, that other tank would lose. And thus when the Germans released their Tigers on the field, other tank crews would rightfully fear because there was a good chance they'd lose their lives.
But the Tiger had a huge disadvantage that nearly every other tank did not have. It was overly complex. And since it was overly complex it had infinitely more problems than any other tank.
The transmission would break, the gas consumption was unsustainable, the fuel system would leak, the suspension would break. It may have delivered on everything a tank commander could ask for...that's while it was working and not in disrepair.
Inevitably it was the Russian T34 tank that would doom the Tiger Tank. Though not as massive, armored, or weaponized, it was cheaper to produce, faster to produce, more efficient, and had only a fraction of the problems. So while the German Tiger Tank could take out 3, 4, even 10 of the enemy's tanks, the Russians could produce 11, 12, 13, even 20 more of them, all of which would see more field time than a Tiger.
Companies are the same way.
Not to brag (because it was originally intended as half a lark), but compare my buddy's company to Asshole Consulting.
Asshole Consulting has the least moving parts possible. In part by it's nature and in part by intentional design as it evolved. There is a bare bones (some would dare say "craptastic") website. A simple e-mail server. A paypal account. A laptop. And one Grade A, professional asshole. 5 pieces of machinery, in total, that generate a tidy sum above beer money.
Compare that to my buddy's company. Three divisions. One subsidiary. About 30 employees. A score of company phones. Two score of company computers. Tracking software. Suppliers. Vendors. Production facilities. Their employees. Managers. Accountants. Phone operators. Delivery men. His operation has infinitely more moving parts which means things go wrong at his company infinitely more times.
Now, admittedly, he is a millionaire and I am not. But if you are a regular reader of Cappy, you know that I endorse entrepreneurship not so much as the path to riches (which is certainly nice), but primarily as the path to freedom. That your time is more important than money. And that if you live the life of a minimalist, then the amount of money you need to make as an entrepreneur is just that much less, making your goal of true freedom just that much closer and more attainable.
The problem comes in where the entrepreneurial idea you concoct may indeed be brilliant, may indeed make you millions, but if it sucks your time and life away, then it was all for naught. This is not to belittle the value of money and riches, nor to tisk tisk you if you make millions (more power to you), but to make you realize the value in not only evaluating which business ideas you should pursue, but how to streamline their operations when you set them up so as to have the least amount of moving parts possible.
Here there are a couple lessons I've learned either through my mistakes or watching the mistakes of others.
1. PEOPLE are the NUMBER ONE CAUSE OF ALL PROBLEMS. We're not talking just employees. We're not talking just supervisors. We are talking ALL PEOPLE involved with the business. Employees, supervisors, suppliers, vendors, lawyers, customers, ALL OF THEM, ALL POTENTIAL SOURCES OF PROBLEMS. This is why I only have one employee at Asshole Consulting and why I control the product process with an iron fist. Like the soup Nazi I DEMAND my employees follow instructions, do EXACTLY as I say, and get paid up front because not only does that limit the amount of problems that can go wrong, but it also lowers prices DRAMATICALLY providing better service to my customers (just think about how expensive therapists are when it comes to insurance, co-pays, billing, accounts receivable, accounts payable, and bill collectors).
2. Run one business at a time. While my buddy runs technically one business, there are two separate divisions within the company necessitating twice the amount of managerial overhead. He also sponsors a sporting event annually which is yet just another unnecessary piece of machinery that can go wrong, and at BEST consumes his vital and limited time. Do not chase every little bunny rabbit that might make a good entrepreneurial venture. Focus on one at a time, and until you have that set on auto pilot freeing up additional time to pursue new ventures, do not pursue new ones.
3. Do not bring Tiger Tanks into your personal life. I know two people who got dogs.
Because they wanted to have dogs.
Never mind neither have jobs or are able to support themselves let alone the dogs. Never mind they're living at home and got into this mess by agreeing to take care of other people's dogs. They simply wanted the dog, and who can refuse a cute little doggie?
Well now, even with something as innocent and unassuming as a dog, look at how much of your freetime is consumed and your life complicated by by providing for a retarded-child-equivalent.
You have to feed the dog.
Walk the dog.
Take the dog to the vet.
Take it out to go potty.
Spend time with the dog.
And never mind the new logistical hurdles you face.
You have to get a dog sitter.
You can't go on planes.
You can't go into most restuarants.
You forever have to rent apartments that only accept dogs.
You just sank the equivalent of a 10 hour per week part time job for a dog.
And dogs are just an example. You need to look at every decision in your life and ask if it adds an unnecessary cog to the streamlined machine.
You want to get your MBA? You sure?
You want to buy a boat? You sure?
You want to start a restaurant? You sure?
You want to get a roommate who may or may not stiff you on rent? You sure?
You want to buy that fixer upper dream home? You sure?
You want to get involved with the local civics group, church group, or run your children around town for their 31 different flavors of sports? You sure?
Everything takes time, and not only does it take time, it may unintentionally become the single largest waste of your time in your life. It may ruin you, even driving you into bankruptcy. But while that is certainly not the most common outcome of blindly making your life more complicated than it has to be, most people unconsciously saddle themselves with at least 10 hours per week of unnecessary moving parts.
Be smarter than that.
Time is your most important (and only) resource you have on this planet. Before either blindly following the crowd, or starting some kind of business venture that will make money, but torpedo you life, evaluate and contemplate how much time that move is going to cost you, and how to design it so that it takes the least amount of time to run.
Make yourself smart and check out Cappy's other sites, media, and books!