Immutable Immutables!

What IÌve Learned in Thirty Years Ò MorrisÌs Seventy-Five Immutable Laws (and a few Home-Spun Anecdotes, too!) (Revised 03-28-02) First, learn who YOU are ÷ and do this as soon as you can! Then, hire people who will ÏbackfillÓ for your weaknesses. Never assume that everyone in this world thinks the same way that you do. Free advice is usually worth exactly what you paid for it. Everyone works on those things that they are good at doing. Only the most successful people recognize that the real ÏtrickÓ to life is getting better at those things that they are not good at doing. Push yourself out of your comfort zone. I have never once regretted taking on and overcoming a previously frightening task. This may be the best advice I can give you. THERE ARE NO SHORTCUTS! Understand human nature. For human nature is what you will deal with your entire life and career. It doesnÌt matter if you read the Bible, the Greek tragedies, or Shakespeare ÷ just understand that it is human nature which drives all actions and results. If you can combine your passion with your work, you are in a VERY small minority and you will almost ALWAYS succeed. EveryoneÌs weakness is in his or her strength. DonÌt trip over your own ego. The worst thing that can happen to a gambler is to WIN on his first bet. (More on this later on.) © Ron Morris 2001 Management Laws Beware the ÏIllusion of WorkÓ (Example: ÏIÌm flying, so IÌm workingÓ.) Measure results, not effort. Victory is almost always just outworking the other guy. DonÌt buy already-existing companies ÷. They are either full of snakes or so well run that you can only screw them up! Venture capital, angel capital, and even bank money can make you weak ÷ always run your business like you barely have enough money to make your next payroll. The SECOND customer is the toughest one, for this is the customer that proves your model. The FIRST customer is merely where you prove that you can scramble. If you KNOW that something is going to inevitably happen, then get it over with NOW! Treat meetings like you would funerals ---- they are essential and they serve a purpose. But you donÌt want too many of them! Share the Wealth (youÌre better off with 10% of a mountain than you are with 100% of an ant hill.) He who chases two rabbits catches none. (A.K.A. ÏIf Hitler doesnÌt turn on Russia, weÌre all speaking German right nowÓ.) A good plan, executed poorly, can succeed. A poor plan, executed PERFECTLY, will fail. Put your time and your money into the foundation. Anyone can build the upper floors! (Corollary ---- you WILL ÏTweak like Hell!Ó so just accept this!) © Ron Morris 2001 Management Laws Page Two ÏManage Differently,Ó ÷ remember, you can take a lot of grief from a guy who hits .350 (credit to Whitey Herzog). Major corporations can lobotomize anyone in as little as three years. Keep this in mind when hiring. Become best friends with the word, ÏNOÓ. Never ÏKnee-JerkÓ to something that exasperates you. hear it twice. Always verify it two or three ways. Always count to ten. One ÏCycle of the MoonÓ has an amazing effect on relative import. Be visible. Every day. Let your people know that you are there, and you are listening. Interview someone every day. I MEAN this. Interview someone every day. Because about one worker in fifty is a true ÏplayerÓ. This is a sad but true fact. So, and to get that ONE, you are going to have to look at fifty people and then ultimately conduct about ten interviews from that batch. I wish I had better news for you --- but I donÌt. From quantity comes quality. © Ron Morris 2001 Sales and Marketing Laws Salaries will KILL you! (Also known as, Ïthe guy walking the fastest is the guy who is on commission.) Never hire a salesperson that wants a straight salary. Ever. Ever. Ever. Ever. Ever. You must SELL something first. Get a customer! To a salesperson, there is no more important word than ÏEmpathyÓ. ALWAYS Ïwalk a mile in the other guyÌs shoesÓ first. When selling, be audacious --- make sure that the buyer will remember you. Differentiate yourself with audacity! When selling, your number one ally is TIME. DonÌt let anyone steal your time! Your goal is to DISqualify prospects. Product is Important. People are Important. But MARKETS will make you or Break You! Often, the Best Business you sell is the Business you DONÌT sell. Compared to great sales people, engineers and operations people are a dime a dozen. There are almost NO Technicians who can sell ÷ RESIST THE TEMPTATION! ItÌs a ÏshortcutÓ. Your favorite people must be your CUSTOMERS. Your NEXT favorite people are your PROSPECTIVE CUSTOMERS. Everyone else is a distant third. Try to talk to at least one customer each and every day. Make sure that your people do this, too. EVERYONE IS A SALESMAN! © Ron Morris 2001 People Laws Look for dignified, high-integrity people ÷ they are winners. The world is full of educated derelicts (credit to Calvin Coolidge) Ò donÌt be overly impressed with ÏPedigreesÓ and ÏMen of LettersÓ. The most dangerous people in the world are those who have nothing to do. Even worse are people who have nothing to do and money! There are just some things that one simply cannot learn except by experience. Never hire a friend, a relative, or someone you OWE! Never hire anyone who worked in academia for more than five years. Major corporations can lobotomize anyone in as little as three years. Keep this in mind when hiring. Hire great people and then get out of their way! If a guy doesnÌt FEEL right to you, then donÌt do business with him. Trust your instincts. The best business you do is oftentimes the business you donÌt do. Hire people who ARENÌT looking for a job. Always check the references that you DONÌT get. It is easier to Change People than it is to Change People. Great organizations are made up of brave people ÷ people who will do the tough, and not just the easy, work. Remember, anyone can get through a workday shuffling papers or talking on the phone. The true winners are the brave ones who do the tough jobs. Find these people. Embrace them. Reward them. For they are the few! Young people will make mistakes of inexperience. Old people often have bad habits that are ingrained and impossible to rehabilitate. Try to build your company Ïthrough the draftÓ Ò concentrating on young people. But also be sure to Ïspot seedÓ with great ÏveteransÓ who will watch over and teach the ÏrookiesÓ. This works. © Ron Morris 2001 People Laws Page Two Hire people with scar tissue ÷ Character is an accumulation of painful experiences. People lie ÷ Numbers (generally) do not. The world divides into just two different kinds of people: those who have made a payroll, and those who have NOT! Listen to the first group (especially if they have done it for five or more years) and listen less to the second. There is no more difficult task in building a business than consistently making a payroll without bank loans and venture/angel capital. Personal Growth Laws Write. Write, and Write. Writing is Work. Always Look for Good Writers. Read. Anything. Just READ!!! Take risks when you are young. ÏWhen you ainÌt got nothing, youÌve got nothing to lose.Ó (Robert Zimmerman). When you Wake up in the Morning, There are going to be Ïthree thingsÓ that are distasteful and VERY TOUGH to do. The natural temptation is to put them off. Instead ÷ DO THEM FIRST! Victory is almost always just outworking the Other Guy. Work on your weaknesses. DonÌt worry --- you have them. © Ron Morris 2001 Character Laws You are your reputation. Get knocked down --- early and often. Ninety percent of life is just showing up (credit to Woody Allen). The most successful entrepreneurs are the ones you never hear about. Stay OUT of the newspapers! All you are doing is feeding your ego and telling some other sharp guy how to steal your business. If you just want to see yourself, look in the mirror. In other words, ÏDonÌt trip over your ego!Ó Your dreams are always 100% IN YOUR HANDS. So are your nightmares. Product and Production Laws Do it right the FIRST time! (a.k.a. ÏDrtftÓ) Ò DIRTFOOT. Quantity is a DISTANT second to quality. Nothing aggravates me more than ÏQuick and DirtyÓ! (This is an everlasting testament to M.P. Lopes --- the best partner I ever had!) Price almost always equates to value. If itÌs cheap Ò thereÌs a reason. Same thing if itÌs expensive. Always do the Ïone thingÓ that the other guy is too lazy to do ÷ there is ALWAYS Ïone thing moreÓ that you can do to serve your customer. Great marketing will get you a whole bunch of first time customers --- great PRODUCTS AND SERVICES will keep them. Keep your business as simple as you can. Eliminate complexity at every turn. Always know your Costs. To the penny. You cannot de-bug AIR. At some point, you have to rip the product away from the engineers and send it out to the marketplace --- this is the ONLY way that you are going to find out where its flaws and the flaws in your manufacturing/distribution chain are! © Ron Morris 2001 Home-Spun Observations on Life and Entrepreneurship On ÏInstant fame and FortuneÓ - Whenever I meet an entrepreneur who has not failed, I know two things right away; first, he/she IS going to fail, and, second, he/she is going to be a MUCH better human being on the flip side of that failure. Now this kind of goes hand-in-hand with another of my favorite saying, ÏThe worst thing that can happen to a gambler is to win on the first hand.Ó You know what I mean and we all know people like this. They are successful Ïright out of the boxÓ (it does happen, you know) and they think that they have the Midas Touch. Well, they DONÌT --- all that really happened was that they were: In the right place at the right time, In a vortex market, With a terrific partner or partners who DRAGGED them across the goal line when they thought it was the other way around. (I give you whatÌs-his-name --- the guy who owned the Penguins after Baldwin. I could ALSO give you the names of a few other local high-tech multi-millionaires, at least two of whom hit it big with IPOÌs.) But whenever this happens, the ÏGodsÓ eventually make it right and take away that which was Ïgained outside of the balance of natureÓ. Instant success is a major curse. So is ANY success. Remember Caesar? Whenever he would conquer a new land, he would ride triumphantly into the center of that conquered territoryÌs main city in a Chariot. But next to him was always an aide. And this aideÌs job was to keep whispering in CaesarÌs ear, ÏAll fame, all fortune, is fleetingÓ. © Ron Morris 2001 More On ÏOld GuysÓ Versus ÏYoung GuysÓ Ò And everyone reading this should by now know that when I say ÏguysÓ, I mean ÏPEOPLEÓ ---- (GOD!, I HATE political correctness!!!) Now HERE is an issue for the ages. Young Guys ÏNo bad habitsÓ Ò this is GOOD! ÏNo habits at ALLÓ Ò this is NOT good. Full of energy Ò Good. ÏReady, Fire, AIM!Ó Ò yep, they will invariably engage their LEGS before spending a SECOND on planning what the hell it is that they are DOING! Ò Bad. VERY bad. Coachable Ò VERY good! Nothing sticks Ò Bad. ZERO experience - Everything they do, they do for the first time. Ò VERY bad! They can almost Ïchew upÓ a FTE just for training! You can PROGRAM them RIGHT! Ò Oh so GOOD! (but see above) Loyalty is often a meaningless term Ò but not ALWAYS --- check their parents if possible. But OH when you catch that ONE future Heisman winner!!! Old Guys Experienced Ò There is NO substitute for this. They KNOW WHAT TO DO. Experienced in Ïfaking itÓ Ò But WILL they do it? And how long will it take them because by now, they are masters of Ïrunning down the play clockÓ. Experienced Ò You donÌt have to draw them a road map. Experienced Ò THEIR way may be diametrical to YOUR way --- and THEY are too old and too tired to LEARN your way. Expensive Ò After all, SOMEONE has to pay for all that experience. Cheap Ò If they can get results with little training and without taking shortcuts, they are a BARGAIN! © Ron Morris 2001 Good ones are Rare Ò Why? Because if a guy is 35 or older and he hasnÌt yet Ïmade itÓ, well, the odds are very much against him EVER making it. There ARE Ïlate bloomersÓ, but you have got to really understand the circumstances of their stunted growth (Prison? Army? Addictions? Completely different career?) Good ones are GONE Ò More likely, anyone over 35 who is good is probably already in business for himself. BUT --- (and see above), this can be OK; especially if he/she just tanked a business. In fact, guys who just went belly-up can make TERRIFIC employees or partners. But understand that they have Ïbeen to PareeÓ, and so you cannot keep them on a tight leash. So WhatÌs ta DO? Play it as it lies. Each situation has to be examined in a vacuum. My approach? ÏBuild through the draft (a steady supply of young guns) and spot-seed with free agents (gray hairs --- especially those who can both produce AND teach).Ó This works. Keep the ratio at about 85/15 (young to old). And donÌt assume that the old guys should always manage. YouÌve got to show the youngsters that they can get there while they are still young. But this status is reserved for the VERY SPECIAL ---- it is the ÏCroix de GuerreÓ, not just a Bronze Star (with FULL apologies to guys who ate lead to earn a Bronze Star, which I have NOT!) And never forget --- ÏItÌs about ResultsÓ. © Ron Morris 2001 That Elusive SECOND ÏHit RecordÓ (Or, you could use the title, ÏJust Take the Money and RUN!Ó) IÌve started eight businesses in my thirty-plus years as an entrepreneur. I like to say that I am Ï5-2-1Ó in those businesses. The ÏoneÓ being a liquidation where nobody got hurt and nobody got rich. In all, I have one huge ÏscoreÓ, a few Ïdecent paydaysÓ, and a spectacular bankruptcy (the best learning experience of them all, BTW) on my resume. But you know ÷ there is one thing about starting and growing businesses that seems, and as I grow older, to be immutably true ÷ and this is the fact that, Ïthe second ÎHit RecordÌ is very, very difficult to produce!Ó Oh, we all try. And sometimes (and sadly), we end up Ïgiving backÓ every single dime from both our Ïdecent paydaysÓ AND our Ïone huge scoreÓ along the way! More likely however, it seems that smart entrepreneurs will lose a significant part of their aforementioned ÏpileÓ of cash before they find some graceful way to slink out the back door. But very few entrepreneurs ever make a second hit record that even approaches the magnitude of their first hit record. As Yogi Berra once said, ÏItÌs true --- you can look it up.Ó Think about it --- Go back and read stories from this very magazine during its inception in the eighties and youÌll read articles and see names of wonderful entrepreneurs who really slammed one out-of-the-park. Then. But today most of these same guys are virtual unknowns --- slaving away at some vacuous reprise that, and alas, will likely never take the substantive form of their forbearer company. Why is this? Well, and this is solely my belief, but I personally think that while so much of Ïhitting a home runÓ is the idea and the skill and perseverance to capitalize on that one great idea, there is also more than just a small portion of luck involved as well. © Ron Morris 2001 ÏGod smiles on start-upsÓ, a caller to my radio talk show once said. And this is also true. For some reason (and you guys who have Ïbeen thereÓ know this better than anyone!) good things Ïjust happenÓ in a start-up that is destined for the stars. For example, the ÏrightÓ people show up to work for you precisely when you need them. Early customers prove to be the ÏrightÓ customers --- they are not too demanding, they overlook your indiscretions, they pay their bills on time, they give great references, and so on. And donÌt forget markets --- sometimes your product or service is Ïjust rightÓ for a vortex market ÏwaveÓ that is still a hundred yards offshore and just beginning to form its curl as it roars towards the beach. All of a sudden, you find yourself Ïin the pipelineÓ, getting the surf ride of your life; and if youÌre honest with yourself, you donÌt even know why! Right now I can envision many of you veteran entrepreneurs nodding your heads and saying, ÏA-Yup. The guyÌs rightÓ Hey --- I ainÌt no Miss Cleo, IÌve just lived a long time. IÌve just seen this stuff happen way too often. So whatÌs a successful entrepreneur to do? After all, it is very hard to climb down off of an F-18, Ïrejoin the working worldÓ, and then just sit and read books, is it not? Well, take it or leave it, but hereÌs my advice. Once you hit your home run, go directly to the bench, and from there, directly to the locker room. Then, take a shower, get dressed, and go home to your family. And whatever you do, donÌt Ïjump back inÓ to the next nightÌs ball game. Instead, catch your breath. Think and reflect on what happened and why it happened. Remember, the worst thing that can happen is that you earn interest on your millions! Remember, You have nothing to prove. You have already done it. You climbed the mountain and you have a piece of turf in your back pocket to remind you that you climbed the mountain! (Welcome to the land of mixed metaphors.) © Ron Morris 2001 In other words, take some time. Observe. Maybe instead of looking for that Ïnext great businessÓ for yourself, you should instead look for some guy just LIKE you who seems to be in line for HIS ÏrunÓ, but lacks only money and sage advice (but not TOO much advice!). Since you have been there, you should be able to find this person. (But again, donÌt assume that you are the only person who can find a promising situation --- once again, youÌve forgotten the Ïluck factorÓ! My advice is instead maybe find a guy with no emotions or biases --- a guy like Frank Demmler at the Future Fund --- to find your next great investment FOR you! ) But in all cases, just Ïstep awayÓ from the limelight and the ÏactionÓ until you can be sure of what happened and why it happened and then, more importantly, donÌt be sprinting along looking for a vehicle where you can blow your nest egg on one or a series of ill-fated start-ups. Never forget that, and despite the fact that you Ïdid it onceÓ; you truly may NEVER do it again. For this is likely the case, at least in my opinion. But hey! What were the odds that you could do it even ONCE? A thousand to one? (Sounds about right to me.) And donÌt forget, you also had the thrill of a lifetime along the way and at the end you were paid handsomely for an incredibly significant achievement. And if you still must have some Ïthrill rideÓ to keep you juiced, take up skydiving or bungee jumping. Or, do like I did --- have two kids at age 52!

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