breaking the rules

1. Don’t Be (Too) Flat: Most small businesses try to have extremely flat organizations. Generally speaking that’s a good thing. Flat organizations foster rapid decisions. But flat can become problematic when a small business has multiple founders and co-owners. Who does what? Who reports to whom?

We crossed this bridge about three months or so into the business. It became abundantly clear that Amy Katz (my business partner) was CEO material. Originally, we didn’t have titles. I simply headed up content and site development, and Amy headed up business development and sales. But who was actually “running” the company? Amy was, but we hadn’t communicated that clearly to the outside world until Amy took on the CEO title somewhere around March or so in 2008. I think it was a five-minute conversation while we were ordering business cards.

Officially, we’re still co-owners in the company. But Nine Lives Media Inc.’s talent base has grown, and on the business side of the house we have one clear leader to ensure we’re executing against our annual plans. Meanwhile, I dove deeper into content, community, SEO and evangelizing our brands out at channel conferences.

2. Decline (Some) Money: Amy is a great negotiator. I’m a lousy negotiator. Naturally, Amy handles the dollars and cents around here. But here’s the really interesting part: Generally speaking, we both know when certain business engagements aren’t worth our time and effort.

Either way, we broke the start-up business rules and walked away from a few lucrative projects that may have distracted us from our core efforts.

3. You Aren’t the (Main) Brand: Sometimes, CEOs and executives personify a company (example: Steve Jobs and Apple). Too often, an SMB is best-known for its executives. Talent certainly counts. But you need to build lasting brands and assets. If you look at Nine Lives Media Inc., our brands (The VAR Guy, MSPmentor and TalkinCloud) are front-and-center, rather than our employees.

4. Exit (Some) Profitable Businesses: Let’s assume you’re trying to build three types of revenue streams. Perhaps each is a managed service, but each offering is slightly different. Now let’s assume all three of the services are profitable. Congratulations. Your work is done. Or is it? Perhaps you should look at the least profitable offering and kill it or exit that particular market.

We did exactly that in late 2010, when we killed WorksWithU — a profitable, fast-growing Web site focused on Ubuntu Linux for business. By all metrics — traffic, revenues, profits — WorksWithU’s 2010 performance easily outpaced the site’s 2009 performance. But we were worried. In terms of readership it was our largest site — pushing above 150,000 page views in some months. But in terms of potential long-term revenue growth, WorksWithU had the least potential upside of our brands.

Further complicating matters, we were emerging more and more as an IT channel-centric media company. WorksWithU was mainly for end-users and IT administrators. I was sad to see WorksWithU disappear, but our December 2010 launch (TalkinCloud.com) is a pure channel play — a much better fit for our corporate efforts.

5. Don’t Keep (All) Your Secrets: Yes, you want your products and services to be fully functional and ready for customers. But sometimes you need to show strategic partners your ideas before a launch — in order to jumpstart the product or service. Two prime examples: Back in October 2007 or so, we showed Kaseya‘s Dan Shapero and Level Platforms‘ Dan Wensley an early mock-up of MSPmentor. The site wasn’t pretty at the time. But Shapero and Wensley each saw the value of a managed services media brand and embraced our concept. Their vote of confidence gave us a spark… and the confidence to move forward even faster with MSPmentor.

6. Ignore Your Rivals (Most of the Time): We respect the competition but we don’t dwell on our rivals. Instead we worry about three core items: Serving our readers, serving our sponsors, and innovating. If we remain true to those three core values we think we’ll be fine.

7. Don’t Do (Too Much) Research: It’s great to survey customers to make sure they think highly of your business. But during a dinner about a year ago with Digium CEO Danny Windham, he mentioned that sometimes you need to just throw an idea out into the market instead of researching it to death. Spend too much time on research and you may miss the window of opportunity for launch. Sound advice. And in retrospect we’ve always leveraged Windham’s approach to business.

Of course, we’ve made a ton of mistakes at Nine Lives Media Inc. And like former Intel CEO Andy Grove, I think we realize only the paranoid survive. When I wake up each morning I worry nobody has visited our sites. My first task of the day is checking Google Analytics.

So far, so good… I hope.

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