Author: John Hyde

I recently read a blog post that made so much sense to me I wanted to share it with others, especially with anyone thinking about starting a business. This blog originally appeared on the website www.dumbtax.com. [Ed. note: This website no longer exists.] I don’t know anything about the author, who seems not have published anything on this site since December 2011. Nevertheless, this post about finding your passion is worth repeating.

Without further adieu, here it is.

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If Profit Is Your Passion, You Will Fail

When I meet with young business startups or entrepreneurs, I always ask why they want to start their business. Their outcome, and ultimately whether or not I choose to work with them, is based on the legitimacy of their motives. If they simply answer “money” I will not get involved. Profit is not a passion. It is an outcome of passion applied.

Seriously, enough with the money fetish already people. Your passion always needs to be greater than the sum of the potential earnings. Your drive for money is not enough to spur innovation and generate the resilience, which is required of you to be successful. The desire for the pursuit of money will die long before your passion does because the desire of money is quickly diminished by discouragement.

The reason is that most startups will take years before you see profits. I co-founded a venture 6 years ago and yet to have seen a single dime from it. My passion for the technology and industry is what drives me.

If your motive is purely money, get ready for a business or idea that won’t last very long.

Fortunately, a proven antidote for discouragement is passion.

Beware of partnering with people whose passion is profit. These people can be bought for a price and easily lured away. Their loyalty is in their personal financial gain. I had an early business relationship, which seemed to be a match made in heaven and the road ahead seemed full of promise and potential. After several months, he was lured away by a hefty paycheck and left me holding the bag for the business liabilities.

All the great businesses and enterprises are founded on passion. Your passion for your idea or business is driven by what it could be: passion to solve a problem, passion to see things change, passion to integrate, passion to optimize, passion to streamline, passion to invent, passion for industry, people, technology and others. Again, if your sole passion is to make as much money at any cost, you’ll end up chasing mirages. Sad but true: many people operating in this manner have wound up with a criminal record down the road.

Don’t get me wrong. All successful businesses must have a profit motive but money should always be the cherry on top, not the body of the ice cream sundae. One year, I calculated that my average hourly wage between my ventures was less than $3 an hour. But I loved every moment of it.

For many people, a paltry sum like that would be indicative of failure, but for me, that $3 an hour is worth $300 an hour to my soul. I am driven by my passion, and the fulfillment is the largest payout for me. Follow your passion, back it up for all your worth and the money WILL follow. Trust me on this.

A woman I know, Mira Wooten, recently published her first book, Welcome to Love. Wondering if she could use Facebook to sell copies, she placed an ad. Here’s how she tells it:

“I tried using FB Ads to promote my new book, Welcome to Love. It’s a romance book based in Austin. I targeted the demographic to women in Austin who had reading listed as an interest. According to FB, it got over 64,000 impressions over the two days I had it live. A total of 133 people clicked on the ad that took them to my Amazon web page. The cost per click varied between.79 -.93 per click. I spent a total of $103.48. I sold zero books during that time period. The cost per click seemed to vary depending on the day and time. Weekends were cheaper. I wouldn’t do it again.”

Her experience reminds me of a story that NPR’s Planet Money reported about two guys who own a small pizza place in New Orleans. Recently they decided to dip their toes into Facebook advertising. I spare you the details, but it’s a good story. The bottom line is this: They ran a Facebook ad campaign. It cost them $240. The result? One new customer made a $10 “donation” to the restaurant.

“That return — $10 on a $240 investment — isn’t much. Maybe at some point, the new Pizza Delicious fans will show up and buy some pizza. But social advertising is so new that nobody knows for sure. It’s still unproven, untested and largely unstudied.”

Clearly, this isn’t enough data to draw any definitive conclusions, but it does make you wonder. Can Facebook advertising work for small businesses? Is there a better approach to Facebook for small businesses than using it for advertising?

I need to learn more about how other small businesses are doing with their Facebook ads. And whether or not Facebook ads are the answer, I certainly believe in the effectiveness (and necessity) of online marketing for small businesses like restaurants and wineries.

Note: Graphic borrowed from a blog post on Entrepreneur.com: “Facebook Ads: Worth the Money?”

Social media and the Internet are powerful tools for small businesses. That’s because their customers increasingly begin their shopping on the Internet, and they use social media such as online reviews when considering which products to buy and which businesses to support.

For that reason, the Internet is a double-edged sword. Used well, the Internet and social media can help small businesses. Online marketing techniques and tools, for example, can help small businesses reach prospective customers who otherwise would have no way of knowing about them. Online marketing can help small businesses sell goods and services anywhere around the world, 24×7. And online marketing can help small businesses compete with giant corporations.

However, if ignored by small companies, the Internet can hurt business. Witness the following case in point.

“Customer Service Sucked!”

A while back I met the owner of Foy’s Bike Shop in Woodland, Calif., when I went into the store to buy an inner tube. When I got back home, I looked him up online to see what Foy’s is doing in the way of online marketing. Turns out, the bike shop didn’t have a website (and still doesn’t). Instead, my search on Bing turned up the following results.

The very first result listed a customer who had not had a positive experience: “I recently bought a bike from Foy’s. It took 4 months to get it. Customer service sucked!”

To be fair, there were also a number of positive reviews in the results page. And, as I mentioned, I had met the owner myself, and I thought he was quite helpful and pleasant.

Still, as this example shows, small businesses ignore online marketing at their own peril. If they are not proactive, if they don’t invest time and effort creating and managing an online presence, it will be managed for them. And not necessarily in ways they prefer.

In 1966, Alfred Peet opened his first coffee shop at the corner of Vine & Walnut in Berkeley, Calif. It’s still there, 46 years later. A lovely store with dark wood, a distinctly neighborhood feel, and an unpretentious atmosphere, the original Peet’s Coffee has arguably had the single most important impact in coffee drinking in the US in the last 50 years, and possibly around the world.

Why? Because it inspired Jerry Baldwin, Zev Siegl, and Gordon Bowker (all friends of Alfred Peet) to open a small coffee shop of their own up in Seattle. You may have heard of it.

Founded in 1971, Starbucks is “the largest coffeehouse company in the world,” says Wikipedia. Though it’s grown much faster than Peet’s, Starbucks was modeled on that original café in Berkeley, especially its style of dark-roasted drip coffee. Currently there are more than 17,000 Starbucks stores around the world, according to the company’s website. So although it’s true that people have been drinking coffee for 500 years, I think it’s fair to say that the way we think about coffee today is how Starbucks taught us to think about it.

But that may start to change. Continue reading “After 50 Years, a Small Revolution in Coffee”

Buried in a recent article in The Wall Street Journal was an interesting point about the insight of two women who served in leadership roles at the Fed prior to the financial crisis. The point was a subtle one, and it appeared only at the end of the article. You could easily gloss over it.

What the article seems to suggest is that, in contrast to a group of men who may have been clouded by miscalculations (and hubris), women at the Fed demonstrated better foresight and greater caution with regard to the US economy.

And it got me thinking: Would the US economy have fallen less – or rebounded sooner – if the Federal Reserve were run by a woman? Continue reading “Why the Next Fed Chairman Should be a Chairwoman”

I think we can now sound a note of cautious optimism in the wake of Apple’s announcement that it had asked the Fair Labor Association to inspect its factories in China. (Read Apple’s press release.) Apple’s actions come in the wake of substantial press coverage and public outcry over the working conditions of factory employees.

I also think we can assume that it was this public and media pressure and the FLA’s inspections that were responsible for even more important and potentially far-reaching changes. Continue reading “A Follow-Up to My Earlier Post: “Dear Apple…””

Advertising veteran Martin Lindstrom, who authored Buyology and has written extensively on branding, recently published something of a manifesto on branding and ethics for Fast Company. It’s a good piece: short, provocative, and worth reading.

In it, Lindstrom refers to himself as a “brand futurist” whose job in part is “to predict the future.” And indeed, if his word is to be trusted, he’s made some accurate predictions in the past – for example, envisioning a Facebook-like experience before Facebook came into being. (This was, notably, right around the time that MySpace appeared.)

Looking forward into the rest of 2012 and beyond, Lindstrom makes this bold statement:

“My prediction for 2012 is a rise in the importance of ethics. I foresee a kind of WikiLeaks emerging to tackle the maneuvrings of less-ethical brands. The move will come from an independent organization with the sole mission of disclosing what those companies are up to. Most companies will be vulnerable to being targeted, despite having some sort of written standards.”

I agree with Lindstrom on the growing importance of ethics in business, but I suggest that his “prediction” has in fact already come true. Continue reading “Ethics and Branding”

Companies go public to raise capital, usually for expansion. Manufacturers build factories. Retailers fund new stores. That’s good for them and good for the economy. These businesses use capital investment for production, innovation, sales, and hiring.

But expansion doesn’t appear to be Facebook’s motivation.

If you read the letter from Mark Zuckerberg that was included in the SEC filing, you may notice that there is a lot of talk about Facebook’s mission, but very little about why an IPO is necessary or beneficial for the company. Is that by design? Continue reading “Why is Facebook Going Public? The answer isn’t obvious.”