The global marketplace has experienced the equivalent of “after-shocks” with the invention of the personal computer and the Internet. The seismic activity within the global marketplace has created a tsunami of historic consequence for business. In no other time in human history have we seen that established businesses are now threatened by small and medium sized competitors.

Businesspeople are not recognizing the consequence that this earthquake and its aftershocks have created. Businesses don’t see the fault lines in the foundation upon which their own companies are built.

They don’t see that inflexible and bloated processes are thwarting the ambitions of owners and shareholders.

They aren’t seeing that it costs too much to engineer their products and services.

What they DO see is that their mind share, market share and profits are eroding.

They act by laying off employees because that always worked in the past. They act by focusing on beating the competition because it worked that way in the past. Sometimes they act by trying to bullshit the marketplace, because that used to work too.

Bourne out of the earthquake the micro-chip created, there is now a tsunami that is crashing down on the global marketplace. It is a tsunami caused by a computer-driven marketplace. When its done, many of the traditional brands and companies will either be weakened, or washed away. Instead of trying to find the “right” solution, I suggest businesses focus on the consequences of the various choices they face.

They can ignore what’s going on and continue to think and act as they have. This will not make the tsunami go away. The company will just live peacefully and weakly UNTIL the water crashes overhead.

They can batten down the hatches and reinforce spaces in their business where they are weak. They can’t prevent the tsunami from hitting but they can “hope” they survive. This will be very costly in time, energy and money. If they are wrong about any of the choices they’ve made in shoring up weakness I speculate they will suffer the same fate as the company that did nothing.

There are other options. One option I teach companies to do is to transform their business. Get on a surf board and ride the wave of computer-driven tools instead of getting hit by it.

Tomorrow, I’ll write specifically about how I help companies tranform.

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As I talk to people about their mobile application needs, I’m struck by how many people are making offers in this area. There seems to be a gold rush of sorts going on. As has been said prior, it is 1994 all over again. People are over-promising and under-delivering their capabilities and time-lines that they can deliver. And it is causing a bit of distrust in the industry.

It’s not just coming from suppliers though. I also see it in the clients. Clients are seduced by promises of little work, low cost and fast time-lines. When a supplier requires more work, more money and more time, clients understandably get frustrated. Unfortunately, though, it’s never as simple as a supplier making requests of the client.

What is much more likely to happen is that the supplier simply stops taking calls. The client, still seduced by getting such a great deal, and knowing that to hire someone else would be very expensive, does everything they can to get the supplier back on track. They end up having to sacrifice in some way with scope or cost in order to get the supplier to do what he already promised to do . . . finish the job. In my experience, these type of suppliers never finish. When they do its usually been half-ass completed as a way to get the client off the suppliers back. The supplier usually doesn’t collect on the final payment because, they just don’t want to talk the client again. At that point the supplier either gives up the business or is off to bullshit another client. Sometimes the client ignores the time and energy it took to see a completed product and pats themselves on the back for not paying a lot.

Clients, if this happens to you once, it’s understandable. You’ll still have to pay the consequences. If it happens more than once, and you’re not seeing the consequences, you need to ask yourself why you invite these situations to repeat. After all, it’s your business that’s suffering. You are doing business with people who don’t care about your need or concerns. Why is that? Are you unable to notice poor ethics because you have poor ethics yourself? Fix that. Ambitious businesspeople are usually able to see ambition in others. If you don’t see it in the people offering you help, move on. Those people can’t help you. They will only hurt you.

Maybe you think you’re clever or special. Maybe you think you’re so great, people want to throw help at you. The reality is that, at best, you’re gullible. At worst, you might not have the intellect to be a business owner.

Good help costs money. Get used to that. If you are in the habit of not wanting to pay for good help, that help will never find you. You’ll then be left with what’s left over. At best, you’ll be stuck exactly where you are and at worst, you won’t have to worry about your business any longer.

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1. Think before acting – In the case study, my friend had already made a decision, long ago actually, that having an app on the iPhone was the right place for his business. There’s so much talk about the iPhone these days but ultimately its still a “walled-in” platform where only a subset of users have access. There’s lots of data out there to suggest that other platforms or architectures should also be considered.

In general, thinking is a good practice but one that small businesses rarely give themselves the space to do. Startups give in to the pressure of acting quickly and decisively. The premise of “Ready, Fire, Aim” (Aim is the thinking part here) is to do something quickly but also inexpensively in order to get some necessary feedback about your application. This iPhone experience for my friend was EXTREMELY expensive. But it might have all been avoided if they looked at other less expensive mobile platforms than just the iPhone.

“Aiming” is actually the most important part of the equation and not the “Firing.” In that scenario, you’re only doing something so you can begin to think . . . powerfully. If that’s the case, “firing” had better be low cost.

2. Be alert for what you are paying for – In general, the least expensive way to transact for something is with money, but keep in mind what it is, exactly, that you are transacting for. When you pay someone to build an application for you, are you just paying for the application? Here’s what you should also pay for:

a. Take care of your concerns – Your primary expertise is probably not Mobile application development or any type of development. These are rough and savage waters and you need someone to lead you and take care of you until the application is complete. You need someone competent and mature enough who knows how to move you and your business to a safe place.

b. Integrity – Dealing with people of Integrity is low cost in any of the ways we transact in business. As I mentioned earlier, this application has become extremely expensive for my friend. First, they still have no application that was contracted for months ago, all due to the cost of that developers integrity. What is the cost? Time? Money? Energy? Resources? All of the above. He spent his time worrying and waiting for the application to be finished. He paid the developer money that he’ll never get back. He spent energy trying to find someone else who will finish the application. And he’s trying to find resources to fund an activity (family, friends, business partners, etc.) that will help him achieve his business goals. Not to mention all the time he’s spent talking to his loved ones about how stressed he is that he can’t get his business to place he envisioned over a year ago.

c. A Partner – You may have contextual needs that you need to transact for as well. For instance, you may wish to project manage the activity yourself or you may not. You may need some help thinking and acting in other parts of your business. A partner is someone you can trust and can turn to when you face a breakdown. It’s better for your business to have really smart people around you no matter where you turn. Knowing those that help you think are powerful people to have around.

3. Understand the business opportunity – What is an average customer worth? How many more customers do you expect to have after your application is finished? How grounded are those expectations? Business owners who look only at what they can afford are typically only interested in earning what they need to make a living. If you have grounded an assessment that within a year you can expect to make 60,000 dollars and it will cost you 20,000 dollars to do it, 20,000 doesn’t seem like much of a cost at all. Many business owners, though, have no clear picture of the business opportunity before them and when they see a cost figure like 10k or 20k they might scoff and try to find anyone who will do it for a much lower price. See items #1 and #2 above.

What have I missed? What’s flawed? I’d love to read your thoughts.

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The iPhone developer “flaked” out. He couldn’t finish the application.

After installing the incomplete application on my phone, I could see first hand what was finished and what wasn’t. I saw some functionality was complete, but after talking to my friend about the capability that was most important to him, I soon realized, it was noticeably missing from the application.

Also, the User Experience was extremely poor. What my friend thought was 80% complete was actually, in my assessment, maybe 50% complete and that’s generous. The capability they longed for was missing and their user experience was non-existent. My friend needed help. I approached this problem in the following ways.

1. This iPhone application was critical to their business. Their business was social media and their users would use the iPhone to interact with their friends in real time and record things as they happened. This capability was a cornerstone of their strategic differentiator. This had to be completed.

2. I didn’t want to be responsible for code written by someone else. The lack of attention given to the user experience meant I was going to have to refactor most of the code anyway.

3. I wasn’t sold that the application should necessarily be an iPhone application. “Smartphone” users account for 40% of all cell phone usage here in a America. Of those, around a fifth of users have iPhones. And of those who own iPhones, according to Forrester research, almost 70% are those making over 70k a year. I wasn’t sold that the demographic of their business fits that category.

I offered him three options:

A. I offered to finish his iPhone application. In spite of the fact that I didn’t want to be responsible for the code, this potential client could really benefit by getting the app out into the world and observe his users beta testing how they use it. The business needs of my client come before mine.

B. I offered to build his iPhone application from scratch. My client needed something different than what he paid for and received. He needed to be taken care of and he clearly wasn’t. The process and tools my partners and I use are geared to take care of a clients needs.

C. I offered to help him analyze his mobile/technical strategy. The problem with startups/small companies is that they are always in “do” mode. They don’t often stop to “think” about what powerful options are available to them next week, next month and the impact of those choices for next year. I don’t necessarily think that the iPhone is best option for this company going forward. After a week or so, I would have the answers he could use to make a powerful decision on his own. *This was my recommended option*

I also threw something extra into my proposal. Integrity is important. When you give your word on when you’ll have something done, others will not have to wonder if you have integrity or not. You either complete it or you don’t. Not having integrity is costly for everyone. So I also offered that if he cooperated with me as a stipulation in the contract, and I didn’t deliver when I said I would, I would waive my fee.

This way, he didn’t have to worry if his partner would “flake” out. It’s written into the contract that delivery is guaranteed. “Not worrying” is low cost for everyone. My friend can concentrate on his core business and help me with the planning and design of the application and can rest easy knowing that at a certain time, the work would be complete. If you’ve ever transacted for something to be done, you know, first-hand, how low cost that is. But its also profitable for those for whom are willing to have Integrity be a strategic differentiator.

Tomorrow, I’ll provide some key learnings that small/medium businesses can take away from this case study.

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