business

Patholical Customers

I think this is part of my pathological customers thesis: you won’t simply have more headaches at $500 than $5k because the customers are more evil about $500 invoices. You’ll have more problems because _people who get into $500 consulting relationships are disproportionately flakes_. You get less flaky behavior from your $5k clients because people who buy $5k services are disproportionately not flakes; the $5k sticker price is kryptonite to flakes.

Bargain-seeking consulting consumers have irrational expectations for what $500 buys them. The $500 is likely coming out of a personal pocket or a pocket which they treat as personal, not out of a Budget which gets handled like an honest-to-God business. They are disproportionately likely to have overcommitted that $500 — it’s perhaps not their last $500, but your invoice is sitting with a number of other invoices and it may not be possible to settle them all simultaneously.

Many of my consulting friends move up-market and find that up-market consists of businesses run by disproportionately mentally healthy people who disproportionately have money in the bank and disproportionately conduct themselves with professional mien like paying invoices in a fashion that suggests their company has paid an invoice before.

.. Pathological customers: when you give them free stuff, they will demand more free stuff, and if you refuse them more free stuff, they will do their darndest to destroy your business.

.. “Pathological customers: they get things for free and then ask for their money back.” The more money a business has, the more professional it can afford to be (literally) in dealing with you.

.. But we occasionally do get the “pathological customers” that patio11 likes to talk about. In those cases having the ability to give a refund is really nice because it is an easy way to part ways and “fire” customers you don’t want to work with.

.. The worst customers, I call them pathological customers, are attracted to things that dont have a lot of money. Its amazing how many people have told me this. You raise prices, and you deal with less crazy people. At 99 cents, people have very unreasonable expectations. 

.. folks who pay A WHOLE NINETY NINE CENTS OF MY MONEY have very shockingly high expectations of polish / quality / feature selection (but no desire to e.g. read what the software actually does), whereas if someone signs e.g. a contract for $X0,000 for enterprise software, it lacks a feature, and they ask for it, “Thanks for the feedback, we’ll consider adding that in a later release. In the meanwhile, I suggest … as a work around” makes them absurdly happy.

The business of SaaS

Understand why SaaS businesses work and how to grow them.

Software-as-a-service (SaaS) is a billing and delivery model for software which is so superior to the traditional method for selling software licenses that it restructures businesses around itself. This has led SaaS businesses to have a distinct body of practice. Unfortunately, many entrepreneurs discover this body of practice the hard way, by making mistakes that have been made before, rather than by spending their mistake budget on newer, better mistakes.

Why Execs Are Ditching Briefcases for Backpacks

Backpacks are storming corporate America, with luxurious business-like versions elbowing out briefcases and messenger bags. Plus: One adamant backpack-hater on why he’ll never convert

some of this growth can be traced to the rise of dress-code-allergic startups and a more casual attitude about business attire overall. But whether you’re an executive or an intern, a backpack suits the densely stacked schedule many men now face. “We think about how a man is living his everyday life,” Ms. Patel said, describing the thought process behind the store’s selection of bags. “We look at functionality: Does it fit his laptop and workout gear—how about a water bottle?” A briefcase can get you to the office and back, but what if you have tennis at 8 a.m., meetings all afternoon and ceramics class at 7 p.m.? A backpack, she added, better targets a modern man’s needs.

.. And while carrying a briefcase leaves you with a single free hand—a hand unable to simultaneously text and funnel caffeine down your throat—a backpack schleps all your stuff and equips you to furiously multitask.

The Morality of Charles Koch

A libertarian billionaire embraces a Catholic business school for its ethics.

the chairman and chief executive officer of Koch Industries finds two aspects of the Washington-based business school highly attractive: at the personal level, its emphasis on character and virtue; at the social level, its message that the right way to get ahead and contribute to your community is by creating wealth and opportunity for others.

.. for his own hires, Mr. Koch ranks virtue higher than talent. “We believe that talented people with bad values can do far more damage than virtuous people with lesser talents,” he says.

.. “Tim always said, ‘You’re a Catholic but just don’t know it,’ ” says Mr. Koch. While he wouldn’t go that far, he will say he is attracted to Catholic University’s effort to put the human person at the heart of business life.

.. or many on the Catholic left, and increasingly on the Catholic right, the idea that free markets might advance Catholic social teaching is anathema.

.. “One can be in business and pursue bad profit,” Mr. Koch explains. “That is, by practicing cronyism—rigging the system to undermine competition, innovation and opportunity, making others worse off. Good profit should lead you to improve your ability to help others improve their lives. But that’s not how many businesses act today.” For Mr. Koch, everything from protectionist restrictions on goods and services to subsidies for preferred industries to arbitrary licensing requirements promote bad profit by unfairly limiting competition.

.. This distinction between good and bad profit illuminates the fundamental difference between how Mr. Koch regards the market and how his critics do. In the view of the critics, free markets treat working men and women as commodities to be bought and sold, and only through strong government intervention can workers hope for a decent standard of living. In Mr. Koch’s view, the most important capital is human, and the truly free market is vital because it’s the only place where the little guy can use his or her own unique talents to offer better a product or service without being unfairly blocked from competing.

.. workers, whose greatest protection is possible only in a dynamic, growing economy: The ability to tell the boss to “take this job and shove it”—secure in the knowledge that there is a good job available somewhere else.

.. The opposite of market competition is not cooperation, as is often assumed. It’s collusion—and almost always the kind that benefits the haves over the have-nots. Which explains why the moral threat to capitalism these days comes not from socialism but from cronyism and corporate welfare.

.. What he wants to encourage, he says, is an economic system open enough so that ordinary people who work hard and have their own unique abilities can build lives of dignity and hope for their families.