Leo Bauboa of Zen Habits built his Technorati 100 blog on one hour a day, leaving plenty of time for a day job and a family.

Tim Brownson reshuffles our priorities so we realize what's important to accomplish and what's not important to worry about.

Merlin Mann of 43folders shows us how merely admitting what we don't like about ourselves and our life leads to a vast menu of options for fixing it.

Penelope Trunk demonstrates that the point of a job is fulfillment and happiness, not the blind pursuit of money. 

If you don't have your health and your family, nothing else matters. On your deathbed will you wish you had worked longer hours or been a better parent? Will you wish you had spent more time Twittering or more time exercising, extending your life by five years?

Compelling. And yet, in my experience this attitude is not the path to success in small business.

Maximizing your chance for success means sacrificing health and family.

This sounds controversial, but it's not just me:

Jeremiah Owyang of Web Strategist: "How do I Keep Up?" This is one of the most common questions I get from folks, or a variant: "Do you sleep?" or "Do you have a family?" I can answer succinctly: "I don't, in shifts, and yes... I think." ... I'm lucky I fell into my passion. It comes with costs however, I'm out of shape, stressed, I don't sleep well, and my blood pressure is up.

Mark Cuban, self-made millionaire and owner of the Dallas Mavericks on how he acheived success: "I slept on the couch or floor ... Because I was living on happy hour food, and the 2 beer cover charge, I was gaining weight like a pig. But I was having fun. ... Every night I would read [software manuals], no matter how late. ... I remember sitting in that little office till 10pm ... I would get so involved with learning that I would forget to eat ...

More from Mark in an interview with YoungMoney Magazine: Question: "Did you have to sacrifice your personal life in order to become a business success?"  Answer: "Sure, ask about five of my former girlfriends that question. I went seven years without a vacation. I didn't even read a fiction book in that time. I was focused."

Penelope Trunk (yes, she has insights on both sides of this issue) on how all-consuming her company is: "I'm desperate. ... You're always sick, but not take-a-day-off-work sick. ... So I suffer with the pink eye, because it's not having all that gross green discharge yet, so I think I can deal with it after funding. ... I diagnose my [temporary] blindness as stress related. ... I say, 'My eyes are nothing compared to the pain of raising money.' ... There's no time for family.

"So what," you could argue, "just because many successful entrepreneurs are workaholics doesn't mean that's the only path to success."

Indeed, study after study has shown that "working more hours" doesn't translate into "accomplishing more shit." If you're not getting enough sleep, for instance, working extra hours doesn't make up for your foggy brain.

Also, optimizing how you spend your time can increase productivity several times over -- an increase you couldn't possibly match by working more hours.

Yeah, but here's the problem.

The "Rule of Closets" is that the amount of crap you own will expand to fill all available closet space. You can create more space by adding shelves and organizers, but then you'll soon discover you have more stuff.

Well I have a "Rule of Time in Startups": How much time does a bootstrapped company take? All of it.

Even ten people could hardly keep up with everything you do in small business -- creating, consulting, designing, fixing, self-promotion, blogging, networking, bookkeeping, taxes, customer support and cultivation, reading startup blogs for ideas and inspiration (!), and all those little crappy things like losing an afternoon troubleshooting your fancy outsourced IP phone system that was supposed to let you "work from anywhere."

One, two, or even three people can't do everything, so of course it takes all your time. If you're working a day job while starting something on the side, of course you don't have time to exercise or play with your kids before bed.

It takes obsession to make a little company go. Forget "passion" -- everyone's favorite word -- it's "obsession." It's not just that you love working, it's that you can't stop working. You're putting your entire self on the line -- your finances, your career, your ideas.

The obsession is there even when you're away from the office, having lunch with a friend or reading to your kids. As my wife would frequently point out in the early years of Smart Bear, my "mental and emotional bandwidth" was entirely consumed. You're physically there, but you're not really there.

Read those quotes above again and you'll see not just passion but self-destructive devotion. You don't put yourself through this meat grinder just because you "like something a lot."

"If you love it so much, why don't you marry it?"

Exactly.

Of course those life-coaches are still correct: This isn't a great way to live your entire life. You need to accept that this is going to happen and ask whether it's OK to incur this penalty right now. For me, I did all this in my 20's when I had no kids, I had enough savings to risk everything for a while, and I had a wife who had her own business and who therefore understood how much work it took and why I was spacing out over dinner.

Bottom line: Every successful bootstrapper I know puts work before self. (Until financial freedom is achieved.) I did too.

Let's discuss this! There are more arguments for both sides. Join the conversation by leaving a comment.

Dear Joel,

I regret to inform you that I must decline your invitation to be a featured guest blogger for Joel On Software.

I realize this will come as a shock, especially given my well-documented need for attention.

The fact is, I don't care how many thousands of readers you have, how many millions of dollars of software you sell, or how many minor celebrities worship you.  At the end of the day, you appear in a little window in an RSS reader. You fill in a template consisting of a cute story tenuously connected to a dramatic point, inspiring wanna-bes to commiserate and laugh with indignation at the stupidity of others. 

While they've been laughing, I've wondering whether you practice what you preach. You admonish programmers who don't understand Unicode, yet five years later our copy of Fogbugz still cannot receive email from Korea because of a character encoding issue.

Also, are you out of gas? Your column in Inc Magazine consists of 1300-word reproductions of chapters from your book which themselves are reproductions of blog entries you wrote in 2001. And your blog has turned into announcements for products and tradeshows.

I can already hear your fanboys calling for my head, but from where I'm sitting, you're a celebrity who is cashing in on fame, no longer compelled to have new ideas.

But introspection isn't your thing. Admitting you've been wrong or that you don't take your own advice would crack your well-crafted façade.

I'm not like that, and I can't pretend otherwise for you or your readers. I'm afraid the answer is no.

                     Sincerely,
                           Jason

Dear Mr. Spolsky, 

I'm not sure if you received the last email I sent. I hope not. I used Outlook's "recall this message" feature, but sometimes that doesn't work. (That's Microsoft for ya, am I right?  Ha ha!)

Anyway, I'd like to apologize for the things I wrote. I feel I've done both of us a disservice by refusing your generous offer to be a featured guest writer for Joel On Software.

If you want to know the truth, my unwarranted outburst stems from a core insecurity. Had you rejected my article, I would have been crushed. I guess this was my way of rejecting you before you could reject me. Juvenile, I know.

In fact I have deep respect for what you've done for the software development community over the past decade. I myself have been inspired by you since 2000; I can still remember the glee of getting new articles delivered to my inbox.

As an entrepreneur, you've taught me everything from how to hire great people, how to think properly about bootstrapping, how new projects help you cope with burn-out, and even how to run tech support. In fact, there's very little I do each day that isn't influenced by you in some way.

That's incredible, if you think about it.

What I'm trying to say is, I would be honored to accept your invitation, and I trust that you will disregard my first email.

                     Apologetically and humbly yours,
                            Jason Cohen

Hi Joel!

I haven't heard from you, so I'm forwarding a copy of an email I sent earlier this week.

You must get an ass-ton of email! So no hard feelings.

                     Talk to you soon,
                            Jason

Hi Joel,

Oh man, that article about hanging the blinds at Fogcreek was awesome. Did you really do all that? Of course you did, it was in the photo! I loved how you tied in the army story -- it's really motivational. 

I'm so glad Inc is featuring you. They need someone to speak truth to power and put the stuffed suits in their place. You're like the Moses of software developers! What's next, the New York Times? Why not!

Speaking of articles, I've got some article ideas I'd love to discuss! I know you're super-busy -- that's what I keep telling my friends. They're such nervous nellies -- they think you're ignoring me! A quick little two-second reply from you would really reassure them. Thanks!

                     +1 for Joel in the NYT!
                              Jason

Joel-

Quick idea: I was thinking of doing an interview series about how your writing has inspired successful software projects. Maybe even make a short film? You could attach it to your next "Interning at Fogcreek" DVD. What do you think?

Here's what I'd say: Your three part series on designing software for real people permanently changed my perspective and continues to be my bible. It's the kind of thing you have to re-read every few months to make sure you're building great, usable software.

P.S. I still haven't heard back about the guest post. Should I be worried?

                     Thanks again,
                             J

Hey hey J-Spol!

I was just telling a friend about your offer. You know, all I have to say is "Joel" and everyone knows exactly who I'm talking about. I guess that's how you know you've made it!

Anyway, this friend thinks that if you were truly interested, we would have had more conversations by now. Imagine how surprised she'll be when you publish my article! Ha ha, we'll both get a kick out of that.

Let me know.

                     Waiting expectantly,
                             Your boy JC

Hi Joel,

This will be my final email. I don't want to seem like a stalker!

So it turns out I have some influence over one of your interns (one of those friend-of-a-friend-who-owes-a-favor-to-a-friend type deals). He (or she!) set up me with a Copilot account behind the FogCreek firewall, so I've been playing with the Joel On Software system myself.

Seems like it's a custom job. No problem -- I'm Smart and I Get Things Done -- I'll figure it out.

So you should see my article appear soon! I'm glad I found a way we could work together without interfering with your schedule. Cheers!

                            --Jason

Modeled after "Dear Oprah" from Steve Almond's fantastic short story book Rants, Exploits, and Obsessions (Not that you asked). Good artists copy; great artists steal. (Said by Steve Jobs, stealing a quote from Pablo Picasso.)

In fact, February, March and April were its three biggest months since its inception in 2006. What recession?

Yes, you read that right. The Bingo-card-generation-software industry is growing while every sector of the economy is simultaneously in the toilet.

Patrick McKensie is too small to fail.

Think Patrick is alone? Balsamiq Studios is growing even faster. After their user interface mock-up design product netted $162k in their first year of business, today they're making so much money they're embarassed about it. They pulled in $35k during the first week of April alone.

Balsamiq Studios is too small to fail.

How?

If your niche is small enough, the customer need strong enough, your marketing targeted enough, your product good enough, your customers happy enough, they are going to buy, recession or not.

That sounds like a lot of "if"s, but let me show you that it can work.

If your goal is to have a huge company and sell $100,000,000 of software per year, you're going to have a tough time. You'll almost certainly fail, it will take years, it will take cooperation among many people you haven't yet met or hired, it will take a massive market, it will take beatable competitors, and it will probably take debt and/or investors. And yeah, a down economy could be your undoing.

But if your goal is to run a smaller sucessful business and be independently wealthy, it's different. If you'd be happy making $1,000,000/year or even $200,000/year many potential problems fall away. A small, focused market changes the rules.

In a small, focused market, you don't need a big marketing budget to get noticed. You know where your customers hang out -- the forums, blogs, community sites, influencers, local groups. You even know the keywords for AdWords and it's easy to optimize, like Patrick did. It takes time -- but not a lot of money -- to participate and get noticed. 

In a small, focused market, you can become the world expert of your niche. You can build the most popular blog, the most frequented forum, the best collection of how-tos, the most comprehensive eBook, the simplest, yet most complete software. Or, in my case, the most popular paperback book on a subject (37,000 copies and counting).

In a small, focused market, you can deal with competitors. The competition might be weak or there might be plenty of room for several winners. Competitors are easy to find and track and analyze. It's possible that you'll never see an 800-lb gorilla because the addressable market is too small for them to ever be profitable (Microsoft isn't going to make a Bingo-card creator). Any other competitor starting now will be way behind; if you keep moving they won't catch up.

In a small, focussed market, you can delight customers one by one. You can develop fans and cheerleaders who will buy anything and everything you make and spread the word to everyone else in the community. You can quickly amass testimonials for your website that sell your services and products better than any brochure possibly could. It's easier than you think; just be yourself.

In a small, focused market, recessions don't hit as hard. Your potential customers have a strong need, not a passing interest. Your existing customers have a personal relationship with you and will go out of their way to help you succeed, even in tough times. Because of your small size, 99.99% of your customers are still in your future, so there's always new customers to discover.

Prevailing wisdom is that "small is risky." It's just the opposite. When you just need to be Ramen-profitable, you can do so even in a recession.

Care to wager? In one year, who's more likely to survive: Balsamiq Studios, or a company with $30m paid-in capital that wasn't profitable even before the recession but has "amazing growth potential in a hot market?" Whose founders are more likely to put $1m cash in their pocket over the next few years?

Remind me again -- what's wrong with small?

Am I glossing over the down-sides of small business, or is this truly the best chance a founder has at becoming a millionaire?
Leave a comment and join the conversation!

You can go there for the podcast (or mp3) of Why you have to engage in social media and Starting a Business isn't crazy.

Of course you're probably more interested in content you haven't seen, such as Fred's interview with Jay Ehret of The Marketing Spot Blog where they talked about the transition from corporate day-job to part-time small business to full-time entrepreneur.

What you didn't know is that I also did an interview (mp3) on the travails of starting Smart Bear where I continued the recent trend of talking about the ugly, hard side of small business while giving specific advice on how to persevere.

My question to you, dear reader: Would you like to see more audio? Or is text good enough? Are audio versions of posts useful to you? Would you like more interviews or is that overdone?

Let me know by leaving a comment.

P.S. Yes, I get the irony of asking if you want to "see" more audio.  :-)

Wow, 95% of all businesses fail, right? That's scary.

Most businesses are never profitable and fail within 5 years.  That's mind-blowingly depressing.  Aren't you worried about all the time and money you'll lose?

So many businesses end in bankruptcy.  Aren't you worried about that wrecking your life?

I don't think that's a good move in this economy. (Right Dale?)

Well actually, these "well-known facts" are crap.

For example, let's examine that 95% failure rate. The United States Department of Labor reports that the number of business that terminate within four years is just 24%. And for only 17% of those, "termination" meant failure or bankruptcy -- the majority were businesses that were sold or the owner retired.

Sure starting a business is riskier than a job, but these proclamations imply that only an ignorant, greedy, egomaniac would be crazy enough to run into the arms of almost certain failure.

If you're thinking about starting a new venture right now, you need to understand the risks, but you need the real risks. The truth (as always) lies between these baseless off-hand remarks and those startup blogs that show only the rosy side of things.

First -- and bare with me on the pedantry -- you have to define "business." The 2006 US Census [1] shows that half of all "businesses" are a secondary income source, not the primary. More than two-thirds of businesses are started at home; only 21% of all businesses employ someone other than the owner.  In other words, most "businesses" are side-projects that the owners might or might not hope will grow into something more.

Not that there's anything wrong with a side-project! But data about "side projects" isn't relevant if you're talking about taking the Big Leap (quitting your job). After all, aren't side-projects more likely to fail than projects you put all your energy and time and heart and soul into?

Yes, depending on how you define "fail." An Australian study [2] found that 64% of business fail within ten years if you define "business failure" as "discontinuance of ownership." But that can mean anything -- even if the founder just loses interest which, if you have a home-based business that isn't your primary income source, could very well be the case.

In the same study, if you define "business failure" as "bankruptcy," the 10-year failure rate drops to a mere 5.3%! In other words, even when it's clear that the business isn't working, bankruptcy is rarely necessary.

What about those long hours you hear about?

Well, that one is true. Every self-employed person I know (myself included) works more than employees (except in those brutal professional sectors like medical services, legal services, and accounting).

Hard numbers: The Canadian government reports that self-employed people work 5 hours more per week than employees. But the real story is this: 33% of self-employed people work over 50 hours, compared to only 5% of employees.

What about making money? NFIB studies routinely report that one-third of all businesses are profitable, one-third are break-even, and one-third lose money.

So here we find some sobering facts. "Losing money" is pretty bad -- even being jobless is better than bleeding cash -- and "breaking even" isn't much better. This is real risk, and on top of this I'll add that you won't be making money for the first 6-24 months.  You need enough money to starve for a while, you have to set financial boundaries for yourself, and you have to walk away if you hit your limits.

However, remember that half of those business are being run part-time. "Hobby" businesses are popular; the fact that someone's back-room bead-stringing "business" loses money isn't relevant if you're thinking about becoming a consultant.

Anyway the real question isn't "How much money do I expect to gain or lose from running a business?" Rather, it's "How much money do I expect to gain or lose from running a business compared to my next-best alternative?"

For most people, "next-best" means a job.  In a 2006 Gallup survey [3] when small businesses were getting slammed with high gas prices, business owners reported four to one that they make more money per hour than working for another company in the same field.  That's profits, y'all, not revenue. And that's even with the extra hours small businesses demand.

Furthermore, half of those owners reported that they were earning more through the business than they would have in a regular job, and 76% said they're better off financially in general:

The US census backs up the "feelings" of these entrepreneurs [4]: In every year between 1990 and 2004, the biggest salaries came from companies with 0-4 employees and companies with more than 500 employees.  So if you're happy slogging it out at a big company, wondering when you might get laid off or have your job shipped overseas, then that's your best bet at a monthly paycheck. If that doesn't sound good, tiny companies are the way to go.

But then there's the economy. Why does everyone think starting a business in a down economy is bad?

Is it because you think no one's spending money? It doesn't matter: In your first 6-12 months you won't have many customers anyway, and those you do get are the most desperate for your product or service. If they're desperate, it doesn't matter what the economy is doing.

In fact a bad economy is perfect. Every vendor is hurting: get cheap furniture, cheap rent, cheap advertising, cheap services like art and web design. Good people are out of work; all the better to get help at half-price or a co-founder who just got laid off.

At Smart Bear we just hired a design consultant for 1/3rd of his usual rate. Advertising vendors are dropping their prices without me even asking. Subleases are everywhere as companies try to recoup the cost of their seven-year lease now that they've laid off half their staff. It's prime time to get stuff at low cost.

Here are six reasons to start up in a bad economy.  Here's six more.

But in the end, the real question is one of fulfillment and happiness, not merely of financial success. With a regular job, "happiness" and "money" tend to be inversely related -- it's hard to have both. This is summarized neatly by Juhan Sonin's evaluation of his own life:

Running your own business may be the way to break the pattern -- both making money and doing what you love -- but small business is stressful and difficult and scary. Is it worth it?

To answer, I'll leave you with this chart from the Gallup [3] poll:

Hey small business readers! How about sharing your own words of encouragement with other readers of this blog! Inspiring words are great when you're overwhelmed. Leave a comment!

References:

[1] US Census, 2006 survey of business owners.  Data here.
[2] John Watson and Jim E. Everett in Journal of Small Business Management, October 1996
[3] Gallup News Service, 2006 Smart Business Index poll.  Came to my attention via the the Corporateprenuer blog
[4] US Census Statistical Abstract 2008 Table 0737.  Data via infochimps.org.

Already I'm cringing at the size and scope of the list, but the real problem comes when the marketing department plays Mad Libs:

Sun GlassFish™ Enterprise Server is easy to use, fast, and scalable ... easy to download, develop, and deploy ... facilitating robust, highly-available, and cost-effective services. (source)

The product description above is prima facie false. In all your experience with computers and software, have you ever experienced a system that truly embodied every one of those attributes? No trade-offs, no compromise? A-plus-plus on every count?

Of course not. Since I don't know which of these claims are true, now I distrust them all. And you haven't communicated anything tangible. Fail.

The cardinal rule of authenticity and believability is that actions speak louder than words. A corollary is that if you have to tell me something's true, I automatically don't believe you. If you're honest, you don't walk around saying "Hey, did you know I'm honest?"

Your "values" aren't words to be shoe-horned into tag-lines or stapled onto disingenuous mission statements. Values are the reason for your actions, the theme behind your words, and the underlying consistency in how you do business.

Hollywood actors call this "motivation." A character's motivation is the secret reason why she is angry or depressed or indifferent. A common technique is to invent a back-story -- construct a detailed account of how the character has gotten to this point in life.

You don't publish the back-story. You don't come out and say "Darth Vader is disillusioned with the notion of a Republic." Explanation ruins everything!

Apple has mastered the art of demonstrating values without words. Apple has values like "design is paramount," "form over function," and even "Apple is cool." But an iPod wouldn't be cool if some corporation claimed it was. Listing features/benefits wouldn't communicate that either.

This does: (Yeah this clip is dated, but remember how amazing it was?)

How would "standard" marketing machinery portray these "features and benefits?"

This rule of values -- show, don't tell -- doesn't just apply to commercials. It's in customer service, your website, how you sell, and even how you hire.

Actions count; words don't.

Explaining your values comes off as disingenuous:

• If you have a high-quality product, you don't say "Your satisfaction is important to us," you have a 90-day no-questions-asked return policy. 
• If you care about talking to customers, you don't play a recorded message saying their call is important to you, you simply answer the phone. 
• If customers love you, you don't say "100 companies use our software," you have a web page with 100 stellar testimonials. 
• If you treat your employees as human beings, you don't call them "resources," you mock companies that do that and display testimonials from your own employees.

Once you're walking the walk, then you've earned the right to call it out:

• "We're so confident in the quality of our hammer, if ever breaks we'll swap it out with a brand-new replacement. For free!" 
• "At MyCo, a human being always answers the phone. Why? Because business is personal." 
• "Don't take our word for it, read for yourself what our customers say. Did we pick the best ones? Well yeah, but we have 100 'best ones!'" 
• "What if programmers were treated like rock stars? ... management, not coding, is the support function. ... people love working here." (from Fog Creek)

The "values" here are still words like "quality," "service," "happy customers," and "great place to work," but they're tangible demonstrations, not trite phrases plastered in all the expected places.

Let values motivate action. Values are the means to the end. Get to the end.

What are your techniques for exhibiting positive values without announcing them? Leave a comment and join the conversation.

"Because it was surprising to hear a beautiful voice come from an ugly person." 

No.  If "surprise" was all there was to it we'd laugh, we'd clap, we'd hold our chests in amazement, we'd be happy, we'd be heartened, but we wouldn't cry. We'd look at each other with knowing smiles and say "you can't judge a book by its cover," and then we'd move on to the next contestant. Proof? You won't cry at Hollie Steel.

"Because we realized we judged another human being unjustly; we felt guilty."

No.  If you prejudge someone as stupid because of a speech impediment, you do feel guilty, you do feel ashamed, but you don't cry.  You resolve to make up for it, you decide not to prejudge like that anymore, you feel reinvigorated to be a carrier of justice yourself, but you don't cry.

"Because we realized a great talent had been wasted."

No.  Wasting talent is a shame but it doesn't cause us to burst into tears three notes into a performance.  We could be shocked, angered, saddened even, but the overwhelming and immediate reaction to weep wasn't this thoughtful.

We cried for Susan Boyle's entire life.  The life we imposed on her.

For fifty years Susan was treated the way we all treated her -- laughs, jeers, doubt, no one listening, no one caring, no one taking her seriously enough to give her another thought.  Even before we learned she's never been kissed, we knew, and we laughed at her anyway.

We laughed.  Fifty years of struggling against this emotional battery. And we laughed. 

Now comes the part where you change your life forever:

What would you have done if Susan Boyle couldn't sing?

You would have laughed.  She would have walked right off that stage  and continued living that life until she died, and you wouldn't have thought twice about it.

Is that Susan any less human?

How will you treat the next Susan you meet?

If you read blogs about marketing small companies, you're inundated with "social media" advice about why you need a blog and a Twitter account and everything else.

Even my 90-year-old grandmother who doesn't own a computer and reads my wife's healthy cooking blog on print-outs asks "What's Twitter?" because she read about it in the New York Times.

Still, most people and most businesses don't think they need a blog.

In the next five minutes, I'd like to convince you that you have to jump into the world of blogging and Twitter and Facebook.

Back in the late 1990s....

(Ew, don't you cringe when you hear the phrase "back in the late 1990s?" Here comes a tale of hope and of disappointment, of "paradigm shifts" and of "eCommerce," of lessons learned and history we shan't repeat! Yuck. Sorry about this; it has to be done.)

Anyway, back in the late 1990s, there was a day (let's call it October 19th, 1997) when suddenly every company in the western world decided they needed a website.

Not that anyone knew what a website was for. Was it a brochure? A storefront? A billboard? The geeks say "It's a new way of doing business." What the hell does that mean?

What pushed everyone over the edge was that on October 19th, if you didn't have a website you were invisible. Not just hard to contact, invisible.

Sure you had advertisement and PR; you could get a message in front of people. But then what? Would they go to your store? Call your 800 number and request more information? Not on October 19th; they want a URL, and if they don't get one they are finished with you.

Mind you, most companies still had no idea what websites were for, but they realized they had no choice. "This is the next big form of media, and whoever figures it out will win," it was collectively decided.

How do you "win" the Internet? No one knew, and even those geeks who indirectly convinced the world to live on the web didn't foresee its massive effect. The Internet was not, in fact, "just another form of media" -- it created opportunities where Amazon is 34x bigger than Barnes & Noble, where NetFlix destroyed Blockbuster, and where Skype is worth $2.6B while telecom companies drop like flies.

It's not just a new media, it's a completely different world. Business models are changed forever.

Flash-forward to today, and the same pattern is emerging, just in a different guise.

Today, a new website is invisible on the Internet.

Take for example my little fun project, LinksFor.Us, a tool that shows bloggers who is linking to and talking about their posts. Thank God I have no interest in making money with it, but suppose I did.

LinksFor.Us is invisible. How would you find it? Googling "blogs?" Yeah right! All the search engine and AdWords optimization in the world wouldn't put a new website at the top of a Google search for "links to blogs."

So what could I do? Take out ads in a magazine that bloggers read? Oops, bloggers don't read print. Okay I'll advertise on actual blogs! Oops, bloggers read blogs in RSS readers that (generally) don't show ads.

LinksFor.Us is invisible. I suppose with enough money anything can be noticed, but in practice it ain't gonna happen. Certainly not if I wanted to bootstrap a little company from it.

The days of "have a website and advertise" are over. It's too expensive to be noticed on an Internet that's already full.

Social media is the only way LinksFor.Us could get traction. If Darren Rowse or Brian Clark talks about it, it's visible. If it hits the front page of Digg, it's visible. Once it's visible, once you have things like incoming links and lots of regular traffic, then you have a shot at using traditional SEO techniques for staying visible. But social media is the only way to overcome static friction (short of spending crazy money).

Social media is already changing the rules of the marketplace, just like the web did a decade ago. It's still early of course and no one -- not even the experts -- knows where all this is going. But it's clear that times are changing again, and those that don't jump in will go the way of print media.

Want examples?

• In a test run by BazaarVoice, Rubbermaid discovered that adding customer reviews to their website increased sales and decreased returns of their products. Skeptics said sales of low-rated products would crater. What actually happened is that sales of low-rated products increased. When shoppers were questioned, they explained that when they read why someone else maligned the product, often they disagreed or didn't care about that particular problem. If the price was right, it was worth buying anyway. 
• Fog Creek software makes millions of dollars from FogBugz, a bug-tracking system. There's hundreds of bug-tracking systems -- free, cheap, expensive, open-source, commercial -- yet Fog Creek is highly visible and successful with no advertising. How? Because the founder, Joel Spolsky, has built an incredibly popular blog about writing software. He was before his time; before RSS he wrote essays and notified you by email when a new one was posted. It's widely agreed that without the blog-before-it-was-called-a-blog, Fog Creek would likely have remained an unknown consulting company with a few struggling products. 
• Nike allowed people to build and order custom shoes on their website. Skeptics said deep customization is too expensive, design-sharing is too complicated, and people need to try shoes on. Wrong! Once the site took off, Nike created physical stores where you could do the same thing.  Joaquin Hidalgo, Nike VP of Global Brand Marketing says those stores now "represent 25% of our revenue." 
• Speaking of shoes, Zappos also sells shoes on the Internet. CEO Tony Hsieh is so convinced that their legendary Twitter presence results in sales, he even wrote a popular beginner's guide to Twitter. He insists that Twitter and other forms of open communication are required for excellent customer service; employees are trained in Twitter. Zappos raked in $1B last year even with the recession; they're doing something right. 
• Oddly-named marketing site Marketing.fm gets double the traffic of marketing.com. One has a blog with useful content and one doesn't. Guess which is which. 
• Zeus Jones describes 16 more terrific examples. (Thanks to David S. Finch for digging it up.)

In the next ten years there will be more stories like this, not fewer.

Will all these social networks and websites survive? No. 
Do we understand how to use them most efficiently? No.
Will there be another new thing someday? Sure.

But today and for the foreseeable future, this is the world. You have to jump in even if you don't yet understand it.

Is social media required for everyone, or are there circumstances where it just doesn't matter?
Leave a comment and join the conversation.

I mean, on the one hand Joel teaches us everything we need to know about customer service while being funny and telling stories. But has Joel ever screwed up? If so, he hasn't said.

Or 37signals, a company run by geeks with a unique vision about why products (not just software) should be simple and beautiful. They even wrote a whole book about it. Inspiration in every paragraph. Love it! But read their blog and all you get is ultimatums -- unwavering confidence that their way is gospel handed down from Mt. Sinai.

Shoot, I'm also guilty of blasting my patient readers to always be honest, never use the phase "and more," and how you should fearlessly pursue ideas, or maybe completely change them. Huh?

"Always" "never" "do" "don't." Such confidence! It's a lot to look up to, a lot to emulate.

Aren't you just like these perfect personas? You've got an internally-consistent philosophy guiding every decision, right?

You've always got the correct answer and never toss and turn at night.  RIGHT?

You don't worry about competitors or worry about having shitty ideas or whether money will come through the door next month.... uh... right?

I mean, can you imagine Joel fretting, wringing his hands, wondering how he's going to make payroll, second-guessing his choices, wondering if maybe they should have added some feature, or frightened that a price-change could completely destroy the revenue stream?

Well that's it. I'm coming out of the closet. It's not fair, and it's not accurate.

Running a little company is frickin' frightening. See if any of this sounds familiar:

1. I don't have the confidence or the stamina that I see in all those successful people that I admire. I can't do this.
2. There's too much to do; it's impossible. How does everyone else find the time?
3. I don't know anything about marketing/sales/accounting/software/websites/Twitter/blogging. These other people seem to know everything. I don't know enough.
4. How will anyone ever find out about me? The Internet is too big.
5. I won't be able to get revenue. The economy sucks.
6. Why would anyone give me money when there are big established companies out there?
7. My orders are supposed to have picked up by now, but they're haven't.
8. Someone just said something bad about me on [insert social networking micro-universe]. Great, that's easier to find than my own website.
9. My website looks like ass. Everyone's going to know I'm small.

This is just the beginning of the thoughts and emotions I had when starting Smart Bear in 2002. I could list another 100. You're not alone. This is normal.

"So what?" you cry! "It's normal. Fantastic. That doesn't fix anything."

Okay. Here's mindset for dealing with all the examples above (in the same order):

1. Their confidence is a façade. Strong statements are useful literary devices; hedging and vacillation are tedious. But these are not core statements they've known about from the beginning of time. Not a one of them has run their companies according to all those rules from day one. They figured it out in the course of running their companies, and then they talked about it. Big difference! You can figure it out too.
2. There's always an infinite amount of work. Remind yourself that no matter how hard you work, there's way too much to do. Take a break and take care of yourself. Do a few concrete things every day. Realize that procrastination is healthy and useful. Success doesn't come because you did everything, it's because you did the important things.
3. Even the "experts" in things like Twitter are still figuring it out. Remember the rise of the Internet in the late 1990's? Go read about what the "experts" said and see if anyone guessed something like Twitter would dominate the world. Don't attack all these things at once; just pick one thing at a time to get good at. For things like law and accounting, yes it's worth the cost.
4. If your niche is small enough, and if your message is targeted enough, you win. Think small, not big. Win in a teeny corner, then expand.
5. A recession is the best time to start a company. Use it.
6. Small companies have advantages and the big-company advantages are not as big as you think, and they shoot themselves in the foot every day. Just phrase things right when talking to customers. And here's more specific ways to defeat the big guys.
7. Business has no correct timetable. That's like saying your kid should be potty-trained by now when every kid is different. You're measuring against a yardstick that doesn't exist.
8. Good words spread faster than bad ones, because it's more fun to tell good stories than bad ones. Thrill some customers, then ask them to post about it.
9. It turns out your website's ugliness doesn't matter much. Sure, when you get a little dough you can pretty it up, but Smart Bear's looked like ass for a long time and it didn't hurt us. Or look at Craig's List. It's a disaster. Doesn't matter.

Remember this: Doubt is good. It means you're being introspective, that you're not resting on prior knowledge (that might be invalid now), and that you're honestly weighing the situation instead of employing blind optimism. Doubt is healthy! Hold onto that.

Will any of this make you feel better? Probably not, because feelings are emotional, not logical. If I read this list back then, I doubt it would have "fixed" my worries. But maybe it helps to know that this is just how it goes.

So listen to the expert bloggers; they have great advice. Just filter their attitudes through your own lens, and remember that they went through this pain too.

Hey you! You must have words of wisdom for the downtrodden little entrepreneur. Leave a comment and boost someone's spirits today!

This is Part 5 of a 5-part series: Joy of Honesty in Business.

During the first year of Smart Bear's existence, my software was crap. How did I get customers, and why were they so vehemently loyal to what was clearly a wobbly, new product from a teeny tiny company-of-one?

Because of folks like Tom.

So Tom calls up one day...

Now wait, understand this is already a newsworthy event! Remember we sell software to software developers, legendary for their phone-aversion. (I'm no exception!) So let me try that again:

Tom called me. On the phone.

Tom wants to talk about new features. What a relief -- for six weeks it's been nothing but bug reports. Real bugs, I admit. In fact, Tom had single-handedly debugged a significant amount my shitty code, even enlisting his own employees for the cause. (Why had he done that?)

Anyway, Tom lists 20 new features he'd like to see. When does he expect delivery? "Oh, I know you're just a one-man shop, so just do your best. If you get through this half as fast as you get through bugs, we'll be fine."

Whozajigga-wha? I never said I was a one-man shop!

"We" always use the first-person plural when talking about "our software" and "our release cycle" and "our tech support." My website was professional-looking (uhhh right?). Tech support always came from support@smartbear.com; my name was never on it.

So was Tom the Sherlock Holmes of small business façades? Hardly. The web site doesn't look that professional. Tom's gotten sales support, tech support, and bug fixes for weeks now; he recognizes the same style and phrases. He's called the main line and never found anyone but me.

Duh!

But this was going to be a problem (or so I thought). See, Tom worked for a big company (I don't have permission to say which) with thousands of employees and billions in revenue. Big companies don't buy software from one-man shops. Or so I've been told.

I almost puked out the mantra of how, yes, I'm the only full-time employee, but I use consultants for stuff when the workload goes up. And I almost went into defensive mode, talking about how good our my service was and all that.

But fortunately I recognized that Tom didn't want to hear that. Tom was saying, "I know who you really are, and I accept it. I still want to do this. How about a few features since we put up with those bugs?"

I had to match that honesty. Anything else would be an insult to his intelligence and a step backward in the relationship.

Truth is such a rare thing, it is delightful to tell it.
                            --Emily Dickinson

It wasn't until I visited him in Ottawa that I fully understood why Tom was so solicitous. We met with two of Tom's bosses in a small office to discuss widespread purchase and roll-out of our peer code review tool.

Tom introduced me in a way I didn't expect: "Half a year ago I found this company in Austin. They had the beginnings of a code review tool. I've been guiding their development so now it works perfectly for our environment."

Hmmm, that's not exactly accurate... or is it? I'm on the spot, so I just nod in agreement.

The bosses questioned the utility of the tool. How much time could it save? Tom had the answer: "I do sixty code reviews every day."

He might as well have said "I can squeeze crude oil from cow patties." One boss flatly said "That's impossible." Honestly I'm not sure whether he was referring to Tom's fortitude or the tool's efficiency. But they both looked at Tom's evidence and approved the roll-out.

In that moment I understood Tom's motivation: Tom was a hero.

Tom had figured out how to deliver code with fewer bugs and was training his new hires faster than other team-leads. Tom didn't do this by paying IBM or implementing a process he read about in Dr. Dobbs -- he found a little company (us... I mean "me"), and he was now personally responsible for directing our product development. We jump when he says jump, therefore the perfect product (for their company) had been forged.

All due to his prescience, product development prowess, and a relationship he had forged with the founder.

Don't forget, this was before "relationship" became the buzzword of modern marketing -- before blogs and Twitter and back when the fastest-growing demographic on Facebook wasn't women over 55.

I can't begin to tell you the amount crap Tom put up with over the years. We're good at this now (no really, 15 people counts as "we!"), but back then screens would lock up, reviews would inexplicably disappear, installers would install the wrong files, and occasionally we'd run computers out of memory.

He put up with all of it why? Because it was just him and me. Because he knew I always kept my word. Because he knew he could stick his neck out for Smart Bear and I wouldn't let him down. Because he knew I would ensure that as the product changed it continued to solve his problems better, because I didn't want to let him down.

So he pinned his own reputation on it and won. As a bonus, he lived vicariously through Smart Bear as a product designer.

If I hadn't fessed up and behaved honestly, perhaps none of this would have happened.

What will your first hundred customers look like? Big, established companies with bureaucratic purchasing systems that you will bluff your way through? Well-known consumer-advocacy bloggers?

No, they'll be early-adopters -- folks who like trying new stuff and like working with new companies who still have spark and something to prove. Folks who want to be part of the creative process and be able to tell their friends that they were there at the beginning.

If you pretend to be something you're not, they'll see right through it. Then what have you done? You've lied to those who would have loved you for who you are; that's not how you build a relationship.

It doesn't mean never telling a lie. Cath Lawson points out that authenticity doesn't mean abandoning social white lies. We all know the difference between outright lies and the business equivalent of "No those pants don't make you look fat."

Theoretically, honesty should be easier than dishonesty. After all, "if you tell the truth you don't have to remember anything" (Mark Twain). It's true that in business you're so accustomed to fluffing your feathers and making a show it can be hard to remember to act like a normal human being.

"Be yourself" is just as hard in business as it is in personal life. But it's worth it.

How much truth is too much truth in business? Join the conversation and leave a comment!

Gee they're both so exciting! Who could choose! I know, I know, settle down. This is how these things go.

Anyway, the next day you have 32 clicks on variant A ("Code Review Tools") and 19 clicks on B ("Tools for Code Review"). Is that conclusive? Has A won? Or should you let the test run longer? Or should you try completely different text?

The answer matters. If you wait too long between tests, you're wasting time. If you don't wait long enough for statistically conclusive results, you might think a variant is better and use that false assumption to create a new variant, and so forth, all on a wild goose chase! That's not just a waste of time, it also prevents you from doing the correct thing, which is to come up with completely new text to test against.

Normally a formal statistical treatment would be too difficult, but I'm here to rescue you with a statistically sound yet incredibly simple formula that will tell you whether or not your A/B test results really are indicating a difference.

I'll get to it in a minute, but I can't help but include a more entertaining example than AdWords. Meet Hammy the Hamster, the probably-biased-but-incredibly-lovable tester of organic produce (click to watch 1m30s movie):

In the movie, Hammy chooses the organic produce 8 times and the conventional 4 times. This is an A/B test, just like with AdWords... but healthier.

If you're like me, you probably think "organic" is the clear-cut winner -- after all Hammy chose it twice as often as conventional veggies. But, as so often happens with probability and statistics, you'd be wrong.

That's because human beings are notoriously bad at guessing these things from gut feel. For example, most people are more afraid of dying in a plane crash than a car crash, even though the latter is sixty times more likely. On the other hand, we're amazed when CNN "calls the election" for a governor with a mere 1% of the state ballots reporting in.

Okay okay, we suck at math. So what's the answer? Here's the bit you've been waiting for:

(For the mathematical justification, see the end of the post.)

So your AdWords test isn't statistically significant yet. But what if you let the test continue to run. The next day you find 30 more clicks for variant A for a total of 62, and 19 more clicks for B for a total of 40. Running the formula: N = 62+40 = 102; D = (62-40) ÷ 2 = 11; D2 = 121 which is bigger than 102, so now the measured difference is significant.

A lot of times, though, you keep running the test and it's still not significant. That's when you realize you're not learning anything new; the variants you picked are not meaningfully different for your readers. That means it's time to come up with something new.

When you start applying the formula to real-world examples, you'll notice that when N is small it's hard -- or even impossible -- to be statistically significant. For example, say you've got one ad with 6 clicks and the other with 1. That's N = 7, D = 2.5, D2 is 6.25 so the test is still inconclusive, even though A is beating B six-to-one. Trust the math here -- with only a few data points, you really don't know anything yet.

But what about the vast majority of people who don't click either ad? That's the "ad impressions" that didn't lead to a click. Shouldn't those count somehow in the statistics?

No, they shouldn't; those are "mistrials." To see why, consider Hammy again. That video was edited (of course), and a lot of the time Hammy didn't pick either vegetable, opting instead to groom himself or sleep. (For the "outtakes" video and more statistics, see Hammy's Homepage.) If Hammy doesn't pick a vegetable during a particular trial run, it doesn't mean anything -- doesn't mean he likes or dislikes either. It just tells us nothing at all.

Because the AdWords "click-through rate" is dependant both on the number of clicks and the number of impressions, you must not use "click-through rate" to determine statistical significance. Only the raw number of clicks can be used in the formula.

I hope this formula will help you make the right choices when running A/B tests. It's simple enough that you have no excuse not to apply it! Human intuition sucks when it comes to these things, so let the math help you draw the right conclusions.

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For the mathematically inclined: The derivation

The null-hypothesis is that the results of the A/B test are due to chance alone. The statistical test we need is Pearson's chi-square. The definition of the general statistic follows (where m = number of possible outcomes; Oi = observed number of results in outcome #i; Ei = expected number of results in outcome #i):

In the simple case of the A/B test, m = 2. From a 50/50 random process, the expected values are Ei = n/2 where n = O1+O2. Taking A = O1 to be the larger of the two observed values and B = O2 to be the smaller, the (unsimplified) formula is:

The squared difference between A and n/2 is the same as between B and n/2 (because A+B = n), so we can replace those squared-difference terms by a new variable D2. The definition of D in the text above as (A-B)/2 comes by substituting n = A+B into D = A - n/2. Rewriting in terms of D and simplifying yields:

Now we have a simple way of computing the chi-square statistic, but we have to refer to the chi-square distribution to determine statistical significance. Specifically: What is the probability this result could have happened by chance alone?

Looking at the distribution with 1 degree of freedom (B depends on A so there's just one degree of freedom), we need to exceed 3.8 for 95% confidence and 6.6 for 99% confidence. For my simplified rule-of-thumb purposes, I selected 4 as the critical threshold. Solving for D2 completes the derivation:

QED, suckkas!

P.S. Useful side-note: If D2 is more than double n, you're well past the 99% confidence level.

"You're lucky to have your own business. I hate my boss."
"You're lucky your business is still doing okay in this recession."
"You're lucky that you sold your business."

You'd think they'd be impressed with the hours I put in, with the ideas I had, with the way I handled customers, and with the stress of bootstrapping.

But no, success is "lucky."

It feels dismissive, perhaps even insulting: It wasn't you, it was luck. Your decisions weren't important, your ideas weren't special; you're lucky. Anyone could have done the same; time and chance happeneth to them all.

It's easy to be indignant and dismissive right back:

So when I quit my job and worked 60 hours a week with no pay for years and finally clawed my way out, that was luck?

So when I invented a unique product and built it from scratch and people liked it, that was luck?

So when I cultivated relationships with customers and truly listened to their needs, that was luck?

So when I had the chance to sell my company at a fair price and negotiated a deal that put more money in the pockets of my employees than any other job would have, that was luck?

These retorts are fair, and they demonstrate that it's not just luck, but if I'm being honest I have to admit that luck still played its part.

Yes I cultivated relationships with customers, but wasn't it lucky that the customers showed up in the first place? Yes, they found me through my Google Ad, but wasn't it lucky that I started Smart Bear right when AdWords were new and cheap, when everyone used Google but AdWords weren't saturated with garbage? Yes, I chose effective, brief marketing messages, but wasn't it lucky that I had a mentor who had already taught me how to do that?

In fact, I can pick any decision in the history of Smart Bear and the same rhetorical pattern appears. My conclusion: Luck and choice are inextricably linked.

Specifically: Good luck and bad luck are constantly swirling around you. How you use it is not luck.

With successes I always find this decision/luck/decision/luck pattern. But what about failures? At Smart Bear, lots of marketing and advertising attempts flopped. Ads in certain magazines bombed. (I'm withholding names; print media is having a rough enough time as it is.) In some cases I spent many thousands of dollars -- which at the time was a significant percentage of revenues -- on ads that didn't net a single sale.

Ads that utterly fail in one magazine when they worked in another -- that's bad luck. The choice to cancel some ads and not others is not luck. In fact, ensuring that we could measure the efficacy of individual print ads was also a choice. Had we not done this, we wouldn't have been able to distinguish success from failure, and then indeed our destiny would be controlled by luck alone.

Overall success in business doesn't mean you "got lucky," it means you used luck, taking advantage of the good, identifying and cancelling the bad.

"Luck" rarely comes up when I'm talking to other entrepreneurs. They're interested in stories and tips and how things work. They want to know how to think, not how to copy. The wrong question is: "What inspired that idea?" The right question is: "How did you know when an idea was right?" Or even more specific: "How does one know whether a print ad is working?"

Your best bet for success is to treat all your decisions as empirical tests. Confidence and experimentation are not contradictory. Try anything, measure everything, and follow what works, even if that means changing everything.

Then maybe you can be lucky too.  :-)

What do you think about the role of "luck?"  Am I giving myself too much credit?  Join the conversation and leave a comment!

So they say.

I completely disagree.  Social media is expensive.  In fact, it's more expensive than traditional media.  It just comes in the form of spending time instead of spending money.

The "cheap" claim is everywhere.  For example, Seth Godin suggests summer camp counselors should make videos:

Have your private school or summer camp record a 7 minute video on every student every month (that's a seven minute a day commitment per teacher) and post them privately. Seven minutes is the equivalent of a three-page personal letter, with far less resistance on the part of the teacher.

Sounds so simple.  Seven minutes a day -- that's nothing.  All you need is a desktop tripod and a computer-quality video camera -- both inexpensive one-time costs.  The result is personal and distinctive and a great reason for parents to send their kids to your camp.

Except....  a three-page letter?  I don't know about you, but it would take me a while to write a three-page letter about each kid... every day.  And then I'd have to read it in front of a camera, which means I have to wash the mud off my face and cover my zits.  (Am I the only guy who wishes it were socially commonplace in America for men to use foundation?  I sure would like to hide these blemishes...)

No, this is not a seven-minute job.  It's at least an hour.

I'm not saying it's not worth it.  I'm saying it's bullshit to say it's "just seven minutes a day."

Here's a different example from the Hubspot blog:

To get into newspapers or on TV you had to pay a lot of money for advertising. On the Internet, you can publish your own blog, pictures, videos and more for very low cost. This is another proof point that inbound marketing is the next phase of marketing. 

But wait, when I paid a lot of money to get into newspapers and TV, my message got in front of people. If I publish a blog, no one cares. Unless, that is, I also do SEO and participate in forums and guest-post on blogs and host events and....  oh, hey, what do you know, that all takes a lot of time!

And there's that "very low cost" phrase again. Let's ask if it's low-cost for Hubspot itself.  They've built a good blog with 8000 subscribers, and they're driving customers (including myself!) to their Hubspot software.  All for "very low cost," right?

Well they've raised $17m and employ over 70 people, over 20 of whom are "Marketing Specialists" whose job is to live and breathe SEO, make blog posts, publish interviews, compile reports, create videos, make podcasts, run webinars, and even draw cartoons. Oh, and they still pay for ads:

Mind you, they're good at this stuff!  Great blog, useful product. And they walk the walk -- notice that the #1 natural search result above is Hubspot.

But "cheap?"  No way.  Want to be successful like Hubspot? All you need is millions of dollars and twenty-odd specialists earning Boston pre-recession salaries.

I'm not saying it's not worth it.  I'm saying it's bullshit to say it's "very low cost."

Of course it's worth it.  Of course this is the "next thing."  Of course those who ignore new media will be left behind.  But blogging properly is a full time job in itself (notable exceptions notwithstanding), and a "full time job" is expensive -- whether you're paying someone to do it or spending the time to do it yourself.

If you're doing it right, social media marketing is probably your largest marketing expense.  Let's stop pretending it can be done on the cheap.

What's your take on this? Leave a comment and join the conversation!

But then you come to some bitter realizations:

• I'm spending way too much time on this.
• None of this is making my website truly awesome.
• Design doesn't come from Photoshop filters; there's color palette, page layout, consistency, compatibility with messaging, not to mention fonts other than Myriad Pro.

Making your website or blog or software gorgeous means finding a great designer. And since you probably don't have enough work to hire an in-house designer, you need to find a freelancer.

Well, you're in luck. Here's how to get freelance design work and how to make sure you don't spend more money than necessary.

1.  Bid out small jobs on-line

The first rule of hiring a consultant is: Maybe you don't need to hire one!

If you're in the market for small jobs, your best bet is a marketing auction site like 99designs or CrowdSpring, or a professional database like GraphicRiver, or a site with both like DesignBay.

To describe how it works, let's assume you want a logo.  You start by describing the project: "Design a logo for Xyz."  (That was easy.)

Next you give parameters and conditions.  Specify your company's color scheme (two or three colors; if you suck at colors just steal borrow a nice set from Adobe's on-line archive.  Logos need to look good both large (for T-shirts, posters, and tradeshow banners) and small (for business cards and corners of websites), even if that means having different but very similar logos for different sizes.  It's often a good idea to require that the logo makes sense in black-and-white, or that it's still legible even if the viewer is red-green color blind.

Finally you specify the amount of money you're willing to spend. Often $150 for a logo is enough.  Why so low? Because a lot of designers are just getting started and need to win jobs to build a portfolio. Also because designers do this on the side for a little extra income, or are willing to take cheap jobs to get through the recession. Or because the designer lives in a country with a lower cost of living.

I know several people who have had great logos designed in three days for under $150. If you're looking to develop your personal or corporate image, surely that investment of time and money is worth it!

But many jobs are too complex or too important for a one-off cheapo solution. Besides, there's a good argument to be made that these design-on-spec sites are morally gray.

In that case you need to hire an expert. 

2.  How to look for freelance designer

You couldn't have picked a better time to hire a freelancer! The recession has created a buyer's market for any sort of consultant. Take advantage of this time to find a terrific person at a bargain.

Start with your network (friends, Facebook, LinkedIn); recommendations are almost always better than nothing.

Be careful though -- if the recommendation is for "a friend" or anyone with a familial relationship ("Oh yeah, my brother-in-law is looking for work), be very very cautious! First, this implies the recommendation is a favor rather than a vote of confidence for the work. Second, and more importantly, it will be hard to have a professional relationship. If you have to put your foot down or even fire them, suddenly it's personal. Not worth it!

Your alternatives include Craig's List, general Internet searches in your area, or web sites like Elance that connect you with freelancers; all these methods can create an avalanche of candidates you'll have to sift through. That means you'll have to be rigorous with your vetting process, described next.

3.  How to choose which designer to hire

So now you've amassed a few candidates.  (Yes "a few," you're not going to consider just one!)  How do you choose?

The most important qualification is whether you like their prior work. I cannot stress this enough: Designers don't morph their style to match yours; they don't deviate from their own style.

If they make slick, glossy, mocha-latte-modern-glassy stuff, you'd better like that. If they make crunchy, green, friendly, round-rectangle stuff, you'd better like that. Scan their portfolio and make sure you like what you see, as-is. If you run across something and think, "Ooh, this would be perrrrfect if they just copied this exactly for me," that's a great sign. If you go through fifteen pages of their portfolio and nothing makes your heart leap, it's a "pass."

I know, many designers will tell you otherwise, and I'm sure there'll be thirty comments calmly and artfully ripping me a new one over this. (And please do! Our dear readers need to hear the other side of the story.) But in my experience a style mismatch is a non-starter.

The next thing you do is call their references. But don't get excited when their references are positive. Of course they are -- otherwise they wouldn't be listed as references!

Instead, you're looking for glowing, over-the-top recommendations. You're looking for things like "Yeah we hired her once and we've been coming back for years." Or "I actually hate to tell you how awesome she is because it might mean we get less time."

A key question you should ask is: "Did the designer deliver on time and on budget?" These constraints are important and separates the artists from the artists-who-treat-this-as-a-business. You need the latter.  (Thanks to Kathy from Virtual Impax for this suggestion!)

A trick is to request a reference for a particular portfolio piece that you like. Don't ask for the references they want to give -- surprise them.  Expect that they need to ask permission before giving out contact information.

4.  What to ask for in the contract

You have to get a few things in writing so there's no mistake when it comes time to trade final product for a check.

• You are the sole owner of all works made for hire. The consultant retains no copyright. You need this to ensure uniqueness -- that the designer cannot just duplicate work done for you and use it elsewhere. You also need it for control; when I sold my company we had to get special releases from all our freelance designers explicitly stating that we owned the intellectual property.
  
  It is appropriate (and recommended) to allow the designer to use all materials in their own portfolio; just make it clear that this isn't joint copyright, but rather a free license you grant them for the purpose of promoting themselves.
   
• You get the electronic source files of all works, both finals and drafts. This is essential so that you can make small changes yourself or switch to a different designer.
   
• Expenses besides the hourly rate must be approved first. I've been bitten by designers who run off and order products we don't need or make expensive color glossy print-outs of things we'd rather see on a computer screen.

A final note on contracts, though -- don't sweat all the little details. Contracts only matter if there's a dispute so severe and irresolvable that it comes down to lawyers. In that case it will be far cheaper to just walk away from the situation, even if that means paying the full amount. 

5.  How to approach and structure the new relationship

So you've selected a designer and you're ready to start. You don't know each other yet, so neither one of you knows how to work together.

You're going to want things like estimates and clear statements of work but the designer doesn't know how many times you're going to change your mind, how many iterations it will take, or whether you're going to blow up her cell-phone at 9pm on a Saturday night.

The designer will want things like a clear direction and approvals for color palettes and design concepts, but you'll be unsure of yourself, unsure how much to trust the designer's instinct when it conflicts with your own, and unable to find the words to express your muddy vision.

Addressing these unknowns is easy -- just be honest about them from the start and make it clear that you appreciate the designer's dilemma as well. Talk! Notice when you're hitting a barrier that might be your own fault.

Take a "baby-steps" approach to the design work. Instead of making a grand plan for redesigning everything, start with the basics. For example, try just the color scheme and logo as described above. This gives both of you a chance to learn how to work together.

Besides, getting the basics totally finished and approved makes it much easier to see how the rest falls into place. Once your colors, attitude, and style are embodied in something as iconic as a logo, the path to websites, white papers, blogs, and tradeshow banners becomes an extension of an idea rather than a new project.

Finally, "baby-steps" means you can spend just as much as you want. If you end up not liking each other or it's too expensive, you can stop and still have something to show for it. And since you have originals, maybe you can take a crack at the rest yourself.

6.  It's worth it

Yes, it really is worth all the effort. Your image matters. First impressions matter. Colors and layout and fonts set the tone before a person reads a single word.

In this ever more cluttered Internet, it's even more important to stand out.

Plus, looking good just feels good. Now I know how Brad Pitt feels. (Yeah right!) 

What are your tips for hiring and working with freelance graphics designers? Are you a designer with tips for the rest of us? Please join the conversation and leave a comment.

Make at least one improvement [every day] that makes Zappos better. It sounds daunting, but remember improvements don't have to be dramatic. Think about what it means to improve just 1% per day and build upon that every single day. Doing so has a dramatic effect and will make us 37x better, not 365% (3.65x) better at the end of the year. Wake up every day and ask yourself not only what is the 1% improvement I can change to make Zappos better, but also what is the 1% improvement I can change to make myself better personally and professionally -- because we, Zappos, can't grow unless we as individual people grow too.

Imagine yourself making 1% changes every day that compounds and will make you and Zappos 37x better by the end of the year. Imagine if every employee at Zappos was doing the same. Imagine how much better you, Zappos and the world will be next year.

At first glance it's inspiring.  At second glace it's poppycock. At third glance you wonder how it's possible for someone to use the word "Zappos" so frequently.

Being 37x more productive is impossible, and I'll show you why.  But along the way it will become clear how becoming 2-3x more productive might be within reach.

His math isn't the problem per se. It's true that if you improve 1% each day over the previous day, that's a 1% compounding rate. My question is: Is it possible to increase your daily productivity by an entire percent every day?

To answer that, I want to give you a fun math puzzle. Yeah, I know, "fun" is relative... Okay look if you don't like word problems just take a random guess at the answer. If you're up for the challenge, try to solve it without pen and paper. You know, just to prove your MIT education wasn't for nothing.

Here's the puzzle: You get in your car at home and head out towards your mother's house 60 miles away. (Your mom likes this word problem, I can already tell.) You hit traffic during the first half of the trip, so after 30 miles you've averaged only 30 miles per hour.

Now the traffic opens up and you can go as fast as you want. The question is: How fast do you have to go during the second half of the trip such that you've averaged 60 mph over the entire trip?

If you're not using pen and paper, maybe you guessed 90? 120?

Actually it's impossible! To average 60 mph you need to travel the whole 60 miles in a single hour. But it's already been an hour!  Even if you went 1000 mph during the second half, it would have taken just over an hour to complete the 60 miles, therefore your average is still less than 60 mph.

It's amazing how periods of low velocity wash away gains of high velocity. In the puzzle, if you doubled your speed in the second half it would increase your trip average from 30 to 40 mph. If you quadrupled your speed in the second half, your trip average would still be only 48 mph.

Once you're behind, you can't make up ground no matter how fast you go.

This puzzle illustrates the weird math of velocities, and what applies to "miles" per hour also applies to emails per hour or writing code or writing prose or any other "gettin' stuff done" per hour.

The problem with improving your productivity is that so much of your day is occupied by low-velocity activity -- dealing with emails you didn't really need to see, dawdling in a meeting that hasn't started yet, or spending too much time reading blogs. (Present company excepted.)

When half your day moves at 30 mph, it's impossible to make up the time during the other half.

This is the problem with Lin's 1% idea -- the low-velocity stuff makes it too difficult to improve even 1% overall, at least not every day of the year. Even with 37x improvement in some areas, you still might not be 2x more productive overall.

There's good news here, however! Once you realize that the low-velocity stuff is responsible for most of the drag on your productivity, you realize that the thing to do is eliminate the low-velocity stuff. Yes it's good to learn to type faster, but cutting down on the time it takes to process useless email might help even more.

Ready for more good news? There are free tools that help you identify what the low-velocity stuff is. I use one called RescueTime. To show you how useful this is, consider this example of my stats for one week:

Whoa -- almost eight hours of email.  That's a solid, uninterrupted, full day of nothing but email I'm blowing through every week. Is that really the way I should be spending the majority of my time?

Even the long tail can be instructive. Notice the 45 minutes of "Calendars." A drill-down bears out the awful conclusion -- yes I spent almost an hour in Google Calendar.  It's true this week was completely packed with events, but still.

Another realization: I had an averaged 5.5 hours of activity per day.  I was in the office for over 8 hours every one of those days -- the rest is sopped up with meetings, office chatter, and lunch.  Here's the mythical eight-hour workday quantified -- I'm starting with 5-6 and even then I spent much of it fielding email.

Once you see the numbers it's easy to correct. I now notice more when I'm in an office conversation that's past the point of being productive. There's millions of tips for how to process email more efficiently.

So if you're serious about wanting to increase productivity by, say, 2x, you can. Identify the biggest perpetrators of low-velocity activity and eliminate them, then do a little surgery on your high-value tasks.

The best part is, none of this means working late or working harder. Just stop averaging down!

What are your tips for increasing productivity?
Leave a comment.  It will be fun.