Video Advice on How to Start an IT Business (Video) 91
Robin: This is Lee Drake. he runs a company in Rochester NY called OS-Cubed, now he specializes in Microsoft solutions for local and, I guess, businesses anywhere. He has been doing this a long time. How did he get started and how might you start if you want to fire your boss, if you want to fire your boss and go to work for yourself? So Lee, any advice for the people who are sitting there in a cube farm gritting their teeth?
Lee: So yeah, my experience is I have been that cube farm guy right. I started out graduating from college with a degree in environmental studies even though I have run technology companies for almost 30 years, basically I did every job that is in my company except for bookkeeper I know I am not good at that one. So basically I have been a programmer, I have been a tech support person, I have put stuff together, shipping and receiving, I have delivered computers, I have supported them, I have trained people on them—all of those tasks. And one of the things that I think is really important is that people not just necessarily skip that phase, right. Learning about what the tasks are within the company that you are building is very important. You need to be able to understand what everybody is doing in order to run a company that’s doing some particular thing. Secondly, you know there are a lot of great advantages to being a business or running your own business, such as being able to set your own hours, and potentially determine the course of where you are going. But there are also a lot of disadvantages. Setting your own hours is only a good thing if those hours end up being less than 70 a week, which sometimes as a business owner you are forced to do.
So your employees are on vacation and a big project is coming. Oh well, you are the guy that’s up there, or the gal that’s up there doing that. So you really do need to be realistic and understand that starting your own business is not a way to get out of work. You have to really be passionate about what you are doing and be really fascinated with what you are doing, and want to do something significant with your company.
If you don’t have that passion, if you don’t have that enthusiasm for what you are doing, you are going to find neither do your employees, neither do your customers. That shows through every day. One of the things... I actually carry all of my computer equipment, my laptop and everything, in a backpack, right, so I throw all of that stuff in a backup, I carry them to work each day, I take it out, I do my work, and I throw it all back in the backpack, and then take it home. And at some point when I get home, I put that backpack in the corner and I don’t access them again until the next morning. Well, owning your own company is just like having that backpack, and it is pretty darned heavy. Every morning you got to get up, you got to throw that backpack on, you got to put a smile on your face, because nobody buys from crabby people, and you got to go out there and do your thing. And there will be frustrations—everything from employee issues to customer issues to service issues, to vendor issues, all those things have to be dealt with. When you are a small business owner, you have maybe one, two or five people those things end up being in your lap more often. The larger your company the more you can delegate some of those things to other people, but the more problems there are too. So it all ends up kind of evening out in the end.
Robin: Well, a few things that I noticed that you are saying: The first one is that you did this, that and the other but you didn’t specify that you were not just a programmer who wrote in one language, you did this, you did shipping, you did receiving, you did everything except for bookkeeping, so I assume that is one of two things, that versatility is that important I assume?
Lee: Yeah, I mean I think that it is not so much that you have to be able to do all those things all the time, but you have to understand what they are, right? When you ask a programmer to write some piece of code, if you don’t understand what it takes to write a piece of code, create the quality assurance behind it, do all of the debugging and the support of it afterward, if you don’t understand all those pieces, it is going to be very hard for you to run a company that does those things. Unless you do hire somebody that you trust, that does those things for you. And it is really important I think, especially in my role I am sort of the master at the top of the puppet show running all the little strings. I have to make sure that when I make my little man dance, that he is doing a dance and he is not looking like he is falling on his butt.
Robin: So here’s the other thing: You said, going in with a smile on your face, because nobody buys from Mr. Grumpy.
Lee: That’s correct.
Robin: Let’s assume, that, I know a lot of people, a lot of Slashdot guys are not big on sales, either buyers, ‘I hate salesmen’, and they don’t think of themselves as selling, and yet you have implied that it is a big part of your business—is it?
Lee: Yeah, absolutely. Everybody in the business should be selling every minute that they are in it, and I don’t care if you are a salesman, a programmer, a tech support person, a bookkeeper—it doesn’t matter—everybody is selling. And that’s something that in our culture, at our company that we really emphasize. And for me personally, I came about the sales end of things sort of at somewhere in the middle of my career, right. I was actually owning a company before I was doing the principal amount of sales for it, because I had a partner who was doing that. And when me and my partner split, I ended up having to take that role over, and I had to learn a lot about sales, I had to learn about how sales worked, and how best to sell. Now here’s the interesting thing: Nobody who met me, would think, oh that guy is a sales guy, right. And the reason is because I don’t do the sort of sales that is the old fashioned sales, you know, the cold calling, the pestering you, time and time again to do the project until it gets started etc. etc.
My mode of selling is what we call solution selling. So typically I am going in to clients who are referrals, I am going in to clients who have found me through a variety of means, anything from an interview like this one, to a presentation that I do at a professional organization, or whatever. And they are coming to me with a problem. And what my company is all about is solving problems. Our company name is OS-Cubed, which stands for Optimal Stable Secure Solutions. So the most important part of that is it is a solution right. It has to actually solve a business problem. After that, we can make that solution stable and secure so that it works great and we can optimize it so that you get the best return on your investment.
Robin: You know, there’s something, I don’t know, you didn’t say it explicitly but it is in there—interviews—like this one, we do an average of 3 Slashdot videos per week, year around, now that’s 150 a year more or less, and they are not generally about this, so that’s a long shot; however, you can call up your local paper and offer to answer computer and security questions. Can you?
Lee: Absolutely. And I do that. The Rochester Business Journal calls me probably six or seven times a week, six or seven times a year, I am sorry, six or seven times a year I apologize to offer my opinion on a variety of subjects. I have a listing with them that lists the specific things that I can help them out with, if they need a quote, or if they need to interview something, and it doesn’t just include my business things. For instance, my company uses the New York state equivalent of the exchange called Shop New York for health insurance. So as a small business owner in order to implement that I had to learn a tremendous amount about how that all works, and as a result I have gotten a lot of PR exposure from the Democrat and Chronicle, from the Rochester Business Journal and even from the television stations that have come in and interviewed me as a business owner about how my health insurance is implemented for my employees.
Robin: So it sounds as if a person starting a business would be well advised to call upa reporter, editor, TV news producer... you should contact them, then email all of the local media outlets. How does that sound?
Lee: Email is a great way to get an initial impression, but I would actually encourage you to actually go find opportunities to talk to them. So call them up on the phone or actually visit with them, and have coffee, especially for your local media, it is really important I think to develop those personal contacts, so that you are at top of mind for them when it does come up with the subject that you are an expert at. And that requires your typical networking type of relationship, you need to keep in touch with them, you need to go back and forth with them, maybe even argue with them a little bit when they put a post or a news article up that you maybe don’t agree with, you know, go back and forth with them a little bit on it, they respect people who push back, and they learn from them. And a good newsperson is going to look for somebody who offers those kinds of opinions.
Robin: Okay. And the other thing you said, was with the networking is talking to groups...
Lee: Absolutely. Actually you would be surprised at how many professional organizations are looking for speakers on technology topics to help them out with education. And most of my presentations, in fact all of the presentations I do, are educational. They are not trying to sell anything. It is just here are some of the things that are out there, it is similar to this kind of an interview where we are talking about a subject where I am not necessarily selling the things that I am doing but I am establishing some expertise in the area. And if you are talking to say, you know, I talk to HR groups about privacy policies and things like that. So I might be talking to them about privacy policies and the next thing, we are going back and forth, they are asking me for some advice on some things, and I might be able to offer them something, that’s a benefit to both of us. I never ever try to fit their need into my solution, right. I always take their need, evaluate it, figure out if my solution is a good one, in which case I will suggest it obviously. But if it is not a good one, I will try to find them someone who can satisfy their need, right. That’s what networking is about. It is about helping people out. It is not about going out there and handing out your business card and giving your 15 second elevator speech and this is what I do blah blah blah—it is about establishing relationships, it is about helping people. And that, my friends, is sales.
That's (Score:1, Flamebait)
While Lee's company specializes in "Microsoft solutions,"
my biggest problem ...
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Same here. One of my biggest gripes in IT is the "for someone with a hammer, everything is a nail" philosophy. For example, a MCSE wants to toss everything on a MS solution. A Big Iron person will have a zSeries solution. A UNIX person will have Linux or Solaris. It could be that the best solution is not one that a consultant is familiar with.
I see this almost everywhere in IT. The Windows guys have some Linux servers or appliances, and they sit unpatched because nobody wants to touch them. The Linux
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I agree, this is a serious problem. I see it all the time. But not EVERYONE is like this.
I have a deep understanding of Windows technologies (since NT4, AD, Exchange 2003 through 2008, SQL Server and more) as well as Linux (been using it since 1995), FreeBSD (1993), OpenBSD, Solaris, and more and most opensource technologies like MySQL, Sendmail, Postfix, Exim, Courier, Dovecot, Bind, etc. Hell, even stuff like Oracle.
I also have a deep understanding of programming (C, C++, C#, Java, Perl, PHP, JavaScript,
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Ironically... Im the guy that fixes this type of stuff.
When I go into most shops I call out the trends immediately... Im a fan of Dell servers, cheap, run well and are reliable.. But admittedly, I have seen some cases where the lenovo and hp options were a better choice and were chosen...
I have gone in and ripped out Oracle.. when mysql was more then enough and they had no issues... they also had in house talent for mysql and were spending uselessly.
Im happy to be where I am but.. admittedly I want to just
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Go back to mom's basement please.
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Wanna know how I can tell you don't know Exchange? There was never an Exchange 2008, you either mean 2007 or 2010. Perhaps that was why the company had to hire a H1B, because they couldn't find anyone with Exchange 2008 experience.
I have 15 years in IT and could do most of what you have there. I am not an especially good programmer, but programming shouldn't be needed in systems work.
I do agree though, it is the difference between a systems administrator and a systems engineer/architect, and perhaps that
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Same here. One of my biggest gripes in IT is the "for someone with a hammer, everything is a nail" philosophy. For example, a MCSE wants to toss everything on a MS solution.
The exact same criticism could be turned on an open source fanatic. For them, every solution HAS to be open source (or at least non-proprietary).
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FYI we actively embrace open source in our solutions. Our main web content management platform is the open source version of DotNetNuke (www.dnnsoftware.com) and we use lots of open source solutions when crafting a solution for a client. "Microsoft centric" means that is where our expertise lies. It doesn't mean that's all we sell or support. Our goal is to build a stable solution at a reasonable price for a client, and if an open source solution makes sense we'll go that way.
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I've tried to "slide away" from Microsoft solutions over the years, but the bottom line is that Microsoft-related work pays the bills. When the bottom fell out of the IT market after the dot-com bubble popped, Microsoft shops kept me afloat when pickin's were slim.
Maybe that's the selfish point of view, but I have a family and bills. I don't know exactly why, but MS work just "pays". Some say it's comparable to being in a boy-band: no dignity, but you get a decent check.
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WIthin the past couple years I've transition to mostly LInux system administra
Re: That's (Score:2)
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FTFY
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Did you come to Slashdot today with anything substantive or useful to say, or just to let us all know that you hate MS?
Step one (Score:2)
Am I missing something? (Score:1)
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I had to go to the desktop version on my phone to see the actual video. Another Slashdot win I guess :) Video appears to be hidden if you are in the mobile version of the site.
Autoplay video is bad, and you STILL get it wrong! (Score:5, Insightful)
What the hell is wrong with you, Slashdot? Autoplaying video is incredibly annoying and an insult to your readers (who, by and large, know how to play a video they want to watch).
But, what's worse, you've managed to make it even more annoying than normal!
1. The video doesn't autoplay right away - there's a delay of several seconds, plenty of time for someone to scroll down to the comments only to then have the video start playing out of view.
2. With Flashblock on, the audio plays, but there's no video (mind you, in this case the video is largely superfluous)
3. There's no volume control
Re:Autoplay video is bad, and you STILL get it wro (Score:5, Insightful)
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Agreed! Anti-kudos for that one. Mad panic for the volume slider.
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Fucking Hell. I didn't even know the video was playing until I got to this comment and scrolled up. (Headphones plugged in, but not on my head.) Evil. If you are a slashdot editor, you are now complicit in working for evil.
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WHY to start a business (Score:2)
One thing I'm very curious about is how his personal income has changed over time, relative to what he'd be earning as a typical IT employee. Owning a business has a lot of pros and cons, but for most of us, the extra hours are partly justified by higher income.
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Net income
huge difference in tax exposure as a proprietor and freelance contractor vs a salaried employee.
Yeah, good point. I actually meant his effective salary, with all those differences factored in. I.e., is his income similar to what he'd get making $70k/year as an employee, or $200k/year as an employee?
(I realize his ownership in the business's assets is a factor as well, but I'm talking about money he can actually afford to pull out as for personal income in a typical year.)
Re:WHY to start a business (Score:5, Interesting)
To become financially independent.
Several people have looked into how people become wealthy, and they divide the methods into 5 broad categories.
The categories(*) change depending on how you slice them, but generally the two which are accessible to everyone are: 1) Commission sales, and 2) Starting a business.
Commission sales is for things like IBM mainframes, telecom equipment or movie scripts, where a single sale can net you 6-digit commissions. A number of people have become independent doing this.
If you can run a successful business you get to build up equity using tax breaks and the productivity of your employees. It's not unusual for someone to start a business and sell it 10 years later for several million dollars. (BTW: The most common business that makes one a millionaire (as of the several years ago, may have changed) is dry cleaning.)
Being financially independent requires roughly $1 million in assets. If you put that in a long-term equity fund, account 1% for management fees and maybe 2.5% for inflation, then you can retire and pull out $50,000 a year for the rest of your life.
Different people have different needs (family, kids, lifestyle), and different levels of economic risk (I'll need $2 million, just to be safe), but that's the basic formula: Figure out how much you need for a comfortable lifestyle, figure out how much you need in the bank to supply that lifestyle, start a business and build up equity until you get that much, then retire.
More info: 80% of first businesses fail, but only 40% of *second* businesses fail, and the percentage goes down fast after that. Having business experience is apparently a strong predictor of future success.
(*) Other categories are: Inheriting it (3/4 of the buillionaires), marrying it, *other* (really rare things like winning the lottery or finding an unknown Botticelli in the attic), and so on.
Re: WHY to start a business (Score:1)
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More info: 80% of first businesses fail, but only 40% of *second* businesses fail
Maybe half of them didn't want to go through the experience again.
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I think the 40% of second businesses has already weeded out those that just gave up. It's 40% of those that DID try again :)
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A) If you treat your employees fairly from a wage point of view how is that "taking advantage of them".
B) Remember that a business owner bears pretty much ALL the risk. They are personally responsible for a number of things. Most small business owners are on the hook for their line of credit for instance. This means that if the business owes the bank $60k - they PERSONALLY owe the bank $60k if the business can't pay it. Owners are always responsible for salaries and taxes - no matter what their personal
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Oh also - if the business fails - we can't collect unemployment. Which doesn't mean we don't PAY unemployment. On the other hand we are personally responsible for any salaries owed employees. And Taxes. etc.
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50k a year isn't too bad if you were debt-free. Imagine no rent, car payment, mortgage, student loan bills, etc.
So part of the path to wealth/early retirement? Get rid of your debt! (easier said than done, I know)
Re: WHY to start a business (Score:2)
On my small SaaS business... (Score:2)
For what it's worth, I've been co-owner of a small software-as-a-service business focused on libraries for the last five years. A week or so ago, I wrote a blog post on our experience and financial situation [ridesidecar.com].
Basic summary: by keeping costs low and our expectations reasonable, we're thriving even without a huge revenue stream.
other vids (Score:1)
This video is pretty good, but his other video is rock solid:
http://youtu.be/SBioHq3aPsQ [youtu.be]
Never trust the advice of rich people (Score:1)
The last thing they want is more competition, despite all their claims of worshiping the free market and risk.
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I would count myself solidly middle class. Not Rich.
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Well yes. I have all those things. So do my employees.
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By the way - just fyi - I'm the guy in the video you're addressing as a "rich person" :)
11 minutes and not a single insight. (Score:1)
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Have you never watched one of these videos before? They are always completely vacuous.
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To be fair there is a transcript if you don't want to watch the video....
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That is because it isn't magic. Find a niche and just do it.
Acronym (Score:2)
That's not how exponents work...
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Lol excellent point my friend..... Math was never my strong point, thus the book keeping comment.
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It's exactly how exponents work. OS would be O times S, yes? Exponentiation takes priority over multiplication, yes? So OS cubed means S is cubed, then multiplied by O, yes?
You're thinking (OS)-cubed.
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Nah technically he's right. S cubed would be S times S time S :) Not 3 Ss.... :) We could write an "S"say about it.... :)
Missing the point (Score:2)
I'm a lifelong business owner, and this guy is calling it exactly, giving good advice, and all you can do is complain about autoplay? Just be decent and don't complain about cubicle life, OK?
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Lol whatever. I hate autoplay as much as the next guy. Not going to bother responding to the Microsoft trolling. To each their own. Thanks for the positive feedback.
Cash Flow & Pipelines (Score:2)
I ran a side business from about 2003 until 2010 when I decided to quit my job and go into full time business, where I still am today.
All the good ideas in the world don't matter for anything if you don't have income actually coming in, day by day. You can have the biggest profit on the balance sheet but if you don't have actual cash in the bank, you're dead. So you find yourself perpetually chasing debtors, chasing money and doing wo
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Great summary and yes - cash flow is king. Getting projects on retainer or prepaid or closely controlling your receivables is the key to that. Developing rock-solid contracts (not just handshakes) is also best. Planning for the inevitable too - inevitably at some point a client or customer will go bankrupt, or fail to make a payment due to THEIR cash flow or challenge an outcome. For you to survive that you need a reserve you can draw on. All the times my company has been at highest "risk" has been due
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Fortunately, while I'm the techy, my business partner is not. He's a business consultant (which I did as a living for a short while too but I'm still fully aware that I'm too focused on the tech). I'm lucky to work with him as he is 100% about the business, so it keeps me in check.
yesscript set to no on slashdot (Score:1)
Actually, the first step ... (Score:2)
Autoplay! (Score:2)
I get the bad feeling that Lee Drake has a problem interrupting people when they are doing other things, has social insensitivity, and has problems with appropriate behavior in an office setting. Oh wait, sorry that's just Slashdot.
Wow. Autoplaying ad = very bad (Score:2)
Seriously, slashdot? I open the page and it automatically starts playing a video advertisement with no way to kill it except to close the whole page. You know better than that.