A Deal Is Not a Done Deal Until Money Hits the Bank

No matter how good you feel about it, do not boast, act on or go to press about a deal you just made (business, employment or otherwise) until the first check goes through. I learned this in Hollywood and continue to stand behind it as I make deals or watch deals unfold around me. You can never completely guarantee a deal will go through until it actually goes through. You can make a serious fool out of yourself by jumping the gun, making public announcements or spending money you don’t have. Better to keep your mouth shut and fingers crossed until fiction becomes fact.

What or Who Are You Competing Against?

Do you even know? No one can genuinely create a sense of urgency without cause or reason. Everyone is competing against the clock (we’re mortals, after all), but why? For what reason? Is it a race? Against whom?

If you have a clear opponent to beat, that’s easy. Wave the enemy’s flag in spite and embrace competition as a positive energy in your organization or life. Move forward and fast, as if it were a fun game.

If you are a startup or non-profit without grasp of a market, what are you competing against? Most small organizations compete against sinking bank accounts. Young companies not yet cash-flow positive must sweat their burn rates and execute on their vision before running out of money. If the money drain is your greatest enemy, make a big deal about that, too. Don’t hide it from your people; share the bank statement with managers if you want them to understand that particular sense of urgency. They will understand.

You cannot motivate people from scratch. You can only give them the tools, information and environment to hopefully inspire them to motivate themselves. As a leader, you must know what you are competing against. And do not forget to share that information with your people who suffer the whip every day.

Profit Is Not the Point

The goal is sustainability. We make money to cover our basic needs – food, water and shelter. The great businesses of our time have figured this out, too. Great product comes before profit – because only great product will keep customers coming back for more. We like steady paychecks and loyal patrons because we can sleep at night and know that life will go on.

The goal isn’t to make money; the goal is to exist. Once you’ve figured that part out, the next goal is to exist longer. Once you realize no one lives forever, the ultimate goal is to leave a legacy.

The only way you can leave a legacy is if you concern yourself less with profit and more with giving life all you’ve got. Sure, you should have a plan to make money. But if greatness comes first on your priority list, then have faith that the rest will follow.

If You’re Going to Spend The Money…

Don’t regret it. Just put the money down, enjoy or learn from the investment, and move on. Cut your losses and figure out how to move forward. There’s no point at all in tarnishing a good evening by despairing about dollars and cents. Live the good life.

Savings: The Game

The best financial advice I received upon graduating college: always have enough cash in savings to survive for at least six months without income. I took that advice with a vengeance. Savings not only provide you with a security blanket, they award you the confidence and flexibility to make major life changes. The risks of quitting a job, changing cities, moving into a new place, taking on a life partner, and having children are dampened by the relative stability of an earned allowance. I would not have felt comfortable quitting my job, leaving Hollywood, and moving to Denver without the cash buffer I built since graduating.

Yes, savings are difficult to accrue. It takes discipline, commitment, and a passion to see numbers grow. I treat my savings like a game: I want to get the high score. With online banking, it’s easier than ever to convince yourself  those numbers are points on a leader board. Have fun with it and take pleasure knowing your high score means something real.

If you are living paycheck to paycheck, you need to find a way to make more money or live cheaper. And who really wants to live cheaper? Negotiate a raise, yo! But we’ll save that conversation for another time.

Decide What You’re Worth

Want to make more money? First, you need to believe that you’re worth more. If you believe it and exude confidence on the subject, everyone else will believe you’re worth more, too. Believe it deeply enough and you may not even need to ask for a raise.

It’s very helpful to know what you’re worth. To the dollar. Not some random number, no abstract figure counts – the exact amount to cover the cost of living the life you think you deserve. Add up your expenses, your lifestyle costs, your health costs, your travel costs. Cover your responsibilities. Price out your dreams and your hobbies. Set a structured savings plan and contingency for accidents. Add them all together over a year period. With simple math, you can conclude your annual salary. That’s what you’re worth. No less.

Be open to quoting that number to others, and do not be afraid to itemize the costs for them. If you can justify every price point and sell your needs, it will be difficult for anyone to argue. Make sure your employer understands this number. If it’s not possible for your company to match, find alternative means to cover the difference (freelancing, for example) – or find a different job.

Know what you’re worth. Believe you’re worth that much. Fight for it if you need to. Do not sell yourself short.

A New Form of Independence

First page of Constitution of the United States

Thomas Jefferson swore “upon the altar of god eternal hostility against any form of tyranny over the mind of man.” The United States of America was formed against the tyranny of dictatorship, a dictatorship that ruled over life, thought, and the soul. We celebrate our Independence from that dictatorship today.

Two hundred and thirty-five years later, we face a new form of tyranny — one less obvious and far more dangerous than the kings of old. Those tyrants ruled with pain and fear. We knew who they were and hated them for it. Today’s tyrants rule with something far more deceptive, manipulative, and resourceful: money. We have all been sold on the value of profiteering by our teachers, parents, media, and leaders who define success by the dollar. We have been raised with the drive for wealth. Money clouds our minds. Greed, our sin; the masters of Greed, our tyrants. And we are only making it worse.

As organized now, few (if any) businesses are democratic. Corporate structure is not unlike an Empire of old: a company’s Founder and/or CEO, its king; the Board of Directors and Executive Officers, its appointed officials; the Shareholders, aristocratic citizens with stake but marginal influence; and employees, the ruled. In this model, citizens do not have the power. Individuals hired into a company have little say in its operation, for fear of being fired; they are predominantly slaves to the will of the Owners.

We are servants, and they are our kings. We buy their products. We work for them to put food on our table. We hustle soulless moderate-wage jobs to cover health, rent, insurance, college loans, and car payments. We are dependent on corporations, so much so that our government twists our tax revenue to bail them out in time of need. And we do nothing to organize against them. Unions barely scratch the surface and have lost traction. Businesses continue to accumulate wealth and are now more powerful than ever before. Profits are going up while jobs and salaries are going down. Large corporations, wealthy elite, and corporatist officials are stockpiling cash to muscle, bribe, and buy us into their profit margins. Money dictates our electoral process. Personal and public debt is higher than ever. Millions of Americans and their freedoms are trapped in a ruthless money game.

Capitalism itself cannot be condemned because it is a free person’s right. And it shall not be blamed. But like all rights, the freedom to economize can be abused. It has been abused. Some organizations, namely conglomerates and banks, have become more powerful than the governments they are legally filed under. In 1999, the United States empowered commercial banks by allowing them investment banking privileges and stake over corporations. Many governments, including our own, are now indebted to, and therefore leveraged by, financial institutions here and abroad. World power now lies in the hands of those with capital wealth and to whom others are indebted. And we gave them that power: corporations are recognized by our laws as living entities with individuality. Unlike real human beings, however, we recognize companies as immortal. Businesses have been granted deity status under our laws. We write about, study, subscribe to, and praise them like prophets. Conglomerates are now our Gods.

Money is not holy, nor is it human. We cannot revere it above the human spirit. Greed now rules over the mind of man, and it must be defeated. However, declaring independence from greed will not be as easy as sailing to a new continent and bleeding the enemy dry. It will take a revolution. It will take an aggressive and confident democratic mass movement against corporatism.

The battle should not be between left and right, for that is a political cage match staged by elitists looking to turn a profit on the cultural war effort. No, the battle should be between corporatists and anticorporatists. Between the greedy and the charitable. Between profiteers and humanitarians. We can experience radical human progress in our lifetimes if we look past regressive profitability cycles to make more human investments. Our civilization could “go green” if natural resource and vehicle companies stop holding back in an effort to perpetuate profits. Our civilization could visit other worlds if investors looked past whether interstellar travel was a “good investment.”  Our civilization could cure countless diseases and save millions of lives if pharmaceutical companies shake their unfounded fear of putting themselves out of the drug business. Our civilization could do so much more if greed wasn’t tugging the reins.

We must wake from denial and the status quo and stand up to established powers. We must respect ourselves and each other. We must not rely on elected officials, for legislative processes are too slow and cumbersome for meaningful change. We must protect and better-educate our impressionable youth. We must reorganize our economy to respect different kinds of intelligence and education. We must empower leaders and businesses organized for efficient democratic progress. We must not lecture our friends, but instead inspire them to stand up to their jobs and their bosses. We must see the dollar as the enemy and look past our own checkbooks. And we must support each other in brotherhood and community.

Let us band together and see to it that our freedom survives through the night.

We are America. We are free. Happy Independence Day.

Smooth Digital Transactions

I have had some nasty consumer experiences online and on my phone lately. Movietickets.com’s seat reservation system is a terrible mess, and it took me 45 minutes to book tickets online. If the movie I wanted to see was available at any other theater, I would have quit and turned away. Because of a terrible digital system, Pacific Theaters and Movietickets almost lost out on $90. I know I won’t be seeing a movie there anytime soon after that fiasco, so they lost a customer as well.

This morning, I was woken up by a handful of text messages from Verizon asking me to renew my ringback tones. I texted back “y” to accept and was replied to with the same message asking me if I wanted to renew. I proceeded to text back Verizon “yes” and got the same message back five times before I gave up. Because of a terrible text message commerce system, Verizon lost out on $20 per year.

If you are not going to sell products face to face, make sure your system of exchange is bulletproof. Test it aggressively. Track it religiously. Use it yourself. And provide an easy-to-find avenue for people to report their problems. If the user experience is not blatantly obvious and fluid for your customer, it’s your fault (no matter how “stupid” the customer is).

As more and more commerce transitions onto the web, the need for smooth digital transactions will not only be a virtue – it will be a necessity to survive.

New Media: Revenue and Profitability? [Film Friday]

This is the third post in my series, “Understanding New Media.”

So far, it’s safe to define “New Media” as “content financed, produced for, and released exclusively on the web that serves itself and no other.” Last week’s post tried to rule out marketing materials and spinoffs (content promoting other content or products). But I asked a key question: what happens when one of these videos generates its own revenue online? Since “New Media” is a tech and entertainment industry term, it is relevant to discuss the format in the context of commerce.

If a company authors products that collect money from the hands or by the influence of consumers, then it deserves to be called a “business.” If the company’s products drive profits, then it deserves to be called a “good business.”

In web land, advertising, subscription, download, and rental revenue are mere pennies and cents compared to the millions generated by the multiplex or family room tube. Web video is still young, and very few Internet networks have been able to grow through these sources of income. Most content is financed by upfront sponsorship and rarely sees extra money after launch. For example, our company depends on sponsorships from large brands to kick-start our projects in exchange for guaranteed impressions. But in several cases online, the cost of video production was so low and viewership so high that notable returns have been made. It is not uncommon these days to find content producers on YouTube bringing in generous annual salaries through the site’s Partnership Program. They might be small businesses, but these producers definitely deserve to be called “businesses” on their own. And in a select few cases, some large budget web series have garnered such a following that they have paid their bills in full and earned a DVD release. My favorite is The Hire, starring Clive Owen.

Some spinoff series online, as well as commercials and promotional skits, have attracted huge audiences and generated revenue beyond the marketing spend. The Old Spice commercials are famous for this. While these pieces definitely serve a greater purpose, audiences have awarded them the respect and merit of being autonomous content online. When this phenomenon happens and commercials become Internet memes, it is hard for me still to call this material “marketing.” Likewise, when spinoff series build so much traction that they turn direct profits for the label, I owe them respect as autonomous entertainment product.

When first approaching the subject, I assumed all web endeavors were only ever marketing extensions that inspire viewers to spend money in a way that indirectly supports the content producer. For example, a sponsored video promotes a product that, if purchased by consumers, can afford new content produced in the future. If a series makes money on a DVD release and not by itself online, the web release is really just promoting home video sales. In this case, the web endeavor is still a marketing extension – even if it is promoting sales of the exact same material. Therefore, it is important to distinguish between content that makes money through viewership on the Internet and content that makes money elsewhere.

Long story short, I think it’s fair to say that any content that makes money online deserves the “New Media” industry label. So, for the sake of iteration, let us expand our definition to include “content financed, produced for, and released exclusively on the web that autonomously drives traffic or revenue online.”

All of that is well and good, but I am still stuck on the evolution of the Internet. In five years, there will be little-to-no difference between the way television and web video are distributed. The pipes will be the same and the viewing devices will be the same. So what then is the difference between “New Media” and other forms of content? While television and web may converge, audiences interface with these platforms very differently.

Next week, we will address the penultimate quality of “New Media” entertainment: active viewership.

Don’t Cut Spending. Make More Money!

Many twentysomethings live paycheck to paycheck. Very rough riding. Most people in this situation try to spend less and make do with what they have. Ramen noodles, no nights out, no entertainment purchases. I think this is the wrong attitude. Instead of protecting every little dime you have, invest your energy into making more money. Side projects, tutoring, part-time work, surveys, leveraging a raise, finding a higher paying job. The opportunities are endless. There’s a limit to how much you can cut from your spending, but no limit to the amount you can make.

Ramit Sethi is a strong proponent of this train of thought. While I find his advice verbose, he makes several great suggestions.

Before you can set out to bring home extra bacon, you need to ask yourself one really important question: do you think you are worth more in the first place? If you do not believe you are, then no one else will either. But if you truly believe, then the money will come. I was frustrated with my work last year and felt I deserved more. I modestly outlined my needs to continue providing the same level of value to my company and was met with a 33% raise.

Believe you are worth more. Act like you are worth more. Life will sort itself out.