The 40 Hour Work Week

I came across what was supposedly a very, very controversial graduation speech given by a right wing talk show host to students at Texas A&M.  It turns out that the speech was simply a chapter in his (fictional) book.  Much of the speech is totally over the top.  But if you’d like to get your blood flowing you can check out the entire speech here. 

The reason I’m posting about it is there was one line towards the end that struck me as pretty good advice for college graduates… 

Speaking of earning, the revered 40-hour workweek is for losers. Forty hours should be considered the minimum, not the maximum. You don’t see highly successful people clocking out of the office every afternoon at five. The losers are the ones caught up in that afternoon rush hour. The winners drive home in the dark.

Also, related to this topic, Salon.com had a good article a while back on the advent of the 40 hour week, that argues bringing it back would increase productivity -- interesting read when you have a few minutes.

What Really Matters

Businesspeople are trained to believe that revenue, profit and shareholder value are what matter in business.  

So if those are the only things that matter, in order to make more sales, all you need to do is show your prospects a strong ROI.  If you can show the client that their investment will pay out 2x or more of their investment, they'll buy, right?  

Wrong. 

The reason this is wrong is because revenue, profit and shareholder value don't account for human emotion.  Humans are generally motivated by their own personal fear and their own personal greed -- these things are satisfied by events that are generally far more basic than numbers.  So when you focus your pitch around nothing but ROI, you aren't tapping into what matters to the human that you're dealing with. Here are some of the questions that a potential partner might be asking themselves when you're blabbing away about revenue, profit and ROI. 

• If this project works, will it make others looks bad?
• Do I want the added responsibility that will come with success?
• Will I get in trouble if this doesn't work?
• Am I going to have to work later at night or on weekends because of this project?
• Will my boss think this is cool?
• Will my spouse think this is cool?
• Will it be fun to work on?
• Will I get promoted if this works?
• Will I have to move to a new office if this works?  Will I have a longer commute?

This is why understanding your client and the individuals you’re working with is critical.  Know what will get them a bonus and know what will get them fired.  And be sure that the value your product brings to your partner will lead to one and prevent the other.  

Client Management Lesson #4: Ask For More

This is the fourth post in a seven part series on Key Client Management Lessons. Lesson #4: Ask For More

In earlier client management posts I’ve talked about how it’s critical to align your interests with the client’s interests.  Identify a shared goal that benefits both parties and work towards it.

In some cases, you may find that your ambitions are far higher than your client’s.  As a result, there can be some friction as the client perceives you as pushing too hard and not deferring to their priorities.  This is a bad situation to be in.  You’re forced to either upset the client or lower your ambitions.  Neither is optimal.

This is why, when setting goals for a project, always ask for more.

To get to a “win/win” in any negotiation you have to ensure that both parties are happy.  If you know you’re going to run into a situation where the client is going to try to get you to hold back on your goals, set two goals.  The first goal should be one that can be reached with solid focus and hard work.  The second (generally 20% to 40% higher) should be a stretch goal -- that is, one where you’ll need some big things to happen to be successful.  Present the stretch goal to your client.

If you do this, one of two things will happen: 1.) they’ll accept it as the goal for the project and that’s a win as you’ll both be pushing for huge success or 2.) they’ll push back and try to get you to lower the goal.  When #2 happens you’re still in a good position as you can concede on what you asked for and still be happy.  Either way, you’re happy and they’re happy, and that’s a win/win.

Sometimes asking for more is the only way to get to a win/win.

There’s a fantastic book on win/win negotiating titled, Getting to Yes.  I highly recommend it if you’re interested in reading more on this topic.

TripIt

I've been travelling quite a bit over the last couple of months -- I’m on a plane or train or both at least once a week.  One of the most painful parts of travelling is keeping track of my itineraries: carrier, airport location, departure times, arrival times, confirmation numbers, hotel names and locations, etc. When you're moving around a lot, keeping track of all of this can be a complete pain.

TripIt is an iPhone app that solves this problem.  Anytime I book a train, plane, hotel or dinner reservation all of the relevant information is imported neatly into the TripIt app.  When I open the TripIt app it shows me all of my trips in chronological order.  When I click on an individual trip it shows me all of the relevant information for each flight, train, hotel and dinner reservation.  TripIt takes a good chunk of stress out of traveling and I never have to carry print outs or search through my email to find a confirmation number.

There are two ways to get your itineraries into the TripIt app.  You can either forward your itineraries to the TripIt email address or you can set it up so that TripIt automatically scans through your email every 10 minutes looking for itineraries. I've gone with the latter option and it's worked great.  

TripIt makes money by offering premium packages -- TripIt Pro and TripIt for businesses.  You can see the different product features here.  So far I've opted to stick with the free version.  

If you're looking to reduce some of the stress that comes with travelling frequently, TripIt is a no-brainer. 

Soap Operas & The Internet

You may not know that soap operas are called soap operas because they were originally created as a way to sell more soap.  Putting a quality drama on television during the day is a great way to get peoples' attention.  Sprinkle in some ads for soap and you have a pretty nice business model.  This is what's known as the "interruption-based" advertising model.  The viewer shows up to watch a drama and gets interrupted every 10 or 15 minutes with profitable ads.

Many of the top internet companies are beginning to look a lot like soap operas.

Facebook is covered with irrelevant display ads and requires you to install all kinds of apps to work effectively.

Irrelevant advertisements have started to pop up in my Twitter feed.

LinkedIn has gone from a super clean site to a mess.

Spotify and Pandora ads are poorly targeted and happen too frequently.

Don’t get me wrong.  I recognize that these are businesses that need to generate revenue and I have no problem with them doing so.  I guess I’m just a bit disappointed that as internet companies have evolved into real businesses, they’ve defaulted to old fashioned disruptive marketing to make money. Each of the companies above have built great products and innovated significantly.  You can't say the same about their business models. 

Boomerang

I recently read Michael Lewis' new book, Boomerang.  It's a fascinating book about the recent European Debt Crisis.  Like most of Lewis' books (especially The Big Short, that chronicles the U.S. financial crisis) he's able to take a fairly mundane topic, roll it up into a few hundred pages and make it a page turner.

The book dives into the crises that occurred in the last few years in three countries: Iceland, Greece and Ireland.

It's a fascinating and very well written book.  It gives the inside story on the political, economic and cultural circumstances that led to the unlikely collapse of three different economies.  If you're interested in European economics, politics or culture, I can assure you that you that you'll enjoy reading Boomerang.

Healthcare Tech Lessons: Fee for Service vs. Managed Care

Today, when a patient goes to their primary care physician with a health problem, they are referred to a specialist, generally in a hospital setting, and given a number of treatments.  The hospital then bills the insurance company or government for each of these treatments (this is what's called fee for service).  The hospital then pays the physician a salary or an incentive-based payment.  One of the reasons that the government is trying to shift the healthcare payment model away from fee for service (and towards manged care) is that it provides an incentive for providers to over-prescribe various treatments -- e.g. more treatments = more money.  

As we shift towards a managed care model, when a patient contracts an illness, the insurance company or government will pay a healthcare organization (what will be called an Accountable Care Organization, or ACO) a fixed lump sum.  This lump sum will then be split between all of the providers that provided treatment.

This change and its effects have been talked about at length.  But here are two effects that may not be so obvious:

1. It could put the Primary Care Physician (PCP) in the driver's seat.  Because the PCP generally has the best relationship with the patient, they could be the conduit for all healthcare payments. The savvy PCPs will setup their own Accountable Care Organizations where they take the payment directly from the insurance company or the government.  From there, they can dole out the appropriate share of the money to the specialists and hospitals.  Having physicians pay hospitals instead of hospitals paying physicians would radically change the power structure in healthcare as we know it.
2. In a managed care environment, there's an enormous incentive to keep costs down.  Because providers are going to receive the same lump sum payment for an affliction, regardless of how many prodedures they perform, the only way for them to profit is to lower their expense base.  As a result, to increase efficiencies, we may begin to see hospitals have floors that are designated to afflictions, rather than specialties.  That is, instead of having a radiology or dermatology or cardiology wing, there may be a diabetes or heart disease or lyme disease wing.  That would be a radical change in the way hospitals are run and costs are managed.

We can't underestimate the disruptive effects that are coming as a result of payment reform.

Healthcare Tech Lessons: Organizational Structures in Healthcare

Today I'm going to talk about the different organizational structures that exist in healthcare from the physician's point of view.  If you're a physician, you fall into one of three organizational structures:

1. Independent: the physician has their own practice and is responsible for all revenue and expenses.  Their success or failure depends completely on their own performance.  This is the traditional model but it's becoming more and more difficult to survive as an independent physician.  I've heard estimates that 30% of independent physicians are barely able to make payroll each month.  Rapid consolidations, declining reimbursements, increased technology and compliance requirements -- not to mention the recession -- have made it extremely difficult for independent practices.  As a result, every day more and more independent physicians are moving into the second type of structure.
2. Employment: the physician is employed by a health system, a hospital or some other healthcare organization.  This is the model that is heating up.  There's a massive shift in healthcare away from fee-for-service and towards managed care.  Fee-for-service is when a physician gets paid for each individual treatment.  Managed care is when a group of physicians are paid a lump sum and that money is split between individuals.  It's extremely difficult to survive as an independent physician in a managed care environment.  Health systems are employing massive amounts of physicians to drive referrals between physicians and to reduce costs through the economies of scale that come from technical and clinical integration.  As healthcare reform continues to reduce revenue to providers, the physicians that are not employed are going to have a tough time surviving.
3. Partnerships: partnerships are really every remaining structure.  Partnerships can be joint ventures, Accountable Care Organizations, physician alliance groups, etc.  It seems that as a result of the major reforms that are occurring in healthcare, a third, more equitable option such as a partnership is going to be the structure that begins to dominate.  But of course there are major unanswered questions that arise with these partnerships:  Who's in charge?  Who's going to get paid?  How are they going to split the money?  Who's going to drive decision making with patients?  Who's going to contract with the payers?

How and when the third option becomes the dominant structure in healthcare is a fundamental reason for the uncertainty in healthcare.  It'll be fascinating to watch all of this take shape over the next couple of years.

Dethroning The King

I recently finished reading, Dethroning the King: The Hostile Takeover Of Anheuser-Busch, An American Icon.

The book, written by Financial Times columnist Julie Macintosh, gives the reader an astonishingly detailed look inside the takeover of Anheuser-Busch by InBev, a Belgian company run by Brazilians. Because the transaction occurred smack dab in the middle of the housing crisis in 2008, many didn't pay attention at the time.

If you like business history and have an interest in the mechanics of enormous organizations and enormous transactions, you'll love Dethroning the King.

The Facebook IPO

Facebook is set to go public today at a $100 billion dollar valuation.  For context, General Electric is worth about $199 billion.

GE was founded by Thomas Edison in 1890, has more than 300,000 employees and is a market leader in appliances, aviation, consumer electronics, electrical distribution, energy, finance, healthcare, lighting, oil & gas, rail, software & services and water treatment.

Facebook was founded in 2003, has about 4,000 employees and is a market leader in, well, display advertisting.  

It's official.  The world has changed. 

Two Posts Worth Reading

Seth Godin had two great posts last week with two simple lessons worth remembering.  Both posts are super short, I recommend checking them out.

The first points out that success comes not just from working hard, but from working on the right things.  Often, knowing what not to do is harder than knowing what to do.

The second discusses the balance between knowing a lot about one little thing but also knowing a little about a lot.  Both are crucial.

Healthcare Tech Lessons

Nat Turner had a good post the other day titled: Why aren’t there more traditional tech entrepreneurs in healthcare?  It’s a good question and a good post, check it out when you get a chance.  One of the reasons he cites for the lack of entrepreneurs in healthcare is “it’s really hard to learn the ropes”.  I’ve dabbled in healthcare technology quite a bit over the last 8 or 9 years but now I’m completely immersed in it -- working with a unique product and talking with healthcare executives on a daily basis.  And I have to agree with Nat -- it is hard to learn the ropes. Between the different payers, independent physicians, non-profit systems, for-profit systems, academic systems, Medicare, Medicaid, regulators, healthcare reform, meaningful use, EHR, different motivations and incentives, community considerations and more (never mind the clinical side)…to understand healthcare, you have to know a lot about a lot.

Over the last couple months I’ve picked up a multitude of information, insights and learnings that I think would be extremely valuable to tech entrepreneurs considering the space.  With that in mind, I’m going to begin using this blog as a place to store many of those learnings.  I’ll try to start with some of the practical basics and I’ll get more granular and complex as I go.  At a minimum this will be a good place to store my own learnings, but I hope others will find it valuable as well.