Crystallization - Beauty Built On Imperfection

Things are never right. That's what ultimately creates order and beauty with a system. The story of crystallization is a remarkably accurate metaphor for how that happens in a natural system that an Active Investor can readily apply to understanding social systems such as their business.

The orderliness of a crystal begins with the random movements found in liquids. Crystals are created when molecules of a substance, normally solid at room temperature, are dissolved in a solution. These molecules will sometimes be attracted to each other for short periods, only to become attracted away by other molecules over time. Everything remains chaotic and fluid until a "seed", a point of imperfection, is introduced into the solution. The seed has a slightly higher attraction to nearby molecules, so they are drawn to it. If this initial attraction is strong enough, the group grows until its size is such that the group becomes consistently more attractive to other molecules than the surrounding solution. This is the "critical size" and when reached the protocrystal is now "in business" and continues to grow.

All of this is similar to a business during its start-up phase. For a business, the solution is not a liquid, it's the answer to a market need. A good business solution can be replicated and the company providing it begins to experience some repetition of sales. Orders will be slow and random at first; but they will grow with greater consistency over time.

This is not the end of the story. There is another step in the crystallization process. The protocrystal continues to grow ; but eventually it gets to a point it can no longer remain "dissolved" and it falls out of solution. Now the original imperfection appears to have been transformed into the beauty, order, and attractiveness of a visible crystal. The visible crystal continues to grow, gaining more molecules from the solution, until it reaches an equilibrium with its environment.

A growing business will face a second step as well. Meeting more market needs will begin to overwhelm the founding staff and another decision, as difficult as the one to initially start, has to be made. An investment must be made in building internal systems and structures if continued growth is to be nurtured. This is hard for the financially struggling team who have sacrificed for the sake of building their solutions; but out of the internal systems and structures come the power to sustain long term growth.

It's now a different business, one that is building lasting values.  Those values will allow it to reach far beyond its initial products and services that brought it to life. A visible legacy drops out of solution.

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Reptitive, Powerful, and Gentle - Intrinsic Motivation

We sense the motivation of a leader is a step above that of follower. Business owners, managers, and consultants have all wanted to capture some of whatever motivates the leader, The Active Investor, and spread it throughout the entire organization. In an 18 minute TED presentation Dan Pink sheds a bright light on the nature of that difference and what some organizations do about it. His message is that business ignores what science already knows about motivation.

Did I just screw-up?

Anyone who has never felt this way is a poster child for the unfulfilled life. Remorse is a negative feedback with destructive potential if ignored. It's also the catalyst for developing our potential if accepted and appreciated.

There is a story about a successful Active Investor, a business owner or professional,  who was being interviewed. She was asked to revel the secret of her success (a great question networking question by the way). Her answer was that success was the result of not making mistakes. This lead to a question on how to avoid mistakes. Her response was that experience would teach you how to avoid them. The obvious follow-up question was about the best way to get that experience. Her concluding wisdom was that the best way to obtain experience was to make mistakes.

The difference between an accomplished athlete and an amateur is not just natural ability. It's the experience gained from extensive training under the watchful eye of a great coach. Even small mistakes are honed away in hours of work on the practice fields. This repetition of action and corrective feedback gently and powerfully develops the the successful athlete's abilities on the playing field we all admire.

Life doesn't give Active Investors a practice field; but the coaches are very present. Everyone benefits from mentoring. This can be from those who invested themselves in us during our past. It can also be from a current network of professional advisers we can develop. It's feedback necessary for grwoth. Being able to get good coaching is critical; however, these are only our external coaches.

There are also our internal coaches that watch our play and seek to guide us. Remorse is such a coach when we appreciate that it moves us towards better ways to achieve our goals. The feeling, although negative, is there as a driver for improvements that inevitably increase lasting values. The feelings are designed to make us stop. Not for self-pity; but to take a moment to learn from what just happened and to guide change.

Our actions may now forever limit us in the future. Limitations in one area creates opportunities for specialization and excellence in what's remaining. They may be cause for an apology. This starts the miraculous process of healing. But, most of all, they are a basis for us to rise above our past performance levels and become who we feel we should become. We get there by thinking about alternatives to our present situation that will make us feel better. It may happen in a single insightful step. Recovery may also be from one slightly better emotional state to another as we recover over time. However, there is always some better feeling way to think about a remorseful situation and our job is to find and follow it.

Although mentioned in a previous blog posting this bears repeating. The Active Investor's emotional strategy when experiencing negative feedback of any kind should be to move from a position of judgment to a position of curiosity.These negative feelings are our sensors and guides, not our enemies.

image credit: TheeErin

Creating Products from Services

An objective of The Active Investor blog is to inspire the thinking of small business owners and professionals to create greater lasting value in their business. There is perhaps no better way to do this than to find ways to create products from services.

A product without services eventually becomes a commodity with business going to the lowest cost provider. Selling only services is a bit like selling air. You can't really sell time. You can only rent your expertise for some time. Expertise is intangible and difficult to either prove or differentiate and in the end the amount that can be sold is always capped by a time limitation. If you want to sell the enterprise, because it's your expertise and you're leaving, the residual value is relatively small. However, when the business offers a deliverable solution that can be named plus is easy to understand and refer, you have hit a "value-added" sweet spot. Here is a personal example.

Names are important. They give the offering tangibility. As a Texas business broker, I create marketing plans for my clients, as do many other business brokers. Since most small business buyers come from the internet, this plan includes multiple internet directory listings, which again, other brokers do. So far, we're still at the services level. I've then created a unique product offering on top of these services named Business Opportunities Bulletins (BOBs). With some creativity and technology, each client listing can appear on the first Goggle results page of significant search terms used by potential buyers. If a client wants to be found by potential business buyers, here is a product, a BOB, that does exactly that.

A BOB is easy to understand. The art of selling your business is to be presented to interested parties and still keep the sale confidential. Prospective clients can see how this is already working for existing clients. They "get it" immediately.

In this example, the product's name is a take-off of my own name. If a need for my business broker services gets touched upon by someone in my network, it's easy for them to explain and refer my product (my service).

Building BOBs takes time,  expertise, and technology but their existence adds critical value both to immediate marketability and to the ultimate value of the brokerage practice. A product has been created out of services common to the industry. How many products can be developed from your services? Something with a name that is easy to understand and refer. I can't image anyone who can't develop at least one more.

Image credit: EraPhernalia Vintage (catching up)