The Rat’s Rules: #6 If You’re Not Growing You’re Dying

““If You’re Not Growing You’re Dying” is probably one of the most misunderstood business rules in a long, long list of misunderstood business rules. Too many mismanagers mistake that phrase to mean the growth is the agent that keeps the business alive. That is not what the phrase means, or should mean.

It’s more important to stay alive than to grow, ask any number of short people or many exceptionally long people. Concentrating on growth allows lazy mismanagers to pretend to have their eye on the target while looking at easy stuff that could be handled by an intern: a stupid, unmotivated intern. Growth mismanagers worry about advertising/marketing, paying the sales force more to develop more sales, reducing costs (like R&D, manufacturing, or employee development), and juggling the books to provide the appearance of growth. None of those things are likely to create long term growth and most of them waste resources that will likely kill the business.

If that kind of mismanager were inclined to take advice from an honest consultant (both, a rare breed), that consultant would tell the growth mismanager  “Don’t worry about growing, dumbass. You are dying. Try to concentrate on staying alive.” Not growing is a symptom of dying, not the core problem. As any old person who has lived long enough to begin to lose height. It isn’t the lost inch or two that is the problem, the problem is being old and close to dying.

“Staying alive” activities are (in order): superior customer service, staying close to customers to determine their needs and desires, creating reliable and innovative products, employee development, and (dead last by several lengths) marketing and sales. When you ask an ex-customer of a company that was once considered excellent why they now dislike or distrust that company, 99% of the time I’d bet the answer will be “they treated me like crap.” Poor customer service will flip a loyal customer to a hater in a few seconds. That kind of hater will spread poisonous word-of-mouth stories that no marketing plan could ever keep up with. There is an old restaurant management rule that says something like “It takes $50 in advertising to get a new customer to try your business, 5 seconds of poor service to lose them, and $5,000 in advertising to get them to try you again.” The cost of poor service is under-rated, often ignored, and when it has gone on too long there is no road back for the company. No one can afford to spend $5,000 to attract a customer for a $20 meal.

22 years ago, I started my RatsEyeView.com (a domain I gave up a few years ago) business page and this blog to attract customers to the business consulting companies I worked for. I was a sub-contractor, most often, for D&H Consulting out of Rancho Santa Fe, CA working with an old friend from California on improving quality management and inventory control. I didn’t last long, 3 or 4 projects I think. It was soon apparent to me that in the early 2000s the corporate rewards were going to mismanagers who could downsize operations to little more than marketing and sales, passing off manufacturing and service to overseas manufacturers and contract companies. What these CEOs and other corner-office creeps wanted to hear was “How much do you like my poetry?” The only "improvement" they had in mind was in their own salary and perks. Almost universally, these mismanagers were all proud holders of the most worthless degree in academia, the MBA. Someone once said that you could sum up the entirety of a Harvard MBA with “Push blame down and pull credit up.” If any of the corporate “leaders” I consulted with had other skills, they did not display them around me. Every one of the companies we worked with has since been absorbed by another entity now, most at bargain basement prices. The CEOs, though, made out like the bandits they are.The businesses and employees were trashed like they were the disposable private property of the executives and, usually, the stockholders got the shaft too.

Why people like that keep getting hired is impossible to explain. Killing a business ought to be a scarlet letter on an executive’s resume, but it doesn’t work that way. Corporate American seems to protect and reward the really major failures. Which is why our companies keep dying while they focus on growth and keep over-paying executives who don’t produce revenue or customer satisfaction.

Go figure.

The Rat’s Rules: #4 Friend or Not-Friend

The Rat's Eye Business Rule #4: Friends can call you on your “bullshit” because they know something useful and they care about you. Everyone else is an acquaintance or just a face in the crowd.

These days, it feels like we’re all being pushed into polar positions. One of those poles is “friend or not-friend(ly)” and that, I guess, is nothing new. In my memory, I think I remember people with different views and politics remaining friendly, if not friends. Today, that seems so long ago and so impossible that it’s entirely possible I’m deluding myself. I have certainly had many Republican friends over the years, but now that being Republican means being a member of the Trump Cult, not so much. My tolerance for that kind of gullibility, racism, sexism, corruption, and treason is near-zero. As someone much wiser than me explained recently, my “bandwidth” for a lot of things has been reduced dramatically by both Trump and his Republican enablers and the cult drones.

One of the qualities I’ve always valued in my friends (of which I only have, and want, a very few) is the ability and willingness to call “bullshit” in both directions. We all get off-track multiple times in our lives and run the risk of crashing and burning or heading down a trail that we’ll either have to backtrack out of or we’ll dead-end into and be stuck. If you get more than a couple of chapters into You Are Not So Smart, you’ll have to face the ugly truth about yourself and, if you are even a little bit introspective, you should hope for a few friends in your life who will gently help you recalibrate. Or, sometimes, not so gently if what you really need is a kick in the ass.

Probably a qualifier for friendship must be a decent match in corrective styles and reasonable expectations. You can’t hear “you’re full of shit” from just anyone. That takes a background of credibility, honesty, competence, and at least a little affection before criticism amounts to anything more than mindless contradiction. If you can’t take hearing criticism from an acquaintance or you don’t feel comfortable giving it back to them, it could be that your styles are so different that you can’t get that close; and you may not ever. So, it’s very likely that, if you use this requirement for a “friend” you might discover you don’t have many friends. Maybe lots of acquaintances, but damned few friends. Don’t be discouraged, most people don’t have any actual friends.

Another important quality a friend should have is “usefulness.” Useful people are the only rational candidates for a practical friendship. My wife has a long history of acquiring housewives for “friends” and discovering how perfectly useless they are when she actually needs a friend for practically anything more complicated than a borrowed cup of sugar. There is no performance measure for either a housewife or a househusband. The only requirement for that job is finding someone dumb enough to carry your lazy ass while you do all of the family adult tasks. Housewife and househusband are just a couple of politically-correct words for “unskilled and unemployable.” My wife found this out the hard way several times, but like the majority of women she is intimidate by women with marketable skills. So, her friendships are lightweight and too often based on being the wives of my friends.

I don’t have a single friend who isn’t smarter than me, more skilled than me, more interesting and well-spoken than me, and who doesn’t have an assortment of skills I will never master or even comprehend. Why would I be otherwise? What would be the point in putting any effort into the relationship with a dumb, untalented, foolish person? What would anyone get from that, other than a misplaced sense of superiority? The world is full of stupid and ignorant people and if that is not a disqualifier for you, you have 99.999…% of the planet to befriend. Of course, if you actually ever need something useful from those relationships good luck with that.

The Rat's Rules: #3 Never Become Expert at Something You Hate

The Rat's Eye Business Rule #3: I can’t believe I’m finally just now getting around to writing up this “rule”: “Never become expert at something you hate, they’ll make you do it for the rest of your life.” This is something I’ve said for at least 40 years. It’s also something I failed to observe for the overwhelming majority of my life. And it’s not an original idea.

The make-or-break moment, for me, came when I was working for one of the least ethical companies on the planet (outside of the military or military/industrial complex) in 2001 and I was depressed to the point that I could no longer read . . . anything. I had become “expert” at organizing and manipulating data (product failure data, in this case) so that product problems could be identified and fixed. Nothing about this “expertise” appealed to me, but it was specially unappealing in a company that had absolutely no interest in improving product reliability. While I have spent a lot of my life at a keyboard, including writing database code, I don’t have the right kind of obsessions to be good at it; or, more importantly, to like doing it.

That job put me in 4 to 5 hour-long meetings a day and most of what went on in those meetings was political posturing and career positioning. I do not believe meetings of any sort are productive. . . politics in business is just bad management. But the job paid more than $100k/year and that was more money than I ever imagined I would see in any life. I hated the company, I hated the job, I hated myself for working at the company and doing the job. My grandson was the inspiration that tripped my quitting-trigger. I realized that my kids had grown up watching me be a lousy work role mode and, now, my grandson would too. With him for inspiration and several friends for support, I left the big money for the scary world of self-employment and temporary contract work. Worst case, I figured I would burn through my retirement savings in 5 years and have to look for “a real job.” Thirteen years later, I retired without having touched my savings and having added substantially to our retirement security. Best of all, I did not hate any part of the last 17 years of my working life. Sure there were bad days, but there were always great moments and good weeks and memories that I treasure to this day.

A lesson that only came to me in retrospect was that when I was doing work that i liked and, even, loved I didn’t need anyone to “make me do it.” Now, to clean up this Rat Rule, I want to be clear on the fact that nobody but me ever made me do the jobs I didn’t love. I chose to take that route for a variety of ill-conceived reasons. I always had a choice to take jobs that were less secure, didn’t pay as well, required more training and preparation, and/or would have taken more effort on my part to obtain. Always. Nobody every put a gun to my head and said, “Do this shitty job or else.” I always weighed my options and went for security, more money, and something that was familiar (something close to what I was already good at). Always, until 2001.

In 2001, several things ganged up on me to help me break that habit. One, my high paying job was so demoralizing and counter to everything I felt was precious to me that it broke me; literally. Not being able to read was simply one symptom of the major depression that job forced me into. Two, my kids were grown and on their own and no one really needed me to stuff my nose into the grindstone for their survival. We went through some rough economic times between 1968 and 2000 and I often felt that if I slipped off of that treadmill we’d be living under a bridge in a heartbeat. Three, I had the surprisingly good luck to have a friend in high places, Michael McKern the director of Musictech College, who offered me a temporary job helping to build the studios in the school’s new St. Paul location. That took a lot of the risk out of quitting my old job. It wasn’t anything near a replacement for the money I gave up, but it was enough money to keep me going for the interim and it gave me a new mission to focus on.

For me, maybe the mission was the thing that turned “work” into something less onerous. For a decade, I really felt like I was doing something that often contributed to making my student’s lives better and, as a result, the world a better place. The problem with most work is that most of us can’t connect the work to our life’s mission; whatever that may be. Having a mission is probably the most underrated quality of a modern life. Just going to work for the check is demeaning and boring and tends to make humans into machines; not very good machines, either. Machines are predictable, reliable, and unemotional. Humans are none of those things and when they are in a creative, inspiring, motivating environment humans kick machines butts every time.

Looking back at a 55 year work career, I am not one of those people for whom work is a means in itself. I need for my work, the thing that I will spend most of my life doing and most of my time attending to, to be something I believe is worthwhile and useful. Like the mistake I made so many years in pretending that I was made to do unsatisfying work because I was good at it, I have also made the mistake of believing that most people do not need a mission in life. I do believe that the overwhelming majority of people in my culture do not have a work mission and do not know that they need one. In this case, ignorance is fatal to your spirit, soul, consciousness or whatever you call that thing that decides if life is worth living or not. It is also true that the mission some people decide upon can be harmful to the world and their community: racial supremacy, wealth and power at the expense of anyone who gets in the way, experimental technology that risks the environment or life, and the rest of that list. Still, when you look at the people who have taken on harmful missions, you can’t help but be a little impressed with their effectiveness.

Missions are powerful and apathy isn’t. If you want to have a career and a life that you don’t hate, you will have to figure out what your mission is, then you will have to stay on it regardless of how easy doing something else seems. Greg McKeown, in his book Essentialism, said this more rationally than me, "If you don’t prioritize your life, someone else will. "

The Rat's Rules #2: When You Know It Is Over

Way back in 2008, I wrote a Geezer with a Grudge rant titled, "A Technological Dead End?" I always intended this essay to be turned into a Rat's Rules for this blog, but because I wrote it once it never made it to the Rat's Eye View. Today, I have fixed that. This is Rat's Rule #2: as a technology approaches terminal, it gets really good.  Then it dies.

All Rights Reserved © 2008 (revised 2012) Thomas W. Day

 

The Rat's Eye Business Rule #2: I have a theory, born from personal experience and lightweight observation of history.  My theory is that as a technology approaches terminal, it gets really good.  Then it dies.  When a new technology is just finding its legs, the technology being replaced makes a wonderful collection of giant leaps; which will fail to stave off obsolescence, even for a moment.  But examining those last moments of declining technological health can be really enlightening.  

I'm not saying this as someone who has been on the leading edge of a technology shift.  In fact, as a mid-tech transient I've been trailing edge for most of my life.  In the mid-1980's, professional analog audio recording gear began to be displaced by digital recording systems.  The last generation of analog recorders were a huge improvement over anything previous technology.  But it was too late: the convenience, cost advantage, signal-to-noise improvement, and trendy-ness of digital wiped out those last moments of glory and hardly anyone even noticed that most of the problems usually associated with recording on analog tape had been minimized.  Today, professional analog recording systems are practically relics and even the simplest personal computer has more editing and playback horsepower than a multi-million-dollar studio from twenty years ago. In my lifetime, I've seen (or am seeing) electronic tubes, analog computers, magnetic data storage, photographic film, visual artist's tools, payphones, cathode ray tubes, analog television, vinyl records and turntables, carburetors, and dual-shock motorcycle suspensions quickly peak and begin the rapid transition from regular use to museums' shelves [2] . 

I was first turned on to this realization when I was a very young man.  When my kids were toddlers, one of our favorite weekend trips was to Minden, Nebraska to visit the Harold Warp Pioneer Village Museum.  The place is stuffed with all kinds of historic tools and toys, from Pony Express relics to railroad history to farm equipment to early internal combustion vehicles. The thing that tripped my trigger was getting a close look at horse-drawn carriages, especially the high-end, luxury models from the turn of the last century.  Just as the first internal combustion vehicles were making horse-drawn transportation obsolete, the last carriages were becoming efficient, comfortable, and sophisticated.  I studied suspension systems that we wouldn't see on cars until fifty years later.  Some of these vehicles had heating systems, evaporation interior cooling, clever convertible tops, interior and exterior lighting, safety equipment, and finish work that made the next half-century of car design look primitive.  Unfortunately, they also had horses providing the horsepower. 

The other sign of impending obsolescence is nostalgia.  This country is currently being decorated with monuments to the Golden Days of Oil.  To anyone with a sense of history, that ought to be a big, red, flashing sign that something is on the downhill slide.  Folks are paying idiotic prices for Gulf, Esso, Kerr-McGee, and Standard Oil memorabilia.  Oil Century Museums are popping up everywhere from California to Tex-ahoma to Florida to New Jersey.  Ohio is home to the "Society for Commercial Archaeology."  And, of course, we have wads of motorcycle museums littering the country side.  On my last long Midwestern bike trip, I counted ads for half-dozen Harley/Indian museums before they began to fade into the fast food, antique store, and hotel signs. The last couple of decades witnessed a giant blast of the past as Boomers tried to revive their youth with muscle cars and 1950s-styled big twins.  That fad won't last much longer, because Boomers are soon going to be looking for their next hipster thing in prosthetic hips (like mine) and electric wheelchairs. 

Watching what's going on in our culture makes me suspect that we're about to see our beloved internal combustion engine technology vanish.  I don't know if you've noticed, but internal combustion engines have become trailing-edge technology, almost overnight.  There are alternative transportation systems on our highways and all over the rest of the world.  At the same time the technology designed into internal combustion-powered cars and, especially, motorcycles has become absolutely incredible.  The performance, reliability, and even the sound of modern motorcycles has been tweaked to the nth degree.  The only thing that's been stubbornly ignored is energy efficiency and that's probably the only characteristic that really matters in the twenty-first century.

In (2007) end-of-year issue, the relatively conservative Motorcycle Consumer News published their "Performance Index" for the current generation of motorcycles. In a summary, they listed the following most important performance categories: ten best 1/4 mile times, ten best rear-wheel HP, ten best power-to-weight rations, ten best top speeds, ten best rear-wheel torque, and ten best 60-0 stops. All but one of those measurements are, essentially, the same sort of 1950's information; power.

Most likely, the only modern statistic included in the data provided would be "average fuel mileage." By this standard, the 2006 Kawasaki Ninja 650R was the winner at 65.3mpg (the 2007 version was 10mpg less fuel efficient), followed by the Ninja 500 (64mpg), and Honda's Rebel 250 (62.6mpg). The Victory 8-Ball at 29.8mpg was the fuel guzzling loser. My daughter's 1991 Geo got better mileage than more than half of the motorcycles MCN rated. From occasional long ride experiences with folks on liter sportbikes, my own calculations estimate that MCN was optimistic about the efficiency of most of the bikes they rated. I wouldn't be surprised at less than 20mpg performance from many of those street legal race bikes. (The new Honda NC700X has upped the game a bit, but I think it's too little, too late.)

While those performance-based qualities are being fine-tuned, the world's oil consumption has rapidly passed world oil production.  Sometime in the last five years, oil demand whipped around oil production capacity and the world's economies will either shift away from burning petroleum or suffer the consequences.  Some experts claim that 2005 was the whipping point; the last year of "cheap oil" and that we're on the downhill slide where production will get further from meeting demand every year.[1]  In 1999, the uber-conservative, alternative-technology-spurning oilman Dick Cheney was one of those "experts" warning that the age of oil is about done.  Cheney told other oil execs, back then, that the reason oil companies weren't building new refining plants was that investment would be putting good money after bad.  We have more than enough oil processing equipment, we don't have much oil left to process.  Some folks estimate that in as little as two or three years, it may cost $100 to fill a compact car's tank.  Filling a bike's tank will be pretty close to half that and it's going to be more expensive every year afterwards.

Let's get real.  A 250hp, liter bike that burns 15-20 mpg is going to be a pretty worthless piece of history when gas costs four to ten times what it costs today.  Everything we use, do, and consume, will be incredibly more expensive when oil bumps against the predicted 2025 $400 per barrel.  If we humans are lucky and put some planning and a lot of resources into the next few years, we might be converting to hydrogen cell vehicles or some other petroleum-less fuel about the time the old technology becomes impractical.  I like to imagine that motorcycles, with their inherent energy efficiency and other advantages will be part of that change.  I'm sure horse lovers hoped horses would find a place in the modern transportation scheme, back in 1906.  Who knows, maybe horses will make a comeback?

Personally, I'm feeling a little nostalgic today, while the majority of Americans appear to be clueless about the future of our energy-dependent systems.  As an example, the dim-bulbs in St. Paul are widening freeways, planning communities that are further than ever from necessary services and employment, and designing government buildings that depend on energy systems that will be disappearing about the time those facilities are put into service.  My sentiments, inspired by that irresponsible bureaucratic inattention to reality, is considerably less upbeat.  Their behavior is more evidence that we always get the government we deserve, just like every other country in the world. 

While there appears to be a fair amount of thought going into replacing the power plant under the hoods of our cars, for a while it looked like that wouldn't be happening for two-wheeled vehicles.  Zero Motorcycles and Brammo have changed all that.  Zero Motorcycle's new Z-Force^tm power pack is pushing electric motorcycle technology fast into the new Green Age. With a 100 mile range, an 88mph top speed, and 3,000 charge cycles (a 300,000 mile battery life), Zero's bikes are beginning to warrant their price premium. Hayes' diesel-powered bike is another cool thing.  A hydrogen-powered turbo sportbike would be beyond hip.

Knowing that this oil barrel is more than half-empty with a rust hole in the bottom has forced me to suspect that the world I lived in is vanishing.  I'm trying not to sound like a reformed whore, but it's hard for me to pretend to any other pose.  I am from a generation that burned gas for almost nothing but recreational uses.  I can "brag" that I sometimes rode my Kawasaki Bighorn, Rickman 125 ISDT, or even the Harley Sprint to the racetrack, took off the street hardware, raced the bike, and, after reinstalling lights and crap, rode back home.  I guess that's something.  But I also trailered, trucked, and station-wagoned bikes to races, took long mind-altering rides in the country, and practiced racing on all sorts of surfaces.  Today, those leisurely rides through the country side feel a bit like immature, excessive exercises in selfishness; and I'm missing them before I've given up doing them.  I know that every drop of oil that I waste is coming out of my children and grandchildren's heritage and I'm becoming more than a little ashamed of the oil I wasted before I knew better.  The days of getting together with a few dozen friends to explore backroads and hang out in the twisties are fading.  I think sports like motocross, road racing, and all of the fun we have had aimlessly and recreation-ally burning fuel are also coming to a sooner-than-you-think end.  Between declining resources and world-wide pollution and global heating catastrophes, it appears that we have hung on to these carbon-burning handlebars a little too long.

I'm not celebrating this.  I'm not gloating or saying "I told you so" while I write this.  I lived in a gloriously ignorant, greedy, selfish time and it was an incredibly fun period in human history.  I wish I could pass it on to my children and, especially, my grandson.  If we're truly a civilization worth saving, we'll find a way to make a world our kids can enjoy.  If we don't, we deserve any misery we receive. 

---

[1] A depressing, but complete site for all sorts of links to information about the coming energy crisis is http://www.lifeaftertheoilcrash.net/.
[2] Paul Young added this note to my list of vanishing technologies from my own lifetime: "One of the guys I work with had his 11 year old son come up to him and ask 'Have you ever heard of something called a landline?' Something else to add to your list of disappearing technology. "

The Rat’s Rules: #5 "The first rats to leave the ship are the ones who can swim."

The Rat's Eye Business Rule #5: Stuff ends. Eventually, everything and everyone dies. Anyone who uses the words “forever,” “in perpetuity,” “to the end of time,” or any phrase or word similar to those in relation to anything human is clueless about time, death, decay, and entropy. Businesses, and in particular corporations, are designed to be easy to kill and for the killers to get away punishment-free.

Businesses often get shutdown to protect the people with the most money and power. The bigger the business, the more protection provided to the perpetrators. The people who did the work, created the products and services, produced the products and services, and who believed in whatever "mission" the business pretended to have get sacrificed. It's the way life in this country has worked for 200+ years, with only a few moments of interruption. Corporations whine that "employees aren't loyal these days." Interpret that to mean, "You people are too smart to buy into my bullshit."

Somewhere out there in the web is a reprint of a great speech Andy Grove (one of Intel’s founders) gave to a collection of business assholes where he explained why employees did not owe those rich and powerful men one ounce of loyalty. His recommendation to employees was to consider their employers as one of many possible customers and to treat their own careers as independent businesses. One absolute rule for the self-employed is to never limit your business to a single customer. Likewise, an employee who commits all of his output to an employer is destined to be disappointed and, probably, unemployment or worse. An employer deserves exactly the same loyalty as that employer gives to employees; nor more and probably slightly less.

In my 50+ years of employment, the majority of my past employers are gone. Now that McNally Smith College of Music has joined those ranks, seven of the twelve employers on my resume have vanished. One, ex-Fortune 100 Guidant is on record as Forbe's #2 "Worst Mergers in History." Another Fortune 500 train-wreak, Telectronics, would have resulted in criminal FDA prosecution if Clinton had been a fraction of the Democrat some mis-remember him being. Two of the small corporations on my resume were absorbed by larger firms; one for a profit and one sold for patents and equipment. The rest just disappeared without a trace. Not a one of those failed companies were well managed, but the mismanagers were all grossly overpaid for their incompetence. Most of them were grossly over-compensated for blowing up the companies they mismanaged. The fortunes created by some of those golden parachutes could have solved Greece’s economic problems.

Here's what I learned from my first experience, back in 1972, with one of those companies. My tech-mentor, L.A. (Arnold) Stevenson, a high school dropout/genius Air Farce-trained electronics tech who is still the hands-down best educator I have ever met, "The first rats to leave the ship are the ones who can swim." That lesson taught me that the day to start looking for work was the day I got hired to a new job. That habit really came in handy when I started my own businesses. 

There is an obvious reason for that, too. The people who stick it out to the bloody end either feel they have no other good option or are so limited or incompetent that they don't have a better option. The ones who bail at the first sign of self-destruction are those who know they can find as good or better employment elsewhere. As Andy Grove infamously told us all, "Your career is your business, and you are its CEO." You are also your business' most important customer and everything you do in your career/business should be designed to first serve that obligation. In the last 20 years of my own career, I finally learned that it was time to leave when I stopped improving myself at work. That means when the resources to make yourself more marketable dry up, you should jump ship.

I didn’t stick around for the bloody end of any of the companies I worked for, but I got damn close in my first engineering job. The first time that company crashed, I stayed until I’d been asked to layoff every one of my techs and mechanics; then they laid me off just before Xmas (sound familiar?). Six months later, that company rehired me as a contractor which, eventually, turned into a management job. The next time their market collapsed, I was the first out the door; leaving my employees and friends with a little more job security and a big warning notice that “the end is near.” One of my best friends tried to stick it out to the bloody end and when he was laid off the Reagan economy was in full recession and there were NO tech jobs to be had in Nebraska. He died of a massive heart attack at 35 an unemployed year later. That was also a life lesson for me.

A lesson I learned the hard way from two of my defunct small company employers was “Never invest more of yourself in a business than the owners (or the people who profit the most) are investing.” For the last 15 years of my career, I regularly turned down management positions because I know enough about myself to know that my loyalty to the people who work for me will override my common sense and I will violate this rule. I will try to drag a dead horse over a mountain, even if I see the executives sitting on the damn horse while I try to move it. The simple solution to that problem is to avoid horses/management altogether. I can’t “fix” me, but I can sure as hell put some fences around my options.

Another thing I learned from Arnold was that I never wanted to be an employer. Everyone who has ever worked for me did so as an independent contractor. I don’t need the responsibility, the people who have worked for me didn’t need to be trained to be dependent on me, and I have always been too interested in too many things to want to be tied down to one business model or customer base.

I worked, weekends and nights, as an independent contractor for Arnold and he paid me about 10x what I made on an hourly rate with my day job. He constantly reminded me that he was my sole customer and that was a bad thing. That spurred me into doing a lot of electronic design work which led to my first product “invention” and a royalty check that saved my family a few years later when I was laid-off and near broke. 

Postscript November 2022: One of the big quarter-flipping winners of the past two decades has been Elon Musk. Purely by luck, his first dotcom was one of those 90's train wrecks, Zip2, that was foolishly acquired for a buttload of cash by the late-not-so-great Compaq. From there a sketchy online bank. X.com, which was merged with Musks' fascist buddy, Peter Theil, and turned into  Paypal, which was bought for a hilarious amount of money by eBay, making two of the most dangerous, most idiotic lucky fumblers into billionaires right when Republicans were eliminating the hyper rich from tax burdens/responsibilities. About the time those two were lucking into their fortunes, the people who were tossing money mindlessly into anything with a dotcom tail started damming up the waterfall of stupid cash, leaving the lucky ones who skated under the wire to take advantage of that timid moment in investment. 

Luck and management skill rarely go together and Musk, in late 2022 is demonstrating that fact. Immediately after buying Twitter, little Elon laid off 7500 Twitter employees with the finesse of a rural northern Minnesota lumberjack set loose in a national forest. Now, of course, he's trying to lure some of them back, but the exodus he began with his incompetent mismanagement "style" is resulting in more rats jumping ship; that includes a bunch of Twitter's most critical management people who are getting out while the getting is good. What do you want to bet many of those people will be recruiting ex-Twitter talent to create Twitter's next round of competition? Having voided their contracts, Musk will have a tough time enforcing anything resembling a non-compete.

#34 The Rat's Rules: #1 No business is more than necessarily smarter than its customers.

All Rights Reserved © 2000 Thomas W. Day

For the last twenty-five years, I've gathered a collection of business rules based on observations I've made whilst trapped in the business world. I used to give those rules random numbers, to make it seem like I have more than one or two of them (the same way some people start a new checking account). Not anymore. I'm going to expose, to the world, just how little I've learned in my dreary little career. So here goes:

The Rat's Eye Business Rule #1: No business is more than necessarily smarter than its customers.

This is a rule of efficiency, in my opinion. When a company is a lot smarter than its customers, resources are wasted. Brainpower and possible technology, for instance.

For example, a company that could be designing user-hostile WYSIWYG operating systems, is wasting time and money porting a me-too, de-featured version of Basic to dozens of godawful personal computers and remedial operating systems. In a perfect business world, this sort of new wave, mid-tech, ambitious little company ought to make an alliance with a really big, really dumb mainframe computer company and concentrate on building software that will make millions of people miserable, instead of just a few thousand nerdy programmer types. That's a hypothetical example, of course.

At the other end of the spectrum, a company that isn't as smart as its customers isn't going to build products that those customers will respect. Worse, if that company is based on an originally good idea, but can't competently execute it, someone will. If the company is really dumb, someone will do a great knockoff almost instantly.

For instance, once there was a really big, dumb computer company that made huge, slow, hard to program computers and software. They accidentally hired and promoted a not-dumb executive who saw a future where very small companies and individuals would have applications for cheap, small, reasonably powerful computers. He drug the big, dumb company (kicking and screaming) into his vision and they did their usual mediocre job of cobbling up the first system they offered to the world. But it was a great idea and that stimulated about every reasonably intelligent computer engineer and techno-executive to reconsider the application for what became "personal computers."

"Big Dumb," we'll call them, flourished for a few years and then has floundered ever since in, what became, a new world of high tech, intense competition, high profile for computer companies. Big Dumb abandoned the twelve loyal (and dumber than most) customers they'd held onto and went back to building large, slow, hard to program computers for the Fortune 500 companies who are not as bright as the PC crowd. In other words, Big Dumb managed to survive because they bowed to the Rat's Rule #1, they moved down the intellectual scale until they found their natural customers.

Another example of this rule was apparent in the 'ole Military Industrial complex. These guys had an unearned reputation for excellence that still sticks in the most terminally brain-dead technological backwoods. In the late 1980's, some of these giant industrial sloths saw the writing on the wall. That brand of rich man's welfare was coming to an end. They made feeble attempts to move their companies away from building products that needed entire battalions of repair techs and millions of dollars of cost-overrunning re-engineering to produce $3,000 toilet seat lids into the hot new world of high tech consumer products.

They failed in every attempt they made. From CAD systems to industrial controls to communications satellites, these foolish executives and their big, dumb companies ended up downsizing so fast they practically killed Southern California's economy. The state still hasn't regained its standard of living, after twenty years of leaching the life out of the other 49 states during their golden corporate welfare years.

What they discovered would have been obvious to anyone interested in doing the research: the military is a dumb customer and, in comparison, consumers are infinitely smarter (it's a divide by zero thing). People who have no vested interest in buying a functioning product don't spend their money carefully. People who are spending their own, hard-earned money on something they intend to use tend to pay attention to little things like reliability, ergonomics, function, and cost.

You can find examples of this rule everywhere you look. Doctors aren't nearly as interested in effective medical procedures and products as are patients. Government is considerably less competent in managing money as taxpayers. And so it goes.

Remember, you heard it hear first: The Rat's Rule #1.
February 2000