Chombo's Blog

February 9, 2010

Changes, Competition.

Filed under: Ramblings — admin @ 11:49 am

Change

As most of you are aware by now, Chombo was recently acquired off its previous owner (Curtis Bayne), who had decided he’d like to focus on the other sides of his business and let Chombo go on its own and continue to evolve. To be honest, I think this was a brave and responsible decision. No one wants to let their baby grow up and leave home, but at the same time I think Curtis knew Chombo had a lot of potential and he felt he didn’t have the time resources to put into its continued growth.

When I took over Chombo, we installed a couple of new servers, we upgraded a few things, and what seems to be most important to the customers we spoke to… we kept the support manager, Andrew Gould and I’ve appointed him as the new General Manager of Chombo. Andrew has helped build Chombo’s reputation to what it is today, and to let such a key person leave the company would be massively disappointing. He has worked tirelessly for Chombo for the past year and I’m sure he’ll continue to work hard. Most importantly, as Chombo grows and we inevitably take on more staff, he’s the kind of person I want training those staff. If everyone had his work ethic there certainly wouldn’t be all the slurs about Generation Y that are around!

I promised I wouldn’t let things change for the worse, and I’ve kept my promise so far, and in fact I feel I’ve done the opposite. Which brings us to the next point…

Competition

When Chombo first launched, it was launched to provide customers with large bandwidth limits at affordable prices without sacrificing customer service. Now, there’s been a problem in all of this. There’s a certain competitor who has, and let’s be honest, a large chunk of the hosting market in Australia, and I commend them for being able to build the business they have. We felt we could “beat them” on a few aspects, but price probably wasn’t one of them previously.

So, I took a drastic step in reducing our plan costs to start at $3.95 and a few people took notice, including this company, who obviously felt it was directed at them. Well guess what, it sure was! But it’s targetting customers who, to use their own analogy,  are after a “Virgin Blue” type provider with low prices but a good level of customer service. As far as a recent promotion goes, they seem to want to position themselves with “Tiger Airways” and offer no frills for cheap on this particular product. That’s cool, all we’re trying to give people the chance to do is try things out at a comparable price and see if they notice the difference. If they prefer the no frills option, they can go for that. If you want get excellent customer service and telephone support, and other little tidbits as free inclusions, they can come with us. It’s about providing choice.

Even QANTAS has sales and responds to market forces. To get people to see that they’re “better than the rest” they routinely run promotions and slash prices to get people on board and then come back later. This is what we’re doing for the first 500 new customers, and we’ll let them keep that price on an ongoing basis. (As a sidenote, whilst I understand the analogy with Tiger Airways, it isn’t a company I’d want to draw a comparison with. They get you there, for sure. But they have the lowest satisfaction rates in the industry, charge more for any extras you want. They do it at a very cheap price though – it’s all a case of what you want from your service).

Finally, I want to make a quick comment about this supposed hatred and animosity between the most popularly mentioned shared hosting providers (particularly on Whirlpool, when someone asks who to go with 3 options as usually given. One is us.), there’s this idea floating around that these three providers all hate each other, the owners are at war and we would never speak to each other if our lives depended on it. This is all just rubbish – I’ve just come off the phone to the CEO of  the company we basically “targetted” with our campaign, we had a polite and pleasant conversation. We’re certainly not going to start giving each other business secrets, but we don’t mind having a chat – we’re all in business for the same reason and there’s just no benefit to being aggressive to one another or causing issues for one another.

We will provide the service we always have, and we’ll provide the customer service that makes us a hit with our customers for all our new customers regardless of what they’re paying. We’ll let our customers speak for themselves with regards to the service. In short, we want to play the ball, not the player.

Michael

May 22, 2009

Like all things organic, growth should be natural.

Filed under: Ramblings — Curtis Bayne @ 7:33 am

I’m going to make a confession – I’m a hippy. I think the paradigm shift towards greener thinking is a significant step forward for ecological sustainability, but surprisingly, this isn’t what this post is about.

Natural progression is a concept which can be applied not only to the organic world, but also to business process and marketing.

As a business, we are still in our infancy. We’re closely watching our projections and our board meetings consist predominantly of financial dialogue – our exit strategy is still well-greased and constantly updated – though given our takeup/conversion rate, that’s a document that’s fast becoming redundant.

When Chombo’s business and marketing plan was written nearly eight months ago, we had a good long think about the type of company that we wanted to be. The direction you take within the first year of your existence determines the end-game of your business strategy. We were faced with two choices: we could either grow our company quickly, hoping to amortize our investment with a takeover within 24 months of our go-live, or slowly grow our business, risking losing our investment due to an inability to service our running costs due to poor uptake.

We chose the latter.

Our end game is simple: to build a hosting company which provides a renewable income stream to fund additional investment into the telecommunications market. Oh, and a Ferrari. Vroom vroom vroom.

As a result of that decision, we’ve make key decisions regarding advertising, promotion and the way we spend/invest money, both in our infrastructure and business, as well as in stocks, bonds and currency.

Key Decision One: Contracts and Prepayment

We believe contracts for web hosting are ludicrous. Shared infrastructure means the costs of hardware acquisition are shared between many customers – as a result of this, the amortization of that investment is the responsibility of a number of customers, meaning that account churns/transfers do not affect the profit margin of the individual unit nearly as much as dedicated hardware does.

Our growth strategy is centered around natural, organic growth. The shortcomings of many initially successful hosting companies lies in the fact that their enthusiasm to bring new products to market often results in over expenditure and an inability to service debt/running costs. This results in a business model that is unsustainable. The biggest problem is the fact that this unsustainability is both  silent and deadly – the inability to gauge the markets reaction to a new product combined with an inherent distrust in new technology means that, whilst often being touted as “innovative”, their well-wishes are often met with third degree acceptance, with little to no uptake. Unfortunately, we’ve yet to find a distributor/carrier that accepts innovation as currency.

As a result of this, I am going to let you in on another Chombo secret – we do not re-invest customer’s prepayment into the business until their money is accounted for in the form of an offered service. We merely treat prepayment as an “account credit”, acting as a “pseudo-bank”, as you will. Lets break this down into an example.

Say you’ve prepaid our $9.95/month service for 12 months as a $119.4 lump sum. Our business rules enforce that we invest NO MORE than $9.95 a month of that money into the business. This ensures that our business model is always sustainable – it also removes the temptation to invest that money into new and potentially disastrous ventures. Instead, we seek our re-investment capital purely from the profit that the business is generating.

Our plans/policies are designed in such a way that, even if a customer uses all of their allocated resources, they still turn us a profit. Admittedly not a large one, but there is no Chombo customer which is not an asset to our business. We are not loss leading.

This avoids a “debt-spiral”, where the business is forced to constantly seek cash injection through the takeup of further prepaid accounts. Which brings me to my next point…

Key Decision Two: Giveaways, Promotions and Specials

When developing our marketing strategy, we opted for a method which would maintain high customer retention. We wanted our drawcard to be the quality of our services, not our price-point or the prospect of a “freebie”. The age-old adage “there’s no such thing as a free lunch” is tried and true and the reliance on promotions to generate new leads is not congruent with the type of business that we are attempting to build.

Don’t get me wrong – I am not suggesting that the use of giveaways and “90% off if you buy within the next two days!” promotions don’t get bums on seats – admittedly, if we were building a business to sell then we would have spent the predominance of our budget on advertising and ridiculous “prizes” rather than network infrastructure and ongoing operational-expenditure support. Ultimately, customers that seek your service based on its own merits are customers that are more valuable to the business than the host-jumping cheapskates looking for something for free.

I’m not saying we’ll never do a giveaway or a promotion – in fact, we’ve discussed a few around the boardroom table, but the nature of these promotions will be just that: products or services directly related to our business which are offered because we believe they will add value to our clients.

Maybe we’re doing it wrong. I’d like to know your thoughts.

April 10, 2009

Management.

Filed under: Ramblings — Curtis Bayne @ 12:52 pm

On my personal blog, I’ve written about Bill Swanson’s 25 Unwritten Rules of Management. For those of you who are unfamiliar with the list, it provides a set of potential pitfalls and common mistakes for new management.

I’ve read a lot about management – of both people and things. Anything from managing HR disputes to ITIL integration and management, the fundamental axioms of management strategy remain consistent: focus on pragmatism whilst maintaining your long term vision.

1. Learn to say, “I don’t know.” If used when appropriate, it will be often.

Upper management tend to be masters of their craft, having climbed the corporate ladder through a combination of technical prowess, charisma and blind luck. Confidence is a large part of being successful in a management role, indeed the ability to identify your strengths and build on them enables you to better yourself within the industry in which you are involved and differentiates you from those who may lack the talent or passion to succeed in a management role. The other side of the double edged confidence sword however, is that people tend to see those who are good at what they do as arrogant or unapproachable.

Having been operational for so long, new managers may find it difficult to step back from operational duties to give oversight to business process. As a manager, you need to trust your employees to be good at what they do, so you can focus on being good at what you do. Micromanagement, whilst effective in some scenarios, tends to negatively affect morale, especially when dealing with skilled workers.

If you notice your employees quipping about your technical skills, don’t become defensive – if you are doing so much operational work that they are able to successfully gauge your level of skill, then you’re too busy doing their job for them. Instead of being reactionary to their accusations, take a step back and identify the ways in which you can improve your approach. You spent many years developing your operational skills, so why is it so that when you’re in management, you don’t spend that time honing your management skills?

2. It is easier to get into something than it is to get out of it.

I have written about this previously in an article called “The Metaphorical Toffee Apple”, which I will post here again at some stage. In small business especially, it is very easy to make promises and deviate from core business in an effort to engage new clients. A perfect example of this is reactionary pricing.

Pricing is a misunderstood beast, especially in the service industry. The quality of your service is judged both by its own merits but also by its price. Price changes quite literally have the ability to change your target market, despite what your advertising intends – this has the potential to render tens of thousands of dollars in branding and brand saturation useless, as your target market makes assumptions about the service based on its cost point.

When a competitor introduces disruptive pricing, don’t be so quick to match or beat – your business model worked before their pricing structure existed, so without supporting anecdotal evidence to support otherwise, there is no reason that it shouldn’t work afterwards.

3. If you are not criticized, you may not be doing much.

You can’t please everyone. No matter how hard you try, you will always encounter people who disagree with your management style (or perhaps just plain don’t like you). This is human nature – learning to deal with criticism is an integral part of management.

When in a management position, you are constantly in the spotlight and you’ll find that your employees are less forgiving than they would be towards one of their coworkers.

It’s important to not let the fear of criticism restrict you from making the decisions that you need to make. Some decisions are just plain unpopular, but if they are in the best interests of the business, you will have the support that you require to follow them through.

You work to make money, not to make friends.

4. Look for what is missing. Many know how to improve what’s there, but few can see what isn’t there.

Business improvement is integral to success. Remaining stagnant within your industry is a sure fire way to drive your business into the ground – this is exemplified by businesses such as General Motors, who have failed to identify their shortcomings and improve their business.

Methodologies such as Lean Six Sigma provide a fantastic framework for encouraging all members of your business to identify non-performing business process and identifying gaps in business process, with the intent of increasing efficiency.

Be sure to get your employees involved in business improvement – despite the fact you may believe you have visibility of their day to day operations, your employees are in the best position to identify gaps in business process and are often the best people to provide suggestions and methods for bridging these gaps. Not only does this give your employees a sense of involvement, but it also relieves you of the pressure of business improvement.

5. Viewgraph rule: When something appears on a viewgraph (an overhead transparency), assume the world knows about it, and deal with it accordingly.

Visibility is the key to success. When you run your business transparently, it gives you and your coworkers/employees the ability to identify gaps, even between disparate business units and management tiers. When someone provides visibility of an issue, it becomes your responsibility to address this issue. This doesn’t necessarily mean that you need to be the person who fixes the problem, but you do need to manage the process behind its resolution.

Not dealing with visible issues generates significant frustration, as employees feel that their input is not valued – this also often leads to them addressing these issues with an upper management tier, fortifying your employees claims as to your incompetency. By being proactive, you’re not just helping improve the business, but you’re also ensuring that your own input is valued by developing a reputation for being proactive.

6. Work for a boss with whom you are comfortable telling it like it is. Remember that you can’t pick your relatives, but you can pick your boss.

As I touched on earlier, building positive relationships with your management is integral to your success within the organization. There are times, however, when your input is not valued by those people who seek it.

Whilst mediation can be effective, there are times when management may even proactively fight any input that you provide: it is important to identify when this is the case, as there is little point in continuing to fight a losing battle. There are many workplaces that actively seek those who add value to their business – apply for a job with them!

7. Constantly review developments to make sure that the actual benefits are what they are supposed to be. Avoid Newton’s Law.

Like dust and those people with poor fashion sense, nonsense attracts nonsense. Enough said.

8. However menial and trivial your early assignments may appear, give them your best efforts.

Your initial work are what your colleagues will judge you by – it provides a yardstick from which to measure your performance. Creating a good first impression is just as important when stepping into a new role as it is when joining an organization for the first time.

Ensure that you remain focused and positive, despite the nature of the work that is thrown at you – it’s easy to become disillusioned by the seeming lack of change when moving into a new role. Remember that, as much as you need to grow into the role, the role also needs to grow into you. You may have operational work that you need to follow up before you’re able to focus on the responsibilities of your new position – this is a blessing in disguise, as management will see you as being focused, proactive and effective within your new role, even though you are merely fulfilling your previous duties. With this mindset, you may find your approach is different.

9. Persistence or tenacity is the disposition to persevere in spite of difficulties, discouragement, or indifference. Don’t be known as a good starter but a poor finisher.

This is intrinsically linked to point two which we spoke about earlier. If you find yourself in a little deep, be prepared to see that through. Having a reputation for not finishing what you start is a sure fire way to ensure you never get to touch project work.

10. In completing a project, don’t wait for others; go after them, and make sure it gets done.

You’re the manager – your job is to manage. As mentioned before, when in management, operational duties become second to the management of the process which surrounds them. Ensure that the people who you rely on are supporting the decisions that you make and are understanding and performing the duties that you have delegated them.

The responsibility for non-performing employees rests not only on the employee, but also on your ability to motivate and guide them – do not be quick to write them off, but attempt to coach them. Retained knowledge is expensive to replace.

11. Confirm your instructions and the commitments of others in writing. Don’t assume it will get done!

As follow-on from the previous point, ensure that you have written correspondence between your employees. Documentation is king and as frustrating as a paper trail can be to follow, it ensures that both yourself and your performing employees are covered in the event that a particular team member does not fulfill their responsibilities.

12. Don’t be timid; speak up. Express yourself, and promote your ideas.

Although it is obvious, sometimes it needs to be reiterated: communication is the key to success. Without expressing your ideas, it is impossible for you to progress or provide input within your role.

An important part of communication is the method in which you deliver it – be sure to provide room for healthy discussion, especially if you’re doing a presentation. Ideas often spark other ideas and improvements and it is through these discussions that innovation occurs. Don’t be tempted to stifle that discussion from a fear of someone “stealing your thunder” – if you’ve taken the time to present your ideas formally, you will be recognized for the contribution that you have made.

13. Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get it done.

We have covered this already.

14. Strive for brevity and clarity in oral and written reports.

You’re no longer in high school or university – reports do not require a minimum word count and overuse of buzzwords just gives the impression that you’re covering for a lack of knowledge. Be concise, but not short or arrogant. Those people reading your report want to get the information they want then head to the water cooler to talk about what they did on the weekend. Chances are, if your report is lengthy and dull, nobody will read it anyway – so what was the point in writing it in the first place?

15. Be extremely careful of the accuracy of your statements.

People remember everything you say and promise. Check, double-check and get someone you trust to check all statements before release. People never remember the thousands of instances where you’ve provided them with factual, relevant evidence and will always pick you up for your mistakes. Whilst these mistakes are inevitable, ensure they are not recurring.

16. Don’t overlook the fact that you are working for a boss.

Your boss signs your timesheets. They’re usually a good person to keep happy. Remember that they have their own priorities and responsibilities and will often ask you to perform duties as a favor to them – if you feel that these need to be re-prioritized then speak up, but if your boss assures you of their priority then don’t argue – time spent doing so is time you could be spending just doing what they asked.

17. Promises, schedules, and estimates are important instruments in a well-ordered business.

Whilst this is very true, it is also very important to successfully manage expectations. Breaking promises, especially to public-facing customers, does not bide well for your companies image.

Estimates and schedules are powerful tools which allow for time management and prioritization. Ensure that these are progressive but realistic – both stagnation and over-aggressiveness are responsible for the murder of productivity.

Don’t be scared to make estimates or promises, but be prepared to back them up with a disclaimer. Never promise without a disclaimer, or your false expectations will come back to bite you.

18. Never direct a complaint to the top. A serious offense is to “cc” a person’s boss.

Remember, your boss signs your timesheets, recommends you for promotion and is in a pretty good place to make your life a living hell. If you have a problem with the way your boss approaches situations, express these concerns with them directly – this allows them visibility of the issue and gives them a chance to address it before it is escalated. If it does need to be escalated, ensure that your boss has visibility, otherwise him/her will feel threatened and chances are you’ll come off worse for the experience.

19. When dealing with outsiders, remember that you represent the company. Be careful of your commitments.

Remember to manage expectations, both internally and externally. Your companies PR department speaks on behalf of the company, not yourself.

20. Cultivate the habit of “boiling matters down” to the simplest terms. An elevator speech is the best way.

Lean, lean, lean. Over-complication leads to misunderstandings and frustration. People already have faith in your capabilities, so there’s no need to constantly prove yourself to them. By doing this, you will create a culture of minimalism and simplicity, which will allow you to better communicate during crisis situations.

21. Don’t get excited in engineering emergencies. Keep your feet on the ground.

Emergencies are exciting, motivating and are a fantastic way to prove your ability to think and act quickly – something that will place you in good esteem for a role in upper management. Don`t be quick to label an emergency; however, as engineering crisis scenarios will earn you a reputation for being impulsive and reactionary. Remain calm, assess the situation and spend a few minutes to plan before taking any action.

22. Cultivate the habit of making quick, clean-cut decisions.

Decision making is a major part of management – learn to make quick decisions without getting caught up in assessment. Whilst major decisions will require significant input and consideration, you don’t need to call a meeting to decide which brand of coffee everyone most likes. That’s what email was invented for.

23. When making decisions, the pros are much easier to deal with than the cons. Your boss wants to see the cons also.

This is another facet of communication – ensure that the business has visibility of all expected outcomes – this allows them to give better input and plan disaster avoidance/mitigation strategies that surround the decision.

24. Don’t ever lose your sense of humor.

Everyone screws up – that’s life. Remember to laugh at yourself when you do – people see it as a sign of character and also acknowledge that you’re human. Your employees will react much better to this than they will to someone who snaps at them.

25. Have fun at what you do. It will reflect in your work. No one likes a grump except another grump.

Management is rewarding – make sure that you enjoy what you do and that the enjoyment is reflected in the way that you treat the people that you work with. You rely on your team to get the job done – you can’t do it all, and if you could then they wouldn’t have hired the people that work underneath you. If you don’t enjoy it, identify the things that frustrate you and take positive steps to address them. There is no reason to not enjoy management or work in general, though you can’t expect these things to be handed to you on a platter.

You need to seek to improve not just business process, but the environment in which you work as well. This will allow you to improve morale and in turn increase productivity.

Hello, Internet

Filed under: Ramblings — Curtis Bayne @ 12:32 am

The internet is an amazing tool. Perhaps the only example of the successful implementation of ordered chaos, the internet allows people of all ages, races, religions and regions to share information, experiences, passions, frustrations and opinions.

The world is getting smaller by the day – not physically of course, but the sharing of information and the advent of tools such as blogging (including microblogging) enables people from disparent locations to connect and share experiences instantaneously. We are on the advent of a new world, where people are able to draw apon the experiences of their fellow men and women and apply their experiences to their daily lives.

The power of the internet is the fact that it gives context. The evolution of humanity has leveraged on the power of collaboration between like-minded individuals working toward a common goal. The axioms of our society that we take for granted, such as structured economy and trade to policial technique has been developed through the collaboration and sharing of information. Geographical seperation has been a barrier to the sharing of this information, which is exemplified by the social customs usually contained to geographical regions.

A perfect example of the way that information sharing changes society can be seen in the way the Roman Empire infucenced the regions in which it was involved – despite significant delays in the sharing of communiation, the ability for one unified society to share, communicate and collaborate allowed rapid development of many policial and economic techniques – many of which we still adopt today.

The internet has all but eliminated these geographical and political barriers, allowing lay people to develop their own opinions and ideas, disparent from the media provided supplied by the society in which they reside – the internet provides context context for life.

At Chombo, we are honored and excited to be a part of, what we believe, will be the tool which revolutionizes both society and humanity.

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