# Thread: What makes successful entrepreneur?

1. It's Becoming Clear That No One Actually Read Facebook's IPO Prospectus Or Mark Zuckerberg's Letter To Shareholders

As Facebook's stock continues to collapse, the volume of whining is increasing.

Four months ago, you will recall, Facebook was viewed as "the next Google." Now, with no major change in the fundamentals, it's viewed as an over-hyped disaster. Meanwhile, there is ever-louder grumbling that 26-year-old Facebook CEO Mark Zuckerberg is in over his head and should be relieved of command.

As I listen to all this whining, I have a simple question:

The answer, I can only assume, is "no."

Because if anyone had read the Facebook IPO prospectus, they would have learned, among other things, the following:

Facebook's growth rate was decelerating rapidly.
Facebook's user-base was rapidly transitioning to mobile devices, which produce much less revenue.
Facebook's operating profit margin was already an astounding 50%, which suggested it had nowhere to go but down.
Facebook's CEO had a nearly unprecedented amount of control over the company.
Facebook's CEO had set up this astounding level of control intentionally. Mark Zuckerberg knew all about how impatient public-market shareholders are. And he set up the whole company so he would never have to pay attention to their whining.
In the 9 months following the IPO, insiders would be free to sell more than 2 billion shares of Facebook that they had been holding for years.
Facebook was going public at an astoundingly high price for a company with these characteristics—about 60-times the following year's projected earnings, in a market in which other hot tech companies like Apple and Google were trading at less than 15-times.

Even more importantly, if anyone had read the IPO prospectus, they also would have learned the following, all of which was expressed in a letter written directly to prospective shareholders by CEO Mark Zuckerberg:

Facebook's CEO is an extremely patient man who does not flinch under criticism.
Facebook will never care as much about clients and shareholders as it does about its service and users.

Facebook shareholders may be annoyed by those facts, especially now that the value of their stakes are getting demolished.

But they can't say that they weren't warned.

And they also can't say that the stock has been unduly punished:

At $18, using the correct share count (2.7 billion), Facebook is still valued at almost$50 billion. And it's still trading at ~28-times next year's projected earnings of $0.65, an estimate that looks just as likely to be too high as it is to be too low. Meanwhile, Apple is still trading at less than 15-times projected earnings. So you can't argue that Facebook is now "too cheap." Lastly, if Facebook shareholders really think Facebook's CEO Mark Zuckerberg is going to cave to their whining and step down now, all of four months after he told them that he only cared about the long term (which, again, is measured in decades, not months), they don't know Mark Zuckerberg. Again, Mark Zuckerberg set up the entire structure of the company so he wouldn't be forced to make dumb short-term decisions by whining public-market shareholders. And he TOLD them that he wasn't going to make those decisions. They just didn't listen. In the interests of "better late than never," I've attached an annotated version of Mark Zuckerberg's letter below. If you've already read it, here's what else you should know about Facebook's stock—especially Facebook employees. ... Read more the rest of the article at: http://www.businessinsider.com/faceb...#ixzz25ZlwhqYL 2. I never consider buying facebook share. Nothing agaisnt facebook, but because I can not figure out how facebook make money. Is it from games and ads? I don't really see any ads on my FB page and I don't play FB games. And I access my Fb less and less. 3. Originally Posted by Missnaughty I never consider buying facebook share. Nothing agaisnt facebook, but because I can not figure out how facebook make money. Is it from games and ads? I don't really see any ads on my FB page and I don't play FB games. And I access my Fb less and less. It seem you follow the same rules than me about share: Never invest in a sector of business that you know nothing about. Acessing FB less and less is what it seem to happen to many people! The basic of share: A company need money for make investment. They sold share on the market (1 000 000 x 5$ = 5 000 000$) They use the money for invest in their business and create revenue. The business is good. Most of the value give to a share is very emotional and stand on none tangible fact. When the business got a "bad feeling" his stock get down. The company decide to get out of the share by buying at the present market price (1 000 000 x 2$ = 2 000 000$) The financial people will told you the company have lost of his value, from 5 now value only 2. The real question is... where are now the 3 000 000$ "lost"??? Yop! They are in the pocket of the company.
A company have nothing to lose by solding share... if they go bankrupt after that, it's because it's what they would have done anyway.
The share buyer have everything to lose on this!!!

And no! it's not what always happen!
But it's what they hope it will happen!

4. Don't forget about debt ratio. Price to earning ratio. and many other indicators. Especially for long term investment.

The Peter Principle Revisited: A Computational Study

In the late sixties the Canadian psychologist Laurence J. Peter advanced an apparently paradoxical principle, named since then after him, which can be summarized as follows: {\it 'Every new member in a hierarchical organization climbs the hierarchy until he/she reaches his/her level of maximum incompetence'}. Despite its apparent unreasonableness, such a principle would realistically act in any organization where the mechanism of promotion rewards the best members and where the mechanism at their new level in the hierarchical structure does not depend on the competence they had at the previous level, usually because the tasks of the levels are very different to each other. Here we show, by means of agent based simulations, that if the latter two features actually hold in a given model of an organization with a hierarchical structure, then not only is the Peter principle unavoidable, but also it yields in turn a significant reduction of the global efficiency of the organization. Within a game theory-like approach, we explore different promotion strategies and we find, counterintuitively, that in order to avoid such an effect the best ways for improving the efficiency of a given organization are either to promote each time an agent at random or to promote randomly the best and the worst members in terms of competence.

The book write by Peter a humorous treatise... meaning not to take it as an absolute true that happen every time, but a something that hold lot of true about company hierarchization.

The Peter Principle is a belief that in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently.
[...]
The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their "level of incompetence"), and there they remain, being unable to earn further promotions. Peter's Corollary states that "[i]n time, every post tends to be occupied by an employee who is incompetent to carry out its duties"[2] and adds that "work is accomplished by those employees who have not yet reached their level of incompetence."
[...]

Solution
There are methods organizations can use to mitigate the risk associated with the Peter Principle. However, the implementation of such methods must be applied at all levels to be effective.
One way that organizations can avoid this effect is by having an "up or out" policy that requires termination of an employee who fails to attain a promotion after a certain amount of time.
[...]

Another method is to refrain from promoting a worker until they show the skills and work habits needed to succeed at the next higher job. Thus, a worker is not promoted to managing others if they do not already display management abilities.

- The first corollary is that employees who are dedicated to their current jobs should not be promoted for their efforts (as in The Dilbert Principle), and instead should be rewarded with, say, a pay raise, while remaining in their current position.
- The second corollary is that employees might be promoted only after being sufficiently trained to the new position. This places the burden of discovering individuals with poor managerial capabilities before (as opposed to after) they are promoted.
[...]

In a similar vein, some real-life organizations recognize that technical people may be very valuable for their skills but poor managers, and so provide parallel career paths allowing a good technical person to acquire pay and status reserved for management in most organizations
[...]

Alessandro Pluchino, Andrea Rapisarda and Cesare Garofalo used an agent-based modelling approach to simulate the promotion of employees and tested alternative strategies. Although counter-intuitive, they found that the best way to improve efficiency in an enterprise is to promote people randomly, or to shortlist the best and the worst performer in a given group, from which the person to be promoted is then selected randomly.[3] This work won the 2010 Ig Nobel Prize in management science.[5]

source: http://en.wikipedia.org/wiki/Peter_Principle

6. They Work Long Hours, but What About Results?
source: http://www.nytimes.com/2012/10/07/bu...&smid=li-share

IT’S 5 p.m. at the office. Working fast, you’ve finished your tasks for the day and want to go home. But none of your colleagues have left yet, so you stay another hour or two, surfing the Web and reading your e-mails again, so you don’t come off as a slacker.

It’s an unfortunate reality that efficiency often goes unrewarded in the workplace. I had that feeling a lot when I was a partner in a Washington law firm. Because of my expertise, I could often answer a client’s questions quickly, saving both of us time. But because my firm billed by the hour, as most law firms do, my efficiency worked against me.

From the law firm’s perspective, billing by the hour has a certain appeal: it shifts risk from the firm to the client in case the work takes longer than expected. But from a client’s perspective, it doesn’t work so well. It gives lawyers an incentive to overstaff and to overresearch cases. And for me, hourly billing was a raw deal. I ran the risk of being underpaid because I answered questions too quickly and billed a smaller number of hours.

Firms that bill by the hour are not alone in emphasizing hours over results. For a study published most recently in 2010, three researchers, led by Kimberly D. Elsbach, a professor at the University of California, Davis, interviewed 39 corporate managers about their perceptions of their employees. The managers viewed employees who were seen at the office during business hours as highly “dependable” and “reliable.” Employees who came in over the weekend or stayed late in the evening were seen as “committed” and “dedicated” to their work.

One manager said: “So this one guy, he’s in the room at every meeting. Lots of times he doesn’t say anything, but he’s there on time and people notice that. He definitely is seen as a hard-working and dependable guy.” Another said: “Working on the weekends makes a very good impression. It sends a signal that you’re contributing to your team and that you’re putting in that extra commitment to get the work done.”
The reactions of these managers are understandable remnants of the industrial age, harking back to the standardized nature of work on an assembly line. But a measurement system based on hours makes no sense for knowledge workers. Their contribution should be measured by the value they create through applying their ideas and skills.

By applying an industrial-age mind-set to 21st-century professionals, many organizations are undermining incentives for workers to be efficient. If employees need to stay late in order to curry favor with the boss, what motivation do they have to get work done during normal business hours? After all, they can put in the requisite “face time” whether they are surfing the Internet or analyzing customer data. It’s no surprise, then, that so many professionals find it easy to procrastinate and hard to stay on a task.
There is an obvious solution here: Instead of counting the hours you work, judge your success by the results you produce. Did you clear a backlog of customer orders? Did you come up with a new idea to solve a tricky problem? Did you write a first draft of an article that is due next week? Clearly, these accomplishments — not the hours that you log — are what ultimately drive your organization’s success.

Many of your results-oriented strategies will be specific to your job and your company, but here are a few general ways that professionals across all industries can improve their efficiency.

LIMIT MEETINGS Internal meetings can be a huge waste of time. A short meeting can be useful for discussing a controversial issue, but long meetings — beyond 60 to 90 minutes — are usually unproductive. Leaders often spend too much time reciting introductory material, and participants eventually stop paying attention.

Try very hard to avoid meetings that you suspect will be long and unproductive. When possible, politely decline meeting invitations from your peers by pointing to your impending deadlines. If that’s not an option, make clear that you can stay for only the first 60 minutes, and will then have to deal with more pressing obligations. And be hesitant to call meetings yourself; you can deal with most issues through e-mail or a quick phone call.

If you’re involved in calling or planning a necessary meeting, make sure it’s productive. Create an agenda that organizes the meeting and keeps it moving briskly. Distribute that agenda, along with any advance materials, at least a day in advance. Appoint a “devil’s advocate” for every meeting, whose job is to make sure that the potential negatives are discussed. At the end of the meeting, make sure that everyone agrees on the next steps, with each step assigned to one participant and with a specific deadline.

REDUCE READING You don’t need to read the full text of everything you come across in the course of your work, even if it comes directly from the boss. Though reading a long article from cover to cover might make you feel productive, it might not be the best use of your time. Most likely, only a very small part of that article is vital to your work. Maybe you need to remember the big ideas, not the intricate details. Or maybe you need only to find one or two examples that illustrate a particular larger point. Once you start reading a text, make it a point to search for what’s important, while skipping sections that are less relevant.

Of course, some materials call for you to become totally immersed in the details. If you are reading an article directly related to the company’s newest blockbuster product, for instance, it probably makes sense to go over every word. But for less important tasks, this level of detail is often unnecessary. If you’re not careful, these tasks can take over your entire schedule.

And avoid rereading your e-mails. I am a great believer in the OHIO principle: Only handle it once. When you read an e-mail, decide whether or not to reply to it, and, if you need to reply, do so right then and there. I have found that about 80 percent of all e-mails, whether internal or external, do not require a response. Don’t let these extraneous communications clog your in-box and waste your time.

7. WRITE FASTER Even if you need to create A-plus work for a project, it needn’t be perfect right off the bat. When some people sit down to write a long memo, they insist on perfecting each sentence before moving to the next one. They want to complete all the stages of the writing process at the same time — a most difficult task. In my experience, this leads to very slow writing.

A better approach separates the main steps in the writing process. First, compose an outline for what you are going to say, and in what order. Then write a rough draft, knowing it will be highly imperfect. Then go back over your work and revise as needed. This is the time to perfect the phrasing of those sentences.
In general, don’t waste your time creating A-plus work when B-plus is good enough. Use the extra time to create A-plus work where it matters most.

AS you try these and other results-oriented strategies, you may well find yourself spending less time at the office — and that can make some bosses nervous. The traditional emphasis on face time, after all, is easy for managers: it takes much less effort to count hours than it does to measure results. That’s why you may need to forge a new relationship with your boss.

You must earn your boss’s trust that you can accomplish your work in less time. In part, you can do this by thinking about your organization and watching your boss. Ask yourself: What are the most important goals of your unit? What sort of pressure is your boss under — to expand globally, to introduce new products, to cut costs, or something else? How might the boss’s personality and management style shape these considerations?

But it’s not enough to think and observe. You need to communicate — often. Every week, write down a list of your assigned tasks — short-term assignments and long-term goals — and rank them by importance, from your perspective. Then ask your boss to weigh in on the list.

You and your boss should come to a consensus about the metrics for every project. If your boss doesn’t establish any, suggest them yourself. Metrics can include both qualitative and quantitative results. They provide objective measures for judging final results — and move your boss away from the crutch of face time. And the process of establishing these metrics can help you and your boss clarify how best to accomplish a project.

Once the boss is confident that you know what to do and how to do it, show that you can consistently create high-quality results on high-priority projects. There’s no particular secret here: you need to do your best to achieve the established goals. And remember that most projects run into potholes or even roadblocks on the way. Be quick to report problems to the boss and to suggest possible solutions, including a revision the project metrics themselves.

I KNOW that a change in focus from hours to results may be a challenge in some organizations. But your boss is likely to be receptive if you politely raise the question of productivity and show you’re willing to be held accountable for results, rather than hours worked. You may also be able to do more work from home, if that’s what you prefer.
Even in a culture oriented toward results, however, you sometimes will need to be physically present in the office to do your work. And some jobs absolutely depend on it. In almost all workplaces, colleagues need to get together to brainstorm ideas, solve tough problems or build communal bonds. But there’s no reason for these interactions to take up large amounts of time.

By emphasizing results rather than hours, I’m able to get home at 7 p.m. for dinner with my family nearly every night — except when there are true emergencies. This has greatly enhanced my family life, and has given me a secondary benefit: a fruitful mental break. I’ve solved some of the thorniest problems in my home office at 10 p.m. — after a refreshing few hours chatting with my wife and children.

Focusing on results rather than hours will help you accomplish more at work and leave more time for the rest of your life. And don’t be afraid to talk to your boss about these issues. To paraphrase the management guru Peter Drucker, although you don’t have to like your boss, you have to manage him or her so you can have a successful career.

8. Originally Posted by PhilippeD
Hi Judylin

From my own experience, the most trouble I have find in Indonesian company: communication.
I think it’s linked with the general cultural corruption of Indonesian. All information is hided, everyone work in closed circle and no one communicate with anyone. That make door wide open for corruption!!!

In the process for a work opportunity (that finally didn’t happen) I had a meeting with all top management of a company. It’s one of the biggest company in Kalimantan and are quoted in stock market. The question from the big boss and owner: how do we make control of what happen in the company? It wasn’t a question for testing me, they were really unable to do it (and got serious problem of cashflow) and searching solution.
Philippe, very true about communication. Sometimes Indonesians beat around the bush too much. When one speak out his/her mind, she/he are sometimes considered as not giving face (especially to superiors) .

I am very curious what do auditors do to the listed company u mentioned above. Seriously, shouldnt they highlight weakness and suggest solutions upon conducting audit?

9. Originally Posted by audrienne
Philippe, very true about communication. Sometimes Indonesians beat around the bush too much. When one speak out his/her mind, she/he are sometimes considered as not giving face (especially to superiors) .

I am very curious what do auditors do to the listed company u mentioned above. Seriously, shouldnt they highlight weakness and suggest solutions upon conducting audit?
Around one year ago, the company was on the list of those who participate in a corruption that was about "saving" on tax.
I'm not in the detail about how is the company now, i know they lost some of there contract.

It's a big company with many sub-branch in diverse activity... but only one unify accounting for everything, they have trouble to figure out where their money goes!
Their mining project goes very bad and was sucking all the cashflow of the company...

From the start the company must not have been allowed to be listed due to is totally irrelevant structure.
If it was allowed to be listed in this state... I don't see why it must be "punished" for that later.

I'm not really worry for the company, they will find a way out, whatever is the way...

10. A manager, like any other worker need tool for make his work. Many time the tool will be more mental than physical. Like any other tool they have their limit, range of application and method of use.

Trough the year the tool I have use the most and I consider being the most universal to all manager is the "goal fixer" tool S.M.A.R.T. acronym. It's a wonderful tool I use as reminder when I give an order to a subordinate or fix a goal to reach to a team.

The S.M.A.R.T. acronym commonly stand for

S - Specific
M - Measureable
A - Attainable
R - Relevant
T - Timely

Personally I don't like this choose of word for the acronym and it's not the one I use. It seem I'm not the only one as it have a long list of alternative word (see: http://en.wikipedia.org/wiki/SMART_criteria).
On my sense being "specific" is in big part include in the Measureable and Timely, making it redundant. Same for the Attainable & Relevant, despite having different meaning, I don't find them bringing enough value for hold 2 distinct position in this "reminder" tool.
Depending of you area of business or kind of work you may want use other word at your taste.

This is the one I use:

S - Significant
M - Measureable
A - Attainable
R - Resource-bound
T - Time-bound

Significant: Does your order/goal are relevant for your team, project, company, etc? Does your order/goal are in line with the company business plan and vision?

Measureable: Depending of your kind of business, the measurement or the performance will go far beyond the amount produce per hour or the physical dimension of the product. Sometime it's quite tricky to find the way to describe a product that is not physical (like a service) on a way to be able to measure it. The big matter here is about to not be subjective but objective in the way of describing the goal to reach.
Note: Make sure to have a measurement before and after. Many time it will be hard to prove the improvement we have realize as nobody have a clear view of how thing where before. As same I will take a picture before and after of something I will ask to be repair, as same I will ask a company to sign a report describing the management process they ask me to improve.

Attainable: This one is a matter to make a check up on your sanity. Does what you ask is possible? Problem about being attainable or not will rarely rise in a goal of a big importance (despite it can really be!). But rather in smaller order or goal where sometime the pressure and stress make us lose a grasp of reality. It can lead to overload a resource by multiple order that will made him unable to realize your request, or simply ask none-sense thing. It's a good thing to make regular check up of how much realistic we are.

Resource-bound: The first question asked is: do I have choose the right person for giving the order or goal to reach? Followed by, does this person I choose have all the required resource for follow my order or reach the goal?

Time-bound: Matter of the order or goal don't get lost in time (never started or never finished), fixing the time is a necessity. I will habitually (try hard) to focus about time on the matter of low importance as it's often the one that will get "lost in time" due to their level of importance.

The good thing about this tool is it can be use as much by the one giving the order/goal than by the one receiving it. It's a good tool for take a look at what is it asked you to do.
The time pass for answer to each of this question must be relative to the importance of the matter. Personally I will rarely pass through the whole S.M.A.R.T. for every order or goal I give. But have the custom to use it daily help to have it becoming more as a reflex.

Page 12 of 12 First ... 23456789101112