Just got off a project where everything was specified by the customer as one liner requirements. System shall do this. System shall do that. Such old school gathering of requirements shows the lack of understanding what a customer really needs and what adds business value.

Here how software development falls apart right from the beginning. First, there is no realistic way to track metrics. Second, the business analyst have to string together what “they” think are the processes. Many requirements are likely never defined but should be or implied. No way to track that either.

Here is an example building a house to illustrate a point:

House shall have 3 bedrooms
House shall have 2 bathrooms
House shall have a kitchen
House shall have 4 electrical outlets in each room
House shall have a family room

Ok, the the analyst spends time putting together the specs and then reviews it with the customer.

Customer response:

Why am I walking through a bedroom to go from the kitchen to the family room?
Where is the shower? I said we need 2 bathrooms! (yeah but you said bathrooms, I didn’t know if you meant half-baths or full-baths)
Why are all the electrical plugs on the same wall?

This goes back and forth and then you get to the front of the house and all the subjective stuff comes into play such as what kind of door, windows, colors and it goes on and on.

So what is wrong with that? It is terribly inefficient. Once more it is a guessing game for the analysts to interpret what the customer wanted and sometimes the customer needs to be saved from themselves. Customers tend to ask for the moon when a 1 acre plot will do.

Also on the metric front, it adds no value and has no meaning. I have 200 one-liner requirements and they get broken down into 40 use cases. Some of those requirements are shared across multiple use cases. So what is the point is tracking how many requirements are complete? You could to have the PM map it all out and spend the better half of the week trying to build a burn down chart for the last week? Who cares about last week! What about this week? If I have one use case that has a single requirement that takes 30 hours to implement and another use case with 10 requirements that takes 30 hours to complete are you going to build a project plan based on the velocity of 11 requirements a week? What happens if I schedule 11 of the 1 requirement use case’s that take 30 hours to complete each? Worthless metric.

So what is the solution? Well I believe small incremental builds that continually add business value is the way to go. Agile development has been working well in that regard for years but it is not is not without issues. Stories written by product owners are either well done or not much better then the one-liner system shall requirements.

I will be discussing the requirements gathering topic in follow up articles. So what works in your shop?

We bought a home in Fuquay Varina that is 20 years old and we knew it was going to take some work to get it where we want it to be. One of the items on the list was the deck that was build to wrap around the above ground pool. My estimation was the addition to the deck was a do-it-yourself job by the previous owner. The wood was splintering, the rails were rickety and very much out of code. The rail posts were only 4×4’s and not very steady. The kids were constantly getting splinters in the feet and because it got so much sun during the day, nobody would go out there until late afternoon or evening. The deck also got very hot as it was in constant sun. We would not go out there until early evening.

We had Rick Ransom, that built and remodeled homes around Raleigh, Garner, Apex, Cary, Holly Springs and Clayton area, put together together a plan to take care of our problem areas. We didn’t like the fact that there was not an edge piece around the pool which made quite uncomfortable to sit on the edge and dip your toes in the water. We also wanted to cut down the amount of sunlight on the back deck. We also would like storage so pool cleaning equipment was not laying all over the place.

Rick did an incredible job. We have bench seats around the pool that doubles as storage for the pool equipment. Rick designed a shadow box over the main part of the deck with an outdoor ceiling fan to keep the air moving. Lattice work on the side also help cut down the sunlight but still lets the air move around. The edge board bent around the pool looks great and keeps the board edges from poking and scraping as you sit on the edge of the pool. The posts are strong with chippendale rails that look great! Rick did an incredible job and I highly recommend him!

If you have a remodeling or new addition you will not go wrong with Rick Ransom. He use to build houses until the bubble popped. So no project too big or small. Give him a call at 919-369-6370 to get quotes on your project if you are in Raleigh area.

You can see more images (before and after) at http://www.facebook.com/album.php?aid=184985&id=607962134&l=bc70f64903

Before

After

This weekend a local wine store opened in town and my wife and I decided to spend time on main street and check it out.   It was a nice store in a historic building with a good selection of wine.

I notice a buddy of mine who is an area wine rep was helping the new store owner by doing some tastings in the back of the store.   Great guy and very knowledgable.   Never got to talk to him as he was helping another couple.

We browsed the store for probably 15 minutes to see if he would free up.  As we perused the wine there were some unique selections that we studied.   We might have even bought a few of these unique bottles but nobody helped us.   I am assuming the other two other folks were the owner and employee or partner.  Not once did they greet us, welcome us to the shop, or asked if we had questions.  Nor did they seem busy as they just hung out at the cash register talking to each other.

Now this might be a bit obvious but if a person comes in your shop they are likely there to buy.   If you do not help said customer out or out right ignore your potential customers, how do you plan to sell the wine?   If I wanted to be ignored and not talk about wine I could have gone to the local super market.

When your a specialty shop your advantage of the mass market such as a super market is expertise in the product.   People go to these specialty stores to learn more about the product and enjoy the experience.

As a business owner you should always ask yourself:

• Are you ignoring your customers?  What can I do to increase interaction?
• What is your competitive difference the market place?
• How can you exploit that to your advantage?

I was reading Whitney Hoffman’s article on the Difference Between Listening and Hearing and it got me to thinking about all the conversations I have had last week, last year and all my life where the conversation was frustrated by neither one of us listening.   I would say X and they would hear Y and then I react to Y and they start talking about Z.   Very frustrating.

I have played a lot of poker and chess in my lifetime.   I like to think several moves ahead and reading people is important to know how they react to such moves.   My father is a classic conversationalist.   He can steer a conversation and take you down a path without you knowing it.   As a teenager it was a bit unnerving because the topics would change to a subject I would rather not talk about and find myself in the middle of the conversation without knowing how I got there.

Conversations come in many forms today with social media sites such as Twitter and Facebook.   Filtering information has become specialized features of these sites and value-add software such as TweetDeck.    Tools make online conversations much easier and person to person it has become harder.    Especially when some folks solely rely on their email accounts.  You can tell a person something but if it isn’t in a email form then the conversation didn’t exist for them.      And what about a more flamboyant conversation online?   Well, Google Wave is about to wash upon us like a tsunami.  I think this problem is just going to get worse where personal communication becomes harder and harder.  Where the computer and email has just about put the death knell on writing letters to a friend and cursive writing, we now have instant conversations via email, Twitter and Facebook.

But what about in person?   I am in the middle of reading    Just Listen by Mark Goulston M.D. (no I do not get any referral fees from Amazon, I live in North Carolina) and he talks about the difficult conversations were people are not listening.    I find it an excellent book for anyone that finds themselves in difficult non-listening conversations be it your teenagers or your boss.   I won’t go through the techniques here since I am only half-way through the book and Mark does need to make a living so buy his book!

That brings me to Whitney’s article of a video of Malcolm Gladwell talking about plagiarism and I had to laugh.   About a month ago I found a presentation with Seth Godin at a change conference where Seth talked got an advance book of The Tipping Point by Gladwell and it inspired him to write a book on the subject and give it away for free.   Of course he sent Gladwell a copy of the book and asked permission to publish it since it was on the same subject Gladwell was writing about.  Gladwell not only approved but wrote the forward to the book!  I recommend you check out Seth’s presentation. It is a great talk on is approach to publishing and marketing that is quite unique and I think can be applied to many businesses and not just publishing.

It is a tough proposition.  I helped build the website GameVee that was dubbed a YouTube for gamers.  The site was geared for gamers.   The best feature was the ability to take XBox Halo 3 film from your file share and convert it to video and put it on the web.   This was a great feature because the user didn’t need a capture card nor did they need to understand the multitude of video formats and bitrates.

GameVee tried to build a business based on advertising.   Like many other “Web 2.0″ sites this is a difficult way to survive as a company.   With advertising you need volume in traffic.   Volume in traffic increases the bandwidth costs.   It is a catch-22.   The advertising revenue generated from the increase traffic never would cover the bandwidth costs.   There were other opportunities to make money for that business but never pursued such as charging a subscription for converting Halo 3 films.   GameVee was eventually sold to GotGame and the best feature of GameVee was shutdown. Indeed it looks like they plan to shutdown GameVee altogether according to one of their administrators.  No doubt the bandwidth costs are the main reason.

Other companies are subsidising the bandwidth costs.  YouTube has been regarded as a money loser for Google since purchased.   If it wasn’t subsidised by Googles ad revenues from the search engine, it too would likely go the way of the doo-doo.

Solutions to this problem are being tackled like the company I now work for Digitalsmiths.  They provide video indexing and search services that will help generate targeted advertisements.  Many of the clients are showing videos of older TV shows.   These shows have a better chance with advertising.  Long running videos can reasonably place advertisements in the middle of the show just like you are watching TV.   More targeted advertising and ad presentations increases the revenue of a video asset.   A better proprosition then short clips like those found on YouTube and GameVee.   These sites would see a rebellion if the ad was shown in the middle of the video.  Instead they rely on ad placements on the page.   That is a very limiting option as there are only a few highly visible locations on the page for an advertisement.

With internet advertisements predicted to retreat in 2009, making money on video will be even tougher.   Time Warner Cable raised their fees recently and Viacom decided to raise their fees as well.  Time Warner Cable rejected the new contract and threatened to take their channels off the line up.  What a giant failure on Time Warner Cable.  They have zero leverage in that negotiation.  They even suggested that fans of Comedy Central could just watch their favorite shows online!   What a great suggestion.  Indeed why bother to deal with a greedy company with terrible customer service.   For years people have been asking for a-la-cart subscriptions.   With the internet that is almost a reality.

Premium movie channels on cable cater to movie buffs.   The failing of these channels is they hammer the same movie over and over.   Time Warner responded with their digital service On-Demand.  Nice service.  You can select a movie when it is convienent and watch it instantly.   Well that service is limited to the 30-50 movies they offer.  Netflix has responded with 10,000 movies that can be watched on demand for their $8.99 a month service for renting DVDs.   Brilliant!  Can you imagine if NetFlix teamed up with Viacom to provide the same service for Viacom shows?   How about working a deal with the NFL and MLB?   These franchises have realized that they can create a premium service because folks will pay for it.   Imagine Netflix creating the dream of consumers, a-la-cart programming service that allows you to watch shows on demand with content you want to see.

Indeed, I did sign up for Netflix after a 8 year lapse because of the “Watch Instantly” feature.   Add in a few a-la-cart options and I will flush TWC completely.   Does that mean it is the end of cable and satellite?  Doubtful, now that most of Americans have gone out to buy their digital TVs.   High Def will ensure cable and satellite will survive.   I’m just one consumer that doesn’t care if I can count the wiskers on actor’s face.

First thing you do is write a business plan.   Learn more. Then the second thing you do is write a business plan.  Yes it is painful but you have to write a business plan.   You cannot get a loan, venture capital financing or know where you are going or if you are getting there without a plan.

Starting a business takes a lot of work.   You need to understand what you are providing, how you going to measure you success, what is the financial return, what is the break-even point.   The business plan provides a lot of these answers.  If you don’t like the answers, then you probably ought to stop and come up with some other idea.

Ernest Young had an outline that I like to use when I evaluate ideas and potential businesses.   There is a PDF located here.

The first thing to tackle is the financials.  Lets face it, the purpose of the business is make money and you need to know how long it will take to break even.   If you cannot live on water and bread until that point then maybe you should find investors, but I get ahead of myself.

Financials need to be there and they need to be realistic.  You can look up online for key ratios for the industry.  This is important to double check that your numbers are real world.   If profit margins are high or cost of doing business is too low, it is likely you didn’t do your homework or you are not being realistic in your financial statements.

Products.  What is your product?  What business are you in?  More importantly what business are you not in?   Figure out who your customers are and how are they are grouped.  Each group may have a different need for your product.   Each group will likely have a different marketing message.   Which group are you going after?  Don’t say all of them, that is not realistic.

Who is your competition?  Why are you different?  Why would someone switch from your competitor and use you?   You may want to read Purple Cow by Seth Godin.   It is good book for differentiating yourself from everyone else.

Still want to go into business?  Still viable?  Great!  How is your company going to be run?  What is the operational plan?   How are you going to run the business?  Who is doing what?   What are they responsible for?  I recommend reading E-Myth Revisited by Michael Gerber.  Excellent book to help you define your organization so you can work on the business instead working in the business.

Need help with the business plan?   There are plenty of professional services likely in your area that can help.  The Small Business Association can point you to SCORE that helps entrepreneurs put a plan together.

So you still like the plan but you need financing?  Well the Small Business Association is a good place to start.   There is also likely an “Angel” investment group that meets monthly that listen to people with business plans to attract early investors.   Understand this group of early investors wants to make 5 – 10X their money.   If your plan realistically is not going to generate that type of return, then don’t waste your time.   Same goes with Venture Capitalists.   They finance 1 in 1000 buiness plans and they are looking of a high rate of return on their money.

Other options is go the slow and steady route if that is possible.   Instead of starting out with a large organization or retail space or server farm, can you do it cheap?   Start small and validate the market?  Can you do it without quitting your day job?  This is usually the best and safest way to enter a market. Some of the biggest companies started small and cheap. Home Depot is a perfect example.   Know why the sign is orange?   Because they couldn’t afford a lighted sign so they made one out of plywood and used florescent orange paint to attract attention.

A business plan is a living document.  During initial development of plan you may rewrite or refine the plan a dozen times.   Once the business has started you will likely need to update or change the plan often.  Any changes in business plan must be communicated to the employees so that everyone in the company is moving in the same direction.  It does no good to make a plan and not communicate it to the employees.  Nothing will happen in that scenario.  Management by wishful thinking is not a viable business planning.

One thing I cannot stress enough is please do not go into business without a business plan.  Too many good companies fell apart because they failed to plan who they are and where they are going.   Too many company have failed because nobody knew how much money was needed to get to the break even point.   These questions cannot be answerd without a business plan.

Took the kids to see Maw-Maw (grandmom) in rural North Carolina.   Driving there I was thinking of my own childhood on Signal Mountain, Tennesee.   We use to go up to the corner gas station and Junior was there with his overalls and we would pick up a case of soda in bottles and return the empty case of bottles.   Now I doubt anyone would argue that ice cold soda from a bottle is one of the best experiences.

Now that the big cola providers have all given up glass except around Christmas time for Coke, I was thinking it would be great to return back to those grand days.   RC Cola is a Carolina product as much as moonshine and tobacco.   They have always fought for shelf space at the grocery store even when they are cheaper better tasting product IMHO.

Maybe Royal Crown should pull a purple cow right out of Seth Godin’s playbook.   If they can setup distribution with local businesses in rural North Carolina and start packaging their product with glass they may see growth against the big companies.  It would be some time before they hit the cities with this strategy because the cities and suburbs are full of transitional people from other lands that just wouldn’t understand and honestly wouldn’t slow down to notice.   But in rural North Carolina it could make a resurgance.  Who knows, maybe we will be seeing more RC Colas, Moonpies and checkers.

So what do you think the goal of these websites are: Flickr, Facebook, MySpace, Pownce, YouTube, etc?   Wouldn’t you love to read the original business plan vision, mission and strategy statments?   I bet it is full of B.S. and what they stated in there business plans was very specific and they became something else.    Facebook prolly had something like, “To recreate the high school/college yearbook online”.    Total crap, they became a lot more then that.

Why are some of these sites so successful and others not so successful?   Look at Twitter ridiculous growth curve.   Do you think they had some vision of becoming a tool for other companies/applications backbone?

I have been reading one my favorite authors, Seth Godin’s latest book.   And it hit me that all these websites basically should have the same vision and mission statement.   Why some are successfull and others are not is really a case of how close their statements are to the following or just dumb luck.

Vision – Create online community

Mission – To enable users to tell there story, connect with others, and promote discussion

Now you look at that and say, how do you get from that to Facebook?   Well, that is a long story but you can look at your Facebook account and the applications you use and look at the ones you passed on.   My bet is the ones you passed on add no value to your interaction with others or are just stupid marketing applications.

Speaking of marketing, look how bad companies are implementing it on social networks.   I get at least an invite a day to some twitter user that is following 55,000 users.   Like anyone is going to follow them and listen to their marketing BS.   Definately old school and pretty much completely worthless today.   I’m afaid Seth Godin is correct, old school marketing is dead.   Move on and use the social web as it is intended.   To tell a story, interact with others and garner discussion.

I was having a discussion over the Friend Feed Social-Media room if people thought there were any parallels to the Dot-Com (Bomb) days with Social Web companies.   Some great points were made that there is a much larger audience now versus then and one comment that software platforms are more accommodating and the barrier to market is a lot less.   Both excellent points and the last one dovetailed into one of my other questions stuck in my head, “Why would anyone develop on the Google Application Engine knowing that they could change pricing within 90 days?”  Why?  Low cost entry and instant scalability.

Now developing on GAE does not mean success for a business.  Let us suppose the favorite application architecture discussion going these days: Twitter.   Twitter has had quite a few outages in the last month.  Clearly as a result of hockey-stick growth they are enjoying.   So the argument and test applications on GAE have been developed, why don’t they just use GAE?   Well there is one problem: Money.  Twitter is a great application with no revenue stream.   So if they developed on GAE and they hit the hockey stick, how are they going to pay for all the bandwidth, CPU and disk?   The infrastructure is no longer a fixed cost but a variable one if you want to scale that number of users.   I assume Google will place some sort of limitations on billing and application usage.   But the problem all comes down to money.   Let’s assume  Google does limit resources your application can consume.  If you app is Twitter, then do you turn off the application when those limits are reached for the month?  Surely that will not work for the business, however you can not spend more then your cash reserves allow you to spend!

Once again money becomes the single problem to crack.  More importantly, cash flow.   If the business model does not a have a revenue model built into the business plan, your dead already.   If the business model is spend money and be popular and sell, you best go play poker in Vegas.   The business has to have a revenue model that works.   If you develop on GAE, the barrier to entry is small but you have to have a scalable revenue model such that you know the cost of each user addition.   So when your business does hit the hockey curve, you can increase the resources available without worries of running out of cash.

Writing a business plan is key to the success of the business, the underlying idea for the business does not ensure success.   In that regard, there are a lot of social web companies that look very similar to the dot-com days with VC money pouring in and very little revenue coming out.  Revenue must be around the corner according to this article on Information Week

I use to be in the coffee business and as a retailer I was one of the lucky few that got to go visit coffee farms in Nicaragua. Traveling with my supplier Counter Culture Coffee, we went to San Ramon, Nicaragua to visit with the organic co-op of small family-owned coffee farms.

The trip was a real eye-opener. We traveled up the Pan American highway from Managua and then took another road to city of Matagalpa. The roads had such huge pot holes that the driver swirved constantly from one side to the other side of the road. Children would shovel dirt into the pot holes and hold out their hands to see if anyone would appreciate the work they have done.

Matagalpa is a city with virtually no tourism and most of the stores there provide basic provisions and tools. Banks were heavily guarded and you were not allowed to wear a hat or use a cell phone inside the bank. Bags, backpacks and such were left with the guard out front.

From Matagalpa we traveled to San Ramon on a road that made the last road look like a well maintained super highway. San Ramon is a small town with a proud people. Originally a mining town it now local hub for coffee farmers. Sunday is the big day and after church, everyone enjoys specially made tamales wrapped in a banana leaf that takes 6-hours to cook in mud and brick ovens. There is a local legend that a golden snake guards the mine hidden under the church.

From San Ramon we traveled on a dirt road to Yucul. Yucul is at best a small store, school and a few homes made of wood with corrugated roofing and dirt floors. We then turn to go up higher in the mountain to where we were staying at Finca Esperanza Verde. The road looked more like a dried up stoney creek bed then a road. On the way up the mountain, coffee-pickers were working their way down the road from a day’s work. At one point about a mile from the Esperanza we got stuck and had to push the vehicle out of the mud. We blew a tire and waited for the driver to fix the flat. I’m amazed the vehicle didn’t shake apart from the trip!

Finca Esperanza Verde is a non-profit organic coffee farm that is part of the Durham, NC sister communities. A beautiful place with no power, no cell phone, no telephone, nothing except the beautiful valley below and the abundant crystal sharp stars at night.

We visited many of the small family farms the next day. Many of these farms are only several acres in size and are primarily coffee farms with some cocoa and in one case passion fruit. The passion fruit was planted when Ocean Spray was thinking about opening a plant down in San Ramon. So the farmers eagerly planted passion fruit. Ocean Spray never opened the plant and many of the farmers replaced their passion fruit crop with beans or wheat.

The primary source of income for these farmers is the coffee. One of the first farmers we visited took 10% of his earnings the previous year to build a wet mill on the farm. The wet mill allows the farmer to separate good coffee cherries from tainted coffee cherries and to process the cherries to get the coffee beans. It is amazing that this farmer, who annually receives about $6,000 a year from coffee, spends $600 to build a mill that will reduce the amount of coffee produced. The reason of course is higher grade coffee commands a higher price. The dedication to organic, sustainability and quality-driven farming practices was impressive.

Many of the farmers were very dedicated to organic coffee for many reasons. The number one reason was health. One farmer said he switched after he fell ill handling fertilizers and pesticides. With no real health care, he was sick for over a month. Most of these families live in wood shacks that has divided room and dirt floors. One farmer invited us in his home to talk about coffee. He fed us bowls of freshly cut papaya. The other room was for sleeping. On the divided wall were photos, posters, and cut-outs. One photo was of his wedding picture. One poster was of Pedro Pablo that was running for regional political office. Other posters were religious and one cut out just choked me up. Here were on a remote mountain, covered in mud, eating papaya in a 2-room house on a dirt floor and there was cut-out of magazine ad on the wall. The photo was a hotel room with perfectly made bed with lamps and framed pictures on a manicured white carpet. It upsetting to me because it was very unlikely he would ever have the chance to enjoy something we in U.S. take for granted.

The farmers would separate the coffee beans from the cherries and then place the beans on drying screens where they would separate flawed beans from the good beans. They would dry the beans for the next week down to about 50% moisture content. The beans would then be sacked and many of the farmers would carry the 100 lb sacks down the mountain to Yucul to be transported to Sol Cafe dry mill processor.

Sol Cafe is one of the mills managed by parent Cecocafen. The beans enter the mill and are either handled by the organic receiver or non-organic receiver. The beans are weighed, sampled for quality, checked for moisture content and tagged with the farmers name. The organic beans are spread out on a special concrete patio for drying. The try to dry to beans down to 12-14% moisture content. The non-organic beans are dried on plastic sheets in the large field owned by the mill. There is one worker that watches the weather for rain. If a rain cloud (almost daily) starts to move in the area, he rings a loud bell and the workers quickly sweep the organic coffee in a pile and cover each pile with tarp. Each farmer’s crop is kept separate from other crops.

The coffee is cupped for quality by the mill and final processing of the coffee for shipping sorts the coffee for size, density and flaws are removed by room full of women sitting shoulder to shoulder while the coffee whizzes by on a conveyor belt.

We had an opportunity to meed the co-op and uca. The Uca is a kind of a meta-group that provides money lending, and technical resources to many co-ops. Cecocafen markets the coffee and writes the contracts and collects the money. The money is then sent to the Uca and then the co-ops and eventually the farmers. If the contract is written with Trans Fair USA then the coffee can get that neat little “Fair Trade Certified” sticker on the bag. Fair trade prices in early 2007 were $1.21 for non-organic and $1.41 for organic coffee. When we met with the co-op it was clear that the 20-cent difference was not enough premium for organic coffee. Many farmers cannot produce enough compost to fertilize their crop and have to buy organic fertilizer. Organic fertilizer costs a lot more then non-organic. We agreed to pay more then the contracted price with bonuses for high scoring coffee.

So now the rub. One year later we find that many of the farmers never got paid for 2007. Was the coffee “Fair Trade Certified”? Yep. It is upsetting to me that these farmers put a lot of effort and somewhere the money did not make it. Communication in Nicaragua is almost always word of mouth and there was some discussion that the Uca decided to payoff farmer loans rather then pay the farmers. With all the middle-men between the Fair Trade contract and the farmer, something is wrong. Counter Culture Coffee is now working on an agreement to buy the coffee direct from the farmers and finding a new dry mill processor the farmers can process their coffee. I believe you will see something of “Direct Trade” brand of coffee similar to what Intelligensia Coffee Roasters has been doing. Geoff Watts sent a long email on the subject to blogger GreenLaGirl.com