I Predicted Remote Working

Ed note: This was written in 2007 at timberry.bplans.com … looking back from 2024, it seems prophetic.

I admit it. I’m a hypocrite. I worry about global warming, and people, and how much humanity we waste every day in large cities all over the world with people stuck in traffic, moving their physical bodies from their homes to their offices, and back. I believe in the abstract in telecommuting as a good idea for not really saving the world, but delaying slightly its descent into chaos and destruction. So why am I a hypocrite? Because my own company discourages telecommuting.

I don’t think I’m atypical. There are a lot of times when running a business means compromising with some extremes.

In my defense, we’re in Eugene, Oregon, a college town of 150,000 where the commutes are way easier than in any freeway-clogged major urban area. Some of our people live outside the town 20 or 30 minutes away, but most of have fairly short drives, five or 10 minutes.

I paid my dues with commuting through heavy traffic (nine years in Mexico City, and 12 in Silicon Valley) so I’ve been sympathetic to the idea of telecommuting for years. For whatever reason my memory has stamped forever a time I was sitting in a taxi in Tokyo traffic, in the early 1990s, thinking about how much humanity was wasted every work day, in larger cities all over the world, sitting in traffic.

What brings this to mind today, with thanks to Steve King of Small Biz Labs for the tip, is  ABC News covering the virtual office and (implictly) telecommuting with a piece they called Any Time, Any Place Management. What’s interesting to me isn’t the story itself — hey, most of us have known about telecommuting for a long time now — but rather the recognition in the mainstream. ABC is noting that larger companies (they use IBM as an example) are opening up to this, bringing it into the mainstream.

Back then, stuck in traffic, maybe 15 years ago now, it seemed to me that this was an unrecognized major problem facing the urban portion of humanity, a problem that needs solving. At the time I was consulting extensively with Apple Japan, doing a lot of work from my office in Eugene OR, using email and telephone. I did have to go to Tokyo about one week a month, though, and I didn’t like it. I particularly didn’t like getting from one place to another in Tokyo when it involved any means of transportation other than walking or subway. And, for that matter, subway in non-rush hours.

I solved my commuting problem by moving to Eugene OR (subject of a recent post on this blog) but that didn’t make me forget how bad it was to lose a couple of hours a day to traffic. However, here comes the compromise. In this company we like to have our people on our team together during the day, in our one location, mostly a bunch of cubes. We like the instant communication involved, the immediate contact, the sense of team. Programmers talk to other programmers, and marketers talk to other marketers.

Years ago we tried working with programmers in Pakistan, and although the people were competent, the outsourcing didn’t work well for us because they were on the other side of the world, asleep while we were awake.

It does make a lot of sense for a lot of reasons. Think about trendy for a second, the problem of global warming for example, and then if some of the smaller things we do makes a difference, how about taking a significant percentage of people off of the road — less fuel, fewer emission, aside from the wear and tear to the human spirit. Sure, telecommuting doesn’t work for a lot of jobs like retail sales clerk or construction workers or traffic cops, but what percentage of the work force doesn’t really have to go from one place to another to work? I used to think about that when caught in traffic. There should be a campaign, a global building of awareness, I thought.

One roadblock was the idea of acceptance by employers. Does somebody working from home contribute as much to a company as the poor commuter who moves the physical body from home to office and back again every day? Now, today, this ABC news story is a reminder that mainstream employers are increasingly more likely to accept the idea, and, back in the real world of small business, I’m not. Not, at least, except for some special cases and special circumstances.

Like I said, I admit.

1992: Moving to Eugene

People ask why Palo Alto Software is based in Eugene, Oregon. I think business stories are a good way to communicate different elements of business, so I’ve decided to share that in detail. This is why we moved Palo Alto Software to Eugene. 

One day in the late 1980s my wife Vange asked me this question:

“Tim, we put up with all the down side of you insisting on doing your own business. Why don’t we get the upside too? Why don’t we just move to somewhere else, somewhere where we want to live?”

At the time Palo Alto Software was based in an office at 260 Sheridan, Palo Alto, CA. That’s a couple of blocks from California Avenue, towards the Fry’s store and the Fish Market. Home at the time was on Pitman Street, a couple of blocks from the public library.

It wasn’t just that one question that one day. We wanted to move. It was nothing against Palo Alto, which is an ideal location in many ways. Palo Alto is right in Silicon Valley, it contains Stanford University, it has beautiful neighborhoods, the second highest number of graduate degrees per capita in the U.S., the second highest average income in California, and we had a nice house.  We, however, wanted to move somewhere else that had less traffic and a different, if not higher, quality of life. And we wanted to reduce our fixed costs, because our variable income from consulting was driving us crazy. Our_house_in_eugene

Theoretically we chose Eugene after a rigorous analysis of university towns in the west, including Chico, Santa Cruz, and Irvine in California, Boulder in Colorado, Spokane and Walla Walla in Washington, and Corvallis and Eugene in Oregon. We looked at factors including pricing, neighborhoods, outdoor activities, quality-of-life indicators, pollution, nearby airports, and others. Eugene came out as the best bet.

In truth we chose Eugene because we had lived there before and we liked it. I did an MA in Journalism there (University of Oregon) after we were married and before we had kids. We’d been visiting off and on for vacations. We’d been happy there. It was a known quantity. Eugene

One thing that helped make a move possible was the lack of employees. We were a very small company surviving on my consulting income. I was the only full-time employee.

Although the company kept, and still has, its original name, it was a very different company from what it is now, with 70% market share in a product business and 40 employees. It was essentially a professional service business entirely dependent on my consulting, but one whose owner nonetheless stubbornly insisted on following a long-term plan to “sell boxes, not hours.” The vast majority of the revenue came from consulting with Apple Computer’s Apple Japan subsidiary, based in Tokyo. The software product was called Business Plan Toolkit, which was essentially a nice manual (if I do say so myself) on how to do a business plan along with templates for Mac or PC, Lotus 1-2-3 or Microsoft Excel. We advertised in the small ads in the back of computer magazines, and in some special promotions like in the box with Microsoft Excel. The software business lost money every year, but I supported it with consulting revenue.

Judy David was director of finance for Apple Japan. On one of my trips to Japan — I was going about one week a month, consulting in strategic planning — I had lunch with Judy and told her we were thinking about moving from Palo Alto to Eugene. Judy, one of the smartest and most competent people I’ve ever worked with, said the following:

“Tim, we don’t care where you get on the plane.”

She had a good point. Airfares, which the client paid, were about the same from Eugene to Tokyo as from San Francisco to Tokyo, so Judy’s comment eliminated the main business objection.

The actual moving was hard for lots of reasons not directly related to business: finding a house, dealing with teenage children, finding movers, things like that. On the business side, I contacted some local agencies responsible for fostering economic growth, from which I got good recommendations for banks, bookkeepers, and insurance agents.

There were also some legal implications. With the help of a local attorney we created an Oregon corporation named Palo Alto Software, merged the California corporation named Palo Alto Software with it, and eventually, two years later, dissolved the California corporation.

Of course we didn’t change the name, despite the name tie-in to Palo Alto the city. By the time we moved to Eugene we had already existed for five years, we had products in the market, advertising, and branding established. Palo Alto Software was always a good name for the company, because it evokes both Stanford University and Silicon Valley.

So Palo Alto Software moved to Eugene, Oregon, in 1992.


(Reposted from timberry.bplans.com)

1981: My Worst Business Plan Engagement

It’s not for nothing that I always say a business plan has to be your plan and nobody else’s. It can’t be your consultant’s plan. You must know it backwards and forwards and inside out, or it won’t work.

I learned this the hard way, sitting in venture capital offices at 300 Sand Hill Drive, the business plan consultant on the tail end of the new venture team. I had done the plan, built the financial model, written the text, shepherded the document through the painful coil binding and the whole thing, but I wasn’t part of the team. I didn’t want to be. I was still at grad school, getting my MBA, and my part of this venture was writing the plan, period. I needed the money to pay tuition.

In meeting after meeting, at key moments, the VCs would ask critical questions and all heads turned to me. I would answer.  I knew the plan, backwards, forwards, and inside out; but I was the only one who did. It was my plan. 

It was a good founders team. It included three Silicon Valley veterans, a marketing guy, a technical guy, and a deal maker guy.  They had about 40 years of computer company experience between them. They had a good idea and, much more important, a market window, differentiation, and experience to make it happen.

The three of them never really got into the plan. It was a hurdle they paid me to jump for them. Every meeting generated new changes, so I would go back to the basement computer at the business school, and re-run the financial model. The team of three didn’t include a financial person to learn and manage the model, so it was always me, tweaking. Which meant I was the only one who knew the plan. I’d re-run my financial model, edit the text, and publish a new version of the plan. They read paragraphs here and there, glanced at the numbers, but they stayed with the strategy, and left the details to me.

Details that, in fact, they didn’t read. They trusted my faithful recording of their ideas, and my financial modeling. They assumed, I guessed at the time, that these were functions that could always be delegated to somebody with special skills, while they generated high-level strategy.

They did not get financed. I was disappointed. When you develop the plan and revise it dozens of times and support it and defend it through the long series of meetings with supposedly interested investors, you want it to take flight.

And time after time, when questions came, I was the only one with answers. It was my plan, not their plan.

All these years later, memory of that disappointment is still fresh. I did learn my lesson, though, and I changed my strategy as a business plan consultant. From then on I made sure that any plan I worked on belonged — and I’m talking about intellectual ownership here, conceptual ownership — to the real plan owners, not the consultant.

If you have the luxury of a budget to pay an outside expert, consultant, or business plan writer, then maybe you should use them. This might be a good use of division of labor, and perhaps you can lever off somebody else’s experience and expertise. However, that will not work for you unless you always remember that it has to be your plan, not the consultant’s plan. Know everything in it, backwards and forwards, and inside out.


(Reposted from timberry.bplans.com.)

1988-89 Macworld & The Fishbowl Story

The first time I took our company to exhibit in a trade show we brought along a big plastic fish bowl with a sign that said: “Free Drawing! Drop your business card in the bowl for a free copy of Business Plan Pro®.”

Three days later we had four fishbowls full of business cards. Business cards, business cards, and not a lead among them. Fortunately we typed in only a few hundred names and sampled the marketing results before we spent the resources to input thousands. The list was useless. None of the people sampled wanted our product.

The following year we took the same product to the same trade show and the same fish bowl too. That second year, however, we put a sign by the bowl that said: “For more information about Business Plan Pro, drop your business card here.”

After that trade show we ended up with a few hundred good leads. We input the data and followed up and made some sales.

I’ve used this story often in teaching and seminars and managing my own company because to me it illustrates the importance of target marketing and focus. In this example, quality of leads is much more important than quantity. Thousands of bad leads are worth nothing, while a few hundred good leads have real value.

This is about selling business plan software. Not everybody wants business planning, and those who don’t aren’t good prospects. It’s hard, or expensive, or both to sift through a lot of leads to find those who have real interest.

A few years later the fishbowl story helped our marketing team recognize that we didn’t want mysterious banner ads or free prize offers that generated lots of clicks and few prospects. We wanted to attract the few interested people, not huge numbers of people who couldn’t care less.

What distinguishes the good leads from the bad leads is their interest. People walking the aisles at a trade show drop their business cards in any fish bowl offering something free, whether they are interested or not in what that exhibitor is selling. We didn’t want a lot of cards. We wanted cards from people interested in our specific product, business planning software, and not cards from anybody (via lucica at dress head).  The marketing follow-up was expensive , whether it was inputting data from business cards or mailing information, and the marketing yield was good with well-targeted prospects and bad with generalized prospects.

Some businesses depend more on targeting than others. Think about that for your business. Do you sell to everybody? Or do you sell to a specialized group? What kind of fishbowl do you want?

For the record, since I like the idea of true stories, this actually happened in 1988 and 1989 at the MacWorld expos in San Francisco, and the product was Business Plan Toolkit®, ancestor of Business Plan Pro®.


Reprinted from timberry.bplans.com A Fish Bowl, a Free Prize, a Lesson.

Revising Mexico Decades Later

I just finished a week off with some of my family on the beach in Mexico, specifically at Villas del Sol in Zihuatenejo.

Mexico is my country in law. My wife of 37 years is Mexican, born and raised in Mexico City. We lived in Mexico City from 1971 to 1979. Three of our five kids were born there. and again for several months in 1981.

I was once a “Mexico expert.” I was with UPI in Mexico City for three years, and with McGraw-Hill World News in Mexico City for six years. I accurately predicted the 1976 currency devaluation, in Business Week, months before it happened. That was the first peso devaluation in 28 years. I covered the Mexico oil discoveries of the middle 1970s. I was a consultant with McKinsey Management Consulting in Mexico City in 1981. During the 1980s I consulted with Apple on it’s ill-fated Apple de Mexico venture. I still speak fluent Spanish. I can still give a two-day business plan seminar in Spanish, which I’ve done twice in the last three years.

Expertise, however, doesn’t last. The Mexico I knew no longer exists.

Loyalty, on the other hand, does last. Mexico was very good to me as a young man just starting a career and a family. I was writing for UPI at the age of 23, and for Business Week when I was 26.  Strangers were generally easy to deal with, accepting of a young American. And for that I feel like I owe Mexico the respect of reminding you, gentle reader, what it used to be.

When I first lived in Mexico City in 1971 it was a city full of trees and music. I drove my car from the Hotel de Mexico area to the downtown newspaper district every day in about 15 minutes, and, miracle of miracles, parked it on the street in front of the office. Today the drive would take 45 minutes and parking on the street would be impossible. We used to go to the Satelite area for a movie on a Friday night, a 10-minute drive on the Periferico; the same drive today would take an hour or two each day.

An interesting fact: a few years ago my wife’s nephew, who lives in Mexico City, swore he dropped his girlfriend because she lived in one of the northern city neighborhoods and he lived in the south of the city. Just as well, I suppose, because now he’s happily married to somebody else, and they have a daughter.

And perhaps the most disappointing change is the safety. My in-laws worry about me when I visit: “Tim, it’s not like it used to be, it’s not safe anymore. Be very careful.” I’m not supposed to get into the wrong taxis.  I’m not supposed to walk around the streets. When we lived there, Mexico was a very safe city, much more so than any US city. It was almost like Tokyo. We could walk in the evening anywhere, and feel safe. No longer.

Ah, but then there is also the bright side of it, the fact that natural beauty like the bays of Zihuatenejo doesn’t fade nearly as fast as expertise. It was a village back then, it’s a city now, and I hate cities; but it’s still beautiful because it sits on the warm Pacific ocean surrounded by hills. Villages grow into towns,  but some manage to keep some of their charm. Aside from the beaches you have some beautiful colonial towns and cities in the interior, like San Miguel de Allende, and Guanajuato, both of which I’ve visited in this millennium and are still beautiful.

Mexico City is one of the three largest cities in the world. It’s Anthropological Museum is amazing. It’s full of great restaurants. People there like foreigners. But like all large cities, the traffic is miserable, and the smog depressing. Living there is very hard, but it’s worth a visit. Stay in the main places and you’ll really enjoy it.

And Mexico still loves its tourists, treats them well, and respects them, more so than most of the countries I’ve visited lately.

My ending thought, another amazing fact: when I first lived in Mexico City there was no one-word Spanish equivalent for the word “smog.”

Reflections on Family in Business

Does the world disrespect family business? Is there an unpleasant assumption of nepotism?

When I started Palo Alto Software, back in the middle 1980s, it was about me and business planning and a few good clients and a stubborn insistence on eventually selling boxes instead of hours. When it started as Infoplan in 1983 my oldest child was 11 years old.

They didn’t teach family business at Stanford while I was getting my MBA degree. It was all consulting and analysis and high-end buzzwords. But they didn’t teach entrepreneurship either, just a single course in “small business management,” taught by Steve Brandt.

So years pass, those children grow up, and I discover family business in the best possible way.  I’m proud. They are now educated, successful grownups, with degrees from Notre Dame, Princeton, NYU, Whitman, and one still not finished, a sophomore at Stanford.

Two weeks ago I named my daughter Sabrina Parsons CEO and her husband Noah Parsons COO.

Nepotism? Let’s see … they are both Princeton grads, they built a London company distributing our software as an independent venture, they’ve managed our marketing as share grew from 50 to 70% and sales by 30%. They were employees #1 and #2 at epinions.com, which eventually cashed in for tens of millions. Noah was employee 101 at Yahoo! and Sabrina managed online marketing for Commtouch.

So now I have what seems like an ideal situation and an excellent example of the upside of family business. I can step down from president-CEO and refocus my job as president on writing, teaching, and living business planning content, the parts of the business I’ve always loved. And at the same time I have a strong management team, experienced, dedicated, and completely trusted.

I can’t imagine a better scenario.