I started my own business because I was the only boss who would have me.
The problem was that I kept getting fired. A lot. I was good at turning operations around and finding new and creative ways to do things. But once the operation was safely on track I lost interest. Bosses didn't like that. So, one after another, they fired me.
1982 was the year that I got fired for the last time. I figured that I could take what I knew and start a business that mixed consulting, writing and speaking in a way that made money. Years later my then-young daughter summed it up this way: "My daddy talks to people and they give him money."
I wanted to be what I now call an Independent Information Entrepreneur (IIE). Here's how that kind of business got started before technology changed things.
First there was the Start-Up Phase. The challenges were to get enough work to stay alive and to lay the groundwork for a profitable practice. Most IIEs avoided hiring staff for as long as possible in this stage so they could save money. They could usually take about half the gross of the business for themselves and still fund growth.
That worked fine up until around $50,000 a year in gross revenue. I'm using current dollars here. At that revenue level there just wasn't enough time in the day for the entrepreneur to do the billable work and still get the marketing and all the admin stuff done. To keep going and growing most entrepreneurs would hire a secretary or a bookkeeper. They might get some marketing help.
With those additions the business could move up to around $100,000 in gross revenue and meet the challenges of the Stabilization Phase. The biggest challenges in that phase were to replace recurring crises with systems and uncertain revenue with a solid client base. Takeout would be about a third of the gross.
Most new Information Entrepreneurs would breathe a big sigh of relief when things stabilized. It wouldn't last long, though. If you were in that position, here's what you'd suddenly realize.
You'd realize that you've got to keep showing up in order to make money. Get sick and you take a pay cut. There are no paid vacations. Get disabled and you're out of work.
Not only that, your overall revenue is limited by the fee you can charge and the number of days you can work. Before the technology revolution most Information Entrepreneurs couldn't get beyond about $150,000 without adding another revenue source.
For most of them that turned out to be information products, usually books or audio cassette tapes. If an Information Entrepreneur could develop products like that and sell them there was no upper limit on income. Even better, an Information Entrepreneur with product to sell had a source of revenue that didn't depend on the Entrepreneur's physical presence.
The basic cycle still works that way but things were a lot easier for me than if I had started my business ten years earlier. That's because I got started at the beginning of the PC revolution.
The Osborne I had been introduced just a year earlier, in 1981. It was the first computer that you could buy with a credit card and also get both spreadsheet and word processing software. The IBM PC followed in August of 1982. Suddenly a single person business could have computer power.
In the twenty years since then technology has transformed the life and business of the Information Entrepreneur. The computer started the ball of change rolling.
I could do my own letters with word processing software. That meant that I could do without regular secretarial help. I could keep some of my financial records on the spreadsheet program where the software did totals for me. And, as a bonus, both word processing software and the spreadsheet program let me do more work for clients more quickly.
As the years went by all kinds of other digital tools were developed that made it easier to run my business. They either made me less dependent on specialized staff or helped me manage some of my business functions more effectively, or helped me extend my markets.
About this time two fellows named Scott Cook and Tom Proulx were working on software that would give reasonably intelligent and diligent folks the ability to manage their finances effectively. Their first product, Quicken, hit the stores in 1984.
Eventually I settled on one of their products, Quickbooks, to handle my bookkeeping. Other folks prefer Peachtree or some other package. These packages made it easy to do the routine accounting work that often had to be sent out before.
Then TurboTax, by Chipsoft came on the market. It wasn't much in the beginning, but it got better quickly. In 1993 that company was acquired by Intuit, the company that makes Quicken and Quickbooks.
Soon I could take my basic accounting records and either drop them into my tax software or send them to my accountant where they would be dropped into the accountant's tax software. No re-keying, and no re-keying expense. And I didn't have to pay accountant fees for work I could do myself.
Accounting and tax software lifted a lot of the drudgery of running a business off my shoulders. It took another set of innovations to help me generate more business.
The first contact management software I ever saw was Telemagic. It debuted in 1985 and it did for lots of basic marketing tasks what accounting software had done for bookkeeping tasks. Other contact management products followed.
I chose ACT for contact management because it was, and still is, the market leader. That popularity means that lots of other programs are designed to work with it. Today the current version of the software lets me share data with other programs and with my Palm Pilot. I can do merges for both print and email marketing letters.
I had email before lots of folks, since I was on Compuserve way back in the early 80s. It was neat but it didn't help much with the business until lots of other folks got email, too.
Once that happened, I could send work back and forth to clients and contractors. I could become part of virtual teams with members spread out across the globe. Email was just the start of the impact of the Net on my business.
On October 17, 1994 a company called Spry introduced a product called Internet-in-a-Box and made the World Wide Web accessible to the masses, including me. That opened up a whole new world.
The Web is great for research. An Information Entrepreneur like me can check out prospects, gather information on issues and stay up to date on news that matters.
The Web lets us strut our stuff. If you sell something invisible, like information or advice, the best way to let people know what you do is to show off. Web sites let us do that. Prospects can visit at their leisure, then contact us when they're ready. We can even sell books and other information products on the Web.
Cell phones and laptops let us work from just about anywhere. We don't have to be tied down to a single "office" location and clients and prospects can reach us easily no matter where we choose to be.
All of this technology has changed the development curve for an Independent Information Entrepreneur who's starting out today. With all these tools, it's now possible to extend the time when you can continue to do most of the work yourself, without adding staff, up to about $75,000. That's fifty percent more than twenty years ago.
With the ability to organize your work and extend your contacts, it's possible to reach Stabilization sooner. That still leaves the challenge of developing information products for long-term security.
In today's world Independent Information Entrepreneurs still produce books and audio tapes. Technology has made that easier and improved our margins. Years ago you either had to invest a lot in equipment, or spend money with the folks who had in order to produce your products. No more.
Today digital editing can be done on a computer using software that you can download from the Web. If you want to buy the mixing and editing equipment, it costs a fraction of what it cost back in the eighties. The change is dramatic for books, too.
Twenty years ago if you wanted to produce your own books you were looking at an investment in the tens of thousands of dollars and a print run of five thousand or so. That led to lots of would-be authors turning up broke with a garage full of books.
Today you can produce a short run of twenty-five books at a reasonable price and use them to test the marketability of the product. If they don't sell, you're not out much. If they do sell, you can ramp up production.
And you aren't limited to books and tapes anymore. Today you can produce video products, burn information, sound, and video onto CDs, link them to Web sites and sell the package. The possibilities are exploding.
Here's the exciting part. We're only entering the second fifty years of the Digital Revolution and, if history is any guide, the changes will be even more dramatic in the years ahead.
We can expect everything to get easier. The software we use to run our business operations and produce our products will get more powerful and we'll be able to do more, and more sophisticated, things. Other offerings let us automate our digital sales and follow-up.
We can expect the market to mature so that more folks buy digital products when and as they need them. Expect to see more information offerings and more people buying them. A lot of that buying will happen on the Web and a lot of the products will be delivered there, too.
I see the information product market splitting into three areas. There will be the products that folks read all the way through, like books that tell stories. They'll still look like they do now, but they'll be produced less expensively and eventually, on demand.
There will be true on-demand products. These are things like training materials, job aids, devotionals and reference materials. They'll be available on the Web for people to use when they need them. They may be sold by subscription or on an individual basis.
There will be short information products available for download from the Web at a nominal price. Some of these will be software. Others will be simple information products like checklists or tip sheets. Still others will be quick guides that will run to several printed pages but which will be downloaded in digital form and then printed by the purchaser.
Twenty years ago, when I was starting out, it was a great time to be an Information Entrepreneur. Today it's easier, and more profitable, and it's getting even better.
