The Three Laws of Business

No freebies. No backsies. GTFO.

Econ 101: The Long Fail

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Fundamental to web economics is the Pareto distribution. It usually applied in serious papers or serious hype justifying business plans with no potential customers. There is an illustration here, worth at least thirty words. 3laws’ first image tag. Welcome to Web 1.0.

By coincidence, this shape models the available funding for a typical failing company over time. The green zone represents 80% of their total funds, and somewhere in this zone the main product was expected to be creating that elusive thing known as “income”.

In The Guinness Book; For The Shit I Took

As usual, I’m deep in fail territory, right up the end of the funding Long Tail. Management has decided the project will succeed at all costs, yet they don’t have the balls to keep on spending until the project is done. As the amount of money dries up, they spend less and we start to head deeper and deeper into the yellow zone.

The product was rushed off to the client as soon as a build could be coerced into working. The client is unhappy and lawyering up. Programmers are fixing bugs and salesmen are sucking cocks around the clock.

The company should have filed for bankruptcy last year, but are managing to scrape together enough funds to stay afloat. It’s a hint that cash flow is getting borderline when they need ‘a couple more days’ to find $12k for an invoice when their staffing bill is around a half-million a month. Time to start billing in advance. First law.

Take Your Broke Ass Home

They are cutting costs by random firings and writing stern emails about printer usage. This will be kept up until there is a full complement of sales, HR, and management supporting a single immigrant programmer.

If you find yourself in the long tail then recognize that you are in “totally fucked” territory. The only thing that is keeping your project going is hope and the only thing that will make it succeed is a goddamn miracle. Hope has no place in business. Know when to cut your losses and GTFO. Third law.

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Written by 3laws

April 17, 2009 at 5:37 am

Posted in Uncategorized

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