After I got my Masters in Computer Science and Optimization from USC,  I worked for banks for a while as a quant (people who do quantitative or mathematical stuff such as build complex models to evaluate financial securities, risk and reward).

Contrary to what most people would tell you about working for a bank, I found the work very interesting—not surprising, given my math background.

But much as much as I enjoyed my work, I was bitten by the entrepreneurial bug and wanted to do something original.

I’m an engineer at heart and I like inventing things that makes life better or improve what people are already doing.

Innovation seems to happen overwhelmingly in small to medium companies and then big companies usually buy the promising smaller ones.

Doing my own thing would also gave me the ability to try out new things at an amazing pace that makes the process of discovery a lot faster.

Initially I had the bright idea of trying to beat the banks at what they do best: price securities.

I invented a way of making models that could learn more from purchase data about pricing than conventional models do and put those models to work trying to outguess Wall Street computers.

Eventually, I realized that even though my algorithms were smart, the networks that were affordable to me were too slow to use this information for the strategy I developed.

Even though I could predict prices, I couldn’t get ahead of computers that were closer to the exchange to make the profitable trades.

I had to make a pivot or bet even bigger and buy access to the necessary networks.

I paused to think for a while and it occurred to me that the world is full of things that need to be priced.

So, why stick to the business of securities where so many quants and fast computers were concentrated in solving a problem with a lot of history?

Why not solve a Main Street problem?

I began looking for a niche where there was a significant problem that I could solve.

About that time I heard a story on the NPR money podcast.

Two sets of people were asked to guess the weight of a cow shown in a picture.
They first asked a bunch of experts what the weight might be and each gave a different answer.
They also gathered answers from a crowd of non-experts on a website.

The median value in the crowd of non-experts was much closer to the true weight of the cow than the group of experts!

That led me to think about how the wisdom of crowds could be used to help small companies make better decisions.

Of course, I wanted to monetize the information in the buying decisions that people make.

How about learning the perfect offer to make to shoppers at an online store?

 I’d recently built complex pricing models to value financial securities, so I knew I could do this.

I quickly noticed that small businesses were leaving a lot of profit on the table. They were essentially using rules-of-thumb, instead of measuring price sensitivity and making optimal offers for peak profit just like the airlines, Airbnb and Amazon are already doing.

How much of an advantage can optimization bring?

For example, the average retail store runs with a 5% net margin.
What  if the store could raise the sale price (after any discounts) of the average item by 1% without affecting demand?

That would raise their margin a staggering 20%!
And that is what happens with just a 1% change.

Imagine what can happen with a larger price change.

In our experiments with stores on Shopify, we noticed that they were so far off the optimal price that they were making less than 70% of what they could be making if they could tune into the crowd.

That is beyond a big deal!

So I began working on an app with the vision of using optimization to create better offer management strategies.

Over the last year I created the company, Quant Price. You can try our first app for free on Shopify.

Join me tomorrow for a closer look at what Quant Price does.

Way back in 2008 I offered free coaching help to my  readers.

I did it because I like hearing about the challenges bosses and workers are facing and I can often help them craft solutions.

Hearing from the people actually fighting the battles allows me to keep on learning — even when the subject is painful.

I said then that it was a standing invitation, which it still is, but I doubt that anyone has seen that post in years.

That’s why I’m making the offer again.

I hope you take me up on it, because, as I said then, the worst thing that can happen is that I can’t help, but you can still vent.

You can reach me at miki@rampupsolutions or feel free to call 360.335.8054.

I answer all calls or return them within 24 hours if I’m unavailable. (FYI, I have rotten hearing, so please slow down and enunciate — diction is no longer in fashion — and keep in mind that a hearing impairment does not affect intelligence or creative thinking.)

One other thought. This is not a ploy or gimmick to get new clients — in case that crossed your mind.

The start of every year is a time of resolutions, which I never believed in; resolutions waver, while goals flourish — not the same thing at all.

With the goal of helping you improve whatever results you seek in 2016, I suggest you relocate.

Choosing to move from the State of Denial to almost any other State will yield amazing results and unexpected benefits.

Of course, the greatest challenge is forcing yourself to leave a place that is fully in your control, completely customizable and personally satisfying.

The State of Denial offers great weather and no storms. It’s one of the only places where wishing for something different actually alters your reality.

The problem is that the State has a tiny population; one person, to be exact, with little chance of growing, as well as a limited range of vision, so it can be a very lonely place.

Worse, some people live in multiple States of Denial simultaneously and trying to move from all of them at the same time can lead to high stress and even depression.

Beyond that, most Denial States are normally at war with other Denial States and constant war is not only exhausting, but also precludes moving forward on other projects.

The secret of relocating is to first define that particular State’s boundaries.

Once you are sure of what you want to leave, then you need to define where you want to go.

You may find that reaching your ideal State is better done in smaller hops, as opposed to one great leap.

The key is that only you can define your current State’s perimeter or the boundaries of where you are headed.

Flickr image credit:  Tambako The Jaguar 

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

The effort to flatten management has been going on for awhile culminating in the idea of totally eliminating it and culminating in holacracy . I’m not impressed. Read other Golden Oldies here

How flat should an organization be?

How well do “self-starters” manage themselves?

Crucial questions for startups and small businesses, since how they are addressed can make or break the company.

Often the most important hires made when a company wants to grow are in sales.

Founders and owners often have technical, marketing or business backgrounds and many have a tendency to shrug when it comes to sales.

They see hiring salespeople as no big deal—there is an assumption that as long as they have a good track record in their previous sales position and understand the new product they can manage themselves.

If this sounds off base to you, you’re right, it’s not that simple. To use a real-life example, I had a client who thought that way.

The CEO hired “Jack” (before my time), a salesman with a fantastic record selling a parallel product to the same market.

The CEO personally taught Jack the product line and explained what the company was working to accomplish and then pretty much gave him free reign.

In the year Jack was with them he sold only two accounts, spent a good deal of his time on marketing and managed one large client; commissions totaled only $15K.

When he left he went to work in a field completely unrelated to anything he’d done before and in a market about which he knew nothing. In his first year at the new company he earned over 125K in commissions.

The difference was management.

Based on his track record both the CEO and Jack assumed that he could manage himself.

However, Jack didn’t have, and didn’t create for himself, the structure, accountability, etc., necessary to be successful.

During his exit interview he admitted that although he had no knowledge or training in marketing, he spent substantially more time than he should have because it was new and exciting.

After the CEO and I had fully analyzed what happened he concluded that the failure was 80-20, with the 80% his responsibility.

Hind sight is 20/20 and my client believes that if he had taken the time to do what was needed, instead of expecting Jack to completely manage himself, that he would still be with the company and doing a spectacular job.

The important lesson here is that “self-starter” does not mean “self-managed.” Even the best will need direction, structure, and accountability in order to perform brilliantly.

I’ve read multiple articles on holacracy, including Tony Hsieh actions at Zappos, but I believe that most people enjoy working for good managers and that they excel more and grow faster.

Of course, the operative word is “good”.

Image credit: iamwahid

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

On one of the last days of 2015 I read a great article about the groupthink that pervades Silicon Valley these days.

It reminded me of how teens of every generation display their rebellion against society through their choice of clothes, while simultaneously making sure they “fit in” with their peers.

This is most easily seen in a subgroup like the goths, whose black clothing and makeup sets them apart from other teens, but within which a rigid dress code prevails.

Unlike the Silicon Valley I knew in the 1980s and 90s, today’s Silicon Valley is far more homogenized and undiversified, with little perspective on the “real” world.

The result is that it’s far less creative and exciting than it once was.

Silicon Valley groupthink is also the force behind what Danielle Morrill, CEO & Cofounder of Mattermark, calls the “tyranny of should.”

But sometimes when I am able to quiet that story down, I catch myself listening because it is just so much easier to have someone else figure out what I should do.

In the first days of this new year I urge you to choose between taking the easy road of groupthink and should or following Sam Altman’s path of most resistance.

“You should ignore what your peers are doing or what your peers or parents think is cool. (…) And that’s the hardest part. We’re all so much more susceptible to that than we think.”

Yes, another ‘should’, but not all ‘shoulds’ are created equal.

As always, it’s your choice.

That’s both life’s greatest joy and its greatest fear.

Image credit: HikingArtist

New year, new ideas — one would hope.

Less ‘me too’ and more ‘me new’, or, as Matt Rosoff puts it, stuff that impresses his 5-year-old son.

By groundbreaking, I mean a technology that changed society, changed every other industry in the world. The World Wide Web was groundbreaking. The internet was groundbreaking. The personal computer was groundbreaking.

And before you write Rosoff off as a know-nothing consider Peter Thiel’s comment.

“We wanted flying cars, instead we got 140 characters.”

It’s nice to know my nobody-know-nothing opinion is in good company.

In the tech world IoT is supposedly the bright light on the horizon, but don’t hold your breath.

According to a study by Accenture of 28,000 consumers in 28 countries, the world is tired of gadgets and no interest in replacing what they have.

Worse for tech, the public is waking up to the fact that it doesn’t give a damn about people’s privacy, security or even safety as long as they buy — at least not until it’s forced to and then only enough to shut up the noise.

As Accenture puts it, companies must “ignite” the next five years of growth by coming up with products that “offer a compelling value proposition,” “ensure a superior customer experience,” and “build security and trust.” 

Read the article. Digest Accenture results.

Then think about what you can build that would impress a 5-year-old—even a little.

Flickr image credit: centralasian

KG sent this to me and I had to share it, in spite of the cease and desist letter I may get from the lawyers.

And for great information on how to avoid being a pointy-haired boss check out the January Leadership Development Carnival.

Image credit: Scott Adams

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

I chose today’s Oldie for two reasons. First, it’s a new year and taking it to heart at the start assures you of a better more productive year, and second, it’s an election year, which makes it ultra-divisive, and there’s enough stress in the normal workplace without adding another element — especially such a vicious one. Read other Golden Oldies here

Sometimes good things arrive in my inbox amidst the silly videos and spam.

And so it was yesterday; I was thinking about what to write when this arrived and it seemed the perfect answer—assuming, that is, that you are as tired as I am of the rising tide of hit pieces so prevalent this election.

Fable of the Porcupine
It was the coldest winter ever and many animals were dying because of the cold.
The porcupines, realizing the situation, decided to group together.
This way they covered and protected themselves; but the quills of each one wounded their closest companions, even though they gave heat to each other.
After awhile they decided to distance themselves one from the other and they began to die, alone and frozen.
So they had to make a choice: either accept the quills of their companions or disappear from the Earth.
Wisely, they decided to go back to being together.
This way they learned to live with the little wounds that were caused by the close relationships with their companions, but the most important part of it was the heat that came from the others.
In this way they were able to survive.
Moral of the story:
The best relationship is not the one that brings together perfect people.

The best relationship is when each individual learns to live with the imperfections of others as opposed to dying alone in the cold.

What do you think? Will humans live up to the example of porcupines or die alone in the cold?

Flickr image credit: Cliff