The Berkshire Hathaway’s annual report recently published and as always it’s full of great wisdom by Warren Buffett. Here are a few of the quotes from this letter I loved.
When talking about shareholders:
While I’m on the subject of our owners’ gaining knowledge, let me remind you that Charlie and I believe all shareholders should simultaneously have access to new information that Berkshire releases and, if possible, should also have adequate time to digest and analyze that information before any trading takes place. That’s why we try to issue financial data late on Fridays or early on Saturdays and why our annual meeting is always held on a Saturday (a day that also eases traffic and parking problems).
We do not follow the common practice of talking one-on-one with large institutional investors or analysts, treating them instead as we do all other shareholders. There is no one more important to us than the shareholder of limited means who trusts us with a substantial portion of his or her savings. As I run the company day-to-day – and as I write this letter – that is the shareholder whose image is in my mind.
Mr. Buffett also mentions the 10-year bet he made and won and closes that section out with this gem:
Performance comes, performance goes. Fees never falter.
You do not owe anyone an apology for choosing to sell something. You do not owe yourself an apology for choosing to sell something. You do not need to mention the economy or your personal economic circumstances. It will not successfully motivate anyone to pay you a thousand dollars. No lawyer in the country does that. No doctor in the country does that. No teacher in the country does that. You being compensated for your professional labor is not an outlandish request. It is the default. This will discomfit some freeloaders in your community. They contribute no patches or money. Let them wget the binaries; do not allow them to wget an iota of your stress budget.
The folks over at toggl created a humorous email generator for freelancers that features two sliders for how much they want to pay you, (from nothing to way too much), and for how professional you want the tone of your response.
The email for this option comes out as follows:
I don’t usually work for exposure, however I’ve got an alternative offer for you.
I’ll charge you my usual fee but give a $100 rebate for every new paying client this work brings in over the next few months. If we manage to break even, I can even offer a commission on new clients!
Now, I get why you may not want to take this offer.
There isn’t any guarantee you would get your money back. Now think about it this way – this is almost the same deal you’re offering. With exposure, there is no guarantee that it will lead to paying work.
If you’re not willing to take the deal I offered to you, why would you expect me to take the offer to pay with exposure?
Sure it’s meant as a parody but still fun to play around with. They just need more emails so they randomly change as you move around the sliders.
Once you come up with an idea when do you start sharing it?
I’ve seen two types of people. Those that hold everything in secrecy and make one big announcement when it’s complete and ready. Then the other that shares or leak out little pieces as they are working on it.
The first style of doing in secrecy is nice in that if you lose interest or decide to switch gears, then no one knows. You don’t have to worry about letting people down, but it lacks the public accountability.
Sharing as you progress builds momentum and has the potential to pull in more interested people as you go. The downside is the opposite of the first style. If you fail to deliver, then you are left with apologizing and feeling like a failure in public. Usually though an apology is all that is required if you decide to pivot or lose interest.
I’ve been a part of both styles of launches, and I like sharing as I go. Talking about what I’m passionate about means more content and the ability to not only show my stuff but to hopefully help other people. If I come across one tip in the process and by sharing it helps just one person, I consider it a success.
Ghost announced it will be moving its company headquarters to Singapore. John O’Nolan one of the founders said, “we’ve wasted tens of thousands of dollars and months of development time [on VAT MOSS] when we should have been making the products we set out to build”.
“At the time we became aware of the full implications of the legislation we had an almost ready to ship marketplace for Perch Addons. It still hasn’t launched, partly because our time was burned up getting ourselves ready for VAT MOSS and partly because we would need to make sure that we coped with the situation for anyone selling through our system.”, Rachel said.
The tax situation in America on software companies is unclear as well. I work for a distributed company and I had the task of building out our online store. Anywhere we have a presence, an employee, we have to charge tax. Then it depends on the state on how its charged, some are charged based on county inside the state, others are just the entire state. Not to mention the big confusion around if SaaS apps should charge taxes–most don’t but probably should be. If you’d like to find out more about American software taxes a good place to start is this post on Nexus by Ian Landsman.
The moral of the story. Hire an accountant and pray you don’t get audited.
In the book The $100 Startup by Chris Guillebeau, he interviews a lot of entrepreneurs and shares insights in how each one got their start. One interview that I found inspiring is with Naomi Dunford and here is what she said about business:
Remember that the goal of business is profit. It’s not being liked, or having a huge social media presence, or having amazing products that nobody buys. It is not having a beautiful website, or perfectly crafted email newsletters, or an incredibly popular blog. In larger businesses, this is called accountability to shareholders. Business is not a popularity contest.
It’s easy to look at others followers, retweets, and shares and compare ourselves, but when it’s related to business none of that matters. Sure it helps, but it isn’t the goal. The goal is profit.