Key Idea #1: Make Life Easier
This is a software business, and like all software businesses they take the mental processes of the brain and impart them to machines. In the hands of Brookstone Technologies, computers have even less respect for space or time. Virtually instantaneously this software keeps simultaneously updated every possible device -- no matter where it is -- that needs to hold information about your business. You decide on the security levels and who is to have access to it.

Topic For Discussion: Where is technology, particularly software, taking us?

Answer: Connectivity within a business is one of the key ingredients for business intelligence. Business intelligence keeps one focused, commits marketing-sales-service-support resources wisely, and contributes to the bottomline. A business can increasingly be seen to be like a human body. If you increase the interconnectedness of all the neurons and synapses firing in your brain, there is an alertness, a focus, and an increased intelligence. In the 1950s a fellow by the name of Turing asked the question about intelligent machines. Robotics has definitively come of age -- remember that drone demonstration in Iraq -- and how ubiquitous these machines have become. So science fiction is just a precursor of the many-possible future realities; now we need the discretion, judgment and intelligence to decide which of these possible realities we want to welcome into this physical world.

Topic for Discussion: Why would we go to Perth to find a small company doing such big things?

Answer: Perth is the most remote city in the world. For a Perth-based company to grow it must have employees outfitted to work remotely. Also, we know that a physical location does impact thinking and therefore innovation. Look at history ... the English were always sailing off to find products they didn't have while Americans, until the past 50 years, have been occupied with the task of discovering and exploiting the resources within. Remember Disneyland and the song, "It's A Small World After All." The Disney ride carried us through a magical, made-up world with child-sized mannequins dressed in clothing from places we had never been. Today it is easier for most of us to sell to global customers than it is to go to Disneyland.

You think about it: What product or service can you invent to make your customer's lives easier? What are the trends in your industry? Are you a leader or a follower? Would it help to be out front?

Key Idea #2: Simplify
We guess that if you are reading this you are old enough to remember when you had to enter the same data over and over because software has been stuck in silos.

Topic For Discussion: What is just one example of how Brookstone simplified the lives of customers?

Answer: They developed a suite of software programs lets the user enter data once. We stand up and applaud. Ease of use and simplicity go hand in hand but we think each idea is so important that we separated it here. A cell phone could make a person's life easier but add complexity. From what we can tell, Virtual Office is making lives easier and simpler. That is a formula for business success.

You think about it: What can you do to make life simpler for customers?

Key Idea #3: Seek Critical Review
Constructive criticism works but it hurts too. Most of us try to avoid criticism although Errol and John asked for it. The experts who gave them an evaluation said the concept is great but the execution stinks. This is true about most new products and services and it is the reason only the patient leaders and innovators make it to market. Bill Tobin said in another episode of Small Business School that the idea is only 2%. Success comes in the 98% which is the execution. Only the naive think they just need one good idea to hit the big time.

Topic For Discussion: Why go to the world's largest technology show (CeBIT in Hannover, Germany) in the world and risk being tainted by a bad review?

Answer: Brookstone Technology is Australian-based but it has the world as its target market. Really. To continue working on their product under wraps and in seclusion would have yielded an inferior product. They needed global criticism and as a result of the criticism, they are able to say in their marketing that the experts said their idea is great. This is called "spin." You can lead with any good information then work to improve what the experts didn't like. These two are grown-ups. They have strong egos but they are not arrogant. Errol and John know that the ideas of others will improve their product and they went through the pain in order to get the benefit of great insight.

Topic For Discussion: What happened because they submitted themselves to critical review?

Answer: They gained respect and won a big award! Respect within your industry can lead to being "discovered" from unexpected sources. We found out about Brookstone Technologies because they won an international industry award. There are thousands of software developers as Bill Gates fears, working in offices and even garages, trying to invent the next new "killer app." It's one thing to be named outstanding by your Chamber of Commerce as a great corporate citizen, but it's even better when the product you make is seen by your peers to be the best in its class.

Topic for Discussion: What does it take to be best in class?

Answer: Creative thinking, hard work and persistence. Errol said he saw the vision of Virtual Office, a decade ago. For Brookstone it also took a merger to get to the winner's circle. Forming a partnership for Errol and John seemed like the best way for them to get where they wanted to go but they had to work out the way they would treat each other. Both came from being their own boss so both had to give in order to get. With offices a four-hour plane ride apart and clearly defined roles, these owners are happy and productive.

We are convinced that company size is not an issue because over and over here we see some of the biggest breakthroughs made by two or three-person teams. When you see a company recognized for excellence, on the stage you see almost nothing. You see a couple of people walk to a platform and accept a trophy. But what was the path that brought them to this place in time? A strong will to achieve.

Many of the companies we have studied on Small Business School have won awards. In fact, that is one of the ways we find these outstanding business owners. Everyone admits it takes time but going for awards can be a great employee motivator and when you win, it will help you attract new customers. First, find the awards you want to win. Next, form an "Award Winning Team" that is given the mission to put together the presentations needed to apply. As the owner, you should be on the team but try to let others take the lead.

You think about it: What would the smartest people in the world in your field say about your products and services? What action can you take to find out what they would say? What awards are given in your industry and what can you do to win one? Is it worth the time to go for it?

Key Idea #4: Make Customers Happy
Customer testimonies are a key to unlock sales and to get those testimonials you have to make sure that customers are more than satisfied. Potential customers love to hear what current customers have to say about you and your products and services. Fortunately, Ericsson of Australia became a customer of Brookstone early on so the tiny company has major marketplace validation from a company everyone has heard of. What could more perfect than to have the company that touts itself as the world's leading supplier of telecommunications using your software product?

Topic For Discussion: How do you think John won Ericsson's business?

Answer: We don't know the story actually but we will guess that since the decision was made in Perth, it goes back to John's fine reputation and his commitment to living and raising a family in Perth. People do business with people. It would be hard to sell a new product to Ericsson by flying into their world headquarters located Stockholm, Sweden if you had no prior relationships with anyone in the company.

Topic for Discussion: How can you better use customer testimonials in your sales and marketing efforts?

Answer: The strong small companies we have studied here do this day in and day out. Low tech examples include Le Travel Store's habit of asking customers to post on the store bulletin board insider travel tips. This recognizes customers and shows shoppers that the owners value the repeat business and that this store is not just about selling things, it really all helping customers have fabulous travel experiences. One dentist with over $1 million in annual sales frames letters he receives from happy patients and hangs them in the waiting room. Time and again we have seen multi-million dollar catalog companies post the pictures of customers so employees know who they are really working for.

The first thing you have to do to use testimonials is to get them. Ask customers to write you a letter on their stationery or even volunteer to write it for them after you interview them. Ask for their stationery, print it up and get them to read it and sign it. It's good to get written notes and letters but even verbal comments can be used if you ask permission. We observe big companies using real customers in marketing efforts which tells us, this technique works.

You think about it: When is the last time you asked a customer for a testimonial? When was the last time you asked a customer if there is anything you can do to improve your product or service to meet their needs even more effectively?

Key Idea #5: Get Fit To Globe Trot
If you decide to make the world your oyster then be glad that technology is making it affordable and a practical effort. Tools like Virtual Office and the wireless/mobile revolution have begun to transform airports, hotels, taxi cabs, even Starbucks, into extended work places. But more importantly, information is being democratized. Look at what the embedded reporters did within the Iraq War. Wireless/mobile devices allowed all of us to be out on the battlefield. There was no hiding. And increasingly, it is getting more and more difficult to lie. That's a very good thing. Honesty is the backbone of business; and somehow toward the end of the 20th century, people lost site of that fact. So, it is good that facts can now be more quickly checked.

Topic For Discussion: How could you use Wi-Fi technology effectively?

Answer: Finally, coordinate the PDA, laptop, and desktop computers and throw out the paper-based Day-timer or other scheduler. We need to let each other know when - where - how to contact us. Just think, it could all be dynamically updated within an intranet and extranet on your website. That's a start. Also, why not have everybody get involved with customer support, such that rolling calls literally find the next person available and everybody is on the roll call! You think about it: Why not downsize the physical office and begin looking at Wi-Fi enabled areas as office extensions? Possible answer: Mobile workers have often had a sense of disconnectedness; the reason is that historically the switchboard of the business was the communications hub. Everybody checked through the "front desk." Now, every desk can be a front desk no matter where it is.

You think about it: Are you working unplugged? If you choose not to work this way, do you have employees who could and would like to? What would happen if you gave all of your interested employees all the tools they need to work without coming to the office? Could you expand markets? Could you help them better manage their personal lives?

Key Idea #6: Merge To Grow
John Stockbridge had pulled himself up out of debt while Errol was struggling to find the right team to take the idea from his head to the marketplace. When they met, they had a good feeling that they could help each other.

Topic for Discussion: What are some advantages of a partner versus an employee?

• Owners are generally more committed to a business.
• An owner normally commits her personal money to get the business started, or, "buys in" as Linda did. If an owner quits, she walks away from cash and "sweat equity." An employee merely walks away from a job.
• Owners share profits; employees expect their salary whether or not the business is profitable.

What are some disadvantages of a partner versus an employee?

• If the business is successful, your partner will likely take more of the profits than would a salaried employee.
• Partners must determine how decisions will be made, whereas an employee will follow the owner's direction.
• Dissolving a troubled partnership is more complicated than terminating an employee.

We learned from the founders of TiresPlus that partnerships should never be 50-50 . 33-33-33 is OK, but 50-50 is an accident waiting to happen. No matter how well you and your business partner complement each other, no matter how clearly you are able to define each other's roles and responsibilities, there will come a point when you fundamentally disagree on an issue. How is that resolved if you are equal owners?

Topic for Discussion: If you are in business with one other person, how do you decide on stock ownership if 50-50 is not a good idea? How can you be fair to the owner with less than 50%?

Answer: The purpose of avoiding 50-50 ownership, even if it is 51-49 instead, is to have a clear and frank understanding at the outset of forming the business. Two individuals commit to work hard together to grow a business and decide that if they ever disagree, which one of the two of them will have the final say. This may seem heartless, but there really is no practical alternative. Without this agreement, the business would be frozen and not able to react to changing circumstances. And for obvious reasons, this is not something you want to discuss with your business partner when the disagreement arises. Ownership and profit distribution are not synonymous. The decision between partners of who should have the final say is independent of salary levels, dividend distributions or proceeds from the sale of the company. These can still be 50-50, protecting the minority shareholder.

Bud Konheim and Nicole Miller started their fashion house on the right foot. They had clearly defined roles. Nicole would design the new and Bud would get it made and sell it. Now they say they could switch roles but they don't. There's a big clue to the answer to this question in what Bud said. When trying to describe why their partnership has made it through thick and thin, he said, "a partnership is not meeting somebody 50-50. A partnership is meeting somebody 90-10."

We've heard others say, "When you don't care who gets the credit, you can make plenty of money." Deferring to the other person, respecting them and putting their thoughts and feelings ahead of your own has worked for these two because they both do it.

Bud and Nicole are both very strong, independent people who do not give up any part of themselves in negotiations with each other. While both of them could probably make it alone, they don't want to. Today they are in this partnership by choice not by necessity so no one feels trapped. This feeling of "I want to be in this together" is essential for creative juices to flow and for the entire team to enjoy a corporate atmosphere of genuine collegiality.

You think about it: If you and your partner are 50% owners of your business, do you have a formal or a tacit understanding of who makes the final decision when the two of you disagree? If not, consider having that discussion now and dispassionately. The ostrich approach won't work here!

Key Idea #7: Protect Your Reputation.
In describing what had happened to John's first venture, he said, "So what I did was I shut the company down and paid off all the debts myself rather than declare bankruptcy or wind up owing anybody -- you know, having people out of pocket because I still wanted to live in Perth. So you have to clear your name, get everything aboveboard and then come back from it. "

Topic For Discussion: What do you learn about this man when you read his statement?

Answer: He is more interested in his name and reputation than he is in money.

Topic For Discussion: Why is it essential that every business owner be a person who is willing to take responsibility for his or her own actions and do the hard thing even when so many around are not?

Answer: To build a business, or a life, that brings value to those around you, the leader has to face down the difficulties with honor. John and Faye lost everything they had accumulated so that the people they owed money to would not suffer. As a result, he found a good job and worked his way, "back to the top." Business leaders with good character attract employees, customers, vendors and suppliers with good character. And, since business is built on trust a circle of good will is put into motion which produces quality products, services and relationships that will endure the test of time. Walking away from debt or lies or deceit is impossible. You may leave a city, a company or even a country but you leave a wake of destruction behind you. We've seen many other business owners who, like John, did the right thing and they can sleep at night.

You think about it: What do business people in your community and industry say about you when you're not in the room?

Key Idea #8: Export A Product
John Wargo is an expert on the postal services of the world. He explains that the US Postal Service has agreements with dozens of countries which make shipping safe and affordable today. We just heard Fred Smith, the founder of FedEx speak to a large group of small business owners. He said that FedEx's small business global shipments are increasing at a faster rate than those of big business.

Topic For Discussion: Why bother?

Answer: There are only 300,000,000 Americans and 6,300,000,000 people who do not live in the USA.

You think about it: What particular countries have the demographics and psycho-graphics that you need to build a market? Is is easy for any user to place an order for your products at your web site?