Unblakeable

Friday Fix: How To Tell If You're Getting Bad Advice

We all get and give advice in our lives and careers. Some of it has been good, some... not. Sometimes (often?) the advice is not solicited. My teenagers broke my habit of offering advice when not asked, as I learned the best way to make sure they wouldn't take my advice was to offer it unsolicited.

I've received some great advice in my life (most of which I followed) and some terrible advice (some of which I followed.) Thus, as the advice recipient, the key is distinguishing good advice from bad.

And as I reflect on the advice I've received over the years and advice that I see given (for example, on social media), there's a dead giveaway for lousy advice.

When the advice is not preceded by multiple questions, the advice is going to be lousy. What if you went to a doctor, and they gave you a diagnosis without asking a single question? If you're not troubled by that, you trust doctors too much. You also need a new doctor.

When the advisor doesn't ask questions, it raises two red flags.

1. If the advisor doesn't ask questions, he or she almost certainly doesn't have the information base required to give you advice intelligently. Uninformed advice is toxic. It's far worse than no advice because uninformed advice often sounds like it's informed. But it's not. That advice may work out due to dumb luck, but if you want to rely on dumb luck, you really don't need someone's input for that. You certainly don't need to pay for it.

2. If the advisor doesn't ask questions, the chances are good that he or she isn't invested in the result and he/she just wants to dispatch with the request for advice and move on. Divested advice also is not likely to be reliable. If someone doesn't have time to give you thoughtful advice, they should tell you that they don't have time to give you thoughtful advice.

3. Someone who doesn't ask questions may be a pleaser. Pleasers find it challenging to be good advisors because good advice is often hard to hear, no matter how nicely it is delivered.

Good advisors crave information and engagement. Questions are a very good indicator that engagement exists. Engagement is critical to solid advice.

What do you think? Do questions from an advisor lead to better advice? What are some other indicators of good advice?

Friday Fix: Ditch the Holiday Party

You won't believe this after reading this but I love the holidays. My memories of Christmas are almost uniformly positive. I still remember opening the Atari 2600 in 1978.

But holiday parties are dumb.

Very few of your employees really want them. They attend because it beats working. Unless you make the party at night or on a weekend - then they are working overtime.

Let's just be clear why companies do holiday parties - so that executives can bask in the fake love the holiday parties synthesize. If you have 100 employees, 10 of them really want the party.

And two of them are people you didn't know (and they didn't know) are alcoholics, and they are just jazzed for the free booze. (If you can't not get drunk around your coworkers and bosses, you have a problem - get help. Seriously.)

They'll raise a glass to your stupid toasts because if they don't, they know it's a career-limiting move. In other words, holiday parties are the North Korea of the corporate world.

For all the "feel good" of holiday parties, here are all the bad things that can happen and have happened.

Someone drives home drunk and kills someone on the way home.

Someone gropes someone else and you have a major HR problem. You'll probably have to fire the groper.

People who don't celebrate Christmas (come on - it's not a Hannukah/Ramadan Party - at least give us the gift of not insulting our intelligence.) feel uncomfortable and are made to feel more like "the other" than they already do.

People who don't show up with dates are going to feel ostracized.

Holiday parties where you can't bring a date always suck. Always.

Someone's dietary restrictions aren't going to be met so they are going home hungry.

People get drunk (or not) and start gossiping out loud or blab confidential information, creating major rifts in teams.

For what? A buffet dinner of CostCo meatballs and an open bar with all the Yellow Tail and Budweiser you can drink? No thanks. (And no - making it 18 year old Whiskey and Absolut doesn't make it better.)

Your introverts (statistically, 50% of your work force) are literally counting the minutes until they can graciously leave (or sneak out with nobody noticing.)

You want to thank your employees? Give them a day off and some bonus cash to go shopping with. People who feel like celebrating together can self-organize.

Holiday parties are so 20th Century. They should have gone out with salmon carpeting, Lobster Thermidor and Cherries Jubilee.

Bah humbug.

Risk Management Mondays: Why Paying "Market Rates" Is a Trap

A recent post by Gentry about paying market rates got me thinking: why do business leaders see "market rates" as a safety net?

In reality, paying "market rates" can make you more vulnerable. Here's why:

1️⃣ It signals your people are average, not exceptional. Who stays loyal when recruiters see their value as higher?

2️⃣ It ignores turnover costs—lost production, rehiring, and retraining expenses can be massive - much more than the additional salary you might have paid.

3️⃣ Market rates fluctuate unpredictably, often based on lagging, biased, or generalized data.

4️⃣ A few employers paying 30% more can quickly redefine "market rates," leaving you scrambling.

Want to retain talent? Pay a premium. A 20% bump above market—on base salary, not bonuses—signals commitment, builds loyalty, and deters recruiters. Yes, it might mean raising prices, but you’re probably undercharging anyway.

Paying generously isn’t just an expense—it’s an investment. Lower turnover enhances your business valuation and builds a reputation that attracts top talent. You want that kind of brand.

Think of it as an insurance policy for your team and your company’s future. It’s worth it.



My name is Mike (Stage Name - Unblakeable)
- Helping you win your best business decisions at your most critical moments.

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Risk Management Mondays: Don't Just Diversify Customers, Diversify Revenue

I've been talking to a potential client for about eight months now. Just sort of tracking them. They aren't ready to sell now, and I agree with their assessment.

The reason is that their business, after years of fast growth and strong profitability, is taking a step back. Revenues and profit are down by 30% from two years ago.

Their business offers online courses, which meant they had a big-time sugar high during the pandemic. People had free time, couldn't go out, and had more disposable income. Many spent some of their pandemic checks on e-learning. (I know I did - I studied Swedish - most of which I have forgotten.) They have thousands of customers, which means that customer concentration is never going to be a problem.

Then, the pandemic subsided for most of us, and we went back to doing the things we used to do - a lot of which wasn't e-learning. At the same time, there is more competition from content providers on the same topic, and AI platforms are also cutting into e-learning revenues.

And costs are going up. SEO and social media advertising are more expensive, as is content production.

They are still doing OK - making good money, but the growth is gone and margins are somewhat weaker. And there is nothing in the environment to suggest that their business will just turn around. They've entered the maturity (and possibly decline) phase of their life cycle. They need a reboot, which is where new revenue streams come in.

They are in the process of launching physical products with their existing brands, but that may not be enough. They are merchandising their brand, and while that is nice extra income, it isn't really moving the needle. Other ideas for diversifying revenue might be affiliate marketing, live events, instructor certification, or brand licensing.

All this, of course, is risky and requires investments on their part - but it is far riskier for them to do nothing. They may need to consider making some acquisitions to catalyze their growth.

Happily, this company is taking action. Ideally, they would have pursued this at their peak, but in fairness, that's hard to do. It's hard to be skeptical of success. If they act smartly, they still have time to address their revenue concentration problem.

Next week, I'll share a case study about a YouTube influencer who seems to be successfully aggressively diversifying his revenue sources.

For AI startups, here’s how to set yourself up for success:

-Define Your Niche Precisely: Focus with laser-like precision on a specific, painful problem in the market that you can solve.

-Validate Market Demand: Conduct thorough customer research and surveys to confirm that there is a demand for your AI solution.

-Show a Path to Profitability: Investors want to see a clear, realistic plan for making a profit, not just promises of growth over several years.

What do you think about AI company success?

Here is my latest video about Investing in AI, please view it on our Youtube Channel: https://buff.ly/40JbxcX

In it, I cover essential factors to understand as a potential AI investor:

–Consider companies backed by renowned investors or influential tech entities.

–Focus on firms targeting underserved vertical markets.

–Ensure the company practices good data hygiene. High-quality, organised, and complete data is crucial for effective AI functioning.

–Avoid investments in companies that develop technology first and then seek problems to solve.

–Validate if the business model is sound for long-term success.

–Keep abreast of potential regulations and legal changes.

What do you look for when evaluating an AI company to consider investing in? What do you think is different about this space?

Risk Management Mondays: Technology Disruption Gives No Fair Warning

One of my favorite services is EasyBib - an online citation creator that formats websites and other research sources into proper citations using a multitude of formats (I am partial to MA8).

It's a lifesaver. I love using footnotes but hate formatting them. Always have since the third grade. Then I discovered EasyBib over 10 years ago, and it changed my professional life.

A couple of years ago they were bought by Chegg, which is basically a homework assistance service that I guess somehow isn't cheating when students use it. I dunno. I just use the bibliography tool.

But now it's in trouble because ChatGPT can do for free what Chegg took years and thousands of hours of manpower to create. Although Chegg hasn't lost that many subscribers, their stock price has, well... glub glub. (Source: Wall Street Journal)

Chegg rode high during the pandemic, and then, like so many companies, the worst news ever was life returning to normal. But then they got hit by ChatGPT...

The second ChatGPT broke onto the stage a few years ago, Chegg should have seen the disruption and responded. Whether they saw it or not, I don't know, but they haven't made an obvious response.

How would you respond? I'm glad you asked!

Chegg should have been developing its own large language model from Day 1, using the vast amount of data it has created and collected, thereby creating a proprietary AI platform that can beat ChatGPT at its own game. Maybe it already is, but if not, it's probably too late for them to catch up.

What's going to happen - what HAS to happen is that for companies to compete, they are going to hoard data, hoard machine learning talent, and develop specialty LLMs that are really, really good in their field of expertise. In effect, the ChatGPTs and Claudes of the world will be general practitioners, and everyone else needs to become specialists.

So, if you're afraid of ChatGPT wiping you out, the response is not unlike any field of expertise. Specialize and niche. Develop an LLM that is hyper-focused in a narrow field of knowledge but will be the deepest in that field - or create some other form of differentiation (creativity?).

In technology, you have to be proactive because technology is like Liam Neeson in Taken. If you try to hide from it, it will find you, and it will kill you.

A purchase price allocation is a complicated process that determines the value of goodwill for the balance sheet in an acquisition.

View the full video, Avoiding Pitfalls In Purchase Price Allocation Valuations For Audits - A Comprehensive Overview on YouTube: https://buff.ly/48D7NM6

My latest video is about auditors, CFOs, and owners who were recently involved in an acquisition. A PPA valuation determines the value of goodwill in the purchase price and is essential for audits. By managing expectations and preparing ahead of time, you can avoid a lot of stress.

https://buff.ly/48D7NM6

Risk Management Mondays: Risk and Value Start at the Top

Mineral Resources Founder and Managing Director Chris Ellison will be stepping down in 12-18 months, creating one of the slowest car crashes in corporate history.

As a result of this announcement and the "major actions" that the Mineral Resources' board of directors has vowed to take, shares in the company fell 7%.

Ellison is being shown the door (kinda at his convenience) because of two key revelations.

First - he failed to disclose the fact that the Australian Tax Office assessed Ellison for millions of Australian dollars in unpaid taxes and millions more in fines. It's embarrassing, but you can continue to be the CEO of a public company if it doesn't happen again.

But the second is unsurvivable - Ellison was found to be self-dealing. To wit: He directed company supply contracts to entities that he owned and didn't disclose this.

The board of directors faced crushing legal exposure if they failed to act. While it seems that many investors would prefer Ellison stay, all you need is one ticked-off shareholder with a legal budget, and those board members would be putting their own financial security at risk.

Keeping Ellison on would be short-sighted. Fraud (and that's what self-dealing is) is usually a sock with a stray thread. When you start pulling on it, a lot of sock unravels. The company may not disclose it, but they will find something else.

And when the CEO has no problem defrauding investors, what are the chances that his direct reports might think and act similarly? And what is the culture at that company? If you believe that a CEO (especially a founder CEO) sets company culture, then "if you ain't cheatin', you ain't tryin'" may be the prevailing decision algorithm.

It also means that either a) too much power was in Ellison's hands that he could get away with self-dealing (for a time), and/or b) there were one or more accomplices that helped him effectuate and conceal the transactions. This is why the company needs to keep him on - the risk of showing him the door on day one was too great.

Why did the shares only drop 7%? Because Mineral Resources has a lot of attractive assets on the accounting and economic balance sheet. They have iron mining rights, lithium mining rights, and supply contracts that are likely multi-year deals. In the short term, they won't be impacted, regardless of the CEO.

I feel bad for the CFO, Mark Wilson, assuming he wasn't in cahoots. The auditors (E&Y) are going to come loaded for bear in the next fiscal year.

My name is Mike (Stage Name - Unblakeable)
- Helping you win your best business decisions at your most critical moments.

Liked this post? Want to see more? Ring the bell on my profile.

Connect with me (also on Instagram, Facebook, and Twitter)

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Join the LinkedIn group "Unblakeable's Group That Doesn't Suck"

Welcome!

Five Vampires That Could Be Sucking the Life Out of Your Business

Vampires have different names. Nosferatu. Dracula. Deacon Frost. Kurt Barlow. Montgomery Burns (Simpsons Treehouse of Horror IV)

Vampires are terrifying undead creatures - intelligent, ruthless, and purely evil - whose only purpose is to feed on the life force of the living, sometimes turning their victims into vampires themselves.

The first horror movie I ever watched was Salem's Lot (the original). Couldn't sleep for days. I don't watch many horror movies on purpose anymore, but that stuck with me as terrifying, as did the Masterpiece Theatre's production of Dracula.

There are vampires in the business world also, sucking the life out of a venture. Here is how you spot the five kinds of vampires so you can avoid or destroy them.

1. Lack of Systems. Systems drain the life out of a business, not just because they are inefficient, but because of the energy consumed. When you have to think about everything you do, it takes energy away from higher-value energy investments.

2. Negativity. Businesses provide ample opportunities for cynicism. Businesses have down times. They don't always make their numbers. A key and beloved team member leaves for a better career opportunity. An R&D project doesn't work out. Some people are wired to seize upon negativity and make it their platform. Negative talkers drain energy from otherwise engaged employees. And the greater the position of responsibility that the negative talker occupies, the greater the drain.

3. Lack of Communication. It's incredible how even small businesses can seem like multinational enterprises when it comes to communication. Lack of communication leads to resources being diffused across the organization and sometimes even deployed in direct opposition to one another.

4. Apathy About People. We're all busy, but an organization that is too busy to care about people doesn't need to exist. Show me an organization with lots of employee or customer turnover and I'll show you one that doesn't really care about people. When people feel uncared about, they rarely perform well or stay as customers.

5. Lack of Accountability. I think it's true that the culture of a business is defined by the worst behavior it is willing to tolerate. When people don't perform, everyone on the team knows it, and they will be watching leadership to ascertain their willingness to act. When people see a lack of consequences for harmful action or inaction, it's a demotivator like almost no other.

These five vampires are terrifying and potentially lethal. I've seen them create undead companies and teams. But they aren't invincible. So grab a crucifix, some holy water and a wooden stake and go vampire huntin'.