Friday, November 9, 2007

The Changing Nature of a Business

I got a message today from Casper Trebuchet. When he did his report on DDE as an analyst on the WSE, one of the things that he pointed out as a possible weakness of DDE was the fact that up to now, it has basically been a one woman show, and that as the business grows, one person will be less and less able to manage everything. He makes a good point for two reasons. First, as DDE grows, the absolute magnitude of time required increases. and second, if I spend all my time with tenants and running the day-to-day ops, I have no time to develop new business streams and diversify DDE so that it can continue to perform solidly into the future.

As you can imagine, this is something I have been keenly aware of. As DDE has grown, it has taken more and more time to run effectively, and I have thought a lot about what to do once the company gets too big for one person to handle. So, I am doing three things to reduce the amount of time that is required to run DDE:

1. Getting some help! This is the most critical thing - I have found two people who are going to help me with the day-to-day operations of DDE. It is not easy to find people with the right temperament , and an extensive knowledge of land, groups, and finances in SL - all of which are required to effectively manage land. Between the three of us, we can cover a lot of time inworld, and can spread the work out between us.

2. Automating. I have been working on a system for automating the rentals for DDE, so that they will require much less time and attention. Believe it or not, until now, I have used a single rental box (i.e not networked) system for all of my parcels (or at least the ones that pay in Lindens). Although this takes more time than centrally controlling the boxes from a server, it has had the huge benefit of giving me a reason to meet and interact with all of my renters (see #3, below). However, with over 60 tenants, some automation is required, so I have been working on an efficient system to manage all the renters through a networked, web integrated vendor system that will really cut down on the time required for tracking. In addition, i have developed a neat little database and rental box naming system which allows for easy tracking of all my financial transactions in SL. These two things together will save many hours a week.

3. Reducing the personal touch. This is the hardest one for me - because it is one of the things i love about being in the land biz. I think that almost all my tenants are on my friends list, and I have attended their store/club openings, weddings, and parties, or just popped over to hang out with them, check out what they are doing with the land, and catch up on what is new with their SLife. However, it is inevitable that in order to effectively manage any more than I have now, i will have to step back a bit and reduce the one-on-one interaction with tenants. This is the main reason that I have held onto the day-to-day operations for as long as I have - i want to make sure that all of the tenants of Delicious Estates feel taken care of, and feel like they have a landlord that actually gives a shit about them. It's also the main reason i have waited to find the right people that can give the same kind of personal attention to people, on behalf of DDE, when I am not able to myself.

On the positive side, the personal approach i have taken to managing land in Second Life has meant that I don't really need to advertise any more - I get referrals from most of my tenants if anyone they know wants land, and most of the requests I get are by word of mouth. DDE has not had to post a classified in a long time, and still runs at almost full occupancy all the time - with new people having to be turned away because I can't get land fast enough!

Still, Casper makes a great point, and it's not one that i can ignore. And, I haven't had whatever success has come my way by ignoring the inevitable! So, Casper, rest assured that I am taking steps to free myself up to manage the company strategically, without getting totally bogged down in the day-to-day operations.




Anonymous said...

If you need some help with something, just holler.



sevenseals said...

hello, believe it or not but the same problem i wanted to address this evening. I'm also a little bit worried. But it's not the only question for me if you can handle the fast growing company alone, but rather what if when you are ill or another thing happens that you have no possibility to go inworld.

Look what's currently happening with THI!

Don't you have a real life friend you can trust and who can proxy if you are prevented?

Regarding your 3rd point: Hope you are aware that when you will reduce the personal touch with your tenants, you really must have the right people doing that for you.

What do you think about more moderate land expansion in the future and use more profit to buy back shares and delete them to increase the earnings per share?

Regards, Eric

Delicious Demar said...

Geyl!!! thanks so much - you are such a sweety! i may just take you up on that!

And Hi Eric :-)

You make a good point. for example, when I was out of town on business last week - I put Anna Andalso (who is a trusted friend and Board member of DDE) in charge while I was away. She is very experienced in all aspects of the business - she and I have been working together for almost two years now.

In addition, Pablo Sienkiewicz and I are both close friends, and business associates - we have a joint venture with his company SIM, as you may know. Pablo is also a real estate developer with a company on the WSE, and he, too could help tun things if I were ever unable to do so.

Finally, Rob Faulkner is another Board member of DDE, and I know Rob in real life - he and I live in the same city and know each other well. He is an astute business person, and has helped me out a lot with developing DDE over the last six months.

so, yes, I have some people that i trust who can take over DDE in the event that I get sick or something. In fact, you have given me a good idea - to make it more formal, and make arrangements with LukeConnell to hand the reigns over to someone else in the event that I ever disappear. lol - not that i am going any where - but there ARE accidents!

Finally, as to your last point - i think that is a good idea. I do intend to slow the pace of expansion dramatically after the current purchases from KJL - and I will definitely consider doing some company buy back of shares and deleting them to increase shareholder value in the existing stocks.