March 2007 – Page 2 – The Business of Creativity

A little Blue Ocean

Read the book Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. (Harvard Business School Press – 2005 – ISBN: 1-59139-619-0).

It’s about innovation – a topic dear to my heart.
In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.

The authors studied buisness launches at 108 companies and found:

86% of launches are just line extensions, which account for 62% of total revenues, but only 39% of profits.

The remaining 14% of launches were aimed at creating “blue oceans” – new areas of value innovation. This 14% of launches generated 38% of revenues and 61% of profits.

So, doesn’t it make good business sense to stop trying to compete with everyone else and start looking for ways to add value and reduce costs? This is what we’re trying to do by bringing the law firm and the marketing firm together – add real quality to both the legal and the branding product, at the same time reducing the costs associated with handling separate partners for legal and marketing services.

eBooks

I have several ebooks I would like to publish. I’m stating this in the blog so that any of you out there can help hold me to the pledge.

Here are the working titles:

Branding & The Law: Naming Your New Company, Product, or Service.
Launching your Creative Business
Marketing & Intellectual Property
Copyright for the Visual Artist
Copyright for the Musican
Copyright for the Filmmaker

I’m open to suggestions for others… just add your suggestions as comments to this post.

Scene Magazine – February 2007

Building Your Team
© Kevin E. Houchin, Esq.

I’m a fiercely independent guy. For the longest time I thought there was great honor in doing everything on my own, and I was right. However, I finally realized that my goals are bigger than the results I can achieve by myself. There is simply no way I can reach my goals without the help of a team. Sure, many of you are probably saying “duh!” – I guess I’m just a little slower than most.

How should one go about building a team? For me it made sense to list all the tasks that are required of me in a day, week, month, and year. Then I categorized those tasks into those I enjoy doing and those I don’t enjoy. Finally, within the list of tasks I don’t enjoy, I ranked the tasks according to which “rung of hell” I find myself in while doing the work. For instance, itemizing my credit card charges is the very lowest, deepest rung of hell. One step up is filing. I HATE those things. Amazingly enough, there are people that find this work fun! Yes, they walk among us. I love finding and advising passionate clients, planning creative business ventures, creating branding campaigns, and networking. I needed to focus on the things that fuel my passion and make me actually want to come to work every day.

Logically, my first team member was a bookkeeper that would itemize all the credit card statements and file all the invoices and even make sure my health-insurance premiums get paid on time. It’s a simple hourly contract, no overhead, no tax liability, and no fuss. My bookkeeper is self-employed and simply comes into my office once or twice a week to keep me out of that lowest rung of hell. It’s easily the best money I ever spent because she can do the work twice as well in half the time while I focus on building my business and actually doing the work I love. And, most amazingly to me, she actually enjoys the work.

As business really started taking off last fall, it was painfully apparent that I was spending too much time managing the clerical tasks of my office. I needed an assistant. I put a couple ads online and got a huge response. I ended up hiring two part-time employees on an hourly basis. These two happen to be qualified to handle several different levels of tasks, so we simply worked out a scaled hourly wage based on the actual work. For instance clerical work is paid at a lower hourly rate than paralegal or legal work.

I had thought when I placed the ad that I would just have them be independent contractors, but as the job description evolved, it made sense to actually do tax withholding as “employees.” It’s important when building your team that you deal with independent contractors as such and employees as such. My two new people would be considered “employees” because they would be working here in my office, using my computers, and under my direction, unlike my book-keeper who brings in her own laptop and does as much work at her office as she does at mine.

I don’t need to go out and hire a business lawyer – because that’s what I do, but if you’re not a lawyer, it makes sense to invest in at least a little advice relative to your formation. Sure, the Secretary of state only charges a $25 filing fee, and it’s a simple on-line form, but that’s just the first step in getting a company set up – which is where a lawyer can help.

I have a tax advisor, a few investment advisors, insurance advisors, and even a “coach” (if you don’t work with a coach, you should really consider finding someone). The next thing for me is to build peer mentoring relationships with guys that are facing some of the same issues as I, and individual mentoring relationships with older more experienced men that I respect and want to emulate. I’m working on those and I’ll share how these evolve in future columns.

What’s all this have to do with a legal column in a lifestyle magazine? Just that most of us can’t reach our goals on our own, we need help. Every business development book will tell you to build a team that includes an accountant and a lawyer, because most people simply lack the knowledge or qualifications to handle those critical matters. Those sources generally fall short of telling you how to assess your own needs for help and approach filling those voids. Additionally, if you are hiring someone on a part time or contract basis, you need to have a written understanding of who owns any creative product, such as copy for a brochure, a logo design, or anything copyrightable. If you’re hiring people as employees, you need to address income tax withholding and other employment law issues.

What’s your lowest rung of hell? What’s your favorite thing to do? If you can answer these questions, you’ll be well on your way to building a successful team.
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Kevin E. Houchin principal of Houchin & Associates, PLLC – a copyright, trademark, arts & entertainment, and business development and branding law firm located in Fort Collins, Colorado. To contact Kevin Houchin, call 970-493-1070 or email him at kevin.houchin@houchinlaw.com.

Scene Magazine – March 2007

Lots of folks, including many lawyers, dread confrontation and negotiation. Others relish the process. I choose to redefine “negotiation” as “problem-solving.” It makes a huge difference in my attitude, my clients’ attitudes, and the attitudes of the parties on the other side of the issue.

If you do an Internet search on “negotiation” you’ll find out it’s not just a process, it’s an entire industry. Many approaches to the process can be described as “classic” or “positional bargaining” and focus on the gamesmanship of a chess match when one party is trying to squeeze every ounce of concession from the other. This approach gives rise to all the anxiety or pleasure associated with competition. I’ve found that the only “winners” in this approach are the lawyers or the people being paid for writing the books and giving the seminars.

If you’re looking for a winning negotiation strategy, take an “Interest-based” approach to negotiation as outlined in Roger Fisher and William Ury’s “Getting To Yes.” This is a small, but very valuable book that everyone – not just business-people should own. Really, order it now. Interest-based negotiation is founded on 4 mental methods:
1. People: You must separate the people from the problem.
2. Interests: Positions are just cosmetic; you need to find the real interests underlying the negotiation position.
3. Options: Don’t be stuck with one “deal-breaker” answer – generate real (hopefully win-win) options.
4. Criteria: Work toward an objective (as such, probably more mutually agreeable) standard for a successful solution.

There is NEVER only one correct solution. It doesn’t matter if you are friends trying to work out partnership interests in a new business or a couple trying to work out if the toilet seat should be left up or down (guys – you’ll always lose this one – it’s in your best INTEREST to give up and put the seat down, even though it’s completely illogical that you are always the one…–but I digress…). The interest-based negotiation process works even if you’ve decided to hate each other.

I don’t have space here to discuss the entire system; it’s the subject of a whole book after all, but I’ll let you in on the biggest benefit. You have to honestly look at the situation from the other person’s point of view, especially if there are more than two parties in the negotiation. What are THEIR interests? As the book says, “If you want to influence them, you also need to understand empathetically the power of their point of view and to feel the emotional force with which they believe in it. It is not enough to study them like beetles under a microscope; you need to now what it feels like to be a beetle.”

To effectively negotiate, you need to understand the problem you are trying to solve is as much emotional as it is practical. Objective criteria help remove the emotional attachment to positions, but sometimes you just need to understand that one of their interests is an opportunity to vent. Sometimes it’s simply an apology. These “concessions” cost little or nothing. You need to make your proposals consistent with their emotional involvement and values. You need to give them a solution that allows them to save face, but still satisfies your interests.

I don’t write Chinese, but I’ve heard the Chinese character for opportunity and crisis is the same. Interest-based negotiation can really turn a crisis into an opportunity. I’ve had many intellectual property infringement situations turn into mutually beneficial licenses. I’ve had arguments that had gotten out of hand resolve into closer friendships and more efficient businesses.

Next time you’re faced with a confrontational “negotiation” situation, adjust your attitude to an interest base “problem-solving” situation. You’ll be glad you did.

Kevin E. Houchin principal of Houchin & Associates, PLLC – a copyright, trademark, arts & entertainment, and business development and branding firm located in Fort Collins, Colorado. To contact Kevin Houchin, call 970-493-1070 or email him at kevin.houchin@houchinlaw.com.