28 November 2007

Responsibility & Legacy

Alternative Perspectives is back with Part One of a two part series on over training.


The media forms an essential counterbalance to those in power, certainly those in government. However, judging from my inbox, the reporting on the riots in Paris is probably being over-done (globally). We have been enjoying the symphony, the Louvre Museum and the Eiffel Tower. The trouble is confined to the periphery.

That said... we did bump into a lawyer's strike yesterday at Place Vendome -- completely shut the neighborhood down! The French do appear to enjoy a good strike. Notwithstanding a little labour unrest, France is a fantastic place and we truly enjoyed ourselves.

As I hit the "publish" button on this piece, we're off to the airport to begin our journey to Hong Kong and onward to Australia. Next week I will be writing you from Noosa, Queensland.


Two weeks ago, I sorted out my will. At its essence, I see a will as being about motivation. A reflection of how I motivate myself; how I seek to motivate those around me; and the impact that I will have on the motivation of future generations.

When I think back over my adult life, the person that I would have been most worried about inheriting capital is "myself". The shakiness of my personal motivation from 17 to 32, was hidden from everyone other than myself -- I have managed to get quite a bit done over the years but it easily could have gone far, far differently. A benevolent chunk of cash at just the 'right' time could have had seriously 'wrong' consequences.

Further, knowing that I wasn't solely reliant on my own resources would have reduced my desire, and need, to take care of myself.

Our ability to responsibly allocate capital is a direct result of our experience with learning how to accumulate it. It is challenging to teach prudent financial management to people that have never had to manage finances.


A Valuable Legacy
I've been considering:
***What drives personal ethics?
***What drives self-worth?
***What drives the achievement of a life with meaning?

Ethics, self-worth and a life with meaning -- if I had to choose three things to wish for my kids then those are a good starting point. None of these points require a trust fund.

The most powerful success factors in my life have come from education, social networks and life experiences. A legacy with meaning is one that shares the lessons of my life.

What does this have to do with motivation?

***Achievement is linked to maximizing our capacity to work, then working.

***Self-worth is linked to favorable outcomes from work done ethically.

***Wealth is linked to favorable financial outcomes from capital invested wisely. True wealth is a function of personal freedom, not merely financial assets.

***Happiness correlates reasonably well to personal freedom -- especially, when that freedom is used for ethical work.

I haven't seen a direct correlation between wealth and personal ethics. Going further -- unearned wealth severely challenges both personal ethics and our sense of self-worth. I often ask myself what I did to deserve such a wonderful life and have tendencies to make my life more difficult (for no appreciable reason).

In our society, wealth provides a shield from being confronted by the effects of weak personal ethics. The frequency that we make poor choices is linked to our ability to tolerate poor outcomes. An example relevant to my early career, getting drunk and being unproductive at the office fails to be an option if our lack of productivity gets us fired. Inherent ability masks a lot of counterproductive behavior -- as Scott Molina notes... "you can justify an awful lot when you are winning".

Most of us will do the minimum to achieve our personal goals -- it is for this reason that challenging goals prove so useful for many of us.

My legacy?

Here's what I'm working towards:
***A clear example of the benefits of consistent ethical work over time;
***a useful library; and
***the authorship of one very useful book.

Off to the Southern Hemisphere,

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22 November 2007


It has been a fascinating week over here in Scotland. As I've been writing about athletics for the last few weeks, I will turn to a few finance oriented topics that may interest.

For most of us "credit conditions" lie invisible until we need a personal loan or a mortgage. However, in my various lines of work (private equity, finance, property development and asset management) we are nearly always in the credit markets. I had a very interesting conversation with a senior banker this week.

By way of background, we founded our Scottish property development business in 2005 and have been assembling property deals since the mid-90s. We are a material, but not massive, relationship for our bankers.

With property development transactions, our company makes money from the value of finished projects being more than the development cost. By way of example, if it costs $80,000 to build an apartment which is worth $88,000 on completion then the "capital uplift" is said to be 10%.

Financially, our business "works" for our shareholders because we are able to refinance their equity investment by borrowing against the "capital uplift" at completion. This lets the company move its share capital along to the next investment -- this drives our return on equity.

I spend most of our board meetings listening, thinking and taking minutes. It is good practice for my 2008 goal of listening more. None of what follows was explicitly said in the meeting, I simply noted it and will share some conclusions later in this letter.

Capital uplift (our company's profit margin) -- after two years of declining margins on new deals -- we were suddenly presented with a large opportunity (>$50 million) that had a projected capital uplift of 25%. The deal popped up because (we believe) the buyer was having financing trouble.

As part of our year-end review, our bankers asked us to provide them with additional comfort on our portfolio valuations (easy for us to do as we operate in a specific geography with transparent market pricing).

Our bankers mentioned that the syndication markets were closed. Debt syndication markets are how banks share and diversify risk for their largest loans. They noted that when the markets came back on-line only the best deals would be taken up. Valuation verification is an important step towards ensuring we will be at the front of the queue when the debt markets re-open.

As for new debt, we have heard from our bankers, as well as others in our sector, that new money will be tight for the next six months. That's a polite way of saying that many banks are presently closed for new business. It's not a case of asking for their money back, rather it is a case of not being in a position to fund new deals -- regardless of how attractive they look. I feel sorry for any business that is operating below par in this market.

Bankers are talking about balance sheet decisions, rather than investment decisions. There is a very clear focus on the balance sheet, rather than the quality of new business. Personally, I take this as an excellent development. In a challenging credit environment, we want to be with an institution that has a keen eye on its own balance sheet. The sooner a bank gets comfort on its own credit position, that faster it will be able to start lending again.

However, the fact that senior bankers are more focused on balance sheet strength than new business is a powerful statement in itself. The credit contraction that is happening in the major financial centers is not visible to Main Street at present. If your business (or your personal life) relies on new finance over the next twelve months then I would start the refinancing process early and make sure that you tick-the-box in every conceivable way. Once the credit markets re-open, lenders are going to choose the highest quality credits first.

The days of covenant-lite and non-doc loans are gone. For the better, too.

I attended a presentation from an executive that works at the Bank of Scotland's treasury department. He had many excellent slides and I've scanned three that are relevant to this letter (and my life).

Here's the first one. I noted the date that we bought our first flat in the UK. To say we had good timing is an understatement.
This next one shows the dislocation between base rate (set by the government) and LIBOR (what people like us actually pay for our loans). What killed some mortgage institutions is that they pay LIBOR but lend to their clients at base. This mismatch is highly costly when the markets move out-of-whack.
Those dotted lines show that the forward markets think that things will return to "normal". However, people are pretty jumpy and when I hear bankers noting that "liquidity and confidence are illusions" I fasten my seatbelt.

The last chart is a neat one that we certainly didn't realize at the time.
What I did on this one was draw in the point where we negotiated the initial portfolio of deals that formed our property development business. Once again, we were fortunate in our timing.

I don't have confidence in my ability to make predictions, however, I think that it is fair to say that the following are happening:

***a large credit contraction is underway in the UK and US (perhaps elsewhere, I can't really comment)

***a high degree of uncertainty (bordering on distrust) exists within the international banking community (reflected in interbank rates)

***due to the lag between liquidity and pricing; there is a dislocation between asset pricing and credit availability -- many sellers don't realize the lack of funding available their potential buyers

What does this mean?

From a business point of view, we are going to focus on keeping our credit providers informed and confident in our company. In this environment you want to make sure your capital providers know exactly what's happening in your business.

If your business, or your main customer, relies on credit, then you've likely seen the impact of the credit contraction already. However, if you are a few steps removed from the credit markets then you might not fully grasp what is heading our way. There are hundreds of billions of debt capacity being removed due to the equity write-offs within our financial system.

Over the next few months, keep a keen eye on accounts receivable as well as your key customers/distributors. If you have any clients who's demise would bury your firm then see if you can get credit insurance (it can be a cost effective way to reduce your exposure). In the early 90s, I watched a number of firms go down as credit tightened and the economy slowed. If you are conservative and cautious then you'll be able to navigate your way through. I have seen "services" recessions in Asia but never really witnessed them in Europe or the US.

From a personal point of view, I'm bearish on asset pricing, especially in the property markets. Liquidity is going to be highly valuable in 2008.

Sitting over here in Europe, the US offers outstanding value right now on a Purchasing Power Parity basis. It's crazy expensive over here in Europe. Seems like dollar-for-pound in the UK. My British friends talk about shopping trips to New York (a town that seems expensive to me). People are flying to New York for a weekend of Christmas shopping. If you are in the US then run the numbers on that same weekend to London or Paris!

Off to Paris next week -- we won't be doing much shopping and I hear that there is an excellent multi-day museum ticket.

Happy Thanksgiving to my American readers,


15 November 2007

The Aging Athlete

The man above is Ron Ottaway -- a very special guy.

In 2002, Ron broke the M65-69 Ironman Hawaii record with an 11:57. One catch... Marcos Alegre went 11:53 that day so Ron finished second. Imagine working your entire life to win, to be #1... then going out and breaking the course record... to finish second.

Ron worked five more years towards one single goal -- win Ironman Hawaii. A few weeks ago he went 13:05 (at 70 years old) and won his agegroup by over an hour.

I've been fortunate to advise Ron for the last six years. Ron's personal excellence has helped make me a better person. Ron was an outstanding athlete many years before we met -- my role is more of an objective cheerleader than a project manager.

Everyone that knows Ron has stories about him... one of my favorites is completing the Western States Endurance Run when he was 54. Another is sending me workout details before heading to the hospital to get stitches from falling off his bike -- I recommended that he get the stitches first next time.

Lest you think that he's one dimensional -- he worked full-time until this year and is a key part of a huge family (both older and younger than him).

What follows are lessons that we've learned together -- I've made some good calls and some poor calls over the years. The benefit of working with a world class athlete is that the bad recommendations get covered up by Ron's competitive spirit.

In 2003, I cost him a podium finish at World Champs -- he only made it on stage due to his strength of will. You can't train like a crazed 35 year old when you are 66. Ron stuck with me despite my errors.

This year, I was _right there_ when he took the lead at Mile One of the marathon. While I missed the Awards, I had a very warm feeling when I flew home from Kona this year. To play a part in another person's ultimate success is one of the "highs" of coaching.

While no coach can "succeed", an effective plan can be difference between success and failure. Together Ron and I have learned a lot over the years.


Now that we've figured out (mostly) what works -- and more clearly, what doesn't work -- we tend to approach most years in a similar fashion. From Kona to the end of the year we don't talk to each other much. Ron has a 15+ year running streak so he runs each day. Some days just a short one but EVERY day.

In November/December, Ron does easy training. I provide support for going easy and resting -- it doesn't come naturally to a competitor at his level. Even when training "easy" Ron is doing around ten sessions per week (3-4 swims; 1-2 yoga; 0-2 spins; 7 runs; 1-2 strength). The guy is super consistent.

Ron swims and does strength training -- year round. While some sports scientists believe that strength training doesn't improve performance, you must remember that growing old is about retaining performance not improving it. Watching Ron, his "strength" work (sport specific and in the gym) appears to have had a beneficial effect on retaining bike power.

For most of the population, long term quality of life is about retaining mobility, much more than improving athletic fitness. One of the drags about growing old (for some) is their world slowly shrinks as favorite activities are given up.

Considering the mobility point, Ron started yoga five years ago and this improved his swimming and overall range of motion. If a 65 year old man can improve his flexibility (and therefore his swim times) then I really have no excuse. I've been slack on the flexibility work lately.

OK in terms of the lessons for most of us. That's it.

For high quality of life, long term, focus on:

Consistency -- little something every day
Flexibility -- retain your range of motion, especially if you are a runner
Strength Training -- hold onto lean body mass & retain strength to survive falls/accidents


Starting in January Ron gets back to structured training -- the "advanced week" at the bottom of this note is the week that I use as his template. Ron does all the stuff in square brackets. There is very little change in the structure of the week. What changes is the overall focus of the sessions themselves. However, even that doesn't change a whole lot. We keep it really simple.

Taking each component:

Swimming -- keep the frequency high; long course as much as possible; watch that swim fatigue doesn't compromise other session quality.

Cycling -- build overall endurance; retain FT power; wide range of variable cadence main sets; and challenge maximal aerobic capacity in a biomechanically safe environment.

Running -- super consistent; wary of any small injuries that could reduce consistency; little bit of uphill running to tax aerobic system; very careful with overall run volume and intensity. Informed risks with volume, frequency and intensity.

Strength -- consistency trumps intensity // we go hard sometimes but only on leg press. Really watch the back with the squats due to flexibility limiters.

Flexibility -- yoga 2x per week; again watch back; helps with overall balance.

Biomechanics -- as you can tell from that photo // outstanding. Ron's built well for endurance. He has a smaller frame, good feet, compact running style and excellent ankle/knee/hip alignment. There is a low wear & tear "cost" to every mile that he runs -- and he has run a lot of miles.

Luck -- the unknown factor // in six years only minor soft tissue damage from his cycling accidents. To be fast in your 60s/70s/80s -- there is a component of fortune.

Mental -- the only 70 year old that can do Ron's program is Ron. The guy has more motivation than anyone that I've ever met. He passed out cold in the massage tent with his family around -- his daughter was super worried because he wanted the title so bad. Low blood pressure, thankfully. He was up and around in about an hour.

He's heading back next year to defend his title.

Ron's a winner at a very deep level.


Some quick Qs on last week's posting.

Q1 -- Black Swan Book link?
A1 -- Find it HERE

Q2 -- Did I record my Personal Planning talk?
A2 -- Not yet. If your company, or club, wants to bring me in to give a talk then drop me a line.

Q3 -- You wrote: "it is easy for me to see that there is a risk that we neglect our larger potential when we seek our athletic potential". I've thought *very* similar things in the past when I was playing competitive golf at university (ie: 'do I pursue golf 100% or devote more to personal/academic/extracurricular pursuits?' I wonder if you could expand on your sentence a bit, and if you have any thoughts on how to "figure out" what is the best route to take?

A3 -- I asked Monica what she thought. She felt that pursuing my athletic potential had never impaired achieving my personal potential. Seeing as she is the most important person in my inner circle -- the only person, other than myself, to whom I have a covenant -- I suppose that's enough. However, there has been something more in my head.

I took her support to mean that she never feels neglected when I am living a life of personal excellence. However, what I was writing about was my internal view on my personal ultimate potential. Given that my self view is limited (to date I can always achieve more over 5-10 years than I see in the present); there was more to my pondering than, "am I being a good husband".

Ultimately, the question that I have been asking myself is what would I do if I "knew" that I would never again race Ironman in 8:29 -- or -- if my window to win Ironman Canada was permanently closed. Would I be OK with that? How would I want to live? The question is valid because at some stage, either I will win, or I won't win. Either way, "I" will be the same guy thereafter.

For now, I keep thinking and make daily choices that are consistent with keeping my options open.


PS -- the actions that clearly impair my personal potential have nothing to do with "what" I do and everything to do with "how" I do them.


Here's the link to the Basic Week that I use with pretty much everyone that I advise. As you'll see, I don't add much value in terms of writing schedules and/or data entry.


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09 November 2007

Business Clinic Notes

The photo above contains more of "me" that most photos of me but, maybe, that's just the way I like to see it. You can pretend that I'm the candle...

"Keep in mind that your role with these athletes is, ultimately, to give them the confidence to stop."

-- Bobby McGee

I learned a lot this past weekend at the Business of Coaching Clinic. That quote above was a salient reminder that often we have the greatest positive impact on clients by giving them the confidence to chose a more positive path than the one that they are on.

Over the last fourteen years, I have used endurance athletics to avoid dealing with important issues in my life.

Some of my greatest successes as an adviser have been helping clients choose an alternative path for their lives.


Bobby challenged us to pick one thing from the clinic and apply it on Monday, noting that "people that go to conferences often collect information without applying it". The same applies with self-help books -- Mike Ricci noted that the most successful people that he sees are the ones that manage to apply 5% of the good ideas they come up with.

What did I apply? I decided to apply Mike's advice about considering, specifically, to whom your company is selling.

Since last year, the target Endurance Corner customer has been shifting in my thinking. This week, I sat down with Alan/Mat and we reviewed what everyone _really_ likes to do. As the lead adviser to the business, I thought about what I really don't like to do as well as what I do best.

We're still working on it but we've made a decision that we are going to be about selling value-added advice, and services, that are a product of our unique mix of skills (strong technical knowledge mixed with very deep real-world experience and access to the best minds/protocols/facilities in our sport).

Running a coaching business... other people (such as D3, CPC, CF, CTS, Ultrafit, VQ...) are able to do that better than us -- so we'll focus on supporting them, and their athletes, and their potential customers.

We will do a limited amount coaching to make sure that we remain practical in our application of our experience and continue to learn. It's essential that we walk-the-walk and follow our own best protocols.

That's a start.


There was a lot of talk about "what coaching clients buy." Many thought that clients are buying "results." While clients are attracted to results, what I see is people buying...

...access to excellence (exemplified by the coach);
...compassion, listening, understanding (our society subtly tells many people that they have no worth);
...camaraderie (social networking, teams, community, sense of belonging);
...time management assistance (established high performers); and/or
...life skills assistance (young high performers).

Coaching is as an aspirational purchase for many people -- if you aim to position your self (your firm) at the top end of the market then you must ensure that your personal positioning is consistent with your target market.

Why do former Marines make excellent coaches? They have been trained in excellence -- it becomes who they are and apparent to their customers -- honor, ethics, excellence.

As Bobby said, you don't need to be an excellent athlete relative to others -- you need to be an excellent person relative to yourself.


Mike challenged us to consider our differentiation as well as the areas where we can be world-leaders.

Two areas came to mind for me:
#1 -- personal transformations using athletics as a catalyst; and
#2 -- critical success factors for ultraendurance athletic competition, specifically Ironman triathlon.


In listening to Mike, I wondered how many of us spend our time on what the client truly values.

Do we know what our clients most value?

How often do I make myself more busy, rather than more successful? Early in my coaching career the answer was... most of the time.

Bobby/Mike/me -- we acknowledged that every single thing that we do reflects on our brand, ourselves, our company -- every single act is a form of marketing.

We also shared our experience that we under-valued ourselves early in our careers. Bobby encouraged us to make the case that ours is a legitimate profession.


Linda mentioned that we have 100,000 USAT members // with the correct business structure, a market share of 0.01% is enough to provide most coaches with a satisfactory income. This is a wide open industry. Even the established players have small market shares with clients that are easily persuaded to change.

Mike commented that one of his advisors cautioned against being in a non-scalable business... I highly recommend a copy of The Black Swan to that adviser.

Donovan noted that there are over 1,000 coaches on TrainingPeaks. What that tells me is that running, cycling and triathlon coaching are rapidly growing industries with highly fragmented and inexperienced competition -- ripe for standardization and consolidation // This is an opportunity for someone else -- we have made a strategic decision not to attempt to sort the market out.

There is tremendous value in the coach (or company) that creates a system for generating referrals and client inquiries. There is also value added in the coach (or company) that structures appropriate contracts, payment terms, legal protections and administrative assistance. But... how do you control quality? how do you retain your best performers?

The coaching industry will become more professional -- I expect that companies like TrainingPeaks will grow ever more sophisticated each year. The bottom end of the market will access their systems via web/iPhone. The top end of the market (companies like D3) will sell value-added services that go far beyond building training plans. The (current) middle market will get squeezed.

The key financial metric (to me) is revenue per relationship. This is different than "per client" -- you could have a low revenue client that generates a ton of referral and associate business. That is a high value relationship -- look beyond the dollars when you assess the key people in your network. Also look to the non-monetary benefits that accrue when you take on an assignment.


Bobby challenged us to consider what we want to leave as our coaching legacy. The normal way to do this is to do an exercise where we write down our eulogy.

I don't need to pretend that I am dying to be honest with myself (although it does help). Daily, I consider my legacy as a person up to this point -- my flaws and failings providing fertile ground for self-improvement!

Some explicit tips that I wrote down from Bobby's presentation:
***Do graduate work after you have direct experience in your field;
***Teach kids to learn how to teach anyone;
***Leadership trumps protocol;
***Take formal instruction on your greatest limiters;
***Work only with people that you trust;
***Focus on what you do best;
***Develop passive streams of income;


Bobby noted that he's not sure that training protocol makes much of a difference for Ironman triathlon -- he did this by contrasting with marathoning. Molina/Hellemans have said, essentially, a similar thing.

As a coach (or successful athlete)... if you think that your training protocol is essential for success remember that you are extremely biased by two effects:

(a) survivor bias -- you survived it; and

(b) silent evidence -- we are (mostly) unaware of the athletes that the protocol destroyed along the way.

More on the way we fool ourselves with "evidence" in The Black Swan.

Boil it down...
Talent, motivation, opportunity, direction -- those come from Daniels.
A ton of training -- that comes from Lydiard.


One of the last talks of the weekend was my presentation on Personal Planning. I love giving this talk to groups of people and had been looking forward to giving the talk for WEEKS.

It is my favorite topic in the world because I passionately believe in the method that I have developed over the years.

I need to constantly work on my #1 point for 2008 which is listening. In the Q&A, I really struggled to shut myself up enough for us to learn from the other panelists.

During my planning presentation... I was in full flow -- really fired up...

I gave myself the mental combination of contrasting my love for Monica and the disappointment of failing to win IMC. What wasn't apparent, or explained, was the link between IMC and an expression of our love for each other.

Monica gave me total dedication this past year so that I could give 100% towards my goal. IMC is the only thing in my entire life that I have _truly_ worked towards yet failed to achieve (most my other successes are due to a combination of chance and natural ability).

I was wide open and had to pause because I was about to meltdown in front of 40 people (!)... it was a "good room" and they got me back on track. However, it took me days to 'recover' from being that open. Powerful stuff.

Monica likes to tease her Dad because he is known to get fired up; blow his circuit breakers; and cry -- all the while being wide open to the person he's talking with.

She may have married the same sort of guy...


Files for Endurance Corner Radio

Alan's Talk on Zones -- Part One is on Alan's Blog -- Part Two is the PDF below, look at Page One of the scan... that is how many ways there are to say the same thing... just on Alan's desk!

Will's Talk on Training -- his test results and my recent lactate test.

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02 November 2007


“Mate, you should get the families on board when you are doing athlete planning. I have seen far too many relationships screwed up by this sport.”

-- Greg Bennett, World Champion Husband


I had a T-Rex in my kitchen this past Halloween... Mat went to CostCo and bought 300 pieces of candy and 30 "full bars" (for special costumes). We live in a cul-de-sac and hardly any kids came! Dave had sixty kids over to his place and he was giving away breath mints... next year, I am going to ramp up my marketing.

As a personal reminder... we did quarterly evaluations this week at Endurance Corner. It was recommended that I work on three things:

(a) remember that my mood has a direct impact on the team's productivity (the leader needs to lead);

(b) reduce interruptions when the lads are working on tasks that require sustained thought; and

(c) when I start to focus on being "right" rather than my objective... stop talking and take a break.


My dad describes a blog as… “a collection of ideas, given away for free, that you would normally spend more time developing and seek publication”. I suppose that is a polite way of saying that these letters read a little choppy sometimes.

I am going to share some ideas that came out of the Endurance Corner advisory meeting last weekend as well as recent discussions that I’ve had with some very smart people. We’ll see how this turns out – lots of snippets, hopefully, they make sense.

Before we kick off, Robbie Ventura is going to drop into the last four days of our April Tucson camp. As you may have heard on IronmanTalk, he is preparing to race Ironman Canada and I’m sharing a few tips with him. We have a bit in common, in 1998, I signed up for IMC when my only triathlon experience was a sprint tri. He’s in a similar boat, especially with his swimming.

In Tucson, we will get the chance to share Robbie’s first super-long triathlon training day (the day before we will SBR Mt. Lemmon). If you’d care to join us at the camp then drop me an email for details. We have a few spaces left for the March/April camps.

The March camp will be set-up to fit with athletes preparing for IM Arizona as well as those looking to jump start early season fitness.


A few months ago, I asked a friend if he thought that he was operating at his maximum potential. I have been thinking about that question as it relates to my own life. In reading Dead Certain, I was struck by the thought that President Bush has certainly achieved close to his personal potential. Quite separate from his popularity, the man has achieved close to his maximum potential. It is an interesting case study that has me looking inwards.

In my mulling over of this topic, I see a distinction from achieving greatness and achieving honor. A great person need not be honorable – and an honorable person need not be great.

When I speak with my grandmother, I note that she takes comfort in doing her best to have chosen an honorable path. I haven’t had honest conversations with any people that achieved greatness without honor – I imagine that their later years are filled with regret. Something for all of us to consider when we are tempted by the easy way. For this reason alone, be wary of situations (and people) that tempt you to cut corners.

I am kicking all this around because I know that my potential as a “person” is far greater than my potential as an athlete. I sense that when I seek one, I let go of the other. I was talking about this point with Graham Fraser – a guy that has witnessed his share of holding on, and letting go. He didn’t offer any specifics, merely the catalyst of placing the thought on my radar screen.

Why this is so interesting to me is that it is easy for me to see that there is a risk that we neglect our larger potential when we seek our athletic potential. Monica thinks that I do a pretty good job of balancing things – however – that’s because she is on-my-list when I’m hitting triathlon hard.

Still thinking that over while I consider a business opportunity that offers me the chance to do something “great”. When business deals look very attractive, history tells me that I am probably tired.



I have been talking with a few business owners about ownership. The same topics keep repeating:

***Equity ownership should only be shared with people that provide capital essential for business growth – human capital counts, probably more than any other type.

***My preference is to share equity capital with individuals that are essential to the development of the goals of the business founder and increase both the size, and likelihood, of success.

***Within the management team, my preference is to share equity capital with individuals that are fit for leadership. Does someone improve the CEO’s ability to lead and improve the quality of that leadership?

***I’m not keen on 50:50 partnerships as someone needs to be in charge and contributions are never equal. In that situation, I prefer 67:33. This is a neat number as: (a) the two founders can sell 24% of new equity to a third partner; (b) the founders can still control 76% of the company, post issue; (c) the smaller founder retains a veto over special resolutions that require 75% approval; and (d) the larger founder controls >50% of the equity, post issue.

***If you create a business that is a wild success then you should not feel obligated to deal out a stack of money to everyone around you – you’ll screw them up and you have done plenty for your team by creating the business. Even more likely is that you are best person around to allocate and manage capital. During your lifetime, consider if you dilute the power of your money to do “good” by spreading it into the public at large. After your lifetime is a topic for another time – I have an article in my head about inheritance and motivation.

***Remember that equity and bonuses are most appreciated at the time of allocation. Frequent cash incentives are much more appreciated than single long-term allotments.

***If you are the founder of a small business then consider who is truly necessary for the business to operate. When you stand back and take an honest look – you often see that you are the only person holding things together. In that case, it doesn’t make sense to deal people in as shareholders.

***People that increase your personal freedom; require limited management; and work towards your goals – are highly valuable. Do what it takes to retain them – frequent cash incentives based on their performance and skills in managing other people – that is what I prefer.

***Ideally, the individual that is most fit for leadership should control the equity capital of the firm. If you are the founder, and best decision maker, then be wary of diluting your ability to steer the direction of the firm – far easier to place key employees on generous profit sharing. If you are in a human capital intensive business then this doesn’t always work. Still, try to keep control vested in a small group of individuals – the best partnerships are run by a core group of senior partners.

***As a counterweight to the above point, if you have the ability to greatly improve the value of a firm and/or increase the likelihood of success… then be sure to negotiate a deal that rewards you for the value you create. There is often a balance between paying your dues and achieving market value for your services. The best and brightest can be underpaid until they test their market value – be very polite to your senior partners if you plan on playing this game. If you over-estimate your market value then you are exposed to having your bluff called.

***Always remember that bigger isn’t better and that you’ll cut your best deals when you are willing to lose them. Keep a steady focus on what you want from your business. It is very easy to get caught up in growth, for growth’s sake.

***Always consider if a new opportunity will give you more satisfaction – or merely more work. Know your personal goals and seek to align them with your work goals.

Two final thoughts:

1 – always be willing to make a little less money to maintain high personal standards

2 – remember that your most important brand is yourself – invest in that brand



Files referenced on Endurance Corner Radio

Bike Efficiency PDF File

Recreational Athlete Treadmill Protocol