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Efficiency is the New Black

Topic: Entrepreneur Evangelist,Managing Your Business | Comments (1)

Posted on January 21, 2010 by admin

Efficiency is Good for Business and the EnvironmentThere are many things that I think contribute to the power of the new contigent/freelance workforce shift in our economy.

I believe very strongly in the value of the empowerment and self-direction that it offers; I think that the opportunity for collaboration, creativity and individual contribution is much stronger; and I am a strong advocate that there are a set of unhealthy economic habits that many of us have formed over the past several decades that this model forces us to correct.

Everything from cramming ourselves into over-crowded cities to be physically near our job, to living beyond our means because we get in the habit of spending our next paycheck before it ever arrives: the ability to work independently and/or virtually can offer highly persuasive reasons to re-examine these habits. Within the Bootstrap and Lean Startup communities, cash efficiency for a business is critical — but that kind of discipline must start in the entrepreneur’s personal life.

I was thinking about this as I read VentureBeat‘s article titled “The world’s best renewable source of energy: Efficiency.” While the article in question is about actual energy use, power production and consumption is a power metaphor that applies far beyond forgetting to turn off your light switch when you leave the room.

Last year at SXSW, Werner Vogel, CTO of Amazon, spoke on one of my favorite panels of the conference about the future of cloud computing. When the panel was asked about their green policies and plans, Werner was emphatic: there is a direct correlation between being environmentally responsible and being fiscally disciplined (in the management of a data center). The environmental movement has often focused on the environmental impact of waste, and forgotten to point out that there is also a direct financial impact for both businesses and consumers.

Of course, like a startup with a great big chunk of change from a VC firm, it’s often hard to be sensitive to the downside of waste when you are flush with cash. This is understandable, and, to some extent, basic human nature.

But, as a business owner without outside funding, being efficient with all of your resources — cash, time, other resources, etc. — can be the difference between being in the black or being in the red. It’s a discipline that we’ve watched the past several generations shed a little more every year, as the cycle of buy-borrow-buy continues to grow exponentially.

And now we are at a new cross-roads. The choices are different, but they have costs. Starting a business or going freelance can be exciting, frightening and confusing all at the same time. Consistently, one of the biggest fears people experience is the fear of maintaining an on-going income. But, without fail, people with a discipline of living below their means are less fearful and better suited to take potentially risky opportunities. People whose mortgage payment is 60% of their take-home pay often do not have the same luxury.

In my work with other entrepreneurs, I find these conversations to often be inspiring. I often ask people about the lifestyle changes they have made in order to be able to get their business off the ground. Passionate people with a goal are often willing to give up a lot of creature comforts that they would have never before considered doing without when they were getting a paycheck from someone else. Suddenly the prospect of sacrifice for a reason is worthwhile.

So whether you are looking at how much you spend on daily coffee, your cable bill, or office supplies, remember: not using (consuming and spending money on) what you do not need is good for you, your business and the environment. Efficiency is the new black. And it’s a good way to help keep your business in the black, too.

Alora Chistiakoff is an entrepreneur, blogger, content strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a content strategy firm in Austin, Texas.