Learn How to Analyze Big Data for Free

Intro Databases and Statistical Learning“What Should I Study?”

Right before I started my first full-time job, I had a good talk with the chairman of my university’s supply chain department. I asked him, “If I were going to study more after I graduate, what do you suggest I focus on?” Without a second of hesitation, he responded, “databases and statistics.”

Really? Databases and statistics?

I had taken the required introductory statistics class. Then, I promptly forgot everything that Excel couldn’t automatically do for me.

I had also done a few queries in Microsoft Access, but anything more on databases was taught over at the computer engineering school – not the business school.

As I entered the workforce, I read up on many other topics related to my field: books on negotiations, communication, and network optimization. I received my APICS certification. Logistics and purchasing trade magazines covered my desk.

I eventually taught myself SQL through Sams Teach Yourself SQL in 10 Minutes so that I could better query our company’s databases, but that seemed like more than enough database knowledge for what I needed to do.

However, after a few years, I kept running into the term “big data.” Although there are many definitions for big data, I like to think of it as ‘more data than an Excel spreadsheet can handle’. What’s cool about big data, and the reason it’s gathered so much attention, is that you can find trends and patterns that were impossible to uncover before companies started collecting so much information. Faster computers also allow you to analyze that information without waiting weeks for your calculations to process.

All of this is extremely important to supply chains and company operations. Millions of dollars are just waiting to be saved if you can uncover better trends and patterns, especially in forecasts.

The surprise for me, however was that to be a big data ninja (or analyst, if you want to use the boring job title), you need fairly decent skills in two areas. Would you like to guess what those two skills are?

Databases and statistics.

Learn Databases and Statistics through Free Online Courses

Well here’s the best part of this article – you can start mastering both of those topics for free.

Stanford University is offering free online classes on both of those topics right now. The process is easy and straightforward:

  • Professors lecture, explaining concepts and examples through online videos
  • You read the free course materials and/or books
  • You work through examples with free open-source software
  • You take online quizzes and talk with other students.
  • You learn some awesome big data skills and even get a certificate of completion from Stanford when you finish

To enroll, you just register at the class websites: Introduction to Databases and Statistical Learning.

I’m taking the statistical learning class right now and I’m really enjoying it. A friend of mine finishing his MBA program let me know about the statistical learning class. His professor suggested that he may want to take it as he heads off to work for UPS.

The classes started about a month ago, but there’s no problem starting late and jumping in now. Plus – there’s no risk at all – so if you start and realize it’s not the thing for you, then oh well, no worries.

Why I’m Studying Statistical Learning

Databases make sense if you’re interested in getting into big data. However, statistics seems a little more intimidating to me. Here’s the reason I’m taking the statistical learning class.
Before the class, I knew how to use the trendline function in Excel to find the relationship between two variables. I could easily figure out if there’s a correlation between sales and the money spent on TV advertising.

However, now I’m learning how to find the correlation between multiple variables, such as sales and combined advertising in TV, radio, and newspaper. I’m in the middle of chapter 3, where I learned what method to use to figure out whether a variable actually relates, or if other variables are responsible for the change. For example, shark attacks and ice cream sales both go up in the summer, but ice cream isn’t causing shark attacks. Similarly, in the advertising data I’m working with, newspaper advertising appears at first glance to have an effect on sales. However, when we look at all the variables together, newspaper advertising doesn’t affect sales at all – only TV and radio advertising do.

Now that’s an awesome observation if you work in marketing, but how will that help our supply chain? I plan to approach our forecasts much differently after understanding these statistical analysis techniques. If I could find relationships on dimensions such as date, location, promotion, price, and other variables, then I could get much better forecasts and hold less inventory. Even if I could improve our forecasts just a little, that’d more than make my time in a free class worth it.

The class teaches you how to use an open-source program called R, which many companies are beginning to use such as Google, P&G, and Ford. If they’re using it, and it’s a free program, then maybe my growing company should use it too.

If anyone is brave enough to sign up with me, let me know, and we can work together on any tough problems we encounter.

Supply Chain Cowboy ApprovedThat’s my thought for the week. The internet and improvements in technology have given us the challenge and opportunity of big data. Similarly, the internet and Stanford has given us a free way to learn how to surmount that challenge. Pretty cool, and definitely Supply Chain Cowboy approved.

If big data is something that interests you, here’s a recent, related article: Getting Started with Big Data in a Small Business

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    One Easy Excel Formula to Track Shipments

    Wouldn’t it be awesome if a Microsoft Excel formula could automatically pull tracking information for shipments sent via UPS, FedEx, USPS, YRC, and other major carriers? Well – you can. Jimmy Pena from ShipTrackAddin.com has created a great Excel add-in that does just that. Best of all, it’s free (although the author does accept donations if it helps save you time and effort in tracking shipments).

    How it Works

    After a quick download and an easy install of the add-in, your Excel will have a new formula called ShipTrack. Then, you just use the ShipTrack formula in your spreadsheet just as you would use a SUM formula. For example, I would type the following into a cell:

    =ShipTrack(301571615207567,”FedEx”)

    After a second of grabbing the information from the FedEx servers, the cell would return this value:

    Delivered Monday, January 13, 2014 at 5:53 PM at signed by MMORRALIS FEDEXGROUND

    It’s as easy as that. If you have a long list of tracking numbers, you can just copy the formula down and it will populate them all instantly.

    You can also use references in the formula, so the following would work just as well:

    ShipTrack2

    ShipTrack1

    Carriers Included in ShipTrack

    Perhaps the best part about the ShipTrack formula add-in is the long list of carriers it covers. The current version, 4.3.1, supports the following carriers:

    Carriers Included in the ShipTrack Formula
    • A1 Express
    • A-1 International
    • Blue Dart
    • CEVA Logistics
    • CMA-CGM
    • Conway Freight
    • DHL
    • DHL Global Forwarding
    • Expeditors
    • FedEx
    • Lasership
    • New England Motor Freight
    • Old Dominion
    • Ontrac
    • Pegasus Logistics Group
    • Purolator
    • R+L Carriers
    • Rworld Couriers
    • Safmarine
    • SAIA LTL Freight
    • TCIXPS
    • TNT
    • United Parcel Service (including LTL)
    • U.S. Postal Service
    • YRC Freight
    • YRC Regional (including New Penn, Holland, Reddaway)

    Carriers are also being added regularly, so check the site to see if a specific carrier is in the works to be added.

    Download the ShipTrack Add-in for Free

    You can learn more and download the ShipTrack add-in over at ShipTrackAddin.com.

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      Build an Awesome Vendor Scorecard Program in 4 Easy Steps

      Vendor scorecards measure and track supplier performance on various dimensions that are important to your organization. At first, I was reluctant to start a scorecard program because I thought our company was too small and too busy. However, after eventually beginning our program, I saw powerful results that freed up time and helped the company grow.

      Vendor Scorecard Example

      Vendor Scorecard Template with ExamplesVendor scorecards strengthen supply chain relationships and help focus your suppliers on what matters most to you. Scorecards set goals for your vendors to reach for so they can become your vendor of choice. You can clearly see where each vendor ranks against each other, which helps you decide which supplier to work with on complex projects. This article outlines the four steps I took in building our company’s vendor scorecard program. I have attached a Excel Vendor Scorecard Template that I put together as a starting place for your own scorecard.

      1. Decide What Matters

      The first step in creating a vendor scorecard program is to define what your ideal vendor would look like. For me, it would be someone that communicated clearly 100% of the time, shipped quality products for free, and had a lead time of 15 minutes. Although those requests are a bit ridiculous in my industry, it does highlight what matters to me in my vendors: communication, quality, pricing, and lead-time. Together with my team, we took my brainstorm farther and came up with four categories that matter most to us with our vendors:

      • Pricing/costs, including payment terms
      • Production and Supply chain, including communication and lead-time
      • Quality
      • Product Development

      Essentially, if our vendors could continually improve on these four points each year, our organization would benefit immensely.

      2. Measure the Metrics

      Having defined the broad categories, we now have to build the nitty-gritty of the scorecard. You need to build specific, measurable metrics for each category. Specifically, what exactly will you measure, and more importantly, how? For example, a pricing metric could be a comparison of costs between all capable vendors. A quality metric might be the percentage of orders with quality defects.

      Good scorecard metrics should clearly define what is good, acceptable, and bad performance in each dimension. Your metrics should be a score for how your vendors are doing in aspects that matter most to you. They should be easy to understand, and if possible, easy to calculate. Unfortunately, building the perfect metrics often takes some deep thought to get them right.

      Nailing the Details is Key

      Many metrics were much more complicated to fully define than I thought they would be. For example, lead time is an excellent metric that I use. Tracking the time from when you place an order to when it gets delivered is a great way to compare vendors and encourage reductions in lead time. However, measuring this can be tricky when you get into the details. Should you track the time until delivery at to your location or delivery at port? If you ask a vendor to delay a shipment, will their lead-time artificially inflate?

      For most quantitative metrics, your accounting system should have the records you need. However, based on the specific things you want to measure  you also might need to start tracking new events or information. For both of the above lead-time questions, I had to change our receipt processes to account for how we wanted to measure that metric. Despite the added work, tracking more data allowed us to trust our metrics and better compare our vendors apples to apples.

      A Note on Subjective Scores

      When hard data is unavailable or impossible, use a subjective grade. For example, “This Vendor is Flexible in Requests to Alter Production” is a difficult metric to track in our ERP system. Instead, at the end of each quarter, our supply chain team fills out a survey for each vendor that rates them on several dimensions such as flexibility. Rating vendors on a scale is the best way to get a good score from a soft metric. Even better is when the survey has an example for a top, middle, and bottom score for the metric so that scoring is more consistent across teammates. Recording everything in a free Google Form that you send out to your team is even better.

      Google Doc Questionnaire 2

      Weight What Matters

      Once you have the metrics you want to measure (I have 4-6 in each category), it’s time to weight them. Start by rating the overall categories. The pricing category may be 25% of the total score, quality 40%. When your categories equal 100%, weight the individual components of each category. For example, if the quality category is weighted at 20% and has three metrics, then those three metrics could be 5%, 12%, and 3%, which adds up to 20%. The Vendor Scorecard Template shows my weighting.

      Example Weighting

      Pull Out the Gradebook

      Maybe it’s from the report cards I received every semester in public school, but the A through F scale carries a lot of significance to me. That’s why I like to use that scale for each of my metrics. Some can only receive an A or F, or A, C, or F, but they all have the same percentage score. Based on their grade, vendors receive a percentage of that metrics weight as follows:

      • A – 100% A metric with 10% of the total scorecard weight would be 10% with an A
      • B – 75% (7.5% with the same metric)
      • C – 50% (5%)
      • D – 25% (2.5%)
      • F – 0%

      Color-coding the scale adds the final touch of understanding so that it translates well and conveys the message clearly.

      Example Weighting

      Build the Document

      Finally, once you’ve figured out your categories, metrics, and weighting, put it all together in a spreadsheet scorecard. You can use my template as a starting point to build your own.

      3. Roll Out the Program

      Once your scorecard is complete, implementation is your next bull to lasso. You’ll need to devise a plan to clearly communicate what, why, and how you are measuring your vendors. Depending on your suppliers, your experience could be much different, but here’s what I did.Why a Vendor Scroecard?

      First, I put together a presentation with one or more slides explaining the following. It was detailed and thorough so that our vendors could clearly understand each score. Specifically, the document had the following:

      • A detailed explanation of each category and metric
        • For complex calculations, I included an example slide
        • Explanation of weights were also included
      • Reasons why we were beginning the vendor scorecard program
      • The implementation schedule (trial and full launch)
      • Our commitment to our vendors

      Armed with a document that clearly defined the program, our CEO emailed the presentation and the scorecard spreadsheet to the leadership of our key suppliers. He asked them to review it and then meet with us in a video conference discussing the program. During the meetings with our six key suppliers, the CEO expressed support of the program and our supply chain team explained the details. Most vendors appreciate being measured on more than just price, and so all of our vendors were excited about the program as a chance to prove their holistic value to our company.

      We designated the first month as a trial period where we would track performance, iron out issues, and report scores but not take action based on their results. After meeting at the end of the first month to discuss the trial run, we began the program in earnest.

      4. Review and Reward

      What will make your vendor scorecard program truly succeed is your diligence after implementation. I strive to send out scorecards on-time at the end of every quarter. My team schedules meetings via Skype or in person to review the scorecard each quarter and discuss ways to improve. The communication is two-way – we want all our vendors to reach perfect scores. That is why we council openly about what each of us can change to improve the metrics.

      Another big decision to make is what you’ll do because of the scores. Will vendors with consistently high scores obtain a preferred status? Will quality checks or audits happen less frequently? Will you distance yourself from vendors who are very cheap, but fail in every other category? Will you reward contracts based on scores?

      If you find yourself rewarding higher scores with more business, then your weighting is probably correct. However, if more and more business is still going to vendors with lower scores, then consider revising your scorecard to better reflect your company’s true priorities.

      A great and relatively inexpensive way to encourage scorecard improvement is a vendor of the year program. This could involve a personal meeting, dinner with the CEO, and a plaque for the winning company. When I watch the “Walmart Vendor of the Year” award go to one of my competitors, I find new motivation to improve. Your suppliers may feel the same.

      Bonus Step – Survey Your Vendors for Improvement Tips

      If your vendor scorecard program is chugging along, then consider asking your vendors to score you. Sending a quarterly feedback survey to your vendors to discuss at the same time as their scorecard can bring insights into how you can be a better customer. Some questions could be:

      • What good practices do your other customers do that you wish we did?
      • What can we do to help you reduce lead-time?
      • What was an example of a project that went well? What about that experience can we recreate for all future projects?

      If you make it clear they won’t be penalized for honesty, then you may be lucky enough to get great feedback on how to truly improve. Becoming a better customer can help your vendors better service you. In addition, you may pick up some best practices from their other customers or resolve root causes of your own deep problems. Address these issues in the scorecard review meetings and make commitments to improve when possible. We received a lot best practice tips from our vendors when we said, “we’re really bad at forecasting, so we’ve brought on staff with forecasting experience and invested in the software we needed.” They detailed how their other customers forecast and recommended we try the same.

      Final Thoughts

      As I talked about in my article on supply chain gamification, games have a way of bringing out our passion and motivation. A vendor scorecard brings the power of game mentality to supplier relations. “Just keep everything green and keep out reds” becomes the goal of your vendors. “Work with the highest scoring vendors” becomes your vendor selection shortcut. Measuring progress brings improvement that both your vendor and you will enjoy.

      From the success I’ve seen from the program, I wish I had started it years ago. This quickly brought to mind the mantra of a friend of mine in process improvement. “There’s two good times to plant a tree: twenty years ago and now.”

      If you haven’t started a program yet, begin today. If you have one already, take a look at how you can improve. Either way, share your experience in a comment below.

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        Stop Throwing Away What You Learn

        Throwing Away What you Learn

        My wife and I have a running joke about asking certain types of questions. She will ask me something like “Do you know when Easter is this year?” In an ironic tone, I’ll reply, “if only there was a global electronic network of information that you could access from your phone that would answer that question.” She’ll roll her eyes at me, lightly punch me in the arm, and then pull out her phone and ask Google her question. Wikipedia usually has the answer, and our conversation moves on. Rest assured though that my wife takes great pleasure answering the same way when I ask similar questions that the Internet easily answers.

        Even though that question is sarcastic for general questions, it holds real meaning for questions in a small business. “Where do I find the form to request time off?” “Where is our procedure for creating an invoice through EDI?” “What are Walmart’s shipping requirements?” To all these, I reply, “If only there was a company-wide, easily accessible, and searchable resource that would answer that question.” From that idea came our company’s wiki.

        Background on Wikis

        A wiki is collection of information that can be edited by most or all users of the program. Wikipedia is the best-known example, an encyclopedia that anyone can edit or add information to. Creating a similar, living encyclopedia of information for our business has been incredibly helpful. Being able to add procedures, forms, and other information to a location where any employee can quickly access them allows us to share knowledge and train others better.

        A wiki is a powerful tool in sharing knowledge across the company. Rather than needing to explain every procedure, employees trying something new can first search the wiki to see if a documented process can show them what to do. This is especially useful if someone is out of the office for vacation. The wiki empowers others to cover for others whose processes are documented on the wiki – and employees can enjoy their vacation time without phone calls asking for help from work.

        How a Wiki can Help Business

        The reason a wiki is different from just a bunch of text documents somewhere on a hard drive is accessibility and editability. A wiki indexes information so that you can search and easily find what you need. Finding the “Time Off Request” form is so much easier to find through a search bar than digging through folders in Windows Explorer or asking HR for the form’s location.

        Company Wiki Search

        Second, a wiki’s true power comes in the ability to edit and update information. When Walmart changes a shipping requirement, I can go to the Walmart page, press the edit button, type the new requirement, and then hit save. The pages are so easy to edit that despite their busy schedules, my team is able to find time to document common procedures. Wikis allow for the ease of sharing information, so that knowledge of processes is not locked away in the minds of individual employees. Without such sharing, we are essentially throwing away all acquired knowledge each time someone is away from the office (temporarily or permanently).

        Wikis are also great to help accomplish work that is not performed regularly. For example, every six months or so, our ERP system needs to be reinstalled on a certain machine because of a problem on that machine. The first time, it took several days for me to figure out how to do the install because of the machine’s unique setup. After figuring it out, I jotted some quick notes on the procedure and posted them on a wiki page under the IT section. Six months later, after I had long forgotten what I had done to fix the issue, the machine started erroring again – the signal to reinstall. This time, I jumped on the wiki and searched for the document. My notes popped up as the first result and the machine was as good as new 15 minutes later.

        Wiki Options for Small Business to Consider

        Company intranets and wikis are nothing new– but many businesses have yet to implement one. Fortunately, adding a company wiki is easy and affordable (there are many great, free options). Here are a few options to consider.

        Confluence by Atlassian – $10+

        Confluence LogoThis is the system my company uses. It’s not free, but for 10 users, it’s only $10. I like it because it’s very easy to use, has extensive documentation and tutorials on how to use it, and you can edit the theme to make it look more attractive. The last point isn’t important to me, but it helped get executive sign off to work on it (looks and appealing design are important at my company).

        Confluence

        MediaWiki – Free

        Media WikiIf you use Wikipedia frequently, then you’ll feel right at home with MediaWiki. MediaWiki is what Wikipedia is based on. It’s free and very popular, which means there’s a strong community and many tutorials to help you easily install and run it.

        MediaWiki

        MediaWiki Sysadmin Hub (Installation Instructions)

        Tiki Wiki – Free

        Tiki Wiki LogoIf MediaWiki doesn’t have quite enough features that you’re looking for, then check out Tiki Wiki. For me, I didn’t want to be overwhelmed and miss my goal of company documentation, but you may want to take your wiki to the next level. Tiki Wiki boasts a very long list of features including the following:

        • Themes, newsletters, banners, and blogs
        • Shopping carts, payment, membership, and accounting tools
        • Friends, surveys, polls, chats, and other social networking
        • Issue tracking and other IT Help Desk tools
        • Spreadsheet, slideshow, drawing, and other office applications
        • Quizzes, webinar integration, and other e-learning tools
        • Many other additional features

        Tiki Wiki

        Tiki Wiki Installation Guide

        WikkaWiki – Free

        wikka_logoIf you’d rather go the other direction and want something more lightweight and simple, then check out WikkaWiki. It is designed to be much easier and straight-forward.

        WikkaWiki

        WikkaWiki Installation Guide

        Dokuwiki – Free

        Doku Wiki LogoFinally, Dokuwiki is a great option for company documentation because that’s what it’s built for. It requires no back-end database and can efficiently fulfill the documentation needs of a small company.

        DokuWiki

        DokuWiki Installation Guide

        If you have an IT person that wants to do in-depth comparisons and look at even more options, then check out WikiMatrix. There, you can compare dozens of Wiki options and find one to fit your expertise and needs.

        A Couple Factors to Consider

        With all company tools, it’s important to consider the side-effects and consequences of using it. Here are some things you’ll want to consider before rolling the wiki out to the whole company.

        Internal or external – do you want your wiki accessible from any internet connection or only while on your company’s local network? If you want it accessible from anywhere, then you’ll need to put some security login procedures in place to keep the world out of your company’s procedures.

        Users and permissions – should everyone in the company access everything? If not, then you’ll need to edit user permissions and groups.

        Moderation – will anyone be responsible to moderate and monitor the wiki’s usage? If you have a larger organization, then you may need someone to keep everything somewhat neat and organized.

        File storage – we often upload Word and Excel documents to our wiki so everyone can access the latest version of a file. However, since our wiki stores the file within its programming, the program can become quite large as many files are added. Will you upload files to your wiki or just add links to the file’s location on your network?

        Use more than text – as explained in my article [article about visual explanations], visuals are often much more helpful than just text. Be sure to include screenshots, pictures, or even video tutorials to make your procedures easier to learn.

        Although your wiki may be sparse at first, be diligent in your implementation and building a company resource. We installed ours just 18 months ago, and my teammates and I now rely on it multiple times each day. It’s allowed us to do more and maintain corporate learning as some employees have moved on. Best of all, it empowers everyone in the organization to learn and effectively do more each day.

        What does your company use to share its knowledge? Could a Wiki help you stop throwing knowledge away?

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          Startups, Sourcing, and Sustainability with Mark Dwight of Rickshaw Bagworks – Interview Part 2 of 2

          In a beautiful San Francisco neighborhood stands a brick warehouse containing something unusual and inspiring – a startup that uses lean manufacturing and sustainable business principals to make products in the US. Relying on local vendors, an honest culture, and talented people, Rickshaw Bagworks produces bags that people love.

          Mark Dwight

          Below is the second half of the transcript from our phone conversation. The first half is available here.

          Q: From your experience starting your own business – how was that to take that step? What would you say to budding entrepreneurs that want to make that same jump?

          Well, the first part was that “I got pushed.” I got fired from Timbukt2, and that’s ok. It was a new group of investors. They bought the company for a lot of money and they weren’t there to have a party. They were there to build it even bigger and sell it themselves. They looked at me and said, “Look, you’re a really creative guy. You did a great job of growing this from 4 million dollars in sales to 20 million dollars in sales, but we need to make it a 100 million dollar company and you have no experience doing that. I was like, “You’re right.” So they said, “Well we’re going to go find a 100 million dollar man.” So I said, “Ok fine. You know, what do I have to say about that? You own the company, not me.”

          So I left there and as I was thinking about what I was going to do next, I thought, “Well I could go buy another little, small company.” But that’s usually hit or miss. I had been very fortunate with Timbukt2. It was struggling, but it had a great brand and a bigger-than-life image. It was ready for someone to take it to that next level, and I was fortunate to be able to do that. Whether I could have taken it to that next level of 100 million dollars, I don’t know. Frankly, in retrospect, I’m not so sure I would have wanted to.

          Rickshaw Bag in ProductionI looked around a little bit and I didn’t find anything that was obvious that I might want to buy. One day a friend of mine said, “Mark, you’re spending a whole lot of time avoiding the bag business.” I had been hesitant because I thought, “If I run off and start a bag business, everyone’s going to say, ‘that’s just Mark. He’s mad about Timbuk2, so he’s going to go start his own bag company out of spite.’” I didn’t want people to think that at all. In fact, I had fallen in love with bags and the bag business because bags are the most personal of personal accessories. People love their bags. At Timbuk2, we’d have people come in with a ten-year-old bag – it looked like trash – and I’d wonder, “Dude, how can you walk around with that on your back?” and they’d say, “I would never give up this bag.” These people would say, “I fell off my motorcycle and it saved my life,” or they’d say, “This stain here is where my wife, when I proposed to her in a French cafe, she spilled her wine. And that stain right there, I don’t ever want to lose that.” This made me think, “Wow, bags are interesting. Every bag tells a story.” I had learned how to make them, and I love making stuff. So I said, “Ok, I love bags, I love making bags, I know how to make bags.” I knew that Timbuk2′s custom business was profitable. Some of the other stuff we did was less profitable, but the custom part, the online customization, was really profitable. “Well, ok, I’m going to give this a try.”

          Then I had that idea for a chassis strategy for custom computer bags. I thought, “Hey, I’ve got some innovative ideas, I love bags.” I had a little money from when I left Timbuk2. I had the grubstake to start, so I decided to do it. A friend of mine said, “You’re spending all of that time avoiding the bag business, why don’t you just go do it? You love it. Go do it. Don’t worry about what other people think.” We all spend a lot of time thinking about what other people think, but finally, I thought, “You’re right. I should just do it.” And I did. That was 6 1/2 years ago. It’s been a long slog; be careful what you wish for.

          Rickshaw Bagworks Staff

          Q: I watched a Stanford video that you did, and I liked what you said about not trying for a hockey stick growth pattern. You just want a good sustainable business that has modest growth. You go to work each day and you’re happy.

          Yeah, you know, I’m not here to be the king of the bag business. I tell people, “I’m not here to make as many bags as possible.” Let’s face it, if you work for investors, your job is to make as much stuff and sell as much of that stuff as possible. That’s how investors make money, not my company. I’m not grading myself by how many bags I sell. I want to sell as many bags as necessary, not as many bags as possible, as many bags as necessary to run the kind of business that I want to run. Of course, I’m competitive like the next guy, but I don’t need to beat Timbuk2 at their game or feel like I’m competing with JanSport. I want my company to be respected for what it does, and I want it to be sustainable financially.

          Sustainability starts at the bottom line. If you’re not profitable, it doesn’t matter what else you got or stories to tell because you’re not going to be around long. Hence, I want to run a financially sustainable business. I love working with my team. I love being my own factory. I love everything about it. Do we want to be a little bigger? Sure – because we’re just on the cusp of profitability right now. It’s been almost seven years, a long time. We’ll all be really proud of ourselves when we get to profitability.

          Rickshaw Factory Floor

          I think the company could be two or three times bigger than it is today and still be a company that I feel is an authentic, make-what-we-sell kind of thing without help from outsourcing. Frankly, I’ve played that game, and I’m not that interested in it. At some point, you have to decide what you really like to do. I love to make my own products. It’s not me sitting down at a sewing machine. I love my company making what it sells in its own factory and the kind of control, and not just control but satisfaction, that comes from that. It’s what makes me tick. That’s just me, and it’s nothing against people who design things and go have other people make them. That’s great. You’re a great designer; you don’t have to be a great manufacturer. I’ve tried to become both. Actually, that worked backwards.

          I said I wanted to be a great manufacturer, and then I taught myself how to design and do the other parts. I tell people, “I’m here to make a living, not a killing.” It’s just bag. Yes, we’re creating a brand, like Timbuk2.

          Timbuk2 had been around for 13 years when I joined them. We basically took that brand and blew it up. “Let’s go to China and make a $99 computer bag – we will sell tons of them.” And that’s exactly what we did. I said, “This company’s making expensive bags in San Francisco. We’ve got a great brand. I know how to design computer bags. Let’s do a $99 computer bag, make it in China, and exploit the Timbuk2 brand and heritage.” That’s what we did, and we sold tens of thousands of those bags. It was the bag that turned around the company. But, as I look back on it, I think, “Well, that’s one way to do it.” But it feels a little like you’re prostituting the brand.

          I think what came with that strategy was a level of exposure that sort of betrayed the roots of the company and all the of the sudden people started saying, “Oh, you guys don’t make bags in San Francisco anymore.”

          “Well, no, that’s not true at all; we still make our custom messenger bags here”

          “Oh, but I just see all the stuff you make in China, so to me, you’re just a China-made company”

          “No, that’s not it at all.”

          With Rickshaw, I’m trying to be a little more true to that, even though I started out in China. Now I’m of the attitude of, “The more I can make here, the better.” We learn more every day. Part of it is training ourselves to make bags.

          The reason China is so great at bags is because they have expertise, equipment, and capacity. The supply chain is all right there. You can sit in your factory there and say, “I want to see the buckle guy.”

          “Ok, well let’s give him a call. He’ll be here at 2 o’clock”

          “I want to see the webbing guy”

          “Ok, we’ll drive over to his place.”

          Everyone is right there. It’s like making cars in Detroit with the way it used to be when everyone was a local vendor. You could go over to the vendor, work stuff out, and go on with your life. Now, you say, “Ok, I have to book a flight to China – how many days do I loose when I go?” and all those headaches. Either you do it remotely or you plan these epic trips over there. It’s very costly, so what we try to do is build our own local supply chain.

          Rickshaw Bicycle DeliveryQ: There’s definitely something to be said for having the local vendors right there. And I’ve heard that you sometimes visit them on bikes?

          Yes, as a matter of fact I’m standing on the curb right now because I was delivering a box of canvas tote bags that we just made for Whole Foods Markets. A couple of their stores here in town are carrying some canvas bags that we make. I get a kick out of delivering by cargo bike occasionally. It gets me a little exercise.

          Q: When you started on your own 8 years ago, knowing what you know now, would you do it again?

          Oh, absolutely. I love every day of it. It’s really fantastic. Running your own business has its own headaches, but working for other people has its headaches too. I like the ones I give myself better than the ones others give me.

          I’m very fortunate that I’ve had the resources to get as far as I have. That’s one thing I do advise entrepreneurs when they go into their own venture. I say, “Look, I guarantee you it’s going to take more time, more effort, and more money than your business plan says – even if you double everything. It just does. And I guarantee you that 3-5 years from now your business will not look the same as your business looks today.”

          For example, Huckberry is a company that curates products for companies like us. They just opened a pop-up store nearby; they’re based in San Francisco. I was just talking to the two founders, and they said, “You know what Mark, we were just thinking back about when we met you three years ago and the advice you gave us.” They said, “We distinctly remember you saying ‘so, how long do you guys think you’re going to be in this business’ and we remember you saying ‘better give it 3-5 years.’” Then they said, “Here we are, 3 years later.”

          I said, “Well you’re fighting a good fight if you’re here three years later.” I’ve been at it for almost seven years. It takes more time, effort, and money than you ever think. But, if you’re enjoying it, it’s ok. And for me, my business at Rickshaw is not only my occupation, it’s my hobby, my life, and my life style. I quite enjoy it. I don’t think about the work-life balance. I have four teenage kids, and I want to spend time with my kids, my girlfriend, and people in my family. But, they all know, “This is what Dad does. It’s a big part of his life.” It’s just what I live and breathe. I try not to let it consume, but it’s also what keeps me interested and vital. When I’m out in the world, I’m thinking about bags.

          Q: I know you founded a non-profit supporting companies making products in San Francisco – how did you start that?

          I founded the organization called SFMade. I conceived of the idea while I was at Timbuk2, and actually, it’s kind of a funny story.

          When I started making this computer bag over in China, the San Francisco Chronicle ran an article about us in the local newspaper. Basically, the gist of the article was that we finally had faced economic reality, and we were manufacturing in China like everybody else. We were facing the fact that it’s too expensive to make stuff in San Francisco. And in the that article, they showed a fairly large black and white photo of a sewer, a seamstress, who was a Chinese woman. If you read the headline and saw that picture, you would had said, “Oh, well of course, there’s one of their sewers over in China.” Well, the Chinese community in San Francisco is the backbone of the sewing community. That Chinese sewer was in my factory at Timbuk2 Headquarters in San Francisco. Now, it said so in the caption, but you read headlines and you see pictures – the same way you read a comic book. So that really irritated me. So I started thinking, “We just don’t get enough credit for what we are doing here in San Francisco.”

          SFMadeI was in Silicon Valley working in high tech when Intel launched their famous campaign, “Intel Inside.” Here’s a company that is behind the scenes, no one really knows them, and they decide, “You know what, we’re going to convince people that if they’re going to buy their own computer, then they should demand that it should have an Intel chip. People don’t even know what a chip or microprocessor is, but we’re going to tell them, if there’s Intel inside, it’s going to work the best.” And they went to great lengths to make it seem like “Oh, your Microsoft Word isn’t going to run properly if it’s not on an Intel chip,” or “the operating system’s not going to work the same way.”  I thought that was brilliant.

          I thought, “Intel can do it with technology, why can’t we do it with Geography?” The Champagne region did it. They protect the word champagne with vigilance. This notion in wine is very common. San Francisco is a special place. People think of us differently, “Whack jobs out on the west coast; super-progressive, liberal city; summer of love; the gold rush.” All those things that happened here in San Francisco are part of our culture. We have a very special place, plus we’re beautiful geographically. We should use San Francisco as an ingredient brand. So I conceived the idea of geographic ingredient branding, just like Intel did technology ingredient branding. I came up with this little logo for SFMade, and we started using the SFMade logo on our custom “Made in San Francisco” bag at Timbuk2.

          When I left Timbuk2, I negotiated with the investors, “You know, this SFMade thing, it’s really for San Francisco. It’s not just Timbuk2′s thing.” I invented it, and they let me take it with me. They actually stopped using it after I left.

          So when I started Rickshaw, I started using the SFMade label. Then I had the opportunity to launch the organization as a nonprofit. The executive director, Kate Sofis has done all the hard work to make it what it is now. Today, it’s 500 companies, in San Francisco, who are either making things themselves or having local subcontractors make things for them. Being an SFMade product means it has to be made by a San Francisco-based company here in San Francisco.

          Q: A deeper question for you, what advice or life lessons have guided and motivated you personally and professionally?

          My father was a successful Silicon Valley entrepreneur. He founded a company, the first commercial laser business called Spectra-Physics back in 1962, when I was 2 years old. So I grew up around an entrepreneurial environment. Business was the topic of conversation.

          One thing that my father has always stressed is integrity – personal integrity and business integrity. He’s always made it clear, “There is no mistake so heinous that you can’t tell the truth. It’s the not telling the truth that makes minor mistakes major mistakes.” I tell that to my company, because you know, you get scared. You make a mistake and you get scared, especially if you’re on the job. “It’s the boss’s money.” or whatever fear you have. I tell my team, “There is nothing you can do here that you can’t tell the truth about, because otherwise it just gets out of control—a small problem becomes a huge problem.” We haven’t had a problem that was a mortal wound. We’ve had problems, and we’ve solved them. If we catch them early, they do less damage. I try to impress upon everyone that your personal integrity is your foundation. It’s your bedrock. Don’t do anything to compromise that, no matter what. Sometimes the truth hurts, but I tell people, “The truth hurts for a day, a lie can last forever.”

          Q: Here’s a fun question for you. If our readers are looking for a nice new bag, which one of yours is your favorite and which would you tell them to check out?

          What’s my favorite bag? Well, my favorite bag is one you can’t buy yet. I’m usually wearing a prototype. But as computer bags go, I love our Commuter bag. It’s my third or fourth bag design for computers and I think it incorporates all I’ve learned over the last 15 or so years of designing.

          I like our messenger bag a lot, and I wear our Zero Messenger bag a lot. It’s nice and simple and I can just throw stuff in it, sling it over my back, and I’m off and going.

          We have a new backpack coming out. We’re just finishing up a run of 2,000 backpacks for Google. We designed the product just for them. We’re going to be launching that on our website soon, so that will maybe be my new favorite, but for now it’s the Commuter and the Zero.

          Thanks again to Mark Dwight for sharing his thoughts. Leave your thoughts in a comment below.

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