About twenty or so years ago, I sold a company by the name of “ISR” (Information and Systems Research) to a British Corporation. The affable but completely ruthless guy who headed that corporation taught me many, many things during the approximate year that we transitioned our company to his. And even though this transition was quite painful, all of the lessons I learned from it have stuck with me over the years.

One of the stipulations of the sale was that I had to spend the better part of one year living and working in both England and South Africa. During one of my U.K. stints, the new buyer, we’ll call him “Barry”, took me to see an “old mate’s” animal processing plant. This plant was located in the tough and seedy town of Liverpool.

I should have been more suspicious of Barry. Maybe if only for the fact that his was clearly a cockney accent covered by a relatively fresh coat of paint. Nonetheless, I genuinely liked the guy. Maybe it was because we shared a certain “street” background. Maybe it was because he recognized the value of sales people.

(Regardless, I should also have been forewarned by the tattoo of a bloody dagger on his inside, right forearm. He told me he was in the Royal Navy. But by the time I got around to checking out this apocryphal tale, I had already been sunk!)

Anyway, we went to this processing plant, which belonged to his “mate”. I could smell the place way before I even could see it, for it emitted the odor of dead livestock. This was quite reasonable, of course, since that’s what the plant was all about. This man (he had a 6^th grade education, BTW) had carcasses of livestock regularly delivered to his receiving dock, bereft of everything but internal organs, bones, and hooves, virtually around the clock.

The plant’s Inside looked to me like something from one of Dante Alighieri’s Nine Circles of Hell. (In fact, it looked most like the space reserved for the Barraters ---my Lord, the politicians!). And you had to look quickly, because your eyes were quickly glazed over by tears and the gagging sensation one only gets from inhaling tear gas.

And serving in this hell were the “men of Dis” ( in keeping with the Divine Comedy analogy ) themselves … these men were half drunk, a third without appendages themselves, and generally looking like something that only “Tom Savini on meth” could create!

“Nothing wasted, eh?”, Barry says to no one in particular, “The bones become medicine, the eyeballs glue, and the organs pig food.” (Which was the last time I ate pork, BTW). “And this guy gets paid for his inbound raw material. Try finding a software package that handles that bit of activity and accounting.”

I often think of that particular “plant visit”. In fact, I often think about it when I’m seated in some gargantuan conference room, listening to some overpaid, venture-capital fueled executive giving a PowerPoint presentation while spewing his personal theory as to why his breakthrough software will become the next industry standard. (No, not the magazine.)

Because the key thing that I learned as a businessman that day was this: “Find a dirty, backwater niche where no one else will go because the work is either too prosaic, banal, or downright disgusting, and you’ll have a great chance to do well.”

These, BTW, were first my grandfather’s words. Immortally uttered to me on his back porch while listening to the Pittsburgh Pirate’s miracle summer – otherwise known as “the summer of 1960”.

I learned something else from that plant visit. And those were the terms “co-product” and “by-product”. For there is always some other (and Lord, I hate this term, but I still must use it) “revenue stream” available to you, usually right under your nose, available for exploitation, should you merely choose to take advantage of it.

Example: back in the early nineties, I was running the Commercial side of a company named Mastech (now IGate Corporation). And it was at Mastech that I saw both of the above principals in play.

First, and when it came to “backwater”, Mastech was right down there in the gutter. Our “products” were India-based software consultants whom we took right off the streets of Bangalore and then dispatched them, at a decent mark-up, to such backwater places as LaCrosse, WI; Altoona, PA; and Mandan, N.D.. We had no exotic business models or expensive meetings --- instead, we just asked (and over the phone) such questions as, “Do you need a COBOL programmer who works on an AS/400?”, and then, “How much are you willing to pay us for this person?”

And we sold this consultant right over the telephone. Nobody got on a plane, and nobody wrote a fancy proposal. It was all a simple matter of demand meeting supply, and our sales guys made some 80-100 calls a day. Every day. From their cubicle.

These “sales associates” had zero experience in software selling. Hell, we gave them a cheat sheet and a small part of a technical consultant and they were on their way. We had guys who had sold theater tickets, aluminum siding, and bonds --- but again, this was all done over the phone. We had history majors and dropouts, but they all had one thing in common --- they could sell!

Dirty, unglamorous niches? You bet. But Mastech has never since made those kinds of profits since. They may never.

I could write about my personal experiences in this regard forever. Very little changes but for the product/service itself. If you want to build a rocket ship business, find the backwater areas where so many others consider themselves too “proper” to muck around in, and then just leave the “high-glamour/no profit” areas to the “Ivy league/my daddy is already wealthy” set.

And as for co and by products? Well, I’ll again refer you to the cockroach (this is a term of endearment in my book, BTW) approach of Mastech and its founders, … “throw nothing away, and find a second or even third use for everything.”

For example, consider just this ONE anecdote.

Remember when I said that Mastech’s salespeople made a total of about 660-700 calls a day? Well, and as any sales manager will tell you, probably about 460-480 of those calls were fallow. No sale.

Some would call these “wasted” calls. But in truth, they’re not wasted in the least, because each and every one of them is pregnant with information! Think about it --- my six or seven guys were talking to some 600-700 IS managers per day. Now, assume that at least 1/5^th of these calls are “relationship-building” calls (that is, my guys gave and took information to the point where they soon became friends with their guy), and as a result, hundreds and hundreds of important and valuable pieces of information were flowing directly from them to us.

Think of the strategic software buying trends we were able to compile. Think also of recruiting direction. These two areas alone helped us plan and smartly grow our business. Hell, Think stock market! If some unheard of tool or packaged software was becoming essential, who would know that before anyone else?

All of this valuable “hard” and anecdotal data was a by-product of another, more pointed effort, the results of which cost Mastech absolutely nothing.

As a buddy of mine said at that time, “It’s like picking up dollars … money for nothing!”

Do they teach this stuff in school? Well, you know I teach entrepreneurship at Duquesne University, and I sure do talk about both of these issues.

But I never once heard this kind of advice when I was a student.

Did you?

So just remember the rules:

Find that dirty, backwater area, and,

Always get at least twice the payback for your effort.

Do this, and I’m pretty sure that you’ll do all right.