There is an old (obviously) English saying, warning people not to be "penny-wise and pound foolish." As the main British currency is the pound, 1/100 of which is a penny, someone who is penny-wise and pound-foolish is someone who refuses to invest a small amount now, leading to a much greater cost later. No matter how often I come across companies being penny-wise and pound-foolish, I never cease to be surprised by it.

In earlier articles, we discussed How to Outsource and When to Outsource. Today, we turn to when not to Outsource. At first blush, we expect not to outsource when our candidate does not meet at least one of the criteria for outsourcing listed in When to Outsource. Better Results: Your outsourcers can get you better results, improving any one or more of quality + time-to-deliver + cost without negatively impacting the others.

Although the title for this article might imply suggestions for Proctor & Gamble's IT department, instead we will address how badly code can "smell" and how and when to prevent it. In business as in software, the concept of a "smell test" is a base instinct for if something is a bad idea or implementation: if something smells bad, it probably is. One of my favourite technology bloggers, Adrian Colyer, wrote a recent article about a fascinating analysis of open-source projects, primarily Apache, Eclipse and Android.

One of the most important rules of successful longtime business owners, right after "Cash is King", is "Pay Yourself First." After all, you do not know what the business will be like in a year or two or ten, so don't shortchange yourself. Of course, you need to invest in your business's growth as well, but don't live in poverty because every penny of profit is plowed back into the business.

For years, people I have known in the VC business, as well as entrepreneurs who have been funded by VCs, have discussed the 7-2-1 rule. For every 10 investments a VC fund makes: 7 will fail - "dogs" 2 will hang around, perhaps returning the initial investment - "zombies" 1 will be a great success - "superstar" This formula is why VCs are willing to take such risks; they expect many companies in their portfolio to fail.