The performance measurement of a start-up.
Read time: 5mins-38seconds-ish.
Over the past two years in my day job at Wayra I have had the privileged and unique opportunity to observe an investment portfolio that has grown at a run-rate equivalent to more than one new investment per week.
I also have a personal portfolio of businesses in which I have a vested interest. Two that I’m currently driving especially hard are:
The obvious performance criteria shared by all investors is for their investment to deliver a healthy/positive return.
The challenge is to identify the ‘lead-indicators’ of this successful outcome, (or conversely, the early warning signs that perhaps all is not going so well).
What follows is a very personal perspective of the lead-indicators that I look for when assessing the on-going performance of an investment. I’m not talking about a mathematical financial assessment, I am talking about the various lenses through which I look at the performance of the team.
I’m keen to emphasise that this is my view, (not Wayra’s evaluation criteria). [Tip: points 8 and 9 are the most vital.]
1. Doing what you said.
Sadly, endeavour; hard work; long-hours - are not enough. Nor necessarily are positive results. More impressive than these is making clear the most powerful priority that you (and your team) are focused on; seeking some consensus about that prioritisation; then delivering it.
2. Clear deliberate, decisive, action.
Make sure that your business is full of purpose. Being purposeful is a very good thing. Avoid deliberation and hesitation.
3. Don’t polish it. Launch it.
The transition from ‘pre-launch’ to ‘post-launch’ is not just momentous, it’s often the most traumatic moment in the entrepreneurial journey.
Launching your product/service is the acid-test - does anyone actually want what you’re offering? Many entrepreneurs and developers that I meet are often much more comfortable building technology and propositions than they are managing and running a live business.
My advice is: get it gone. “It” can always be improved. Avoid the temptation to overly invest in proposition improvement prior to launch. Get your proposition in front of paying customers immediately - then improve it.
We’d all like to invest £100k and three months effort on research to validate our hunch and avoid embarrassing failure. Sadly this is a luxury no start-up can afford. Navigating this challenge is invariably vital.
So once your business has been launched, how agile you are in adapting it, your ability to improvise on-the-fly, will often be the key determinant of the business’s success or failure.
I’m looking for evidence of extemporary excellence - which is why entrepreneurialism is so difficult to teach.
In the remarkable words of Matthew Key: "Use your instinct and trust your intuition. It’s what got you here."
5. Being clear on what success looks like.
I often ask entrepreneurs to define what their key measure of success is - what’s the one KPI that they are most focused on? The answer provides a very clear view of whether or not the team is pursuing the most effective/appropriate goal.
Are you chasing revenue or traffic? They’re not necessarily mutually exclusive objectives, however the strategies to pursue them may vary considerably.
6. Attacking your ‘A-list’.
I’ve previously written that business success is all about ‘Focus’.
The concept of the ‘A-list’ for your business is simple: whether your business is B2B or B2C you should be able to identify, define, articulate and target the “must-have” people/contracts/deals that would have a positive transformative effect on your business. Whether that’s doing a deal with Tesco - or Google, or getting a celebrity to endorse your product - it is up to you to define who (or what) is on your A-list, and what is your traction in courting them?
I’ll write more extensively about this with a separate blog-post.
7. Health and well-being.
I’ve yet to find a business whose success was not utterly dependent on the extraordinary effort of the Founder and their team. Businesses both large and small now fundamentally require people to disproportionately invest their discretionary effort and good will. Which is why brilliantly inspiring leaders are so vital to the success of modern business. But this requirement has a risk of being unsustainable. If the demands of the business are too severe it will quickly become apparent - which in-turn means that the business is possibly not viable, the team-effort not sustainable. I look for happy, healthy people who are able to have fun. Grumpiness, tiredness, lack of humour, pallid complexions are all lead indicators and early warning signs.
There is no doubt, hard-work is an integral part of being an entrepreneur and/or working in a start-up. But symptoms of acute exhaustion are hard to hide and can be symptomatic of far bigger issues.
8. Proximity to investment and/or revenue.
Proximity to investment and/or revenue is the most important performance measure.
All the time you can demonstrate that you are absolutely achieving positive traction in landing a substantial order; or that you are demonstrably closing the necessary investment (ideally from quality investors) in order to continue the growth and development of your business - then you’re making great progress.
If such progress proves ultimately elusive, then the viability of the business will inevitably be brought into question.
9. Keeping the dream alive.
Occasionally, I see start-ups that I believe really do have that “billion dollar” potential. The magic exponential potential that “this could be the next Facebook”.
'Exponential potential' is a rare quality.
But if your business possesses this remarkable scope - then your job is to keep this dream alive. Take care to avoid proving that this potential is not realistic; that the idea is too far ahead of its time; that the endeavour required to achieve success is overly excessive.
I am sure that we can all think of examples where businesses are valued in billions but who have yet to raise an invoice or generate a single dollar of revenue. But clearly, they must be doing something right or they would not have received the valuations that they have.
Five quick steps to getting your digital start-up started.
- The five steps: approximately 30secs-ish.
- The detail: approximately 6mins-58secs-ish.
I have helped co-found several start-ups. Over the years I have refined the method I use to build a start-up. What follows is a 30 second guide on how I go about creating a new digital start-up:
1. Identify a need / opportunity.
2. Give it a compelling name.
3. Get designing. Package the idea beautifully.
4. Get coding. Create a MVP.
5. Promote the hell out of it.
If any of these steps seem impossible to you, please read the remainder of this post. I believe that anyone can make a demonstrable proto-type of their digital business idea. And that building it needn’t cost a fortune.
What follows is more detail about each of the five steps together with indicative costs:
1. Identify a need / opportunity.
At a very basic level, business fundamentally relies on a value exchange between two or more parties.
More than ever before, the world now has:
- More computer processing power
- More connectivity between people and between things
- More freely available open-source-code
Which is why I believe there has never been more opportunity to ‘add-value’ than there is right now. Welcome to the Digital Economy.
To bring this to life with an example: We now have the technological capability to be prompted when our house-plants are too dry and need watering. This may seem trivial to you - my point is, if we can do this, what else can we imagine?
The challenge is to identify opportunities to add-value and work out how to translate them into a commercial business. Key questions to help with this:
- What problem is your business trying to solve?
- What is it that your business is improving?
Your start-up can’t start until you have identified and can articulate what value you are going to add to whom. Customer insight is the key to unlocking this potential.
Ideally you need to pick something about which you are overwhelmingly motivated and feel passionate to pursue.
To create a successful start-up it is not essential to invent something completely unique or original. (In-fact investors often regard a lack of identifiable competition as evidence that your intended market does not yet exist).
But, to succeed, your business will need a meaningful point of difference. What are you going to do better? (For example, there are a number of people already working on the houseplant watering idea above - so why should customers choose yours? Entrepreneurs risk failure if they do not look for, and sufficiently acknowledge, the competition.)
Indicative Cost: Creativity and inventiveness at this level of business development should cost nothing. Don’t spend fortunes on expensive research and validation at this stage. Instead, rely on:
- Your instinct. What annoys you? What’s inconvenient? What’s not dished-up as you want it?
- The power of your own observation.
- The strength and value of advice from trusted friends and willing experts - especially those with a proven track-record of success. Listen carefully to them. Don’t be defensive if they don’t tell you what you want to hear. Don’t be in denial.
2. Give it a compelling name.
Having chosen what the business does, the next step that I usually take is to invent a name for it. This may sound premature, but for me, it works.
The success of a business idea often depends on the ability of the founder to articulate the proposition in a succinct, powerful and compelling way.
In many ways the name that you choose for your business or brand is the ultimate distillation of its proposition.
Which is why finding and choosing the right name for your business is often vital to packaging your proposition in an impactful way. The more immediate this impact, the better.
Ideally, it is best to choose a name that is distinctive - something that you can own.
There are loads of online companies that sell URLs / domain names. Use one of these to search if the domain name you like is available. Buy the domain if it’s available. (I’ll write a separate post on what to do if the URL you most want is unavailable - but for now - give-up wanting a name that you can’t have and choose another one - keep searching).
Tip: Canvas the opinions of your friends. If people ask you to repeat the name (ie. if you have to say the name twice), it’s probably the wrong name.
Indicative Cost: Domains are really easy to buy. You should not have to pay more than £8.99 for a “.com" address. I no-longer bother buying all the surrounding / associated domain extensions and variations - that is a bridge to be crossed further down the line.
3. Get designing. Package the idea beautifully.
Bring your idea to life. A picture paints a thousand words. Two steps that I strongly recommend:
- Work with a designer to create a brand identity / logo.
- More importantly, work with a designer to visualise key elements of the user experience. This is about bringing to life the customer journey; visualising the key points of functionality; the pivotal points in the user experience. Not all of it, but the key points.
For example, of your idea is a mobile app’, then get a designer to convert your rough sketches into something presentable for the most significant moments in the user journey.
In most cases, coders will need some form of design-layout in order to convert your ideas into something that actually operates on the internet / or on a device (eg. a smart phone). Even if you are lucky enough to find a coder who is also a gifted designer – being able to show the coder what you are looking to build will significantly help reduce the time and cost of writing the code to make it work.
Many businesses struggle to find good designers and engage creative people. You can choose to work with just one designer, or you can crowdsource creativity.
I helped to co-found a crowdsourcing website - it is called www.ConceptCupboard.com - it enables businesses to:
- Crowdsource creativity, design and marketing.
- Get ideas and concepts from not one designer but a range of designers / creatives.
- Connect directly with creative students thereby accessing the very latest talent, ideas and creativity fresh from college and university.
- Buy creativity cost effectively.
- Give young people an invaluable opportunity to ‘earn & learn’ and build proper commercial portfolios that demonstrate their talent.
Indicative Cost: I used ConceptCupboard to get the TallManBusiness logo designed. Basically briefs on ConceptCupboard are a bit like a design competition, whereby the winning designer gets the prize. I offered £350 to design the logo for TallManBusiness. I received designs from 21 different creative students. The winning designer received my £350.
If you want to brief-in some page layouts for a new website I’d recommend being really prescriptive on exactly what you want (ie. not creatively restrictive, but be explicitly clear about the scope of work). You should choose a selection of key pages from your new website - ideally you should draw some rough sketches of them yourself. I’d set a fixed budget for the project - depending how much work, perhaps a prize somewhere in the region of £1,000 to map out the look of key product pages/fucntionality. Go to ConceptCupboard's website for full details of how it works.
4. Get coding. Create a MVP.
Find a good coder / coders. Make a modest investment to start building a MVP (minimum viable product).
The scope of this will depend on how ambitious your idea is; how technically demanding it is; and therefore, how much coding it requires. All these factors will all go to determining the size and extend of the build required.
Good coders / computer-scientists will be able to give you advice on this. It is vitally important to start the process of engaging coders in order to get this technical input.
If it is not viable to build the whole concept that you have invented, work with the coder to define what is possible that would bring to life the initial designs that your chosen designer has visualised. If your idea is too difficult to build fully, perhaps a coder can help build an initial simulation.
Even if all you can practically build is a demo and not an actively working prototype, this is still a massive step forward and one that will help significantly develop conversations with potential investors / accelerators who may be willing to invest in the development of your dream.
Indicative Cost: I help run Wayra, the business accelerator that belongs to Telefonica. At Wayra we tend to invest in teams rather than solo entrepreneurs. As investors, we’re not alone in this preference. You may already know great coders who you are keen to work with. Getting connected to the right technical coding talent is something that I see many aspiring entrepreneurs struggle with. Which is why my friends and I built www.CodingCupboard.com. It’s a similar idea as ConceptCupboard - a marketplace that connects businesses with great student talent - only this time it’s all about coding; coders; geeks; and computer-scientists. It’s simple to use:
- Write a brief.
- Name your price (define the budget).
- Receive proposals from brilliant coders.
I’ve just completed a project on CodingCupboard to fix the Twitter feed on this blog and significantly enhance the ‘share’ buttons. I received six proposals from six different coders. I chose one who completed the work brilliantly for c. £150.
5. Promote the hell out of it.
You may well have noticed that two of the five steps [that I recommend] actively promote businesses in which I have a vested interest. I thought about declaring this at the start of this blog post. Perhaps I ought to apologise. However, I am immensely proud of both ConceptCupboard and CodingCupboard - and the much needed services that they both provide. The insight is clear - I regularly see start-ups and entrepreneurs struggling to source good creative and good code. I want to alleviate these obstacles and see more businesses fly. I perceive a skills gap and I want to bridge it.
And I want good students to be more ‘work-ready’. It is incumbent on people in business today to build the talent-pool of tomorrow - on which their future business will inevitably depend.
Once you have some form of alpha / beta / demo / ‘show-piece’ that brings together your idea into something tangible that you can present to people – then go and sell the hell out of it.
Pitch your invention to anyone who will listen: other entrepreneurs; potential investors; media / PR opportunities; and probably most importantly, to potential customers.
Please Tweet me if you are at:
#Step1 - “I have an idea” - or magically you are at either: #Step2; #Step3; #Step4; #Step5 - in which case, don’t forget to mention your business’s name.
Staying agile in an evolving marketplace.
Read time: 3mins-52seconds-ish.
Feature article in the International New York Times, Monday March 3, 2014. By Julia Werdigier.
SIMON DEVONSHIRE is director of Wayra Europe, a unit of Telefonica, the Spanish telecommunications company. Wayra Europe provides financial and other support to start-up companies in exchange for a stake in the companies.
Q. You are surrounded by young managers. What are the most common mistakes they make?
A. Many leadership issues I see people struggling with here are also very common among managers of larger businesses. One of them is focus. It’s about identifying the most powerful action that is going to mover your business forward the furthest. It’s something that when expressed in a clear and definitive manner should be quite easy to do and identify. Yet it eludes many people, whether they work for a small or a big company.
Q. Do you mean a strategy or an objective?
A. There’s confusion between objective and strategy. Objective is the ultimate outcome, and the strategy is the plan with which to realize that objective. People struggle to define those two things. Then they come up with complex strategies to achieve those objectives. It all gets slightly chaotic. I’m an advocate of introducing simplicity. One of the benefits of working with start-ups is that they commonly pursue the agile work methodology, which is flying a plane and building it as you fly.
Q. That sounds dangerous.
A. It’s actually an absolute necessity, because the market is developing so quickly. How can you build a career in social media when it’s evolving so rapidly that whatever you learn in your first year at university will already be outdated by the time you graduate?
Q. How about managing a group of people and keeping staff motivated? What recommendations do you have for founders of start-ups?
A. This fast-moving pace of industry can be hugely unsettling for staff. What is my job going to look like next year? Is my boss going to be around? So, as a leader, you have to install confidence. Uncertainty and instability cause doubt, and doubt has the same impact on business and commercial success as cancer in humans. It causes people to throttle off. Every business is dependent on discretionary good will. Only by virtue of employees’ going above and beyond the call of duty will a business succeed. So your job as a leader is to identify doubt where it exists and eliminate it with confidence.
Q. How do you eliminate doubt?
A. One of the techniques I use is repetition. Today, we’re taking for granted that we can use communication devices to manage our diaries and pretty much everything. But when I started in this industry, I managed a group of people who were very skeptical about that. The only way of convincing them was to publicly stand on stage and declare, “This is the strategy we are now pursuing.” And then I did it again and again. And after a while people started to realize that this was a strategy that was not going to go away and they had to buy into it.
Q. What else do you think is important to do to install that confidence?
A. Norman Schwarzkopf, the general who took the Americans into the first Iraq war, said, “To be a great military leader you need two things: strategy and character. And in the event that you find yourself deficient of one, make damn well sure it’s strategy.” Because people will fight and die for a character, but they not fight for a plan. Too many leaders focus their time and attention to crafting a plan, while what they really should be doing is bringing the crowds in.
Q. What do you tell young entrepreneurs who come to you and say, “I want my company to grow fast, but I don’t know how to get the right people to help me do it”?
A. The thing that is more compelling than anything else is hunger. I work with a company here that’s working on using a phone to help people eliminate melanomas. Trying to do this is like climbing a huge mountain. A lot of people will tell you it’s not going to work. So you need people who are really hungry and whose conviction to embark on this journey is authentic.
Q. Was there one person whom you worked for who really inspired you?
A. Richard Duvall. Richard created Egg the Internet bank, and I worked with him in 2005 for one year [on Zopa.com]. At the end of that year, Richard was sadly diagnosed with cancer and he died three and half weeks later. I was heartbroken. He was astonishingly bright, had a great character and a brilliant sense of humour. We had numerous calls with potential investors, and Richard had the habit of putting the call on our side on mute, would make an absolutely inappropriate comment, which would have me in tears laughing, at which point he would then unmute the phone and confer the question to me. One way to make conference calls more interesting, I guess.
Q. What did he do to get the best out of you? What do you think makes a good manager?
A. Doug Richards, a friend of mine and an entrepreneur who invests in start-ups, said something like, “If you give people the opportunity to fail, it’s surprising how very rarely they do.” Where management is at its most successful is when people are left alone and empowered with sufficient authority to match their accountabilities and responsibilities. Motivation starts fundamentally with you. Motivation is like oxygen. The higher up you need to go to get it, the thinner it gets. And if you are in any way dependent on getting it from someone else, that will always be your ceiling.
Q. Do you have tips for self-motivation?
A. I’ve always been quite obsessive with harvesting commercial achievement. Even if my business goes bust tomorrow, if it’s had an amazing result, no one can ever take that away. It comes from when I was a child. I used to be an athlete, and when you get that medal, no matter what happens in the next race, that medal is yours.
NOW is the perfect storm for Corporate Venture Capital #CVC.
Read time: 5mins-7seconds-ish (this post is longer than usual).
In-case you hadn’t noticed, there’s a new buzz-word in town: “CVC" - Corporate Venture Capital.
This is not the first time that Corporates have put money into ‘venturing’. However, from my perspective, I think that what we’re seeing now is different. And, I believe that the opportunity for BIG business to help (and invest-in) small business has never been more important.
I am proud to work at Wayra, a business accelerator that invests-in and grows amazing digital start-ups. Wayra belongs to Telefonica, which is indeed a very big Corporate.
At Wayra, I have received interesting enquiries about CVC from both corporates and from the UK Government who pleasingly are keen to encourage big companies to help small businesses. I hope that we will see this energy translate into actual cash invested.
From my perspective, what’s different about this period of Corporate Venturing versus previous era’s (say ten or fifteen years ago) is that:
- As a generalisation, previously Corporate Venturing was typically of the substantial £100m+ Merger and Acquisition (M&A) variety.
- Corporates used to prefer their acquisitions to be established businesses. Ideally ‘ready-made’ Companies having already achieved scale (way beyond the traumatic phase of crafting the business from scratch).
- As recently as four years ago Corporate investment in early-stage start-ups was unimaginable. CFO’s don’t get out of bed for deals less than £100m.
- However, the convenience of acquiring ready-made businesses comes at a high price, literally.
- However, NOW, new Digital start-up minnows have the genuine capacity to grow into GIANTS in little more than a heart-beat.
- Digital is what makes the difference.
Perhaps the CFO requirement for deals to be over £100m is still very much present. Perhaps it’s the real possibility that embryonic digital start-ups are now often smashing the £100m valuation-milestone which is causing a corporate fear of being caught napping, a worry of missing the opportunity.
NOW is the perfect storm for CVC because:
a) According to media reports, Corporate balance sheets have never been so fat. Collectively Corporates are sat-on vast wealth.
b) Digital start-ups have the potential for exponential growth (as per my last post). They can achieve global scale in literally a couple of years.
c) Buying equity in early-stage start-ups is relatively cheap - but can be relatively risky.
d) Corporates can mitigate the risk. Corporates can be the agent of success - which is why I am so passionate about CVC:
- As investors, Corporates have a unique asset that no other investor that I can think of possess.
- More important than their cash, corporates have the potential to provide fast-track access to millions of customers. (But this advantage can be incredibly difficult to make happen).
- If Corporates can leverage the enormity of their customer numbers, then Corporate Venturers can make the success of their investment a self-fulfilling prophecy. They have the scope to guarantee scale-up success.
And, as Mrs Devonshire has consistently said: “Winning paying punters is often the hardest thing to achieve in business - getting people to part with their money for your product/service is not trivial.” Having been immersed in over one hundred start-ups wrestling with this commercial challenge, I have no doubt that this is where Corporates can help most.
Context is a powerful thing. It is brilliant to see a renewed confidence in the economy. Order books are filling. Employment is rising.
There has never been more opportunity to add-value than now. The world has never been more:
- Technologically capable with more computing and processing power than ever.
- Viral - able to spread good ideas contagiously, globally.
- Willing and interested in entrepreneurial success.
- Curious and hungry for innovation.
- Abundantly stocked with open-source code which has decimated the cost of technology development; imploded economic barriers to market entry. In my experience, the availability of code has reduced the cost of technology build to less than one-thousandth the cost incurred ten years ago.
It is this remarkable combination of attributes that is my definition of the Digital Economy - and why now is such a special time. And it is the Digital Economy that makes a tangible difference to the opportunity for Corporate Venture Capital (and makes it distinctly different from anything previous).
Not only do DIGITAL start-ups provide the possibility of exponential growth, but today’s start-up may be tomorrow’s BIG competitor. New digital businesses can be market-disruptors and potentially, market-destroyers. If Corporates want to safeguard their future, then they should invest in Digital. But for this to work, they need to fully engage in the opportunity - writing the investment cheque is the easy bit.
Which is why I am so proud of Telefonica and the digital businesses that it has invested-in and grown through Wayra. In some of the Wayra academies as many as half of the businesses invested in are already in some form of active trial / engagement with Telefonica. Which is even more remarkable when you consider just how young some of these businesses are.
There’s more: I strongly believe that if Corporates collaborate on their investments, the potential for the success and growth of these start-ups multiplies disproportionately.
And so I am also passionate to congratulate bold corporates like Centrica who with British Gas have partnered with Wayra to co-invest in green-tech / energy-tech ventures. You can read about their “Ignite” programme here.
At Wayra we’ve seen the backing of Telefonica materially accelerate the valuation of digital start-ups. Where only a year ago many of Wayra’s investments were valued in hundreds of thousands of Euros, now we have not one but several investments that are valued in tens of millions of Euros.
Imagine then how the opportunity (and thereby the valuation) potentially scales when an energy-tech start-up is also backed by one of the world’s biggest energy companies. Or a fin-tech start-up that is backed by both one of the biggest telco’s and one of the biggest high street banks.
We need the jobs and the economy that these new digital ventures create. Start-ups need to scale-up - and they need help to do so. Which is why I’m petitioning Governments across Europe to give Corporates tax relief to offset the cost of their investments in this opportunity. It’s not about Corporate tax avoidance. It is about incentivising Corporates to do the right thing.
Let’s encourage both Government and Corporates to realize the remarkable opportunity that is now.
If you run a start-up and you think that it could achieve explosive growth through corporate investment, please Tweet:
- Your business’s Twitter-handle
- The name of the corporate you’d ideally like investment from
- And the hashtag #Iwantacorporateangel
… Let’s see if we can use the start-up network to connect you to the right person in the right Corporate.
Finally, if you are thinking of creating a digital start-up, or currently run one - then apply to join Wayra - we’re keen to find, invest-in and grow great tech businesses.
Digital = exponential.
Read time: approximately 2mins-31secs-ish.
Looking back is as important as looking forward.
Read time: approximately 2mins-36secs-ish.
The birth of the Digital Economy is the dawn of a new era. I am confident that this new era will bring with it more positive change to people and society than any previous transition in the history of humanity.
I hope that I live long enough to see all the amazing developments that are coming.
I am quite sure that my daughters will - which is the driving force behind my passionate interest in this transition. My concern is that I suspect that in parts the journey might be ‘a bit bumpy’. And so, I have an overwhelming sense of purpose to help make more smooth this transition - to minimise the potential for trauma and unrest in these potentially unsettling times.
Having explored in my last post what was unimaginable to me when I was the same age as my daughter - I thought it would be interesting to quickly repeat this exercise with my Dad. With significantly more scope for hindsight than me, my 79 year old father considers the following four things to have been unimaginable when he was nine years old:
- That everyone would have a car.
- That everyone would have a telephone (my father was referring to phones in our houses, not our pockets).
- That we would have heating - and generally be warm.
- That food would be so plentiful.
Interestingly, he didn’t mention “the man on the moon”. What’s also missing is the power of context. It’s worth noting that when my father was nine years old it was 1943.
Thankfully the era in which my children are growing up is a far happier and plentiful time.
Anecdotally, for more than two years now I have heard a resoundingly common belief among entrepreneurs that there has never been more opportunity for entrepreneurialism.
The rate of progress, innovation and technological development has never been more astonishing. And yet the past few years seem to be indelibly marked as ‘the crisis’.
Perhaps economic turbulence is on-par with climatic turbulence. However, while I see loads of people actively interested in, debating and petitioning all the things that they believe contribute to the earth’s environmental challenges (such as global warming) - frustratingly I don’t see the same level of interest, discussion and participation in what’s happening economically.
And yet, individually I think that we each play as much of a contributory role in directly affecting economic outcomes as we do environmental ones.
The world is changing more significantly and more rapidly than ever before - it’s like the birth of the Industrial Revolution on steroids. If it were possible to travel back through time I’d be keen to go back to the dawn of the Industrial Revolution and comfort people that they didn’t need to smash the machines - it will all be alright. In-fact, given our relative prosperity, comfort and well-being, it’s more than alright.
Change brings instability. Insecurity is a natural human reaction to instability, (which is understandable, it is unsettling to not know what’s next). I’d argue that the consequence of insecurity is, doubt. And the consequence of doubt is a lack of conviction. And a lack of conviction is the opposite of the key characteristic required for entrepreneurial success.
The very thing that we are most frightened of is, ironically, more likely to happen as a result of not more positively managing our fear.
I’m not advocating optimism - I think that a strategy based on hope and desire is not robust (and is therefore foolish). I am keen to champion pragmatism - when you look back and see what was, I believe that it is entirely computational to extrapolate our relative good fortune and the predictable and consistent trend that this will continue.
Hindsight is an exact science. By taking a moment to look back we can convert this hindsight into foresight, which is more useful. We can learn from our past success in navigating significant change and apply this to our advantage in order to help realise the fullest extent of the amazing opportunity ahead of us.
And as per my last post - perhaps start by sending me a Tweet - what, from your perspective, was: #unimaginablewhenIwasnine?
Imagine the unimaginable.
Read time: approximately 2mins-55secs-ish.
Lately I’ve been wondering if we’re not collectively a little bit complacent about innovation. That we find it surprisingly easy to forget what life was like before we had the technology that we now take for granted today.
It is so easy to forget that iPhone really is only six and half years old. Before it, phones had big buttons and pretty much they were exclusively used for occassionally speaking to someone.
And yet, unpicking and understanding innovation is fun.
Much of the innovation that we enjoy today was literally unimaginable when I was a child.
My youngest daughter (whose hand is featured with mine in the photo) is nine years old. When I was nine years old I could not have imagined:
- The internet
- Self-serve checkouts in shops
- Self-parking cars
- (Or that there would be such a profession as: dog walking. But that’s a whole other story).
I will never forget when I interviewed a young candidate, I casually commented that: "Of course when I started work, there was no email." When this trivial observation landed, the youthful applicant was almost inconsolable - it had never occurred to him that such an era could have ever even existed. In absolute terror, he exclaimed: “What, you mean there was no email!”. To which I replied: “Indeed, there was a time of ‘no email’. In-fact, when I started work, photocopiers had yet to be invented.”
The birth of the Digital Economy creates more possibilities and opportunities for more invention than at any time in history. I think we are witnessing a global explosion in innovation, inventiveness and entrepreneurialism. The unimaginable is not only being imagined, it’s being materialised. And this makes me feel that this period of time in which we live is not only more significant than the dawn of the Industrial Revolution, but what’s more important is that this is happening right now, under our very noses.
And so I think it’s important to discuss:
- What are the new skills, capabilities and talents that we now need in order to thrive and survive in this new Digital world.
- I want to share thoughts, ideas, observations and insights on where the greatest areas of opportunity might be.
- I want to help imagine the unimaginable, to fuel inspiration to accelerate the arrival of new innovation, and with it thereby enable the new economy to arrive more quickly. (Our old analogue jobs are running out - we need more new digital ones faster).
- I’d like to better define what are the commercial challenges that we now face, with the purpose being that greater clarity of the obstacles will better enable more of us to successfully navigate them.
- In the face of such enormous change, how do we tackle and overcome a natural human reaction to be collectively paralysed by worry and feelings of insecurity.
- To celebrate success more. Who are the pioneers and heroes of this amazing and historic time, and how are we going to capture their momentous achievements.
- I want to provide a glimpse of some the innovation that I see coming; discuss what the impact might be; to better prepare us for these positive changes. And also prepare us for what is about to become extinct.
… and on that last, potentially negative note, I don’t believe extinction is something that humans need fear at this time - in-fact, there are more of us than ever before.
So I’m busy writing about the above topics and will post more on this in the coming weeks. More importantly, I want a discussion about this amazing time and what it all means. I welcome your thoughts and ideas. Please spread the word; Tweet and Retweet.
And perhaps start by sending me a Tweet - what, from your perspective, was: #unimaginablewhenIwasnine?
The future is utterly predictable.
Read time: approximately 5mins-11secs-ish.
You see an old garage. I see a new economy.
In-fact, this old garage, is my old garage. It was built for the very first owner of our house in 1927, apparently a local bank manager, who wanted a home for his Austin 7.
Unfortunately for me, the Austin 7 is an especially small car. Whilst this garage is good for storing an Austin 7, it’s of little use for storing a modern car.
But this little building is a massively disproportionate monument for a revolution that is about to happen, especially in London.
We are witnessing the birth of the Digital Economy. I believe that this is one of the most momentous transitions ever experienced in the history of humanity.
Previously the world has consistently become more prosperous each time society and commerce transitioned from one era to the next. Arguably one of the biggest and most dramatic changes was the birth of the Industrial Revolution.
Pragmatically, I think that the Digital Economy will supersede all earlier ‘revolutions’ in its wealth creation - even more so than the Industrial Revolution.
However, change of this order of magnitude understandably causes uncertainty and insecurity. At the dawn of the Industrial Revolution, people literally smashed the machines.
I believe that the birth of the Digital Economy brings with it more opportunity for entrepreneurialism than ever before.
And yet, paradoxically, the period of the last few years has been iconoclastically named as “The Crisis” - an era now famous for the most intense feeling of insecurity in history.
Happily, things in the last six weeks (in the UK) seem to be picking up in the economy. Confidence is returning. Unemployment is falling. Even new car sales are up.
But I think yet more could be done to tackle the fragility of this confidence issue and better manage insecurity.
My observation is that the primary reason people feel insecure is because the impact and consequence of the Digital Economy is difficult to predict or envisage. It’s not commonly known what this new Digital Economy actually looks like. People can’t see it. They don’t know what it has in-store. For many people, it is understandably hard to imagine how such dramatic developments and new technology may affect them personally.
Traditional institutions and mechanisms that society has historically relied upon to help us deal with such change: schools; politics; religion even - are all struggling to keep-pace with developments.
I am compelled to do something about this issue of insecurity. To bring to life some of the developments that are likely to happen. I am not a futurologist. But my work in digital innovation gives me a tangible glimpse of what’s coming. From this, I don’t just see some developments as a ‘possibility’ of something that ‘might happen’. I see them as literally and utterly inevitable.
It is not as simple as merely being optimistic - my perspective is actually driven more by pragmatism than it is by hope or desire.
If I were a clever mathematician, I think that the sort of developments that I’m alluding to are absolutely computational.
Metaphorically, this is where my little garage, for just one moment, takes centre stage.
I live in a relatively small suburban residential street. In the thirteen years that we have lived here, the majority of the houses, (including ours) have been expanded with a loft conversion. This construction work generated a lot of economic activity.
Soon (eg. over the next thirteen years) the majority of the houses in my street will also convert their garages into a more usable space: either a ‘garden room’ or an office.
I don’t see this prediction as a speculative guess - I think this eventuality could be calculated:
- The rate of house price inflation is relatively predictable (our house has almost trebled in value since we’ve lived here).
- It must also be possible to compute the real-estate value per square metre at which point people no-longer put cars on it.
And even if the current occupants don’t agree with the methodology of my forecast - they may be determined to corrupt my prediction by doggedly clinging on to their dusty old garages - what they don’t realise is that frankly, their view is irrelevant. With the current rate of house price inflation it is also possible to accurately / mathematically predict that the current occupants won’t be there much longer. Eventually the opportunity to liquidate the vastly accumulated wealth trapped in the bricks and mortar of their home will become overwhelming - they will cash-in and be replaced by an even more elite segment of professionals.
And for certain, the new occupants will look at the value per square metre of their garage and instantly remove the car from it to make space for humans. To them, a garage is the equivalent of parking a car in your living room.
And all of this excludes the paradigm-shift of the Digital Economy. For example, new innovation such as driver-less cars, the introduction of which will make absurd the idea of storing a vehicle for the rare occasions that you need one. Instead you’ll just send for a car and it will come to collect you on-demand. The technology for this literally already exists which is why I see the implementation of this innovation as inevitable.
And if driverless cars seem ridiculous and/or unimaginable, then perhaps more believable and more practical is the already established and rampantly growing trend of ‘plural-working’ and people wanting to work from home. Digital technology (eg. things like super-fast broadband) are the growth-engine of the ‘flexible working’ trend. All of which is another tangible proof-point of the Digital Economy.
And as we all know, once one or two houses convert their garages into beautiful new habitable spaces - ‘neighbourly envy’ will build its own contagious momentum.
And so, if I were an entrepreneur, I’d think about setting-up a business to convert garages into wonderful buildings for humans to use. Perhaps I’d call it:
www.DoUpYourGarage.com (Click ‘Read more’ if this spikes your interest)
Basically, I see the wholesale redevelopment of garages on residential homes in London as utterly predictable and totally beneficial:
- We will create spaces that we will enjoy – it will make us happy.
- Happier = healthier.
- Garage conversion will drive-up house prices – we will become more prosperous.
- And most importantly, it will create millions of revenue in the construction industry.
I hope the story of my garage offers practical glimpse of what is likely to come.
Change, especially the extent of it that we are currently experiencing, can be massively unsettling. But we ought not let a sense of insecurity overwhelm us and thereby deny the remarkable opportunity that is the Digital Economy. Much of what is happening can be accurately forecasted. I think that is exciting - which in terms of motivational energy is the opposite of doubt.
One thing that is utterly predictable - the days of my old garage are numbered.
I have always believed in sharing creative ideas for new businesses. Rarely does anyone possess all the capabilities necessary to build a business on their own.
Regarding the ‘DoUpYourGarage' business idea - not surprisingly I've bought the .com URL. Realistically I am not going to set-up this business - but I am passionate about the idea and its potential. I reckon I know a thing or two about business, and so, if anyone out there thinks that this is sufficiently compelling that they want to give it a go, please feel free to send me a proposal. For someone with the right resources, perhaps this is the start of a viable business.
Innovation has overtaken branding as the best way to communicate with customers.
Read time: approximately 3mins-14secs-ish.
Soapbox: SMEs must place much higher priority on being innovative, says Simon Devonshire
Innovation has overtaken branding as the best way to communicate with customers, says the director of O2 Telefonica’s Wayra incubator programme for entrepreneurs.
SMEs must become more innovative in the way they do business or risk being left behind, says Simon Devonshire, director of the Wayra incubator programme for entrepreneurs, which was created by O2 Telefonica to promote innovation in digital technology.
He said: “Innovation has become a really important way of communicating with customers. Sales rarely happen these days as a result of a single moment; they are nearly always dependent on dialogue, conversation and rapport with your customers.”
He added: “Being innovative enables you to have ongoing conversations with customers who aren’t going to be irritated by the intrusion and will instead be curious or even delighted to hear from you, because people want to know what’s new. They like the idea of being thought of as early adopters.”
Devonshire said that SMEs relying on the launch of one product a year to take their business forward should think again, saying that businesses should ideally be creating new products and services, or ways of getting them to customers, twice a quarter. “I would encourage small businesses to innovate their proposition once every six weeks. Six weeks in the life of a customer is a long time. If you are only launching one initiative a year to grow your business you are asking a lot of it.”
Devonshire, who is an advisor to the government’s Department of Business Innovation and Skills, said that innovation can take many forms, from new products to new ways of getting them to customers.
He said: “It is increasingly important for a business to be remarkable, as in literally to be remarked upon. The world’s most notable companies are now in my view becoming famous not just for what they do, but for innovating. Some of them do it overtly and very clearly like Apple, others are more sophisticated such as what Google has done with Google Glass. It is more vital now than it has ever been for businesses to be hard wired into what is happening in that space.”
O2 Telefonica opened the first Wayra incubator in 2011 and there are now 14 such incubators across Latin America and Europe, including sites in London and Dublin. Each team of digital technology entrepreneurs accepted onto the programme is given workspace for six months and seed investment in return for giving O2 Telefonica a 10% stake in their ventures and first refusal on anything that is developed.
So far 268 digital technology entrepreneurs have taken part in the programme and nearly half of the 98 start ups which have graduated from the programme are currently in some form of active trial with 02 Telefonica.
Devonshire said: “My view is that if a big corporate like O2 Telefonica can be innovative, then there is no excuse for smaller companies not to innovate. Telefonica is a long established company and so if we can do it, anybody can do it.”
He added: “Innovation is a mindset. You have got to surround yourself with the right people to give yourself the inspiration necessary to create the insight that is going to enable you to add value to your customers.”
Earlier TallManBusiness blog-posts related to this interview are:
Selling = the transfer of enthusiasm.
This photo captures a Tweet from Liam Black. Liam is not only a proven entrepreneur but also a global pioneer of social-innovation through enterprise.
I am passionate about entrepreneurs connecting, networking and sharing learnings. Twitter is a good medium for this. However, Tweets can be as momentary as birdsong. I didn’t want the wisdom in this Tweet to evaporate as quickly as it was published, and so I’ve decided to expand upon it:
Selling, really is the transferal of enthusiasm.
What follows are some practical suggestions on how this might affect you and your business:
If you are employing sales people:
- Vitally you must make sure that your front-line employees (ie. sales people) have an enormous capacity to be enthusiastic naturally.
- Enthusiasm alone is not enough - your sales people must also possess a demonstrable ability to infect others with their passion.
- More importantly, this transfer must be authentic, sincere and effective.
Let’s bring this idea to life metaphorically. For just one moment, think of selling as the transferal of happiness. And so, from this perspective, when viewing your sales people, please consider:
- That their being happy is not enough.
- That their wanting and helping others to be happy is not enough.
- You need people who can actually make others happy. De-facto.
If you are a sales person:
- Be enthusiastic.
- Make sure that you carefully select the Company that employs you - choose one that offers products and/or services that fire your gift for enthusiasm.
- Actively go and spread the word. Be contagious with your enthusiasm.
If you are not a sales person:
If you are not a front-line sales person, luckily this makes your purpose really clear:
- Whether you are the CEO, the CFO, a coder, a product manager, a markerteer, a secretary, or an intern - your job is to help your salespeople to sell.
If you are able to influence the Company’s strategy:
- Build products and services that ignite the enthusiasm of your sales people.
- Give them the permission to excitedly contact all their existing customers and prospects with the thrilling news of your Company’s new propositions.
- Due this regularly in order to fuel that conversation.
- Help to create a willing audience of ‘paying punters’.
Two related posts on this topic:
Innovation = sales. Increasingly sales depend on building rapport. The launch of new propositions is a fantastic route to give yourself permission to proactively talk to all your potential customers.
Business growth is all about the eights. This post suggests the frequency and pace