Energy storage: generation’s forgotten twin

In recent years, the conversation around renewable energy sources has grown broader and louder. Although wind, solar, and their lesser-known cousins do not (yet) represent a majority of energy generation in the vast majority of countries, they form an increasingly significant part of the grid’s energy mix. Indeed, in 2017 – and for the first time in its history – Britain generated more of its electricity from renewable and nuclear sources than from gas and coal.

Great news. Onwards and upwards! But there’s a small hitch… Renewable energy is famously intermittent. The wind blows when it feels like it and, to the ire of many British beachgoers, the sun shines any time other than when you want it to. Ok, some renewable energy sources such as hydro are more predictable but let’s focus on the intermittent side of things for now.

Because of our historic dependence on ‘predictable’ conventional generation, we often overlook a critical component of energy provision in the next 10… 20… 100 years: storage. All too often, energy generation and storage are unhelpfully divorced from one another. Yet, we will never successfully achieve a renewable future without realising an equivalent investment in, and evolution of energy storage technologies. The yang to generation’s yin, if you will.

It is only really since the advent of Tesla that the world has started to think seriously about energy storage (good Tesla). We have been talking solar panels and wind turbines for several decades. Storage has some catching up to do. Indeed, it is the automotive industry which is really driving the flow of investment into energy storage technologies. This is also why many people are limited to thinking that ‘storage equals batteries’ (bad Tesla), predominantly lithium-ion. Yes, I know we use the same chemistry in the batteries that power our phones, laptops, etc. but this isn’t the coalface of chemical battery innovation.

The potential problem with this battery-focused view is that it will not be the best storage technology in all situations. Lithium-ion isn’t even that good: it doesn’t store that much energy, it’s expensive, and it’s not entirely safe. You can pick figurative holes in all batteries, all technology types, but my fundamental point is that this is not a ‘one size fits all situation’.

For example, a remote monitoring sensor requires short, large bursts of power that might be provided by a supercapacitor. Electric vehicles of the future might run on fuel cells, instead of batteries. And grid-scale renewable generation will need to be paired with grid-scale storage which could take the form of giant flywheels, compressed air energy storage in vast underground caves, or something we simply haven’t invented yet.

Successful innovation leaders will remain agnostic as to what future storage solutions will be required by each industry and application. My point is that, by focusing on batteries, we may limit the development potential of other technologies, some of which could be essential to our energy future.

Secondly, and to go back to where I started, we will need a myriad of solutions to support the energy transition to a cleaner, renewable grid. Unless we re-establish the critical link between storage and generation, innovation in the former will continue to lag behind. In practical terms, we will produce all the energy that we could possibly want from the sun and the wind, but it will have nowhere to go.

How early is too early: knowing when to engage your customer

“But we need to develop 3 phases of prototypes, go through accelerated life testing, and get 10 patents granted”. Or so go the usual protestations against early market engagement. The value of bringing partners and customers into the conversation at an early stage is often trumped by fear. “They’ll steal my technology”. “It isn’t advanced enough”. “They won’t understand it”.

There is only one thing that you need in order to commercially engage with companies; a proposition. Something to spark their interest. Let’s say you live in a very rainy country and I’ve invented the umbrella (which for some reason, no one else has figured out). If I approach you and tell you that I’ve got a solution to the downpours that blight your every day, do you think you’d be interested in talking to me? You bet you would.

What happens next? I find out what size umbrella you would like, what colour, and how much you are willing to pay. Because there’s no point in me spending 6 months and spending all my savings on an umbrella that is pink, made of wood, and costs £100 when what you wanted was red, plastic, and costs £50. No, the smartest thing I can do is make sure that I am developing the desired solution to a real problem, before I invest a significant amount of resource in doing so. Moreover, customers may be more open about the value of a solution when they’re encouraging you to create one (as opposed to negotiating over price).

Now, I don’t mean to downplay the importance of solid IP protection or reliable performance data. My point is that these are not prerequisites for starting a conversation with the company which will eventually use or distribute your technology.

These early conversations can significantly reduce market risk for emerging companies and their investors. They validate that a valuable problem is being solved. They help to shape the technology development path so that solutions are compatible with supply chains. They demonstrate demand for what you will ultimately be selling or licensing. All of this helps to avoid uncommercial development, something critical for young companies with short runways looking to maintain a competitive advantage.

Solar power: going wireless

Pylons. Nobody really likes them, do they? They’re a bit ugly and you rather wish they weren’t there, ruining the view. Let’s be honest, power grid infrastructure is not pretty but there might soon be a case to do away with it, albeit for slightly better reasons than aesthetics.

Traditionally, the way to get power to large numbers of people has been to build more power plants, extending the transmission and distribution networks, and facilitating grid connections. And it remains true that this conventional system is the backbone of power provision in most countries but is it the way of the future?

In most developed countries, rates of electrification are extremely high, usually above 99% even in rural areas. In developing countries however, this number can be surprisingly low. 15% in Kenya, for example, dropping to only 5% in rural parts of the country. This means that a significant majority of the population live without access to grid electricity and are still dependent on polluting fuels such as diesel and kerosene, often expensive and time-consuming to acquire.

The challenge is to find the most effective and efficient way to get power to areas that currently go without.

Let’s think about phones for a moment. As with electricity and lighting, access to communication is seen as one of the key indicators of development. Similar to power, the traditional way of connecting homes and businesses via phone was to construct a huge amount of infrastructure dependent on thousands of miles of cable. But this is no longer the case, or at least not to the same extent, and especially not in developing countries.

With the advent of mobile phones came a reduced need for conventional landline infrastructure. In developed countries where the equipment was already in place, no one was going to go tearing up switching stations or telephone poles but the situation was a little different in countries where such infrastructure did not already exist. Communication analysts now predict that some developing countries will skip building the traditional phone network altogether because mobile is already so prolific and affordable. Whole countries are going wireless.

So why not do the same with power?

It used to be the case that on-site renewable power generation was unreliable, intermittent, and therefore not a realistic alternative to grid electricity or diesel generators. Today, however, there is a growing range of innovative renewable technologies that not only provide reliable power, but can compete with grid electricity on cost.

Great leaps in the efficiency of photovoltaic (PV) technology mean that the levelised cost of energy (LCOE) for African utility projects ranged between $0.13-0.26 per kilowatt-hour (/kWh) in 2013 and 2014, with utility-scale PV in South Africa reaching as low as $0.075/kWh. More recently, Zambia is set to sell solar power for as little as $0.062/kWh following the approval of two large scale PV projects as part of the World Bank’s ‘Scaling Solar’ programme.

With continued improvements in efficiency, and costs continuing to fall, the business case for adopting solar PV starts to look irresistible in areas with high levels of solar irradiance. These areas are largely concentrated between the Tropics, which is also where the majority of the world’s developing countries are located.

Companies like M-Kopa and BBOXX have cottoned on to this opportunity, both offering domestic, off-grid solar solutions that provide lighting and other electrical benefits to homes in East Africa. Buffalo Grid is using its solar-powered technology to power mobile phones in developing countries, offering both a service to end customers as well as a renewable business opportunity to kiosk owners.

This is all before we even think about alternative micro technologies such as small wind turbines. We should also not forget about key enabling technologies such as off-grid storage, but more on that in my next blog…

 

 

 

Want to succeed? Get used to failure.

A few years ago, at a startup networking event, a colleague of mine asked a budding entrepreneur how he was going to grow and scale a business. His response? “Build the app. Marketing. Go viral.”

Now, while I admire this individual’s chutzpah and ambition, this is not likely to be a successful strategy. Why? Because it does not allow for failure.

There are plenty of stories to be told of hugely successful entrepreneurs who started with failure before finally ‘making it’. Bill Gates with Trof-o-Data, Henry Ford with numerous failed automotive ventures, and even the iconic Colonel Sanders who, penniless at 65, decided that age was no barrier to starting a business that would eventually spawn a global food empire.

Inspiring and intriguing as these tales are, they do not explain why it is that failure is such an important part of the tapestry of success. Before I go on, I should say that yes, some people will achieve success at the very first attempt. But I would venture that there is always an element of good luck in this and, more often than not, this will not be repeatable.

 

Ffion's Blog

 

It is important to learn to fail but to fail fast. More often than not, we will learn what works from learning what does not work. That is how we as a firm enable both ourselves and our clients to achieve commercial success more quickly; we have been there, we have made those mistakes, and we know how to avoid repeating them. Now, this isn’t to say that we have a magic wand for avoiding failure. We will and still do experience it. But, having become familiar with some of the pitfalls facing early stage companies trying to commercialise their technologies, we now know how to navigate around them, and that makes for a shorter road to success.

Think about how you would approach a challenge. If you did not know how to overcome it, would you put all of your eggs in one basket and go with one approach? Unlikely. Would you be more likely to employ a tactic of trial-and-error, taking slightly longer to find the solution, but also avoiding fatal errors and, eventually, learning what works? I’ll wager it would be the latter.

In this way, we are naturally predisposed to learning from failure but for some reason, this is a bit of a blind spot when it comes to building a business. Too many of the entrepreneurs that I meet, fear failure. When things don’t go as expected, I tell my clients that it is a good thing. We learnt how not to do something and can therefore quickly move on to trying a different approach. This process of constant iteration is very much at the core of what we do.

As Samuel Smiles said, “We learn wisdom from failure much more than from success. We often discover what will do, by finding out what will not do; and probably he who never made a mistake never made a discovery.”

Why is male the default setting?

I have a pretty unusual name. It isn’t that unusual in Wales, actually, but it certainly causes a lot of confusion in day-to-day life. Think booking a restaurant table over the phone and trying to explain to the person the other end that yes, you are sure that your own name begins with two ‘Fs’.

The other sphere in which my name causes some confusion is in the world of business. In our line of work, we frequently have to engineer conversations and meetings with international organisations. This means that, more often than not, the people with whom I am engaging have never before encountered a ‘Ffion’. So what does this have to do with being a woman?

Nine times out of ten, the replies that I receive to my e-mails will be addressed to ‘Mr Rolph’. Since my Father is retired and has certainly never worked for this company, it is clear that most respondents have made the assumption that I am male. A quick Google search would tell them that ‘Ffion’ is in fact a “popular Welsh female name” (thanks, Wikipedia). Instead, most people (women included) tend to make the assumption that a person working in the world of business and technological innovation, is a man. It begs the question; why is ‘male’ the default setting?

The gender pay gap and lack of women in C-Suite positions is not news but it is still surprising that, in 2015, the pace of change seems painfully slow. Roughly 14% of the top jobs in S&P 500 Index companies are occupied by women, with no real increase in this figure over the last 4 years. This is despite the fact that Fortune 500 companies with high female representation on their boards significantly outperformed those companies with no female directors.

It is often the case that women adopt a different approach and possess a different set of professional tools versus male counterparts. The more diverse your workforce and leadership, the more diverse the pool of skills from which you can draw.

While there is plenty of talk about the need for change and examples of emerging initiatives such as the 30% club (which seeks to achieve 30% female board members in FTSE-100 companies by the end of 2015), the fact is that day-to-day perception and expectation is slow to change. When most people hear ‘CEO’, they immediately picture a man. I too am sometimes guilty of this.

In the same way that attention is being drawn to the importance of encouraging girls to participate in STEM subjects, we also need to make sure that girls are being encouraged to pursue positions of leadership and authority.

A great instance of leading-by-example is one of RIG’s client companies. Led by two women in their mid-twenties who formed a business from a technology developed while at school, the company today has 2 patented solutions which solve significant hearing and industrial noise challenges respectively. The company is already revenue generative and is today engaged in conversations with several multi-billion dollar organisations which are interested in pursuing the testing and, ultimately, licensing of their technology.

I sincerely hope that we continue to see a shift towards equality over the coming years. More women in business, technology, and leadership does not just benefit the women themselves; it benefits everyone around them.

A conversation with RIG’s founder

RIG Engagement Manager, Ffion Rolph, sat down and interviewed Founder and Managing Partner, Shields Russell, over a series of face-to-face meetings. Here, Shields shares his thoughts on RIG’s history, its evolution, and its future.

 

FR: Is it fair to say that RIG’s market focus has evolved significantly in the last few years?

SR: I think that ‘evolved’ is the key word. We have certainly increased our focus on energy, natural resources, and major industry. This was deliberate and we now have some portfolio companies with terrific technologies in this area.

 

FR: But you didn’t just stumble into these areas?

SR: No. In part, it has been a decade long evolutionary process of reflecting on where we have had most success and greatest impact.

 

FR: I assume that the emphasis around IP rich technologies emerged out of this process?

SR: Very much so. There are several sources of competitive advantage that are defensible to varying degrees: brand, business momentum and market dominance, business model, and intellectual property (IP). We strongly bias IP for the simple reason that proprietary technology is the most defensible advantage a company can possess. It reduces, if not eliminates, the threat of replication. Unburdened by the threat of commoditisation, it less susceptible to pricing pressure. In a B2B context, it is an asset that can be exploited exclusively by the ‘creating company’ or through that company granting rights to other organisations.

I would say that while we are attracted to IP rich technologies for these reasons, I am conscious that the technology must be decisively better than what it replaces. It must do a much better job. You can make money though delivering marginal improvement but you can make a whole lot more if your product is in a different class.

 

FR: What other factors have informed the current focus?

SR: In my case at least, getting older has also played its part. It’s the big, global, long run challenges that most engage me. These challenges have really important social and environmental dimensions. They really matter. And, of course, addressing massive challenges can offer huge economic opportunity.

I am never oblivious to the mission and political aspects of these challenges. My second job was as a teacher in Botswana. I earned about the same in a month as I had in a half a day in my first business in New York but the mission was more important. More meaningful. For me, commercialising a technology that directly contributes to sustainability is simply more motivating than building a sales operation for a B2B SaaS application that delivers greater efficiencies. Mission driven challenges have a great ‘why’ and I love that.

 

FR: The largest group of companies in RIG’s portfolio is focused on energy challenges. What has driven that particular angle?

SR: Energy is such a critical space as it lies at the heart of the climate change challenge. I cannot see any other way of tackling the acute energy challenges the world faces other than through adopting new, more efficient technologies. You cannot dispute the need but that is not the same as saying that new energy technologies can just turn up and the world will be their oyster. I think that is where a lot of the first wave of cleantech companies were wrong-footed. There was a lot of vision and a lot of big numbers but finding that market that could give the company traction often proved a bridge too far.

 

FR: So market discovery is a critical element of the process?

SR: That is the essence of the challenge and perhaps no less challenging than creating the technology in the first place. Finding high momentum applications and engineering adoption is a huge, often quite complex, challenge and that is where we can play a pathfinding or scouting role. In terms of building a market, innovators need to think small to get big. They need to identify and then offer a superior solution to a specific energy challenge. That is very much what we do. It is where we fit.

 

FR: Is it accurate to say that RIG’s more focused approach also reflects a broader trend in the venture space?

SR: Yes, that is a good observation. When I was first involved in what you might call the ‘start-up’ scene, entrepreneurial ventures where generally lumped together. Many start-up events reflected this. Now, of course, you have events for different tribes – those involved in FinTech, EdTech, or CleanTech for example. Many VC firms used to have partners focusing on investments in a several fields and, of course, many still do. But now you see much more focus which makes a lot of sense. I imagine that several VCs all with a focus on a single area, let’s say consumer internet, makes for a much better conversation and investment decision than a group of VCs each with a different specialisms. I think it is a reasonable assumption to say that the most successful Series A investors are the ones with the most focus and the most evolved investment theses. So in our way we are very much aligned to this trend.

That said, as a firm focused on innovative technologies, I think we must remain open to possibilities that lie outside our declared areas of focus. Those areas of interest we call our ‘column’. That ‘column’ is permeable with purposely ill-defined parameters. It is in many ways a tool that drives our internal discussion. What’s in? What’s out?  What’s happening out there? What’s emerging? What are the grand challenge that engage us? We have to remain alive to the non-linear developments and the emergence of new challenges that cannot be addressed simply by improving on the thinking and technology that can rise to them in the first place.

For example, we are working on a fascinating and important cyber-security project. It does not lie within ‘our column’ but we are totally committed. It ticks the interest box of one of our partners and that is always an important factor for me. You get the best from an individual when their ‘desire’ coincides with ‘opportunity’. So our focus will always in a sense be negotiated. We are that type of firm. We attract people to come and work for because of what we do and the areas we work in. Equally, we are influenced by how their interests develop. What interests people drives their development and when we work on things that interest us that gives us passion. There is nothing harder than doing a job that commands zero interest. It is like the class you hated at school.

 

FR: Does a more focused RIG mean the firm is becoming more specialised?

SR: We have made some choices that undoubtedly makes us not only a more focused outfit but also a more specialist one. Our future is very much centred on building out market practices where we can combine specialist knowledge and relationship capital with our more generalist ‘how-to’ knowledge. That combination packs a powerful punch. It is an approach that enables to us to codify our knowledge and utilise our contact network much more effectively. In terms of how we allocate our time, engineering licensing deals, building out networks of distribution partners, finding solution partners, or executing high value – and by value I don’t just mean revenue here – direct sales, consumes most of our time. Over the last ten years we have done a lot of business building. We will do a lot less of this type of work going forward.

 

FR: Why put the brakes on what is a valuable activity?

SR: We have accumulated a great deal of business building expertise over the last decade. This widened the scope of our operations to the extent that we had specific experience vested in individuals rather in a shared company-based capability. But the big question for me now is where we best apply this expertise. Helping a company find some product-market fit and achieve some early traction is without question valuable. It is the first staging post on the way to building a valuable business. Building organisational capabilities to take advantage of this is also undoubtedly valuable. There are lots of managers that are well qualified to grow an organisation. The know-how and experience required to build a revenue-generative organisational capability from its early evangelist stage to something that is more repeatable and scalable is fairly hard-to-come-by competence. As it often the case, companies with the beginnings of organisational capability believe that hiring a manager from a larger company in their space will help them navigate this stage. They are nearly always wrong. They have hired that individual too early. Building something from scratch is not what they do.

But for us the problem with this type of work has been one of value perception. Clients place a different order of value on securing first revenues and consequently we have the opportunity to make a healthy return on our efforts here. The same cannot be said for business building work which is time consuming and less glamourous. It is ‘airline’ work – it takes a lot of planning and organisation, creates a lot of value but is rarely profitable. But while we will do less of this type for clients, we shall look to apply this expertise in building more of our own ventures.

 

FR: Where does starting new ventures fit into the picture?

SR: I am agnostic as to whether we are working for companies that are client partners in the traditional sense or companies that we co-founded and part own. What is certain is that in the next five years we will increase the number of companies in our portfolio that we have co-founded and are significant shareholders in. To date, we have been opportunistic. Going forward, we will be much more systematic and objective driven about it. We have learnt from the ventures that we have started not least from our failures. Where we can make things happen is on the commercial side, in mitigating market risk, in introducing the customer into the product development process, and in establishing distribution channels as early as possible in the commercialisation process. In contrast, our natural co-founders are the product-centric CEO or technologist with a prototype operating in our areas of interest.

 

FR: What has prevented RIG from starting more ventures?

SR: The lazy answer would be time. I think we have huge potential as an entrepreneurial platform but in truth we have been reactive rather than working out a more systematic and proactive approach to identifying opportunity. One key element of this is resolving the funding challenge. If you are starting from scratch with each venture, then securing seed funding can be a drawn out process and take an ordinate amount of time. One of our goals in the next 12 months is to develop ‘a bench of investors’ that can fund not only new ventures but can take advantage of opportunities within our client base. I am interested in creating a tight knit group that become intimate with and confident in the work we do, that share our approach and values, and are interested in markets and technologies we are engaged with. We have started talking to some HNWIs and we shall also look to some family offices. I am most interested in investors that will place value on social and environmental benefits alongside financial return.

 

FR: What is RIG offering this investor group??

SR: What we will offer our investor bench has a few dimensions. If we take opportunities within our client portfolio then I think we can offer fantastic dealflow with our involvement acting as a form of due diligence. We know our best clients inside-out and we know the size and nature of their market opportunity. There are two scenarios we will bring opportunities to the table. The first is essentially ‘follow-on’ investment opportunities where the investment is made on the back of substantial market traction and the where the business model has been defined. The second scenario is less straightforward and is best characterised as addressing a short term funding need. Even those companies that are well established and firmly on the path to success are not immune from a variety of problems that can result in funding challenges. Few if any emerging companies can get all their ducks in a row. But if the core product and market fundamentals are in place then there is a great opportunity. The critical thing is to be able to move quickly, to ensure a problem does not become a serious distraction, and to preserve or re-establish goodwill.

With regard to new ventures these may attract a different type of investor. What we want to here is to establish a very structured, gated approach whereby we chunk the commercialisation process in a fairly granular and transparent way and then align funding to each specific stage. I believe that by engaging with the market early, by co-developing solutions to high value problems with industry partners, and by confirming, prioritising and sequencing demand, we can accelerate the time to revenue while reducing both business risk and a new venture’s early funding requirement.

 

FR: What still surprises you after running RIG for more than 10 years?

SR: I suppose I thought that as I got older my curiosity might wane but it hasn’t. I thought I might become more conservative with age but if anything I feel more adventurous. We play in such interesting spaces. There is so much to learn and engage with. I spent a little bit of time on my summer vacation doing a deep dive on the ‘circular economy. It is so relevant a concept that it must become part of our internal discussions as to which companies and technologies we work with.

 

FR: Are you ahead or behind where you might have imagined you would be when you started?

SR: Definitely behind. I am impatient person who has had to learn patience. What I have learnt is that developing talent takes time, sometimes much longer than first imagined. But I have stuck with people. I made the decision early on to hire young people and to try and give them the type of challenges that could drive their development. I think you have to commit to talent and be prepared to wait. It probably takes six years or so to get really good at what we do.

 

FR: Last question: Why are all RIG’s partners male?

SR: It is a fair question and it is something that I would like to see change. I started with four male graduates; one is now the CTO of a crowdfunding platform, another left to join Roland Berger, and the other two are senior partners at RIG. So we started off with an imbalance which was compounded by an early failure to attract a sufficient number of female candidates. Foolishly on our part, and mistakenly on theirs, we were viewed as being overtly ‘techie’ which is a mile from the truth. But we are well past that now and so the situation should rectify itself over time. I think that will have a very positive impact on our culture.

"I wanted to get closer to the companies themselves and have more involvement with the actual operating businesses" – an interview with Simon Jackson

I recently caught up with Simon Jackson, Director, in order to learn a bit more about his RIG story.

When and why did you join RIG?

I joined RIG in June 2009 by osmosis. I first started working on one client, and within 2-3 months I was fully engaged working on 3 clients. I’d known Shields for a long time and always thought that what he did and the way he talked about it was very interesting.

I’m a technophile and my career has kind of gone in the opposite direction of flow to some people in some ways. I started off as a fund manager so I was very far away from the things that I was investing in and so I had no influence over those things. Then I was in M&A for technology related companies. In M&A, there’s a lot of excitement in doing the deal and then the real work starts once the merger or acquisition is completed. So I wanted to get closer to the companies themselves and have more involvement with the actual operating businesses.

So essentially your background was as a…?

Frustrated scientist meets techno wannabe.

How would you define your role at RIG?

I wear a couple of hats. So, one is as a regular member of the RIG team which is all about winning and delivering high quality client work.

Then, as a director of the firm, it’s about shaping the direction of the firm. We have been thinking a lot recently about how to grow the firm in a non-incremental fashion. I also act as an ambassador for the firm; seeking to engage with people and build on that which will hopefully bring high value opportunities to RIG. Not just clients, but also high value transactions, potential investors – leveraging X for the benefit of RIG.

With the finance hat on, I do financial planning for the firm: how to grow value for the firm; how to find good ways of compensating individuals; how to create incentivisation plans that reward individuals for being engaged. That’s the finance side of trying to make RIG an exciting place to work, grow, and be rewarded. Along with Shields, I think about team development and team growth.

I also want to help embed in the firm a culture of equity ownership, which is about us owning the investment in other companies and the culture in RIG needed to facilitate it. Part of that is to extend RIG’s skill set in a financial direction because, over time, we are building out the things that we can do with companies.

Catch the second half of our interview with Simon in the near future.

An interview with the founder and CEO of Export Technologies, Daniel Loughlin

Daniel Loughlin founded Export Technologies, an eCommerce platform provider and consultancy, in 2005. To date, their eCommerce platform, the IRP, has transacted over £1 billion in retail eCommerce sales in over 180 countries. I caught up with Dan in order to delve deeper into the world of eCommerce and entrepreneurship.

How would you define an entrepreneur?

From my point of view, it is someone who can create a viable business out of an idea.

How did you come to be an entrepreneur?

I was initially a programmer and had a big interest in eCommerce and still do, and an opportunity arose. Because I was able to facilitate the eCommerce side of it, from there I really developed the business out of that. I didn’t set out thinking I wanted to develop the business but it happened because I knew how to do the eCommerce part of it so it was a very quick and natural thing to do. I’m sure a lot of people in the technology sphere materialise in a similar way – they start with an idea and the business comes afterwards.

If you could go back ten years, would you do it all again?

I’d possibly do it slightly differently. I think one of the bad things in many ways about technology is that it’s not quick. It takes a lot of detail and a lot of time. The length of time you have to sink into these projects makes you question doing it. Saying that, I still enjoy the area that I’m in and it remains very interesting. As you get to learn things, you do realise you could have made a few quicker decisions in the early stages.

How would you encourage someone to get involved in the world of eCommerce?

I am positive about eCommerce, but it has moved on from where it was 4-5 years ago when my answer would have been “get involved” and it was still possible to grow businesses very quickly. I would say now that people should get involved to maintain or expand the market share. To find areas of huge growth in a pure selling sense, you’d have to pick your market very carefully and have absolutely the right technology.

I think the best time to start a pure eCommerce company would have been between 2000 and 2004, after the end of the first boom.  There is a lot more money to be made on the technology side of things: efficiencies, solving problems et cetera. On the shop and selling side of things, it’s definitely getting more competitive.  For serious growth markets I think people should be thinking about selling internationally instead of selling here. Look for demand and think about selling some of the high quality products that we have here and carve out a niche.

You were partly responsible for growing Chain Reaction Cycles into the world’s largest bike store, achieving a turnover of £180m. How did working alongside CRC have an influence on shaping Export Technologies into the company that it is today?

I think it had a big role to play because it essentially allowed us to fund our R&D and was a very nice position to be in. So because of CRC, we became an R&D organisation instead of a selling organisation and remained there for a long time creating a great product.   It was also a great opportunity to learn a lot about the way that online markets work in depth.

You’ve previously mentioned that you got involved with CRC at a time when there were strong tailwinds in the cycling market. In which markets do you think we are currently seeing strong tailwinds?

In my view, you can make money in most markets. You need the right technology and the right choices – it will not just happen. Unusually, there isn’t enough focus on a pure sales angle. Probably because the world of online selling is a bit more opaque. But companies need to get real skills in that area in order to really get on top of the key metrics and they key channels. Unfortunately, these require a lot of detail in order to make them work properly. Not being able to physically see your customer is a challenging thing. Normally, you meet your customer. You can watch them, talk to them, and learn, and in the online world you’ve got to shift your thinking into a different way of doing that.

If I was to pick a niche, I would be thinking carefully about what the populations of the growth economies are consuming, and whether or not we can supply them from here. For much of the world’s history, China has been the largest economy. I’m not sure about the restrictions, but I’d look at Eastern markets e.g. do they consume something that we can supply from the UK?  If there are no export barriers then whiskey might be an example. There will definitely be growth areas like that. People need to look at poorly serviced markets where there’s a demand – companies like us are useful in trying to analyse these markets.

What are your main aspirations for Export Technologies over the next three years?

I would like to really strengthen our technology and simplify it so that it reduces the barrier to success – that is a key thing. Commercially, I’d like to see a wider adoption of the technology because I believe it’s very strong.  And also to grow the business in a structured way, based on a strong value proposition. I believe our IRP technology and our vision of “Commerce in a Connected World” can have an impact.

When you’re not doing all things eCommerce, what do you like to spend your time doing?

I spend time reading about the area I am in, business in general, and current affairs. I enjoy competitive sports; playing them rather than watching them and getting away from the computer screen in the outdoors.

Sometimes I think about the impact our work has, and the bigger impact of Information Technology; the area we are in. There are competing forces in our own area of Commerce – between ‘buy local’ and ‘buy global’ so it will be interesting to see how this shakes out. I think most of us are spending more time interfacing with technology, and less with other people which is a change for society. There are also issues of personal data and security brought about by the way communication has changed that society is yet to catch up on.

Strategy Matters: Part II

As I was saying at the end of Part I, strategy is important.

This is particularly true of early stage businesses which are often constrained by limited resources, and can find themselves in precarious situations if those resources are squandered. Consequently, each hour of work and each pound to be spent should be allocated in line with the business strategy that the company has elected to pursue. In this way, developing a strategy is all about reducing risk.

For a technology startup, risk presents itself in many ways:

  • Competition – How are you going to compete, and will the competition put you out of business before you really get started?
  • Technology – Does yours stand up to being scrutinised and for how long can you maintain any technological advantage?
  • Route to market – Do you have the channels in place to get to market, and how long will this take?
  • Financial runway – Do you have the adequate resources to sustain your business until it becomes funded and/or self sufficient

One way of developing a strategy is to go through a process of internal and external analysis, before implementing the now widely recognised SWOT (strength, weakness, opportunity, threat) matrix. By simultaneously identifying these internal and external factors, a business can develop a strategy which leverages its greatest strengths in the biggest area of opportunity, and therefore generate the highest chance of success.

Although there are many ways of coming up with a strategy, the important thing is to make sure that you actually have one. It aligns all of your business’ activities and creates a focus within the company which helps to drive efficiency. However, Paul Wiefels (Managing Director, The Chasm Group) notes that it is important not to spend too much time on strategy planning and that businesses should move towards strategy doing once a clear and coherent strategy has been developed and committed to.

Strategy Matters: Part I

During every football season, I like to indulge in a spot of fantasy football. Being fairly competitive, I tend to take the whole thing rather seriously, much to the amusement of my friends.

Ahead of Wednesday’s string of mid-week matches, I elected to make Sergio Aguero captain (double points), believing that I could rely on his brilliant recent form to deliver plenty of goals. In doing so, I overlooked the possibility of captaining Luis Suarez (despite being a Liverpool supporter) and therefore threw away the opportunity to benefit from the four goals which he would subsequently score against Norwich. Bad strategy.

Why was this a bad strategy? Luis Suarez had grabbed two hat-tricks as well as a single goal against Norwich during the two clubs’ last three meetings. There was clearly a trend here which I failed to identify. I missed an opportunity because I did not capitalise on the fact that Liverpool would be applying their greatest strength to a proven area of weakness (Norwich’s defence).

And so to my point: strategy matters. Whether you’re picking your fantasy football team for the weekend, or trying to ensure that your business will ‘win’, strategy is important.

To be continued…