Technology

Startups are an Experiment

The most interesting technology startups, in my experience, are those who are trying to do something new.

In Europe, prior to the Enlightenment, one group of people who tried to do something new were the alchemists. Classically stereotyped as people who sought to create gold from base metal, they were lampooned by Tim McInnerny as Lord Percy Percy with his nugget of purest Green. His depiction was of a group of people who attempted, seemingly at random, to apply treatments and actions in order to create change.

The alchemists were swept away, in part, by the propagation of the scientific method throughout Europe. The scientific methods remains with us today, informing the approaches we take to discovery – and arguably creating innovation cycles that are faster than any could have imagined a thousand years ago.

Do you want to be an alchemist or a scientist? I subscribe to the latter approach over the former – and I believe that those establishing startups should view them through the lens of a scientist, treating them as an experiment

What does this mean? To me it means following an ordered process in order to best understand what you observe and maximise your chances of proving your hypothesis.

Think back to school – hypothesis, methodology, results, conclusion (no, I cannot forget!) – and take the same approach. With reference to startups, I would summarise the scientific method as follows:

• Question – how can consumers and/or businesses most effectively complete an activity?
• Observe – what do they currently do, what are the deficiencies to the approach?  Coupons in magazines in 2008 – why?
• Hypothesise – we believe that businesses / consumers would use coupons more if they were online, promoted on single days
• Create a methodology – build a site, and promote it for those interested in saving money via coupons; get businesses to provide aggressively priced coupon deals on a daily basis
• Analyse the results – are people using my coupon site?  Is the promotion right, are the coupons offering deals in the right industries?
• Interpret – yes, people really like daily coupon sites
• Create a new hypothesis – people are willing to pay a monthly subscription of £15 to access my daily coupon site

New businesses are created by inquisitive minds who ask questions and observe deficiencies. However, just having a great idea (or a hypothesis) does not mean automatic success.

Consider your business – are you sitting in a candle lit room in a pointy hat, creating nuggets of purest green? Or are you a scientist in a laboratory conducting a series of experiments to prove or disprove hypotheses about businesses and consumers? I know which I’d rather be.

Posted by David Gates on April 26, 2013 at 10:09 am in Blog, Entrepreneurship, Strategy, Technology | Permalink | Comments (3) | Trackback (0)

         

The Value of Video

It is amazing how disarming a camera can be in the face of an otherwise articulate person.

It happens to virtually everyone: they are calm, confident, and eloquent normally, but turn on the camera, and suddenly it all goes to the dogs. We see this blinkless eye beaming at us and suddenly our brilliant trains of thought vanish and we are left dumbfounded, self-conscious, and fumbling. And it’s all being recorded.

Speaking on camera is a skill and it takes a lot of practice. This is maybe one reason a lot of companies opt for animations these days instead of live filming. Regardless of whether it is live filming or some form of animation, the value of video for a business can be tremendous.

For starters, every frame in video is important. This forces you to streamline your message down to the absolute essentials — a powerful exercise in itself. The limitations of time make you focus your message and articulate what your business does in its essence. Perhaps a narrative or analogy will be most effective; perhaps a case study. Whatever it is, the message must be clean, clear, and easy to understand, typically in 2 minutes or less.

Once you have a good video made, there is a lot you can do with it. Video is more easily digested than text or still images. It’s the fastest, simplest way of communicating a message, and that message can travel quickly to any number of people.

But the use of video doesn’t have to stop at just having a clear description of your business for your website’s homepage. If you can make video a core competence of your organisation, you can begin to use it for all kinds of applications. A presentation of a proposal can be watched by board members on their own time and passed around to all relevant parties. Customers can be educated on how to use a product or service. A video can be made quickly to explain a company’s process for maintaining a CRM and that video will not only be accessible to the whole sales team immediately, it will also be available for future reference if something has been forgot.

Video as a medium is very powerful, but creating good videos is not easy. Something with a clean look can be made relatively simply, but the message behind that video must be streamlined and focused, and that’s what takes the most work. It is, however, work well worth doing. Whatever business you may have, it is worth exploring the potentials of video in relationships with team members, customers, investors, and anyone else involved.

Posted by Aaron Ralby on February 22, 2013 at 2:52 pm in Technology | Permalink | Comments (1) | Trackback (0)

         

Big Data – the New New not-so-New Thing

The cry sounds very familiar: “Big Data. We’re doing Big Data”. Substitute ‘the Internet” for “Big Data” and it could be 1997.

In 1997, it was very common to meet people who were “doing the Internet”. It was by far the most exciting game in town. There was often not so much understanding of how “doing the Internet” was going to generate value. There were new business models and new future titans being built. It was also imperative for all existing big corporates to be doing it.  They didn’t have the in-house skills, so a raft of product and service start-ups mushroomed to fill the as-yet-not-so-defined gap.

There is a similar rush now with Big Data. And as in the internet rush, while there are some people that are building and investing in companies that generate and look set to monetise Big Data, there are also many that are looking to take advantage of and fill the gap that the lack of maturity in this discipline has opened up.  In many cases, it’s not obvious what kind of business is actually being created.

In a way, this is to be expected. As in the early days of any emergent field, there is a surge of new entrants. This is particularly helped by the fact that much of the underlying technology that is being used to manipulate Big Data is open source. The cost of participating is low, while the perceived need is great.

When looking at companies that want to provide services to enterprises, one major decision is between whether to offer a platform or an industry-specific solution. At RIG, we have come across quite a lot of companies that are in the middle – they have a basic platform that they are trying to use to solve problems for a range of customers. Essentially they are offering tool-driven consultancy, taking advantage of the gap – as for the internet – where core mass data handling skills are not yet embedded in the organisations that have the data and which are facing the expectation of being able to do something interesting with it.

This can be a starting point, but we would strongly recommend that they quickly move to focus on a cohesive set of industry-specific problems, preferably for an industry whose problems they understand well.  As my colleague David Gates’ wrote in his recent blog post, having market focus sharpens a company, improves its product, and ultimately allows it to offer and extract more value.

Sometimes early success can get in the way of finding a better path of evolution. One company we spent time with had won a couple of big name customers, but was having to spend a huge amount of time providing consulting and customisation services to deliver. The business plan showed a move to a self-serve product and ramping sales numbers, but it seemed that much of their value was actually in their ability to consult.

Ultimately, Big Data will go the same way as the internet. It will spawn a host of new technologies and tools. It will become a core competence for most large corporates; there will be some excellent ‘pure Big Data’ companies. And it will create a raft of new kinds of jobs. While we should expect that most of the current Big Data startups will not last, their existence now is important as part of launching the movement to imagine and unlock the value of data.

Posted by Simon Jackson on February 18, 2013 at 10:00 am in Demand Generation, Technology | Permalink | Comments (0) | Trackback (0)

         

Build Engines, Sell Cars

We often need to reinvent a concept entirely in order to improve it. Small tweaks here and there are only worthwhile if the underlying technology is as advanced as it can be. When we tear something apart and start over, however, we need to remember that the customer will want a car not an engine.

Building an engine is the hard part. It takes the most research and development. The majority of customers won’t want to buy the engine, but rather the vehicle that is powered with that engine. The same engine could power all sorts of vehicles or equipment; the customer pays for that functionality.

The analogy holds true for many businesses and innovations. Look at 3D printing, for example. Not many have really figured out how to build businesses around this technology, though most agree it has immense potential. A 3D printer itself is an engine. It allows you to do all kinds of cool things, from rapid proto-typing to creating bespoke parts. Most end users don’t want a printer, however; they want the things made with the printer.

Some people in 3D printing are trying to build businesses selling the printers and printing equipment. This is something of a mistake, in that the total market for printers will be relatively small, and the printing technology is likely to advance further before that market could actually be addressed. Other 3D printing businesses operate around a combination of products and services, capitalising on the flexibility of the printers and the knowledge of those in the business (it still takes a lot of know-how to work with 3D designs and CAD technology). Such a model plays to the strengths of the technology in question as well as the people working with that technology. From the customer’s perspective, it’s not even necessary to know that a 3D printer is being used to produce the product they are ordering or commissioning.

Developing 3D printers took far more research and work than it does to print objects with them now. They are an engine that will power all kinds of innovative businesses. Most people won’t want to buy that engine on its own. If developing a new technology with real IP, then in the process of turning that technology into a business, you’ll need to ask yourself: is this a vehicle, or just an engine? Developing a new engine is ultimately more valuable, as long as you remember to put it in a car before selling it.

Posted by Aaron Ralby on January 11, 2013 at 2:27 pm in Strategy, Technology | Permalink | Comments (0) | Trackback (0)

         

CamTech Meetup

Last night I had the pleasure of attending the CamTech Meetup – Resurrection Edition. A series of Cambridge-based entrepreneurs gave 7-minute demos of their businesses. Though the time for the demos was run with machine-like precision, the atmosphere was more relaxed than many “pitching” events, as this was more of a forum to share work than to sell business ideas. Ironically, I found these demos more compelling pitches than most investor-style pitches I’ve seen.

Among the more interesting demos was Cambridge Intelligence, a web-based software that sits atop existing databases and provides visually compelling means of interpreting various kinds of network data. Their target is security, and the demonstration they gave showed (as their website does) the way their tool can be used to visualize the connections between known terrorists and terrorist organisations.

Skin Analytics and PatientSource presented two different healthtech innovations. Skin Analytics provides algorithms for detecting changes in the size, shape and colour of moles and lesions on the human body. The software is designed to account for differences in camera angle and lighting conditions. It is not a diagnostic tool itself, but if used consistently, could provide important information for early detection of melanoma as well as data not currently available on the development of skin cancer.

PatientSource provides a solution that seems like a no-brainer, but which will likely be difficult to get off the ground as a successful business. The software provides digital versions of doctors’ notes and patient records that are structured like current paper-based notes, but which can be easily updated by doctors on wards using tablets or PCs. The software goes a step further by facilitating analysis of patient data in a way not possible on paper. As an off-the-shelf solution, the software seems like a logical buy for small and medium-sized hospitals; but as with any sale into the NHS, the process will likely be longer and more difficult than it appears it should.

Other demos included KowledgeTransmission, an e-learning platform for packaging and delivering existing content from publishers, and Shaderlight, an easy-to-use rendering system that works with Google Sketchup for 3D models.

The demos were high quality at this “resurrection edition” and it will be interesting to see if they remain at such a high level at subsequent events, which are likely to be held every 6-wks.

Posted by Aaron Ralby on November 30, 2012 at 11:58 am in Technology | Permalink | Comments (0) | Trackback (0)

         

The rise of the accelerator model

Traditionally business incubators have been physical spaces in which fledgling businesses can rapidly develop with access to important resources at a significantly reduced cost.  This model still exists, but has been surpassed in popularity by the accelerator model, which has risen in prominence over the past 3 years.  The accelerator involves a fixed period of time with a more intensive program of activities for each startup involved and sometimes there is a small input of funds.

Why has the accelerator overtaken the incubator?

Accelerators essentially batch produce companies.  They create a pressurized but inspirational atmosphere by putting multiple startups in one place and have them build their companies alongside each other.  They can learn from each other and exploit each other’s networks, whilst also benefiting from mentoring and workshops provided throughout.  Often the focus is on the final day where an expo is held to showcase the startups that are ‘graduating’ from the accelerator.  This takes the form of each company pitching to investors.  The incubator certainly serves a useful function in the startup ecosystem too – keeping overheads low and giving access to a network of some form, but companies can stagnate within them and become too comfortable without any set goals.

Sign of the times

The increase in number of accelerator programs worldwide is a sign of how many people are turning to entrepreneurship as a career path.  The proportion of graduates starting companies straight out of university is higher, and the accelerators are the natural place for them to take their ideas to develop further.  Some even argue that a stint in one of these programs is a better investment of time (and money) than an MBA course.  It has also been said that the increased number of places in these programs decreases the quality of the candidates being developed further and that this is a waste of resources which should be focused solely on the best start-ups.  I think there is value in taking forward a larger cohort of companies though, as some of them need the extra help early on to get to the growth stage.  The startups that really aren’t great will then be weeded out when it comes to the early funding rounds.  In the future I think we’ll see a dominant set of accelerators which are deemed credible along with a few specialist accelerators whilst others will fall by the wayside.

Funding

From a funding perspective accelerators provide an excellent filtering system.  Not only do they filter out the lesser companies and ideas, but they then coach the selected ones up to a certain standard.  As an investor I would be much more comfortable investing in a company that had been through an established accelerator as it almost guarantees a certain standard.  Increasingly I think this is the case, and all the different types of investor are showing a preference towards companies that have been ‘trained’ via an accelerator program.

Post by John Sherwin

Posted by RIG Admin on August 24, 2012 at 8:15 am in Blog, Entrepreneurship, Technology, Venture Capital | Permalink | Comments (0) | Trackback (0)

         

P2P lending: a good place to put your money?

Peer to peer lending has established itself as a great way to get a loan, but from the lenders perspective things are a bit trickier.

Problems

To begin with, there is imperfect information for the lender. You may be told the credit score of a borrower, or the rating given to that borrower by the site, but often the processes to deduce these are not transparent or accessible. The next problem is that the loans are unsecured. They are not protected by the UK’s Financial Services Compensation Scheme meaning that should the borrower default on the loan, the risk rests with the lender and the government will not help them.

Although there are obvious economic reasons for a borrower to use P2P lending sites, their low public profile often means that they are a second choice to banks, and so the people applying for loans via P2P have often already been denied one by their financial institution, indicating that they are a particularly high risk candidate for defaulting on their loan. That said, the credit supply from banks is very low currently, and that is one of the things that P2P lending addresses.

Some concerns were raised around users not being fully aware that their loans were unsecured and being unfairly given the illusion of control by slick interfaces on the platforms. I for one disagree with this – all the major platforms make the risk very clear, and a slick interface should be applauded as it makes the process if anything more transparent and easier to understand for the average user.

Some solutions

Platforms are also innovating new ways to safeguard their lenders. UK based Funding Circle allows borrowers to set a director guarantee, where collateral is put up to secure the loan. Another UK based firm Ratesetter has created a provision fund which also attempts to protect lenders. Borrowers have to pay into the provision fund when they get a loan, and if a loan defaults the fund is actively managed to ensure lenders are returned their capital before anyone receives interest. The construction of risk filters that keep the most likely defaulters off the platform is widespread, and further safeguards the lenders from default.

Outlook

All in all, despite the potential risks, if you follow the advice on all of the sites and invest small amounts of money across a large number of borrowers, the returns you can get average out far higher than what you could get through banks or even high risk government bonds despite defaults. Isn’t that why people are investing in P2P lending in the first place?

Post by John Sherwin

Posted by RIG Admin on August 3, 2012 at 12:39 pm in Blog, Entrepreneurship, Technology | Permalink | Comments (0) | Trackback (0)

         

Insights from a complex negotiation

Most readers of this blog will be interested in getting to the point that a current client finds themselves in, so I thought I’d record the process we are working through to resolve it.

Picture this: you’ve found an enthusiastic sponsor, got them to buy into your proposition ….. you then find they have opened an opportunity bigger than you could have dreamed of (or given them credit for!).  The opportunity is business changing …. it smashes that sales target ….. the world is about to take a serious change for the better!

You’ve dealt with the sponsor and business user all the way through the sales process, everything makes sense …. then you hit (corporate) reality – an unhappy procurement function.  Why are they unhappy?  Your sponsor decided (almost certainly correctly) that if they were involved early on they’d kill the whole thing stone dead – and the business needs your software so they didn’t want it killed off early.

The call is set up, the agenda point is ominous – “commercial discussion”.  That’s where we find ourselves today.  Time for some scenario planning.

Position-based negotiation – a brief segue 

Just like in position-based warfare, you either win or die in your trench.   Positioned-based negotiation is the same – and thus to be avoided unless you have nowhere to run!

Back to the point

What will come up?  In reality there are actually very few things that procurement can say / do.  They either need to tick a due diligence box to say they checked it all out and understand it – or they are going to try and beat you down on price.

As I see it, there are only really three start points you should prepare for:

1. The price is too much
2. They don’t like the pricing structure
3. Justify the whole piece

The price is too much

So let’s start with the first point – the price is too much.  The price is too much?  How is that possible, we spent all that time with the business users who hold the budget working through it and making it the right fit.  How can it suddenly be too much?

In my experience it can be too much because: a) procurement has a corporate target for reducing initially quoted prices e.g. everything down by 10%; b) the budget that the sponsor and business users identified got spent and they weren’t aware of it; or c) procurement isn’t particularly evolved in this corporate and is spectacularly unimaginative when it comes to negotiation!

So how to respond?  Remembering to avoid a position based approach (“it’s the best we can do”), ask a question: “why is it too much?  We have spent time with X and Y, who confirmed the budget was available, so you need to explain this to us”.  It’s a killer – now the procurement person has to explain their rationale for their statement – if they aren’t coming clean, try a couple of other questions: “do you have a corporate target? Has the budget been spent elsewhere?”  This puts you in the driving seat as you are now asking the questions.

We don’t like the pricing structure

This for me is a classic.  I have a tendency to specialise in subscription-based businesses – I like the model, as it lowers the cost for users to adopt and provides the business with on-going revenue to pay its employees and further develop the software.

However, subscription-based software isn’t old hat to everyone – in fact, some people still think that all software is sold on a license / maintenance basis.  This is not good, because you might have to explain the whole rationale of subscription based software to them, and then break the news that they won’t even own it – and some procurement departments hate not having something they can take away (even though in the long term they are totally powerless to develop it in house!)

There are several ways to address this:

1. That’s our business model – take it or leave it (bad position-based start!)
2. The pricing structure is like this because it reflects how we deliver the software – a lot of our costs are in on-going development for your benefit, as well as server space to deliver it across all those different geographies
3. Give them a quick calculation of the license / maintenance cost – hey, if they want to buy it like that then why not!  So your £50k per annum software is now £127k (£115k+£12k) year one and then £12k for the following two years.  Obviously that’s good for my cash flow and bad for yours, Mr Procurement, plus we won’t be able to deliver you with any of the development benefits over the three years because we are going to have to create a separate instance of the software for you on another service, and once that’s in place we won’t be able to tinker with it in case something goes wrong and affects your business
4. Ask them why they don’t like it – then knock off all the responses with the standard SaaS arguments – it won’t make them look good, so hopefully they will stop making stupid points fairly quickly!

Justify it…..all of it

This has to be the worst one …. not because you can’t do it, but because it takes so long to do.  You have confidence in your pricing, otherwise you would not have put it in front of them, and you’ve probably already been through this with the sponsors and business users – so it’s just tedious.

Do get some practice in beforehand though – time spent in preparation is time well spent.  In all likelihood the question that keeps coming up as you go through will be “why is that like that?  And why is that like that?”   As I said before, you have confidence in your pricing …… you are just going to have to spend a long time explaining it.  And there’s always the risk that either “that’s too much” or “I don’t like that” is going to come up – if so, I reference you back up to the previous two sections.

Final Thought

Generally you don’t get to a negotiation unless the customer wants to work with you.  Keep that in mind….and you’ll have a successful outcome – and lastly, the only business worth winning is profitable business!

Posted by David Gates on April 23, 2012 at 12:07 pm in Blog, Entrepreneurship, Pricing, Sales, Strategy, Technology | Permalink | Comments (0) | Trackback (0)

         

“The only guidepoint is reality” – Interview with Andy Hutt of triOpsis

Andy Hutt is founder and CEO of triOpsis, a real-time visual intelligence company designed to provide technology that allows enterprises to use mobile devices to track the status of products and services on the ground.

I can’t promise any words of wisdom at all, but I can promise words.

1) Why did you decide to become an entrepreneur rather than go down a more traditional career path?

Lots of answers to that. As with most things in the world, life is a bit more complex than, I woke up one day and said, “Fantastic! I’m going to do this.” Life evolves to a point and you make some decisions. For me, one of the most important ones, and it is only one of many, is when I looked at a traditional career path, I just saw boredom. My background is in finance; I’m a qualified accountant. Way back when I worked for PwC, I worked in Private Equity Transaction Services at Deloitte, I worked in corporate finance, blah, blah, blah. And the problem was whenever you looked at the career path of any of those, it was frankly just boring. And for me, I didn’t want to spend 30-40 years of my life doing that. At all. So it’s about how to make a change. And any change is very difficult to make.

For me, the obvious one with the skillset I had was to go and set up a business. It was possibly a bit of a random choice in terms of where we went, but you have to use what you have around you. I had no background in software prior to this, I had no background in retail, no background in utilities, never set up a business, all those kinds of things. But you have to make a decision that says, I need to change something. I need a more interesting path in my life, I need to do something which I find more satisfying, more enjoyable, and I have more control of.

2) What new skills and specialisms did you have to develop as you got triOpsis going? How did you develop new skillsets?

One of the skills a potential entrepreneur has to have is risk taking. Risk taking possibly equates to stupidity or arrogance, because if you knew all the risks, you probably wouldn’t do it because you’d assess you’d fail; or you understand the risks, and you’re so arrogant that you think you can succeed anyway.

A lot of people are very risk-averse when it comes to trying different things. I’ve never set up a business before. Ok, fine, how do you do that? You just go and talk to some people, get a bit of guidance, and do it. And a lot of it comes down to just doing it. I’ve never run a technical team before, in terms of coding, never run a PR campaign before, I’ve never been a salesman, I’m going back to when I started the business, and it’s about risk taking, just dive in and do it. And if you work out you haven’t got the skills, learn. So, can I be a salesman? Yes. If you can’t afford a salesperson at first, that’s what you have to do. You can’t say, “I don’t have those skills!” You have to dive in, do it. The key thing is, if you’re prepared to take that initial risk—which is basically whether you’re prepared to show yourself up, whether you’re prepared to effectively fail—you need to learn quickly. Dive in, learn quickly, chuck it at the real world and off you go.

In terms of acquiring new skills, it’s partly about risk taking, it’s partly about confidence, and it’s the ability to learn quickly. A large chunk of my view of the world, when it comes to learning and entrepreneurship, is about surviving enough failures to succeed.

Most of the time, until you’ve made your business, you’re assembling a collection of small failures. If I go back to the first sales pitches I did four years ago, I cringe. I’m like, “My God, did I ever actually pitch something as stupid and vague as that?” But you have a go and you just learn, and that was a failure. You’ve got to collect these failures. And in terms of how you fund the business, ideally with entrepreneurship, you need to get enough funding to survive enough failures to have learned enough to succeed.

People view failure as though there’s only one way to fail, which is, you know, like the Eurozone at the moment: BIG! And actually, entrepreneurship is lots of little failures. “I tried that, it didn’t work. Put that to one side. I’m going to try that, ooh that didn’t work, ooh that does, let’s do more of that.” Ideally it’s not catastrophic. I got a good piece of advice early on, which is, “Never bet the ranch early on any particular given path.” Some people say, “You’ve got to do it the whole hog, just go for it!” And if you did that, put all your money in one strategy, one path, one thing, and it fails where do you go? I’d rather spread the failures, and then try and learn where I passed. “That bit did succeed, I’ll put some more money over there.” With failures you learn. Success doesn’t actually teach you anything, it’s just like, Oh, I got lucky. More of the same.

3) How do you balance breadth across industries and depth within an industry?

It’s a really good question because for me, success only comes if you focus. But it’s actually the point I was making a second ago about failures, because you don’t actually know which market, which product is going to be a success. So what you have to do, and what we did, is we started off in brands and we tried retail, and we’ve ended up in utilities; we ended up in water, and we’re now in gas and electricity. It’s a case of the same learning curve, but the ultimate goal has to be a focus. As a small company, you don’t have the resources to do lots of stuff. Provided you understand that to start with then you may succeed. If people don’t understand that to begin with, if they think they can have a go at everything, they will fail. You can’t. Unless they’ve got a really big bank balance, in which case, good luck to them! So, what you have to say is, ultimately I do have to focus to succeed, but I don’t know where to focus, so it comes back to how do I learn? How do I fail, etc.? And what you try and do is get into a niche where you think, yeah I’ve got something real. And that particular point to me in terms of business is what I was talking about earlier: you have to get that in the real world. You can’t sit in an office and think, right, it’s going to be this. That’s the way for me. You have to take the risk and then actually go and talk to that particular client. And they’ll probably go, “Oh that’s rubbish.” So you go back, you have a think, you listen and then you go back and you try that again. And ultimately it comes down to, sadly, what will this generate in revenue for somebody or will it save them money? You need to understand that as an end point.

The only guide point is reality, and that’s the bit when I was talking about risk taking earlier. A lot of people aren’t prepared to take a risk. And a risk is standing up in front of people and actually potentially looking a bit stupid. And for a lot of people, they’re not prepared to do that. The ultimate arbiter of everything is reality. You can’t sit in an office and make a profit. You have to actually physically go into the real world, get your product into the real world, and get real world feedback. Think of anyone who sits in an office and says, “Yeah, this is the best thing since sliced bread!” For our products, we could say, “Yeah insurance market, hey! We can do all of this stuff!” But actually if you spoke to someone in insurance they may turn around and go, “Err, you can’t do it for these reasons.”

4) What is the lifestyle of an entrepreneur like?

The lifestyle of an entrepreneur? It varies. In the world of big corporates, hard work is when you have lots of work on. For a small business, when you’re an entrepreneur, that’s easy. I’ve got work. The hardest part is when there’s nothing. You know, there aren’t any projects. You haven’t got a team of people, you have to sit and you have to go, I need to do something, I just need to create something from scratch. That’s hard work.

Posted by Aaron Ralby on April 20, 2012 at 5:12 pm in Entrepreneur Viewpoint, Entrepreneurship, Entrepreneurship, Management Tips, Real World Lessons, Sales, Strategy, Technology | Permalink | Comments (0) | Trackback (0)

         

The ‘differentiated’ sales force

As technology advances and the manner in which technology is consumed changes, traditional software sales jobs are fast becoming an anachronism. The selling of largely standardised solutions using a direct sales force has been replaced by an internet-based, self-service, sales-less model in which marketing comes to the fore. Recommendation and virality create and drive demand. The change is marked.

If you are running a direct sales team today then you are in the business of selling higher value solutions with a degree of complexity. The sales force is no longer merely the execution channel; they are a constituent part of the solution’s differentiation. Sales skills alone are not enough; they must offer the prospective customer expertise. This value-add is integral to the sale. Sales consultants must become ‘consultants’ in the true sense of the word. They must have domain expertise and problem-solving skills that are valued by the customer. They must be ahead of their customer’s thinking. They must be able to challenge and educate the client. Value is created though collaboration. While the technology at the core of the solution must remain scalable, the skill in creating a dialogue around the client’s needs and configuring an attractive solution is not. Building this type of differentiated sales force requires know-how and investment.

This type of shift is significantly changing sales management from management of a sales force that can articulate differentiation to one that is in itself part of that differentiation. This is a significant evolution that impacts selection, training and development, and sales practice. Where it is not practical or desirable for all the knowledge required to execute a sale to be contained in one individual, team selling (an anathema to the traditional software sales manager) may emerge from being the exception to being the norm. Incentive and remuneration structures will change to facilitate this. Where developing specialised domain knowledge is a core competence, a ‘hire and fire approach’ (always an excuse for poor management) makes no sense. This world of sales demands the brightest and the best. Those that have both IQ and EQ in abundance.

Posted by Shields Russell on April 16, 2012 at 1:17 pm in Blog, Sales, Strategy, Technology | Permalink | Comments (0) | Trackback (0)

         

London Web Summit – an excellent networking event, but “Where’s the Beef?”

Hats off to Mike Butcher: he runs a great event. London Web Summit, held yesterday at The Brewery, this time brought together with Paddy Cosgrave of Dublin Web Summit, drew a wide range of entrepreneurs, investors and ‘glue’ people in a day packed full with panels, interviews, discussions and startup presentations. There was a ‘coding dojo’ for kids. There was even a band, just like on The Tonight Show. The networking was excellent – there was a matching platform for surfing the delegates and booking meetings in advance. In terms of rallying the startup ecosystem, to quote the song, “nobody does it better”…

Content-wise, there was lots on cool new ideas, and, as ever, much focus on getting VC funding and whether there is enough of it, and a session on exits. I couldn’t help feeling though that the bit in the middle – i.e. building and scaling the business – was completely glossed over. Finding out from practitioners the answers to questions like “How are you changing your organisation as it grows?”, “How have you created a scalable model and what did you need to learn before you were ready to scale?” and “How are you structuring your sales and marketing efforts to ensure you deliver your growth milestones?” can only be instructive and thought-provoking to anyone going on the same journey.

There was a fair amount of attention given to hiring the right people, but the implicit assumption is that if you get the right people, then all of this will be taken care of. If exactly the right people exist, then maybe it will be, but in practice, very few people have all the right skills, and even then, there is so much that can be learned.

With Sonali de Rycker of Accel Partners saying that it is normal for up to 8 out of 10 of their investments to fail, the odds of success post-funding are still only 1 in 5, which means that getting funding is only the start of the journey (even with a world-class VC). In this case, why would you not want to devote a huge amount of time to learning about how to navigate the course and mitigate the risk?

Quite possibly it’s not the point of an event like this to look at how to generate and manage growth. Perhaps it’s felt that it wouldn’t make for an interesting discussion – maybe it’s too detailed and too specific. But if not here, then where?

Posted by Simon Jackson on March 20, 2012 at 3:18 pm in Blog, Entrepreneurship, Technology, Venture Capital | Permalink | Comments (0) | Trackback (0)