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An e’diary part 2: what are the responsibilities of an entrepreneur

Vincent van Wylick — Tue, 16 Feb 2010 22:06:23 +0000

This post is part of a series, a diary of starting a business if you will. It follows part 1, the decision of becoming an entrepreneur.

One thing I found out is that it’s hard to put your responsibilities down on paper… there are so many!!! There is of course a basic job-description, which more or less sounds like that of a project manager/pull-the-rabbit-out-of-the-hat magician: “make it happen that we go from this thing on paper to the product in the hands of customers.” “Make it happen” is a super-loaded phrase, which can mean countless things.

There is a continuous struggle between micro-management and keeping the overview. Micro, because it is your responsibility that every (little) thing is carried out by your employees (if you have them). Overview, because You the entrepreneur are The Organisation. There is a third struggle that shouldn’t exist really, that between your professional life and your personal life. I’ve come to the conclusion that the only way to do this thing well is to focus on it exclusively. Friends, family, love, …blogging… it’s a nice luxury to have, but it comes second place.

The responsibility of an entrepreneur are thus: have a goal and make sure that everything is executed to get to that goal.

In a technology company, there are matters of technology and business (really, in what business except for strategy consulting isn’t there a mix of “technology,” which can mean anything from cooking to software development, and the commercial side of things, which is meant to pay for everything?). What I found was that as someone with a business background, who sort-of-kind-of has an idea about product development, and has a better grasp of business development, I still can’t let go of the reigns of product development entirely.

Product development ties in directly with business development. People are unwilling to pay for something that doesn’t exist and similarly our budget is supposed to last us until we have something worth paying for or investing in. Therefore, as an entrepreneur I have to make sure that product development stays on track. The absolute best way to do this is to have a capable product development manager in charge. The truth of it is that startups by their nature are resource-poor, which includes tripple-A product development managers (probably employed at multinational X or Y somewhere), and there is a lot of learning/training on the job. Learning/training means that the (hopefully) existing product development manager (in our case yes) still has to be managed, through schedules and regular meetings. In any case, product development is in its conceptual stage a very brainstorm-friendly activity, which means the more the merrier. But ultimately, a startup must get beyond this stage, respecting the entire resource-poor situation that a startup usually faces.

So, responsibilities of an entrepreneur as far as the technological product development is concerned: If you have a product development manager, you have to make sure that he works under the realities of the business. If you don’t, which I imagine many 1-person software startups operate under (as well as those lucky strategy consultants), well then you have to do the job of product development as well, keeping a close eye on the business realities.

OK, the business part of things. My role is fairly well-defined here as I come from a business background and approach startups from a business perspective. Assume that role 101 is having a firm grasp on everything that goes on, which can be phrased as “where are resources (people, time, money) being expended at and is it wise to do so.” This entails having a good budget plan and sticking to that.

Role 102 is to build the business, which I call business development, but that often gets confused with sales as that that is what it says in job adverts. Business development is the building of the business, which includes sales, but also includes building the company and all that entails.

So, we are trying to get from point A to point P, how do we go about it? If product development is about turning an idea into a product, business development is building a business plan into a business. Business plans are total BS unless they contain validated information. Some key-chapters in business plans are the market overview, the market approach, the time-line, and the financial need to meet all these objectives. Business plans can serve as a. cannon fodder, b. a plan of approach, c. one of several signals to attract investment. For c. no investor will take a look at your business unless you have a plan of approach (b.). On that plan, there should be a time-line, which you are following (predictability!) and there should be a goal: the market you are targeting and your approach.

The market section of the business plan presents a big problem for technology entrepreneurs. Because (non!) customers often don’t know what they want. I can ask a target group “what kind of air do you like to breathe?” and it wouldn’t surprise me if a significant number of responses would say: “I like to breathe air that smells like perfume.” OK, that’s a terrible question, but what I mean is that people sometimes make up answers that have nothing to do with reality (that said, both the perfume business and the fast-food industry have made lots of money from essentially selling air that smells good. Scent is also plays a very important part in memory, but I digress…)

What I’m a big fan of is validated market data, which is data gathered from actual customer experience with your product or part of it. That brings forth another problem of a bias towards early (and over-excited) adopters, something which the book “crossing the chasm” deals with, but is really not something that I think is realistic to address at an early stage, except that validated market data can also come from experts in the markets you are targeting.

The implication is also that product development is again completely tied in with business development which leads us down the path of rapid prototyping, another practice that works great in software / on the web, not as easily (though not impossible) with hardware. In any case, the experts in this area most well-known today are:

- Steve Blank, who wrote “The Four Steps to Epiphany” and is currently hosting the excellent Stanford’s Entrepreneurial Thought Leaders seminars (btw. Steve Blank also writes a great blog on customer-focussed development, which I’ve only just started reading.
- Eric Ries, who authors the blog Startup Lessons Learned and has some great articles on responsible (=lean) development.
- And Donald Reinertsen, who wrote an incredibly dense book called “Principles of Product Development Flow,” a book which is clearly an authority in the field, but which I cannot recommend to any sensible entrepreneur with a 60hr/week schedule. Those principles, by the by, number in the 100+.

As well as of course Toyota and plenty of other experts out there, I’m sure, many of which are referenced by the people mentioned.

I think that it can safely be said that task 3 or a sub-task of business development is working towards the customer, the lifeblood of a business.

There are other tasks of course, which have to do with human resources, legal work, accounting, etc. Some of which can be outsourced, some of which can be done half-heartedly (oh no, I didn’t say that), some of which are really-really important, etc.

All these tasks, however, require a certain authority. The entrepreneur’s responsibility is to either be an authority on a task level or to be sure to work with authorities, either in the company or in an (informal) consulting fashion, so that they are carried out responsibly.

Task 4 can thus be entitled: be an authority on the tasks that need to be carried out or have access to one.

So, a whole can of worms starting a company can be and it is vital that it does not interfere with the single most important thing that you must do as a human being: be healthy! Health is part sleep, part exercise, part food, part love. There is no yin without yang and vice versa. Thus forget everything I said about personal life being no. 2. The best is if it reinforces what you do in your work. Health leads to happiness and happiness leads to optimism: a key-quality in entrepreneurship if there ever was one.

So the responsibilities of an entrepreneur summarised:

100: keep your eye on both sides of the court: the goal & the resources needed to get to that goal
101: align Product development with Business development
102: always validate your market data by staying close to your customers
103: be an authority on the tasks that need carrying out or have access to one
104: stay healthy and happy.

This was written in a single session with minimal editing. I hope it kind of makes sense. Part 3 of my e’diary will be on the topic of: can you prepare for entrepreneurship? As I have a master in entrepreneurship, I thought it might make for an interesting perspective. All my entrepreneurial diary posts can be followed under the tag ‘Vincent’s eDiary.’ By choice, I’m being mysterious about my company. If you have questions, feel free to comment or write to me via the email address on the right.

Picture courtesy of Be The Dream.

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The Poor Man’s Business Model—How Out-of-the-Box thinking can generate tremendous value for customers

Vincent van Wylick — Tue, 01 Dec 2009 13:17:21 +0000

I’m always fascinated by business models, i.e. at how entrepreneurs and companies put together services in order to make money from them. I’d call it the source code of business if I hadn’t seen the other source code in Luxembourg —legal and accounting—but arguably that’s more like binary code, i.e. 99% unintelligible.

Sarah Lacy writes about SMSONE, a ultra-local news provider in India similar to Outside.IN, a Union Square Ventures funded US-only company that provides news updates via the web. SMSONE does it, as the name suggests, via SMS. And it spreads through a franchising model, working with local entrepreneurs that pay a franchise fee and also collect a share of the advertising revenue from locally focussed businesses. It is able to do this because of something that apparently doesn’t exist in the US (but does in Europe): receiving an SMS in India doesn’t cost the recipient anything.

When reading about this, I was immediately reminded of a similar business model employed by a Dutch entrepreneur in Russia, Ms. Annemarie van Gaal, founder of Independent Media, a company that distributed Russian versions of magazines like Cosmopolitan, Marie Claire en Good Housekeeping (source). When she spoke at the Star entrepreneurial seminar in Rotterdam a year ago, she told us about how she differentiated herself from the competition (paraphrased as I haven’t got my notes with me):

The trouble with getting your magazines distributed in Russia was that you had to pay quite a lot of money (some would call it bribes) to companies that would then take care of it… badly. Instead van Gaal decided to do it differently. She would hire street kids to distribute her magazines, similar to the gold days of newspapers: the newspaper boy.

If you read Sarah Lacy’s account on Techcrunch, you’ll see that SMSONE does it similarly, hiring local kids, often without much education, to take care of distribution. Doing it via official channels is likely a nightmare over there, and centralising distribution kind of defeats the purpose of micro-news.

It’s a different way of thinking, which many of us westerners don’t have. I mean, would you entrust your products to a beggar on the street or to a street musician? Not only is it probably against the law (except if the government does it), we pride ourselves on our super-organised infrastructure, where anything from temp-workers to interns are there to provide companies with a flexible workforce, and anything from printing presses to mobile internet exists to produce and distribute your stuff.

Of course, I wouldn’t just leave you with these two examples. In the beginning of 2008, Boston Consulting Group published a study of “local dynamos”— domestically focussed companies, which use creative business models to capture value from emerging markets that are filled with challenges, like lacking infrastructure and low-income consumers. The map below shows how widespread these companies are.

Some very interesting examples are mentioned, like:

Shanda, a Chinese gaming-company, that, in order to combat software-piracy, focusses on providing interactive services through gaming, services that are impossible to pirate. And to overcome a lack of a financial infrastructure to pay for online services, they work with pre-paid cards.
Indian CavinKare, which sells cheap sachets of shampoo through small local retailers, while using educational marketing to teach customers how to use their products.
Goodbaby, which targets the many 1-child families in China, who are both willing to spend more on their child than multi-child families would, but are also in need of education.
Amul, an Indian food-and-beverage-marketing-organisation, which collects and pays for milk locally, while tracking all operations via satellite and uses ERP solutions to make analysis based on the data and gauge whether future supply needs to be increased or decreased.
Wimm-Bill-Dann Foods (Russia), which works extensively with local partners, and has devised leasing schemes for expensive machinery to boost their production and is able to serve 280 million consumers nation-wide.

The BCG, of course, takes the stance of its customers, Western companies, and the study is mainly aimed at how multinational companies (MNCs) can replicate 6 of these dynamo’s advantages, in order to compete with them. They are:

Customising to local needs – which involves first understanding these needs, and then meeting them.
Devising innovative business models that overcome local challenges – a logical follow-up to the last point, how to make money from the info you gained.
Leveraging the latest technologies – meaning that these emerging economies are less burdened with traditional infrastructure and quicker on the uptake of more affordable, newer, and easier-to-spread technology, e.g. mobiles.
Beneﬁting from low-cost labor and overcoming shortages of skilled labor – there’s two ways to look at this; a local workforce will be better equipped to interact on a local level, a highly-trained workforce will be better equipped to run a business. Tough call.
Scaling up fast – Russia, India, China, Brazil, etc. are all giants with the promise of huge rewards when you capture them. Many of these dynamos grow quickly through both through acquisitions and building up their network of suppliers and distributors.
Sustaining long-term hypergrowth without imploding – this kind of follows on to the last point

Some of the Western companies mentioned, which have managed to compete on a local level, include:

General Motors, which has adapted its luxury-liners to meet the demands of its Chinese customers, who are usually sitting in the back;
LG, in China, which has learned that the audio-quality of its televisions is more valued by its customers, who often reside in noisy environments;
Carrefour, which has started to work with local municipal governments in China, as these don’t meddle in their operations like local dept. stores would, and are able to provide access to prime locations;
Perfetti Van Melle, in India, a candle/chewing-gum manufacturer, which has found local means to advertise, interacts frequently with local partners, and has adapted its products to local tastes;
and Yum! Brands, which owns Pizza Hut and KFC, and has adapted its menus to meet local Chinese tastes, started a new food-chain aimed specifically at the market, and uses its international expertise to integrate IT, lean supply chains, and a higher level of food standards into their offering.

It shows the value of out of the box thinking in terms of reaching people, and I believe that traditional “Western” thinking should long ago have been thrown out the door anyway, particularly in light of the troubles that media-, automotive, and financial industries are going through. We are in the flux of disruptive innovation and only those quickest to grasp new technologies and ways of thinking are able to survive another day.

No shortage of lessons on that from entrepreneurs in emerging economies…

Vincent out

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Political & Commercial World Powers and the Dynamics of Education

Vincent van Wylick — Fri, 21 Aug 2009 08:33:38 +0000

As is usual when I take a long break from writing, my blog posts end up becoming insanely long. Take it as you will, but I’ve tried to make it as coherent a post as possible. P.S. this is a post written under de cover of my “leave of absence,” which means I still write, but less frequently. – - Vincent.

A good friend of mine, Zihni Ozdil from the Netherlands / Turkey, Historian Extraordinaire, is now publishing his wisdom online. If history, politics, and culture (“beyond the superficial”) is something you find interesting, I encourage you to check it out. On his site, I found an article entitled ‘the real Evil Empire,’ which, ignoring the provocative title, deals with the interesting topic of the cold war and the ‘demonification’ of Russia and communism at that time.

Yesterday, I had an interesting discussion with some Canadian Swedes that moved to Florida with their kids and had trouble finding a school. The only way, it seemed, to guarantee that their kid ended up in a good one is to have an A-class school in your district (which you can find via a website that profiles attendees according to race and economic background… wow…) and to have paid your electricity bills. It worked out well for them, but clearly suggests the underlying problem of a long-term selection bias.

Last night, meeting the Canadian Swedes, where I was also in the company of a Russian and a Japanese, I noted that it was strange that while both Russia and Japan, being superpowers in their own right, have infamously challenging education systems, which result in some pretty smart people graduating from either country, the US does not seem to follow that pattern, at least not at the high school level, and certainly not across all demographics. Yet, by all accounts, the US is a superpower, if not the superpower of this and the last century.

My post today is not about comparing countries’ education systems, it’s more about the strategic purpose of education. Many people don’t know this about me, but I don’t vote and I don’t generally care about (regional) politics. To me, our planet should be one country, where anyone can move and work anywhere, and services don’t have to be moved just because you physically moved XX km/miles to another country. But I do recognise the power of competition and how that can lead to excellence. Versus a ‘group think’-like mediocrity where everyone just tries to be like everyone else and no one exceeds. So, in a way, I endorse a system of divided regions, because I think it leads to competition and thus excellence.

Education plays a strong role on the competitive advantage of nations, as it does in certain companies. Last year, applying to a lot of consultancy companies and working as one myself, I was struck at the importance that the accumulation of knowledge plays in this industry. If I were to start my own consultancy, continuous education of the staff would most certainly be a cornerstone of the business strategy, because knowledge is your product as a consultant.

I know that this thinking plays a strong part in government circles as well: how to make your/our country as strong as possible, not (just) in military terms, but in the sense of knowledge, mostly measured by the no. of graduates and the no. of patents that are published every year (as well the commercialisation thereof, which doesn’t go quite as smoothly).

I know that the no. of graduates coming out of Chinese universities is tremendous, and the no. of patents coming out of US ones is among the highest in the world also. So clearly, the US, superpower extraordinaire, is doing something right. I don’t however entirely understand why the primary/secondary school system is so abysmal then in the US. My only explanation is that, in academic circles, there are no national boundaries, and a Russian researcher can just as well (if not better) produce patents in the US as anywhere else.

There are other dimensions to the US superpower status as well, of course. It’s a military superpower, it is a cultural superpower (in terms of films, music, and literature), it has a large consumer-base. These three dimensions—safety through military strength, an easily adopted culture, a consumer’s paradise—also have the effect that they serve as an attraction point for outside academic or other talent. And while other countries may have strong educational bases, the other aspects are perhaps ignored just a little too much, still making the US a prime export location for knowlegde.

In the strategic literature, there is the concept of the resource-based view, which stipulates that company strategies are nothing more than a collection of resources, some of which are internalised and some that are not. I think that in the context of the US and education, the resources that must be internalised are those that lead to the commercial exploitation of technological advantage, which sounds abstract, but basically means making sure that the best technology/knowledge is produced in-house and generates economic benefits in-house as well.

But there other resources that must most certainly not be held onto in-house. These include standards, which facilitate the assimilation of knowledge. In education, the standards that we use are the bachelor-master-phd system, which can easily be studied in different combinations and locations. And text-books, which as many students know, are often from US-origins.

In many ways, the cultural exports from the US—movies, music, literature—are nothing more than the spreading of a standard, that of a language and a way of thinking, which makes assimilation of outside talent easier. And as long as that outside talent is used for the benefit of the US, in the form of patent exploitation, the US benefits, even if their own primary/secondary education system is quite uneven.

As mentioned, I don’t care about politics, country-differences, or governments. But if my logic is correct, I wonder if a metaphor exists for commercial superpowers, i.e. companies that are market leaders and remain so by attracting the greatest talent and finding ways to turn that into economic benefits.

Organisations are not complete economies like governments are and also have the benefit of being mobile—by law they are considered single persons, which have residence, pay taxes, etc. just like everyone else. So, as long as they obey the law, they can choose where they stay and choose to ignore local conditions, much like, I theorise, some governments do, instead focussing on the bottom-line: attracting excellence and turning that into profit, while keeping ‘unnecessary’ expenses as low as possible. Well, at least that is the stereotype of an organisation, while pressures have certainly lead some to adopt a more socially-responsible attitude.

Clearly, the question of talent, whether attracting or training it, remains a vital one for both countries and organisations. But I don’t think there is necessarily a correlation between talent and local conditions.. at all.. though local conditions do play a part in the quality of life, or lack thereof, which affects the talent’s in question desire for a certain location.

Vincent out.

(Picture courtesy of thehindubusinessline.com)

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The Dynamics of Blogging and the Dynamics of Doing Business

Vincent van Wylick — Sat, 08 Aug 2009 10:05:07 +0000

I hate breaks in anything I do, blogging, work, sports, love, etc., because it’s always harder to return back into the zone. Similarly, I already knew subconsciously that it would be hard to return back to blogging after the proposed hiatus. Routines are good and when they are moved aside, they get replaced by something else.

The human body is a machine and everything, from hours in the day, to food and exercise, to making money, to relationships, are all pieces in the machine of life. There’s only so many hours in the day is a well-familiar phrase to most of us and reflects the difficulty in balancing different activities and responsibilities, with some just falling off the map.

I am not saying that I plan to stop blogging, but I do think that we all need to make choices in our lives which will affect other, previous ones, like domino blocks.

Dynamics…

I just bookmarked a blog post on delicious on forming sales teams in a startup. It’s a good one and you should all read it. As I tagged and bookmarked however, I immediately thought, hey, I’m pretty sure no one on my company will read it. Why? Maybe because we already figured it out… Maybe because we figure stuff out as we are doing it… Your choice.

Blogging or any kind of writing for public purposes brings several complications to business people:

it is public knowledge, meaning that the competitive advantages are slim: I don’t think this is a major factor, as most innovations are combinations of different ingredients that may or may not be public knowledge. Great artists steal, as they say.
Writing is processed explicit knowledge from something that was previously implicit and needs to be made implicit again by the reader for it to be useful in a practical context: I’ve written about the knowledge-generating company and the knowledge spiral twice before. Another phrase, “You can’t help yourself, because your *self* sucks!” also comes to mind.

It’s the latter that represents the greatest challenge to authors and consumers of their work. I’ve also previously written about the benefit of formal education, which, I think, tries to recreate the knowledge spiral, turning explicit knowledge into the implicit kind, to be used by students in their work later on.

The dynamics of business is that there are expenses—YOU, the team, the office, etc.—which need to be recuperated by your work—the work you do for customers, after which they pay you. It leaves very little time for reflection, e.g. through blogging, etc., and for making things explicit, e.g. through blogging, etc.

I’m still a big fan of Michael Gerber’s E-myth revisited, which is really about writing that franchise manual for your business, so you can both understand the processes happening in your company, and expand on those, by more easily passing on knowledge. It’s Taylorism, of course, or Scientific Management, or any of the other management methodologies that followed in the past century.

But these activities require time, time which people inside organisations usually do not have, and hence prefer to outsource to outside consultants, who then need to make their knowledge explicit and again implicit in the minds and methods of their clients’ organisation.

It’s a real nightmare for people (like me) who think to much and always aim for something higher. And who want to blog. And who want to do good business…

Thoughts?
Vincent

(Picture courtesy of Fisica & Psychica)

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Recap: My favourite Tech IT Easy posts for June 2009

Vincent van Wylick — Thu, 02 Jul 2009 12:36:36 +0000

It’s around that time again. First of all, I’d again like to note that I am, for the moment, the producer of 99% of the junk, eh, I mean Gold that appears before your eyes on Tech IT Easy. So, for the moment, these are favourite posts that I wrote.

If you are interested in contributing to Tech IT Easy, either as a blogger or guest writer, please write to us!

This month, I’d like to thank Georgia for writing about guerrilla marketing. Last month, I forgot to thank Jeremy for publishing his interview with social marketeer, Michelle Greer, and Georgia, for writing about Mint.com.

Let’s get to the favourites (in no particular order):

The “captain’s chair” phenomenon, in which I identify a problem that many one-person-companies-growing-into-SMEs face, the centralisation of leadership around the founder, and the lack of processes that facilitate delegation. Expect more posts about this.
A short guide for surviving Windows [aimed at Mac-users], in which in a series of a few posts, I start discussing how to survive that “traumatic” move. While I have certainly managed to, I am now happily back on my Mac at work. Even so, I am writing this post on Windows Live Writer, through Parallels (it’s what I call an anchor-app, something that ties you to an environment). Related: Awakening from the OS X vs. Windows War and Battles in the Virtualization Space.
Media’s Basic Duty to tell the Truth (P.S. Blogs are not Media), in which I, again in a series of posts, defend Techcrunch’s reputation, in regards to their accusation towards Last.fm. My premise: blogs (like ours) are not media, but some professional blogs, like Techcrunch, have become its equivalent and thus (have to) respect the same principle of reporting the news as accurately and honestly. I don’t want to generalise though, I think that Arrington’s posts in particular, can be much too emotional, provocative, and definitely more blog than pro-media.
Where do Good Ideas come from?, in which I propose four areas and write about the ease of implementing these ideas. Two supplement posts: On having Heroes in your Craft and The Right Mix between Idea and Execution and One reason not to blog (at least not to blog about your plans) (I sure do blog a lot about idea generation… ).
What would an Always-On Device look like? Do we even want it?, which comes down to that I would like a device that records everything that I do, in whatever format needed. Some complications: a. do we even want it? How would we process the information? I think that suitable devices already exist, from your camera phone to more specialised and expensive methods.

That’s it for this month. May’s recap can be found here. Until the next time, on Tech IT Easy.

Vincent

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Blogging’s not dead, but it’s pretty damn unrewarding

Vincent van Wylick — Tue, 30 Jun 2009 07:47:29 +0000

In the last two years, I’ve seen more and more people in my social circle starting blogs. Most of which were focussed on a micro-topic, including travelling to South America, to Japan, having a baby, self-help topics, and team-dynamics. All of them with merit, but about 80% of them ran out after a while. What is the problem? How about: finding the inspiration, not getting (m)any comments, balancing it with your actual job, etc. etc. Also, the baby eventually grows up, you eventually return from your trip, and there’s only so much to say about self-help (in my opinion).

But while our perception of blogging has changed over the years, particularly if you listen to early adopters, you could say that in a way blogging has become a mainstream phenomenon. Mainstream not meaning that everyone does it, but that everyone can do it. And the reason for that is I think the popularity of Facebook and Twitter, which is a gateway onto other services (incidentally, not many Facebookers I know that started a Facebook-only blog).

Sure, many companies have entered the game, several blogs have become companies, and many personal blogs have been closed or abandoned. Consolidation and commercialisation often means that there is no more space for the little guy. But, who cares right? You could still set up 10 blogs in the next hour and nobody would stop you. It’s just, nobody would probably read you, unless you write a really good blog + advertise it a bit. But while traffic is clearly a currency of blogging, as are comments, it does not seem to be driving the adoption of blogs in the short-term.

Looking at the current blogging landscape, I can only conclude that blogging is far from dead. But is is perhaps best to be aware that every blog is not the same. Just take a look at the following categories that I have identified, which I am sure is not a complete selection. There’s:

The micro-topic blogs, which get started every so now and then, run out after a while, but don’t discourage others from starting their own.
The small business blogs, for professionals and SMEs seeking to differentiate themselves. Whether these blogs can continue to exist, I think, all depends on whether they can reconcile their short-term profit goals (and needs) with the long term benefits of blogging, which are far from clear (please don’t take 37 Signals as an example that all SMEs should blog).
The small media-blog, which is what the Techmeme 100 is all about and which will never go away, as it’s a low-cost competitive approach towards battling/replacing big media.
The big media-blog, which is really a hybrid of journalism and opinion, neither of which will ever go away.
The corporate blog, which, similar to the small business blogs, still needs to find a raison d’être for itself. Exceptions are companies that already work on the web, like Google, IBM, Microsoft, O’Reilly.
The small and large (web-)celebrity blog, which for some is just ego-stroking and for others is an artistic outlet, both of which are justifiable, not only to the people who write them, but I think is also a big driver for the new blood in the blogosphere.

Clearly, no matter what people may say about the rise of micro-blogging and social networks, the blogosphere has become a complex beast, one that continues to attract attention, whether it’s in the form of traffic, comments (those 2 aren’t correlated on Tech IT Easy), or perhaps simple hype.

Blogging is dead, yay, now let’s get blogging!

Vincent

P.S. This marks the 5th anniversary of my blogging, which started in the Summery of 2004. How the time flies by.
P.P.S. Picture is of the St. Louis Gateway Arch, and is meant to be symbolic.

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The Right Mix between Idea and Execution

Vincent van Wylick — Mon, 29 Jun 2009 10:40:37 +0000

If I ever succumb to the temptation to blog like I did last night, feel free to shoot me. Now, back to our regular programming…

Last week, I wrote about having heroes in your craft and how I found it noteworthy that some examples are more effective than others in everyone’s path to self-improvement. I attributed it to the vague concept of compatible brain-patterns, but really I think it’s a much more simple idea. The reason that my writing heroes have an influence on my craft is because I practice it. In other words, there is a right mix of idea and execution (I would call it semi-right as there’s much room for improvement).

There are plenty of blog posts about this. Most well-known to me is Derek Sivers’ blog post about the “execution multiplier” that makes ideas more or less valuable:

AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO- EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.

More recently, Sarah Lacy wrote a post on Techcrunch, entitled “Is Execution More Important than Vision?,” where she differentiates between entrepreneurs that are visionary vs. those that are good at execution. In other words, she categorises people as either fitting in the one or the other.

What is clear from all of these is that ideas unapplied are essentially worthless. Which to me means three things:

That if you have ideas in an area that is difficult for you to execute on, you’re probably better off focussing on areas where you can execute them.
Or, that it is equally important to find the right resources (skills & knowledge, network & team, money & customers) for your idea as it is to have the idea.
That you ultimately need to move towards a system of rapid iteration or rapid prototyping, because, as we all know, ideas are ideas, and the reality will more often than not change your original product idea. The quicker you can test them out and improve them, the better your chances of making a commercial success.

It’s a bit of a leap from my post about writing heroes to executing entrepreneurial ideas, I know, but I think it makes sense.

Vincent

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The "captain's chair" phenomenon

Vincent van Wylick — Mon, 08 Jun 2009 09:42:59 +0000

The “Captain’s Chair” is what I call the chair of the entrepreneur which always has to be filled and which sits prominently in the middle of the office and all the business being conducted within. It comes out of the simple evolution from running a 1-man show, and then hiring on more people to do the work. It also has a lot to do with how sensitive the service is that is being released, and when customers expect services to be at the same level of professionalism that the initial founder has always displayed, it is understandably hard to let go.

It is also a trap that is being written about in plenty of business “self-help” books and is, in my opinion, best solved through designing processes to be as failure-free and as simple as possible. In other words, like the preparation of a McDonalds hamburger, which is a scientifically designed factory process.

One public example of the captain’s chair phenomenon is Micheal Arrington’s Techcrunch, which has, until recently, always been run out of his own apartment, and even today he is (I believe) the no. 1 editor and certainly the no. 1 PR guy. In no other media publication of that size (in terms of readership numbers, not company size) does the founder take such a prominent and involved position and, physically and mentally, I’m sure, it is taking its toll on Arrington. Similarly, I know several small companies, where this is a problem, with similar consequences on the founder.

This is not to say that doing the opposite is necessarily a good thing. As perhaps the case of Starbucks showed, which recently had to ask its original founder, Howard Schultz, to return to the captain’s chair, sometimes an organisation can forget the original values it was based on and do some silly things. In Schultz’s case, I have actually always blamed its problems on his book, which was essentially a franchise manual for anyone who wanted to set up a coffee-shop, and which might have also inspired McDonalds to basically become an affordable Starbucks alternative for the masses. A story for another day, but I think the current Starbucks model is doomed and Schultz will have to redesign the company’s business model from scratch.

There is certainly a careful balance that needs to be maintained when designing a company to both expand a business’s reach, without losing the heart of the business. Together with the simple process of “preparing a burger,” you need to instil the values that also lead to the “smile” that accompanies the sale of the burger and leads to a satisfied customer (and his return-visit).

Designing companies must thus, in my opinion, be a rich process, involving the founder(s)’s, the employees’, and customers’ input, finally leading from the single business to the chain of businesses serving all customers equally or superiorly well.

Vincent

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My theory of the firm

Vincent van Wylick — Wed, 03 Jun 2009 12:51:41 +0000

Inspired by the Grasshopper podcast on Venture Voice.

Har har,

Vincent

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What I dislike about business plans [addendum]

Vincent van Wylick — Tue, 26 May 2009 09:05:21 +0000

First, what I love about business plans. I contains four elements very close to my heart: Writing, talking to people, innovation, and entrepreneurship. That is not to say that writing business plans is a fun activity that should be taken lightly. The crux of writing a business plan is that it needs to be executed upon. And that is where the complication arises.

One of my last freelance projects was amazing fun and in two ways very rewarding. Financially, because the investment that followed it, far exceeded the more than generous fee I was paid. Creatively, because my involvement lead to a lot of focus product- and strategy-wise, and we developed what I thought was a clear timeline as to the execution of the plan in different phases of product and market development.

But, as mentioned, writing a plan does not mean that it reflects the reality. I was reminded of this again, listening to a venture hacks podcast on “pitching hacks” (you can watch and listen to the presentation here). Business plans are worth squat, because a. there’s a lot of them, and b. the proportion that is executed upon is fairly small.

In theory, business-plans serve as a way to make the strategy of a young company explicit. Kind of like Gerber’s “Franchise manual” for startups in the E-Myth Revisited, it allows you to solidify what you do while you’re doing it. But, I don’t think it automatically leads to a (better or actual) business…

…

Those three dots is where I stopped writing some three weeks ago, and I have in the mean time developed my thoughts further on this. I think that the gist of good business planning is taking ownership of the project. And the single most important key-component of the business plan is the timeline section. And the single most important action as an entrepreneur is to already have at least 10-30% completed of that timeline.

In other words:

if you’re an entrepreneur you should write your own business plan: you cannot outsource this!

The most well-developed section of your plan should be your timeline: as conservative and realistic as possible!

The best way to illustrate the value of your plan (and timeline) is to already be following it: actions scream much louder than written words!

If those three components are in place, I think that the world of business planning and entrepreneurship would be a much better place.

End braindump…

Vincent

Addentum: The problem of multiple agendas! I should also add that another complication is that plans are written with a singular vision in mind, perhaps alternative scenarios are included, but it still very often reflects a singular approach to “doing things.” But… many companies are composed of multiple people, who may or may not have multiple agendas. I still think it can belong to taking ownership of the idea, in the sense that the plan is worked on together and perfected until everyone agrees with it. But more often than not, the business function is delegated to certain individuals, meaning that this isn’t the case.

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Why you should invest your time & money into space technolology

Vincent van Wylick — Fri, 22 May 2009 11:33:02 +0000

Depending on where you stand, this is going to a long boring blog post or an interesting one. While I didn’t write much about it, my last consulting project as a freelancer was to help get a startup into the European Space Agency Incubator (ESI)… successfully, I’m happy to say. I wanted to write a post about how interesting it is, I think, to invest your time and money into space technology businesses, particularly because it’s about spinning space tech off to applications into the real world, but realised that this interview with Bruno Naulais, ESI network manager, would probably do the trick.

I conducted this interview in the summer of 2006, as part of my thesis. It was previously published on my personal blog, but it [the whole blog] has since disappeared into MySQL “does not compute” hell. Here goes.

The Interview

VvW: What is the ESA Incubator all about?

BN: It is actually called ESI, the European Space Incubator. It is part of a network, called ESINET, and consists of 35 incubators, spread across most of ESA member-states and some Eastern European countries (eg Ukraine, Bulgaria).

The ESI business-model, in a large part conceived through Niels Eldering’s thesis [a fellow Rotterdam School of Management graduate] and BN’s Business Plan, could be described as consisting of three dimensions. These are the start-ups, the stakeholders, and the supporting services.

1st Dimension: The start-up

The start-up is seen as a place where fertile (space) technology meets an individual or a team of people. They in turn go through an incubation process (at the ESI) and finally come out as a company to do business.

2nd Dimension: Stakeholders

This doesn’t apply to all incubators in the network, but in the Netherlands, the two main stakeholders are the ESA and the Dutch ministry of economic affairs (EZ). Both naturally want to promote employment, economic growth, and entrepreneurship in the Netherlands. Furthermore, ESA has the objective to improve the image of space in the eyes of the general public, of investors, and of businesses.

The latter is of particular importance, as space is still perceived as expensive, dominated by large players, and generally irrelevant to the lives of Earth’s citizens. What the incubator aims to do is to show to it’s stakeholders and to the general public, that space-technologies and space-systems can be benefited from in everyday life.

3rd Dimension: Support

This happens both through 3rd parties, something called Key Innovation Business Services (KIBS) and in-house. Through this, the aim is to prepare the start-up for doing business in the real world, and to receive further investment. The latter of course depends on the ambitions of the founder. Some are pretty limited in their targets. They only want to set up in their country, or perhaps the Benelux. Others want to go cross-continental or even global.

VvW: Exploring the “Support”-angle further, how does the ESI assist it’s starters in finding private financing?

BN: First, it is necessary to assess the type of start-up. Depending on the type of product/service and the market, an advice is given as to what the growth-strategy should be. This doesn’t always need to be angel or venture financing. In many cases, the advice is to consider a strategic partnership. In this case, there’s a larger company already active in the market/industry that the start-up is targeting, and has an interest in taking a stake in the company, with the option to acquire it at a later stage. This requires there to be a kind of fit between the partners. So far, the ESI has had two start-ups taking that option.

Then there is also the option for a joint venture, an equal partnership between two starters in ESINET, or a starter and an existing company. One ESI start-up has done that.

For private financing, like a business angel or venture capitalist, start-ups usually still have a way to go. Usually, they first attract financing from the 3 F’s: Friends, Fools, and Family. This can happen before or during the incubation-phase. More experienced investors usually require the company and idea to be more mature. With a proof of concept, you can attract a business angel. When you are ready to sell a commercial product, you can approach venture capitalists. There are some exceptions to this of course, but this is the way it usually works.

The aim is to ultimately have a core group of business angels that are allied with the incubator. To a degree, this is already the case with venture capitalists, of which a group is being made aware of the inner proceedings of the incubator-companies. The idea is that the start-up does not need to educate these people on space or their idea, the incubator is already doing that for them. And the incubator will basically give residing start-ups feedback on their stage of development and, depending on that, the availability of pots of business angel- or venture capital.

VvW: What are the advantages of a start-up approaching investors through the incubator, rather than going at it alone?

BN: To start, a venture capitalist can receive thousands of business-plans during a year. The aim is that ESI-plans land on top of that pile. This is because the ESI, and the ESA, provides a quality label to its’ residing startups, which manifests itself in four ways.

For one, there’s the quality of the work done at the ESA, their procedures and methodologies. The incubator tries to pass those on to the start-ups.

Second, there are the favourable statistics for technostarters residing in incubators. A survey from 2004 [which I still have to read] reports that ca. 87 % of start-ups in the incubation process are still alive after three years. For a standalone technostarter, this figure is much lower, between 20-30 %.

Third, there are the networking-aspects of the ESI. Business incubation does not work well as a standalone function, it has to be part of a network. In the case of the ESA, it is present in 17 countries, as well as active in non-member states, such as the US and Russia. This can be useful as a gateway for the start-up to expand or move to another country. It’s also good for cross-fertilisation—between different ESI-start-ups and -graduates, suppliers and customers, investors, and other companies. Through the ESINET-network, it is also easier to conduct international market-studies.

Last, but not least, there is the access to the ESA technology and resources (experts, labs, test centre, software tools, facilities, etc.).

VvW: Are there examples of venture capitalists investing in any of the ESI startups?

BN: Sure, there’s ThruVision, which received a substantial amount in two rounds of investment [note: I know the exact sum, but am not sure if I can make this public knowledge: I think it's public since it is mentioned on their web site; perhaps you should have a look (http://www.thruvision.com)]. This company has now graduated, i.e. no longer resides within the ESI.

VvW: From your experience with venture capitalists, how do they feel about the companies that are still in the incubation-/seed-stage?

BN: As was mentioned, they prefer more mature ideas to work with. The key-phrase here is “work with.” Venture capital really means two things, investment + support. Along with the investment, the venture capitalist wants to coach, put people in the right place—on the board, as a CEO. For the latter, most of the start-ups in the ESI-program are founded by someone with an engineering-background. A founder is typically someone that understands the technology and how to build a service or product on top of it.

A venture capitalist, on the other hand, looks at the team, the product/service, the market. He or she will look for people that can run the course, manage the growth. The preference then usually falls to someone with a track-record, who has experience doing that. In the case of ThruVision, the founder is now the technical director, and the CEO is someone with an impressive business-cv.

Another statistic from the European Venture Capital Association (EVCA): In something like 95 % of start-ups invested in by venture capitalists, the founder has been replaced as CEO.

VvW: Do venture capitalists also support the incubator itself in some ways?

BN: Not hands-on, no. They do provide access to a network of companies, investors, and people to work with, which wasn’t there before. There will be more, once the ESINET-fund is started.

VvW: What is the ESInet fund?

BN: First a little background. There is obviously a gap between early stage and growth. This was known from the start of the incubator. This is especially so when you talk about space. Investors look at the space-sector with skeptical eyes. They see it as a market for large players like Alcatel and Astrium. They see it as a niche-market. And when you think about satcom, there’s a lot of international competition from the terrestrial systems. The satcom has already lead to a few big-name and big-investment projects to go bankrupt, example of this are Iridium and GlobalStar.

Furthermore there’s a misunderstanding about what the utilization of space-technologies and -systems really means. Utilization means you are using something that already exits. You only need to adapt it to a non-space sector. This means testing, modification, and validation, something that doesn’t need to take years, rather months. Space-systems refer to satellite-technology, for which you don’t need to build the satellite, you need to be able to receive a signal and use it. For space-technologies, we are talking about transferring and adapting applications and materials used and developed for space to non-space sectors.

First investors need to get this picture. But even if a few of them understand, that doesn’t mean they have the needed expertise. Usually venture capitalists are experienced in certain areas like biotech, meditech, telecoms, etc. Space-related technology does not have that many corresponding VC-experts. So the thought was, if investors will be so hard to find, why not start our own fund?

And this is where the ESINET-fund comes from. Its fund managers don’t need to be convinced on potential business development from space systems and technologies (much) and there is funding for early stage ideas. ESA was convinced to sponsor the fund with 5 million Euros and recently selected a management company from 12 applicants to manage the fund and raise more. The target-size of the fund is 40-50 million Euros in total, to be completed by mid-2006. The ESI is responsible for the deal-flow. This will mostly come from ESI-startups, though if those do not fulfill the needed requirements, investment van occur into other ESA-“ventures.”

The fund-management company will act much like a venture capitalist as far as investing is concerned. It will be present during selection of start-ups and have a supporting role in the development of invested-in companies. And it will take shares in the companies it invests in.

VvW: What do you think the effect will be on other investors, to have this fund running?

BN: It’s always a nicer picture to have a fund tied to an incubator. Having a fund will hopefully attract other investors. Many venture capitalists like to invest in syndicated deals, meaning a group of investors spreading the risks between them. In investments, there’s also usually a leader and followers. It is hoped that the fund can fulfill a leading role in the process.

For business angels and the three F’s, there will always be space. For one, they invest much smaller sums, and second they provide the added value that they bring as people. Like many informal investors, business angels are often interested in a hands-on approach, to be involved in their start-ups, which will benefit entrepreneurs greatly.

VvW: What is the investment climate like in the Netherlands, compared to other European countries?

BN: The Netherlands is not so great for finding private capital, except for subsidies. Both the UK and Germany rank highly for private capital. France and Italy have good governmental support.

VvW: OK, back to your start-ups, what criteria do they need to fulfill to become part of the incubator?

BN: During the course of the incubation-phase, they are asked to prepare financial projections, including parameters like Net Present Value (NPV), Return on Investment (ROI), and other ratios. Templates are provided, if needed, and access to third parties that can help. Over the course of the incubation-phase, the incubator-staff tries to follow the evolution of the NPV. In the future, it is hoped that NPV will be calculated at the application-stage, before the start-up becomes part of the incubator. If that’s possible, of course.

Other than that, the number 1 criteria is the market. If they are not able to define it, they will not be accepted. Similarly, a market-study must be prepared.

VvW: How does the ESI feel about teams starting?

BN: Very supportive. On the whole there are both types, entrepreneurs starting solo and finding partners along the way. Or entrepreneurs that start in a team. Generally the incubator encourages partnerships between technologists and business-people. Investors invest in a team after all. The incubator also has good ties with MBA-programs to find people for start-ups.

VvW: Is the staff able to deal with all the demands of the incubator?

BN: The staff has broad knowledge about issues like legal and intellectual property matters. There are specialists that advise on strategy, market, technology, etc. But it is impossible to know everything in depth. For that the start-up can approach third-party specialists, of which they can get the contacts via the incubator.

VvW: Do you compete with other incubators?

BN: Not at all. In fact, collaboration is encouraged and projects are sent to others as well. Geography is also very important to entrepreneurs, they have a life, etc., so it’s not that feasible to draw them away from a more logical location-choice.

Note: If you have any questions, don’t hesitate to post a comment or mail me. If you are interested in applying to the incubation programme at the ESA also, check out this page and also don’t hesitate to ask me about my experiences of working with two tech-startups in the programme.

Vincent

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The "how to furnish your startup" conundrum, revisited

Vincent van Wylick — Thu, 18 Dec 2008 22:00:42 +0000

About 6 months ago, or longer, Jason Calacanis wrote an essay about what he viewed as the optimal setup, furniture-wise, for the productivity centre that is a startup. Jeremy wrote a response here, as well. I’m sure, things have changed, with the recession and all, but my mantra about that is… don’t dispair, just work harder. In other words, I’m ignoring the recession… just working harder. The setup of an office shouldn’t change, that’s an investment in your productivity.

This last week, I spent in Luxembourg, evaluating whether or not to take on a position in an accountancy. I may write more about this in the future, I may not, but it also confronted me with the topic of productivity in a group-environment. Writing my thesis, I think, has turned me into a “Getting Things Done” freak, reading that book hasn’t helped either, of course.

Right now, I’m working on a dated PC, with a dual screen setup, on Windows 2000, running software that keeps track of the many official documents that form the core of “being accountable,” writing on a French keyboard with crazy letter-placements… sigh. This post is, luckily, written on an international keyboard, on my trusted Mac, which would be my machine of choice as well. Oh, and we have one of the best coffee machines on the market (I will edit this post with the name tomorrow, when I’m back in the office. Edit: the magic word is SAECO), and the chairs are, afaik, of great quality.

Do Macs increase productivity?

So Jason and I agree on this at least, Macs increase productivity. That said, life is not quite that simple. Working in a group-environment, in a legal environment, puts a certain responsibility on you, that you have to produce in an environment that is compatible with everyone else. My Mac would help me, but would only work if, either, everyone had Macs, and if the software, I worked with, is cross-compatible between Windows & Macs, which this one isn’t, afaik.

What I don’t like about Windows… I could write an essay about this, but mainly that it doesn’t feel like it’s designed for most machines I work on. My Mac is a dinosaur, but I run the latest OS on it no problem. Office 2008, on the other hand, that’s a different story.

Verdict: depending on software, hardware, and co-workers / business-partners, both Windows and Macs can increase productivity. Definitely not a black & white issue.

What about dual screen setups?

Having worked with Leopard spaces, ever since I first reviewed it, I’m quite used to have different screens for different activities. However, the way it works on a Mac, when I go to a screen, I only get to see that screen. In a physical multi-screen setup, you see both screens, the advantage being, that you can keep your permanently-used apps (e.g. Word) on one screen and your once-in-while apps (e.g. Outlook) in the other. It’s also somewhat useful for copying text from one app to the other (not copy-paste, but typing out text… on a French keyboarrrrrrd, grrrr).

What I don’t like, however, is that the app-placement is not straightforward—this seems like it can be set up in the ATI-software, but I have no idea where exactly to do this. The Mac-spaces setup can also be frustrating, but is at least understandable and part of the OS. With two physical screens, it also feels like the mouse has to travel much farther, something that isn’t a problem when using multiple virtual desktops, which you can switch to at a finger-click.

My verdict: if you’re constantly switching between multiple apps, then a multi-screen setup can be useful, but I don’t see it as better than Leopard’s spaces.

Should you have a great coffee-machine?

Coming from a guy that’s been drinking green tea for several weeks now, and switched to coffee as soon as he arrived here, my answer is a big fat yes. I remember Jason writing something about saving you the trip to Starbucks. That isn’t actually a problem in Luxembourg, there’s good coffee everywhere (much like in the rest of Europe), and isn’t why I say this.

Good coffee is good for two reasons: it boosts productivity and it boosts morale. The reason coffee is so popular because we live under the reality / illusion (depending where you come from) that it wakes us up. Good coffee boosts coffee consumption and should hence boost energy.

Coffee is also popular because people love it, and people love good coffee more than bad coffee. Hence, good coffee = happier people. As a manager you can now say: look, I know I scream at you guys sometimes. But here’s some good coffee, now please get back to work. Done.

Answer: yes.

What about furniture?

I think that IKEA makes perfectly affordable furniture that works great as well (big fan), so I see this as a basic expense that every business needs to make. And you need to have furniture that allows people to be comfortable for longer periods of time. Not only the 0 to 24 hours a day, you spend in the office, but the many months to years that you will work in that same office as well.

Answer: yes, but it doesn’t have to be expensive.

Other factors?

I’m too tired to think of them now. Furnishing your office feels like spicing your food. Food will often taste fine without spices, but add the right spice and it creates taste-explosions in your mouth.

Well, that’s my sentiment. Who’s next?

Vincent

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A brief review of "Valuation" — A Strategy Book

Vincent van Wylick — Mon, 01 Dec 2008 12:09:40 +0000

In many ways, I consider this the best strategy book, I’ve ever read. “Valuation,” by George Norton, is, as the name suggests, a book that uses financial models as a basis to build (sound) strategies. It is also a textbook—my version is hardcover and 190 pages long—but written in a format that reads easily and is structured to be implemented—ca. 30% of the book are (group-)exercises meant to implement what the book suggests.

If I had to criticise it, it’s that I don’t consider it very practical in an entrepreneurial setting. One thing that such methodologies require, is time, which is often a luxury that smaller/younger companies and projects do not have. Building up a set of co-ordinated, organisation-wide strategies can be a matter of years, and, I expect that if you were to follow the book’s advice, you’d engage in a 6 month trajectory, at least.

That said, it is a well-written book and achieves the objective of a book, which is to make understood its topic. In this case, valuation means understanding the value of companies, their products, and business activities. The financial part only really plays a part in the first third and last third of the book, while the middle is more about the actual coming up of the company’s mission, its broader goals, its objectives, and its strategies—the latter being the nitty-gritty activities of how to fulfil the grander vision.

And, where valuation comes in, everything will affect the cash position of the business: some activities may be research-intensive (= costly), but lead to greater rewards in the long-term; others will be quick-sale actions, which generate revenue, but may not always improve the long-term position of the business, unless that revenue is re-invested in more sustainable growth.

I find that these principles easily translate into small business- and individual activities, but only if taken on a holistic level, in which case reading this book may be overkill. But if you’re a finance-geek that wants to learn how to better translate the numbers into practical company-activities, or, vice versa, if you’re a creative business-person, who wants a relatively easy intro into the financial fundamentals behind strategies, then this book may be for you.

Vincent

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Thoughts about the New Venture business-plan competition, part 2

Vincent van Wylick — Fri, 28 Nov 2008 08:15:47 +0000

A lot more multi-part blog posts on Tech IT Easy; finally some continuity again, which is nice for both you and me! So, today was the ceremony for stage 1 of the New Venture business-plan competition, the submission of the idea, of which a prize of €500 was to be won by 10 contestants. As I expected, for several reasons, I wasn’t among those 10, though the race isn’t over yet! The next submission is February 26th 2009, the feasibility-study, for which I may compete with my own idea or change it (to another, if needed). The feasibility of an idea entails technological and business aspects, and there’s still a lot to be worked out on both ends. I’m letting you know for completely selfish ends—it would be nice to see a familiar face, if only on the other side of the court. Of course, one team-member must be residing in the Netherlands!

So how was today? I wasn’t really top-fit as it feels like I’m doing a 101 things and am a little overwhelmed, i.e. stressed out. So I didn’t come with high expectations, mostly to check out the competition and perhaps meet some people. The event was presented by Roland Koopman, a Dutch TV-presentor, and the awards were handed out by Pim Batist, founder of SellaBand.

Two “insider”-stories were presented, one was SellaBand and other was Taniq, a rubber-company, for lack of a better word—the company makes it so that rubber hoses and similar are more stable, while using less materials and no metal. You should check out the film their site, it’s very well-made. Most important insight from Taniq: the importance of coaches/mentors, which appear to be abundant if you take part in the competition, for bouncing off ideas & solving problems. But also on the hiring process—when the three young founders decided to look for some “grey haired” commercial talent, they found out, the hard way, that big-company sales-talent is not the same as small-company talent. In the end, if you can’t sell your own products as an entrepreneur, you’re probably in trouble!

The best example of this was perhaps Pim Betist; what a magnetic personality! SellaBand is a crowdfunding mechanism for bands, who, instead of walking to a record-company (for whatever reason), can place themselves on the site, after which fans can vote—with their wallets!—for the band they like. And with that a music-cd, etc. can be produced… He came up with the idea in 2001, residing in New York. Then, for reasons unexplained, he decided to take on a 3-year job at Shell, until he finally quit that job, sold his car, moved into some (illegally) free housing and focussed all his energy on working out the idea. He recruited a guy from Sony BMG as co-founder, by posing as a student wanting to write a thesis and holding several meetings with the company under that subterfuge—a side-note: recruiting people from Sony should never be hard, these guys, from my experience, are all chronically made unhappy by the politics in that company. I’m a little more into music over rubber, as you can tell, but that’s maybe also because the presentation was excellent. Not that Taniq didn’t have a nice movie either, definitely to be watched on their site!

So what about the winners? If there was a definite theme to the evening, apart from innovation, it was that pretty much all of the prize-winnars had a sustainable idea. It wasn’t necessary green, but more efficient, more ethical, more social, etc. What I remembered was:

a one-handed fire-extinguisher for handicapped people
a crowd-funded electrical cart for people in third world countries
a way to make fuel consumption more efficient in cars
a sensor that measures how people sleep

On the off-chance that you are planning to take part in round 2 (send me a mail, if interested), that should give you a hint of where to direct some energy at! Looking at the credit crisis now, it should perhaps not be a surprise that attention is being drawn towards both efficiency, but also more sustainable ways of doing things—that is, incidentally, one the conditions that will probably be imposed on the car-companies, if they receive financial aid: to become more green.

That’s it from me on this subject! It’s not too far a leap for me to write a feasibility study, but I’ll only know for certain if I’ll take part a few months from now. So, let’s hope for a part 3, 4, and beyond!

Have a nice weekend!
Vincent

The truth about headquarter locations

Vincent van Wylick — Tue, 18 Nov 2008 12:55:50 +0000

One of the first thesis topics that was proposed to me, as part of my strategic management master, was to research why companies are located where they are. Turned out that this is some super-secret thing and there hardly is any data on it. Our assumption was that this must hence be strategically significant.

I abandoned the project, after making this super-complex mindmap about it. I decided, I just wasn’t interested enough in the topic and that the reason was probably a very boring thing, like taxes.

(click on pic to see full pdf in Scribd)

Yesterday, I had a pretty cool meeting with a software-company that has been running successfully for about 10 years. Only it was in the middle of nowhere, close to some Dutch village that you will never have heard of. After the meeting, I asked why on earth they had located there (no thesis-related motive at all)!? Turns out that when you start a company and start hiring locally, your loyal employees won’t be so loyal anymore if you decide to move to e.g. Amsterdam (about 2 hours away).

Sometimes the simplest answer can be hidden under a lot of complexity…

Vincent

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Six one-line business book-reviews

Vincent van Wylick — Tue, 28 Oct 2008 08:41:46 +0000

I read too much and review too little. Following is a list of books, I’ve enjoyed and a single line to describe what I learned from them.

What the CEO wants you to know: turnover is the lifeblood of a business.
The E-Myth Revisited: assign roles and responsibility for every aspect of your organisation (even if it’s an organisation of one!).
Valuation: behind every strategy should be solid financial reasoning.
Positioning: every choice you make about the outside-face of your business will affect the way consumers perceive and buy you.
The one-minute manager: You can’t manage people without setting clear goals, measuring results, and encouraging good / discouraging bad behaviour.
Blue Ocean Strategy: focus on what your competitors can’t do.

Coming up (sometime in the near future): a number of one-line unconventional book-reviews!
Vincent out

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Lessons from the Star entrepreneurial seminar

Vincent van Wylick — Mon, 27 Oct 2008 16:27:26 +0000

I spent today at an entrepreneurial seminar, hosted by Star here at the Rotterdam School of Management. A number of speakers gave lectures, including Bernard van Oranje (co-founder of Levi9), Marc Cornelissen (adventurer), Annemarie van Gaal (founder of AM Media & panel-member at the Dutch Dragon’s Den), Henk Keilman (founder of RIG Investments & also at Dragon’s Den), and Dirk Scheringa (founder of DSB Bank).

As readers of this blog are mostly non-Dutch, most of these names will mean very little to you, and I won’t go into their individual companies here. Rather, I’ll focus on individual points that came forth.

The most interesting speaker to me was Marc Cornelissen, who spoke mainly of his expeditions into the Antarctic and the North Pole and is also active in combating global warming.

3 main points:

Terrain: When you’re operating on ice, there are different kinds of terrain and they also change dynamically. Sometimes everything is stable, sometimes you can walk on it, but can’t stand still, and sometimes you should avoid it. Traversing such terrain requires attention to detail, improvisation, teamwork, and speedy reactions.
People: people’s motivation can change during the journey. Sometimes you find that you have to turn back at the beginning because for some reality was different than expected. It’s affected by the management-style certainly—sometimes putting too much pressure on someone can produce favourable results in the short-term, but cause burn-outs after a while—and it’s affected by what Marc called the iceberg: you see two parts of a person. The tip, which is the human resource with a certain skill-set, and the much larger part underneath, which is the personality, the motivation, the passion, the ownership of an idea. Getting to know that bottom-part requires interacting in an environment where it becomes visible.
Choices: There are macro- and micro-choices. Macro-choices are the big ones you make, e.g. start a business, relocate your operations, etc. Micro-choices are the ones you make within each macro-choice and can affect your motivation. If you’re in hell and you have a choice to turn back, you will more often than not turn back. If you have no choice, you finish or die. Creating “no-option choices” may be scary, but they are sometimes what is needed to succeed.

These points resonated with me throughout the whole day, and hopefully for longer.

Annemarie van Gaal also mentioned three success-factors that were critical for starting her media-business in Russia.

Have a flat organisation with no HQ to speed up decision-making and minimise overhead.
Unlearn past behaviours, especially if the reality of where you are requires out of the box thinking.
And immerse yourself in an environment and give yourself little choice to pull out. Find motivation in what you do and don’t give up.

Again the points of preparing for uncertain terrain, managing people well, and no-option choices was present in all of these.

Dirk Scheringa of DSB Bank was probably the best way to end the day. DSB Bank is a bank that has managed to avoid most of the pitfalls undermining current financial institutions. It focussed on simplicity, transparent & solid decision making, and growing stably, rather than explosively. Well, I can’t pretend to know enough about banking to give a good explanation.

His key-lesson for me: surrounding yourself with smart people, means that you grow with them. It seems like a simple thing, but it often requires reducing your ego to work with people that are (as) smarter than you.

That’s all folks!
Vincent

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User-archetypes for web-apps?

Vincent van Wylick — Sat, 18 Oct 2008 12:57:10 +0000

Probably not a mainstream user

Now, my list is not scientific at all, and is, as usual, meant to be the start of a conversation. What I would do to make it scientific however, is as follows:

Talk to experts (hello there, experts )
Based on expert-input, design a survey that measures preferences per demographic (gender, age, spending-behaviour, etc.).
Advertise that survey on an industry-specific website (Alternatively: use survey to interview people face-to-face during an industry-specific event. Works well as a combo, the first being quantitative, the second qualitative.)
Process data into user-achetypes (and expected ratios).

In web-apps, by which I mean a web-utitlity like Facebook of Netvibes, I’m curious as to both the archetypes and, later on, how to deal with them. Generally, you of course have the early adopter and the mainstream one, which, I know, should be catered too differently.

Following is a list of the ones that I would expect to play a role.

The money-maker: This is typically the most pragmatic of the group, cares about results, speed, and task-specific information, but not so much about elegance and useless information.
The (early) geek: This, at the risk of generalising, is very much the Digg-, Techcrunch-, and Engadget-audience, by which I mean the typical commentator on those sites. They ask for feature, after feature, after feature, and often ask for too many of them. I call them “early” geeks, because I expect them to be rather young.
The newbie: This is not the loudest of users, and tend to accept that which they get (as long as the quality is ok). I’m thinking people that use PCs with Vista-home pre-installed. I think that these are also pretty hard to reach with niche-apps.
The specialist geek: I’m thinking photographers or writers, who have very specific demands of what an app should do and also a certain aesthetic demand. This would be more the Macbook Pro / Photoshop audience. Whether these are a large segment in the web-apps category, I’m not sure. I would expect that these apps don’t really meet with their approval, most of all because they are often free.

What do you think? Were there any archetypes that I missed or is the reality much simpler? (How) do you find out what the user-archetypes for your apps are?

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Why the Rhine Capitalist model of regulation is the right one… for now

Vincent van Wylick — Sat, 04 Oct 2008 22:31:07 +0000

The matter of Rhine Capitalism vs. Anglo Saxon Capitalism, referring to the battle between the capitalist system that has long reigned in the US vs. the more socialist system that came forth from European countries, is one that is on the table right now. The question is this: should we let the market be free, assuming that all information is perfect and hence that all decisions are rational? Or should there be a big brother figure, keeping an eye on market movements and stepping in when necessary?

More banally, should we be paying 50% of our income to regulators in the form of taxes, as it is common in my country, the Netherlands, and several more, or should we minimise that spending to a much lower figure, again betting that everything will sort itself out without expensive regulation? I think that anyone who’s ever had to fork out 30% or more of their hard-earned cash, wished that there was no government at one time or other.

The fallacy of “freedom”
Getting back to free markets and the perfect distribution of information required to make rational decisions. I think it is clear that the latter is not the case. For information to be available to all, there should be no barriers to entry, everyone should be sufficiently sound of mind to process information and everyone should have access to it, either because it is “free” (paid for by taxes), or because they are wealthy enough to afford commercially collected information.

In other words, we are talking about at least middle-class income levels on a massive scale here, which correlates with education and job-prospects. We are also talking about basic education for everyone, the ability to make decisions based on accumulated intelligence. This is not the case in the US, nor any other country that endorses the “free market w/o government intervention” philosophy.

The Credit Crunch and aftermath
More complex is the matter of the credit crunch, which hasn’t been happening on a level that you and me typically frequent; it has been going on between businesses, banks, and ultimately those taking out mortgages and those being shareholders of one of the companies involved. What happened here is 100% a free market problem on a global scale; the belief that investing in housing is a safe bet and the laissez-faire attitude of regulators towards the businesses involved. And the aftermath, which is that banks are being quasi-nationalised on a massive scale.

We are seeing the return of Rhine Capitalism, which has been waging a losing war since the Second World War.

Rhine Capitalism automatically comes with higher taxes. It comes with a re-empowerment of the government and the popular belief that, once again, the government is our parent with all the answers. Both the increase in taxes and the added income from the acquired banks also has another effect, that governments will be richer, will be able to, once again, afford to better provide for the general population, something that we have left to commercial parties in the last years, some of which has been good and some of which bad. This will hopefully lead to better education and perhaps even an alternative solution towards the masses of greying populations that we’ve all be told to fear.

Will it be good for business, the strongest voice opposed to Rhine Capitalism? No, certainly not.

Rhine Capitalism isn’t the solution either
Yes, as my words show, I’m a firm believer in education for everyone, in lowering the barriers to entry for those of low income. I believe in empowerment of people and hope that it will lead to better decision-making on all sides. But I think that going back to the government being daddy is devolution, not evolution.

These last decades, we have seen plenty of progress, particularly on a technological scale, but also accompanied by plenty of others, facilitated by technology. We’ve seen massive developments in science, in logistics, in productivity. We’ve seen a greater awareness in people of global issues and the exchange of information, which has exploded. We’re half-way towards a world, where regulation is an automatic consequence of the fact that everything is becoming transparent.

Eventually, we will also see that issues like the credit crunch will no longer arise, because barriers to national data, to local data, to individual data will fall, allowing individuals and businesses managing their money, to make truly rational decisions.

What happened these last 15 months or so (perhaps even longer) is a warning shot, telling us that we’re not there yet. What happened this last week and the coming weeks is a consequence of exponential decisions based on negative emotions (mainly greed, fear, and ignorance). What should happen today and tomorrow is for people to use this as a lesson to shape our future world and build technology and systems that are designed to overcome these problems and replace the need for the current devolution towards an inefficient, but necessary system of regulation.

There is still a place for the government, as long as large portions of the global population are being suppressed. But, hopefully, it will actually do what it’s meant to meant to do, which is taking care of the people, instead of markets and businesses. But that is certainly something that will have to wait for several more years, until this current mess sorts itself out.

Vincent

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Why do startups fail?

Vincent van Wylick — Tue, 30 Sep 2008 18:52:30 +0000

Hi, my name is Vincent, a now-familiar face in Tech IT Easy’s blogging family, and today I’d like to write about my thoughts about startups’ reasons to fail (and as a consequence: reasons to succeed). This is my 3rd non-tech topic in a row, and if you hadn’t guessed it, I have little inspiration to write about tech these days.

So, “why do startups fail?” seems to be a relevant question these days and I guess to everyone running or thinking about running or working in a startup. Depending on who you talk to, no actually pretty much everyone, over 90% of startups fail within 2 years of their launch. The stats vary according to whom the startup works with, it is much lower with venture-funded companies, as well as within certain incubators.

The Credit Crunch

One of the most popular reasons I heard while writing my thesis (which involved me interviewing over 200 tech-startups), is of course lack of money. That seems really relevant today, and is certainly a factor.

To give a personal example of how the credit crunch is affecting our lives negatively, back when I started a bachelor in Manchester, UK, about 10 years ago, I was able to get a student-loan quite easily at a British bank. You walk in with your details, get a 1000 pounds overdraft and a credit-card to boot. This was still the case until a few months ago. My brother, who just left for Lancaster, UK, was counting on a similar deal. But banks had withdrawn that service to non-UK citizen, rather abruptly, forcing my brother to find alternative solutions. Banks don’t care about who needs or deserves a loan, when they cut it off, we’re all screwed.

Fred Wilson pointed out that seed-funding will likely suffer most, and true, banks are, both directly and indirectly, an incredibly important source in that arena, as well as at later stages. The graph below showed my own results, for two measures carried out during 2005 and 2006 on the investment climate for high-tech startups in the Netherlands (a Dutch version of that report can be downloaded here).

What this graph also shows is that even pre-credit crunch, most startups didn’t use or weren’t able to use much beyond their own savings (the turquoise part) at the seed and sometimes the later stage (of course that still includes credit cards and similar bank-related funding sources). No way that this is something that should be generalised across all countries of course, I imagine that the distribution of investors will vary quite substantially from country to country.

Forget funding

I happen to think that funding is not the factor to focus on when talking about startup failure. In a perfect financial market, which, many financial people try to convince me, exists, you get funding if other conditions are in place. Receiving an investment is a validation of your idea, and if you can’t get investors to talk to you it’s either because:

Your idea is bad.
Your presentation is bad.
There are too many similar startups applying for funding.

The key here is then for 1. to improve your idea, for 2. to improve your presentation, and for 3. to stop being a sheep and reinventing the mousetrap. While this makes me sound like an asshole, the point is that none of these reasons have to do with funding, they have to do with the quality of your venture.

Non-financial reasons for failing

A startup is a machine that needs to be built, needs to operated and maintained, and needs to produce sufficient output/income to cover the costs that building, operating, and maintaining require.

Therefore, startup-failure is related to:

Too expensive a building-process (both in money, people, and time), which comes out of bad planning and insufficient skillsets to get results.
Improper operation and maintenance, which is really to do with bad HR-practices.
Insufficient output/income, which can be related to the quantity produced (bad planning, skills), bad pricing, and of course a bad market.

The “bad market” factor is an interesting one, because it seems very related to the credit crunch problem. My brother, who is forced to look elsewhere for funding, will be less likely to buy a laptop from the start now. Everything ties back into funding somehow.

Bad market or bad business-model?

The top business models, in my mind, are built to withstand recession. Some could argue that they are built during a recession. An example of this is discounters like Aldi, which was built in a poor Germany, many years ago, and has caused a revolution in European retailing. Im not 100% sure, but I think that the strength of European discounters here has even prevented monsters like Wal Mart from taking over the place.

Other streams of thought about this take you into “blue ocean” or “long tail” territory, both somewhat hip ways of saying that you should think outside the box.

A bad market can be a lack of desire on consumers part to pay for your product. And it can be that the market is simply to small, suggesting that it may be a good idea to think globally from the start. Certainly, investors like the idea of entrepreneurs thinking (realistically) big. Also when you see some of the industry-growth-stats in emerging economies, it makes sense to target those markets, instead of the many 0-2% growth economies in the Western world.

I guess what I’m saying is that a bad market is just an excuse for failure. If your business is advertising dependent, you should be aware that most advertisers cut their spending during recessions, a recession that has been predicted for years now. The same applies to certain luxury goods, etc. So, perhaps the market isn’t bad, perhaps the business-model is bad too.

In summary…

Yes, the credit crunch is scary, as are all recessions. Yes, we would all like our ideas to simply be output – input = profit. But the core of entrepreneurship is to think in opportunities, to not get stuck in ideas, and be market-focussed. It is about breaking rules and making new ones. And, while it is a harsh world where failure is accompanied by a high price, at the core of entrepreneurship is also optimism—the belief that everything can be solved with the right perspective.

So why do startups fail? By setting themselves up to fail.

Vincent out

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Is Microsoft doing right with the "I'm a PC" ads?

Vincent van Wylick — Sat, 20 Sep 2008 12:20:11 +0000

So some short thoughts. Plenty of people have been criticising both the Seinfeld+Gates ads and now the crowdsourced variant of “I’m a PC.” I’ve only really read three points of view, namely Micheal Arrington’s (a media guy), John Gruber’s (a Mac-head), and Jason Kottke’s (an (alternative internet-)culture guy). All three have been fairly negative about it.

[youtube=http://www.youtube.com/watch?v=kkZdkHylJ3w&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&fs=1]

Jason writes:

“That’s the problem with Microsoft’s ads. They’re still #1 and the bigger company, but by referencing Apple’s successful ad campaign, they’re acting like Apple is #1.”

I think this pretty much echoes John’s point of view.

The problem here is that both treat PCs as being one market… the Apple-one, which is students, “stupid users (like me) who don’t want to know what’s under the hood,” and a certain type of individualistic professional. In that market, yes, Apple appears to be doing quite well.

Microsoft has a somewhat different segmentation of customers. It has the three above, it also has the cheapskate (those that have it pre-installed with a $400 PC or those that pirate it), the business-traveller, and the Dell-crowd (lot’s and lot’s of grey machines in big equally grey buildings).

What has Microsoft done with the “I’m a PC” advert? It has attacked a strong player in one segment that it and Apple are both competing for. Apple’s “I’m a Mac” has been promoting Macs as the easy and elegant solution, while Microsoft-PCs are the clunky and slightly psychotic alternative that nobody wants. By showing a diverse set of PC-users, Microsoft simply removed the foundation that Apple built this last year and a half, and has levelled the playing-field.

Is it a me-too ad? Definitely! But we all know about Apple by now and there’s no use pretending it doesn’t exist. Will it affect Apple’s bottom-line? I’m not much of a believer in advertising, but at the very least Apple will have to change their game. I think that Micheal Arrington makes a similar point here.

Does this have any effect at all on Microsoft’s no. 1 market, the Dell-one? It does if you believe that students, “stupid users,” and individualistic professionals will bring about a revolution in the work-place, which may happen eventually. In the short-to-medium term (the one the stock-market cares most about) however, my gut tells me that all of this is pretty irrelevant to that business-only segment, which cares about creating products that work on a massive scale, and about buying PCs that become cheaper with economies of scale.

Vincent

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What stops you from being an entrepreneur?

Vincent van Wylick — Mon, 15 Sep 2008 10:20:04 +0000

It’s a simple question, but one, I’m sure, will solicit a plethora of answers. I previously asked what the ingredients to starting a company were, and I’m sure part of the answers are there, e.g.:

I don’t have a good idea
I don’t have the knowledge
I don’t have the team
I don’t have the money
etc.

On the other side, there’s the risk-component, e.g.:

I can’t bear to fail
I don’t want to go into debt
I got kids
etc.

The people that do start businesses have a number of characteristics, such as:

the non-desire to work in a regular job
a network of people that they bounce ideas off
a stuburn belief in oneself and the idea
the willingness to take risks to get to where you want to go
the love for it

I’m still figuring many things out myself, but one thing that I do believe is that life is like a computer that can be programmed.

You can come up with a good idea and figure out a system of how to research its viability.
You can find people everywhere to talk to about your ideas and how to set up your business
You can get money with a good idea
And you can create tons of positive signals that boost your self-confidence and the belief in your idea.

But it will always be an opportunity cost, between the risk that you take (losing a steady income, endangering your home-situation, etc.) and the upside, that you actually get to do what you want to do (sort of: your customers are still your boss).

So what’s stopping you from being an entrepreneur?

Vincent

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Company-strategy: answering the 'process-coding' riddle

Vincent van Wylick — Sun, 03 Aug 2008 13:47:12 +0000

The way I blog is pretty much continuous; I try to relate everything—from fashion, to relevance, to mobile-commerce, to SOA, etc.—to a general theme, which I eventually hope to use as a framework of principles and values in my future activities. I guess that this to some extent answers my previous question of whether process-coding is good or bad. It is good, as long as it takes environmental variables into account that may affect its effectiveness, as well as the fact that a basic human prerogative is to exercise the freedom of will and choice.

This post will be a little academic, as I’ll be quoting from a number of sources from that field. The reason I thought of writing it was because of following paragraph, I read this morning, by Michael Porter, strategy-expert extraordinaire:

“Strategy, in modern language, is a solution to the agency problem that arises because senior management cannot participate in or monitor all decisions and directly ensure the consistency of the myriad of individual actions and choices that make up a firm’s ongoing activities. If an overarching strategy is well understood throughout the organization, many actions are obviously ruled out and individuals can devise their own ways to contribute to the strategy that management would be hard pressed to replicate.” (Source)

This quote comes from a 3-part framework of firm-success, the first being a clear strategy, the second an alignment with external (industrial) conditions, and the third being the exploitation of ‘distinctive competencies.’

In other words, setting strategy is a form of ‘process-coding’ the behaviour of individuals within an organisation. This is easier said than done. According to another book I am reading, called “Valuation,” the process of reviewing the state of a larger organisation’s functions (marketing, sales, production, finance, research, etc.), in order to paint a picture of the historical and future “deployment of assets and resources” (the author’s definition of strategy), and their (expected) returns, is both a qualitative and quantitative process, which can take years to complete. I quote:

“The installation of a top-to-bottom, comprehensive planning system endorsed by all members of the organization and practised by people well-educated in its use is a process that usually takes three to five years.“

For smaller and younger organisations, I imagine that many of the exercises, described in the ‘E-Myth Revisited,’ will do just fine.

Last, but not least, Harvard Business Review recently published an article on ‘strategy execution,’ which is in the end the most important part of strategy—how well it is carried out. It is well-worth a read and I’ll just share the first five success-factors, out of a total of 17, with you:

The results came out of a 1000-company survey and are pretty telling; the more explicit the company strategy, the more explicit the role of individuals within the organisational context, the higher the success-rate of strategy execution. Meaning that no matter how hard it is to achieve just that, it is well worth the effort.

Something to think about.

Vincent

P.S. if you want to read a horror-story of how not to do it, check this out.

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Book review : The One Minute Entrepreneur

Fidji SIMO — Wed, 14 May 2008 04:36:03 +0000

Ken Blanchard, the best-selling author of The One Minute Manager (13m copies sold), was the guest of the eBay Speakers Series last week, to present his new book, the One Minute Entrepreneur. I had such a great time listening to him that I read his book in an hour on the same day. Like most of the great speakers, it is really tough to sum up in an article what he said: he presented essentially life stories rather than business ones, without any PowerPoint (and I can tell you that it is pretty unusual in this kind of setting!), but with a lot of humor, modesty and wisdom. For those who are interested in great speakers, you can check out his impressive biography. Since it is hard to share those anecdotes, I’d rather highlight what I liked in his book.

If you want to purchase an entrepreneurship book to know how to approach VCs and start your business, just buy The Art of Start. If you want to understand the mindset of an entrepreneur from a psychological point of view, and how it translates operationally, just buy The E-myth revisited. But if you want something more inspirational, a story on entrepreneurship rather than a business book, then The One minute Entrepreneur is the right choice. It basically relates the story of an entrepreneurial adventure, and highlights the “one minute insights” that we can derive from this story. They can be summarized under 4 Ps:

Passion: You need to love what you’re doing, otherwise you’ll never accept all the sacrifices that go with your venture; leadership is about love (loving your missions, your people, your customers)
Profit: You need to find people willing to pay you for what you love, otherwise you have a hobby and not a job, and quickly eating becomes more important than having fun
Priorities: this is the one I like the most. You should have your priorities in order, and find the right balance in your life. There is a good quote in the book, from the book When Bad Things Happen to Good People from Rabbi Kushner, who says that he never heard anyone on their deathbed say “I wish I had gone to the office more”. And Ken Blanchard seems to be really putting that into practice: he spoke more about his wife during the conference than about his job, he seems completely enthusiastic about his life, and has accepted the bad things that happened to him recently (loss of his house during the fires in San Diego) without too much pain because he has a clearly defined set of priorities.
People:
- Entrepreneurship is about mentorship: you don’t have to do everything by yourself, you just have to send a positive energy and a lot of motivation to get people to help you. In the story of the book, it is clear that the entrepreneurs manage to find the advice of the right people at the right moment, and being able to ask for help appears in this case to be their main success factor
- You need to be a servant leader: you have to empower your people to take decisions (bottom up approach rather than top down). A leader can’t be there during all the interactions with a customer, so he has to give the right power to his employees to make the right decisions during the Moments of Truth of the customer relationship with the company. It reminded me of what Tony Hsieh, CEO of Zappos, mentioned a few weeks ago about creating a strong culture so that your employees do the right thing without being obsessed by processes and rules.
- You need to help your people get an A: as a professor, Ken Blanchard never understood the need for a normal distribution, and mentions that nobody recruits according to a normal distribution, which is really true! He advocates that in companies, the role of a manager is to make his people get an A rather than grading them. Therefore evaluations shouldn’t be a surprise but only a collection of ongoing discussions.

This book is worth reading for many other insights, and apparently there is a free offer here, so you shouldn’t hesitate. Do you have any suggestions of good entrepreneurship books that you would like to be reviewed here on TIE?

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The Wanna? announcement post: TechTour & Converteo404

Jeremy Fain — Wed, 02 Apr 2008 00:51:17 +0000

This post is aimed at helping friends bootstrap projects (although they certainly don’t need me to turn everything into gold, especially these ones). I apologize for the inconvenience caused to readers coming for content, not announcements, but these are 2 AMAZING projects that definitely deserve exposure. Unfortunately, a number of readers won’t be able to be part of the game since #1 is for French companies only, and #2 is for French speakers only. There we go:

Sheirin Iravantchi, Aymeril Hoang & Paul Degueuse, three people who have been instrumental in the success of the study trip to Silicon Valley (full quality debriefing in French by Olivier Ezratty here)I organized back in November 2007, are organizing what they call a (French)TechTour between May 19th & May 23rd 2008. The concept is pretty clear and very appealing: a sample of 10 startups will be selected to go to Silicon Valley & meet with corporate development departments of major large corps. Here’s a list of planned meetings (note the diversity of industries considered):
1. Google David Lawee, VP corporate development
2. Ebay Erik Stuart, Director, Corporate Strategy
3. Cisco Didier Moretti, VP Business Incubation, Emerging Technologies Group
4. Microsoft Beti Cung, Director, Emerging Business Team - I met Beti before, and an hour with her is worth the return trip: super smart girl, if all meetings are planned to be of such quality then becoming a TechTour participant is what you should be desperate working on
5. HP Damien Henault, Director, Strategy & Corporate Development
6. AT&T Rupert C. Young, Director, Strategic Business Development
7. Intel Capital Eghosa Omoigui, Director, Strategic Investments
8. Symantec Hans van Rietschote, Senior Director, Office of the Chief Technology Officer

Assuming that the agenda speaks for itself, impressive uh?, my bet is that you should take a look at the following links and apply:

(French)TechTour, the blog here; details on the tour here; application file here; the launch post here. Enjoy!

2. Thomas Faivre-Duboz, a former classmate of mine & Raphaël Fétique are 2 very active entrepreneurs in Paris. They run a consultancy aimed at helping website owners with a conversion rate enhancement methodology. The name of their company? Converteo. The good news is that Converto recently launched an Error404 competition: design the most appealing Error 404 page and you’ll win a one week conversion rate optimization audit worth 4000 euros HT (1 million US dollars – just kiddin’, around 6000 USD). I believe this is a great initiative: some Error 404 pages can be such a shame that they might never make you feel like coming back on a site; on the other hand, some display a message like ‘our teams are now aware of the malfunction, thank you for helping us improve our service and sorry for the inconvenience’, a sort of message that may improve user stickiness at the end of the day. Here’s the link to the Error 404 Converteo competition.

Wanna jump on one or the other, or both competitions? Please be their guest. Feel free to keep me posted on the outcome of your applications.

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