Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great."
- Mark Twain
A lot of entrepreneurs worry about people stealing their bright ideas. In my experience, ideas are easy - its execution that's hard. And even if your idea is brilliant, the best ones aren't necessarily so. Any really good new idea will seem either bad or mad to most people; otherwise someone in China will already be doing it. Your idea needs to be almost good and it helps if the world around you helps turn your fad into a fashion. Look at all the money going into green energy - its even got its own name 'CleanTech'. Most funders are driven by consensus, not just within their firms, but within their community. Surely that's exactly how the credit bubble happened - everyone was doing it, so it must be a good idea. Not.
And being too clever ain't necessarily a good idea either. My claim to fame is that my Ph.D was part of a research project that won E.J. Corey his Nobel Prize. That research itself never generated anything that was directly commercial. However, the spin-offs that were successful were infinitely less ambitious in their goals, but solved real-world problems in an explainable way. It’s a great case study of how a small change of perspective and focus on an addressable market opened up a commercial opportunity – and why trying to be too smart is not always a good idea in the real world!
So when the next small-minded person tells you what you are trying to do is bad or mad, breath a sigh of relief that maybe you on the path to greatness! Someone right now is probably telling the next Google why what they are doing isn't such a bright idea. And he probably works for a bank!
Monday, 15 December 2008
Monday, 8 December 2008
Bonfires, Dry Stone Walls, Clouds, Inches & Death Computing
Colin Beveridge spoke at the 20/20 Vision event organised by Sandford Technology/Virtronix on Fighting the Trillion Dollar Bonfire (effective information systems for the 21st Century). His conclusion seemed to be that system integration is the way forwards. I have to agree. Most IS systems seems like good old Yorkshire stone walls - they require immense intricacy to put them together and great skill to build, then they fall down after a while because there's nothing but air and friction holding them together. What we need is some 'cement' to hold the functional bricks together and facilitate process, workflow, data sharing and increased productivity. Yorkshire Forward seem to have woken up to the fact that each 'brick in the wall' they fund is replicating data and not sharing it effectively with each other. They are introducing a CRM that all agencies can tap into, leverage and generally use. Great idea! I have been saying this for three year's and every other agency seemed to wave the data protection act at me as to why we can't share information more!!!
The death of the corporate datacentre seemed to also be on the vendor agenda with all our data being entrusted to third parties (like this blog and my emails). Ian Weatherhog and Mike Briercliffe waxed lyrically about how the PC was the root of all evil when it came to data security (he also spoke at our recent TechTalk event). I can remember far enough back when I accessed the old cloud i.e. our corporate IT server from a remote PC and the data could be viewed, but not manipulated. We used to say all this valuable data was "an inch from the desktop" and spent ten years going that final inch and start turning data into information, albeit with security and integrity compromised. Now we seem to be poised to unify the competing factions with the eventual promise of network computing and Larry Ellison's vision of thin clients that all they do is the final rendering.
I suppose it's only a matter of time before we all have enough certainty that "till death us do part" our data is safe and backed up in the cloud and not deleted when our credit card expires. Now that's what I call security.
The death of the corporate datacentre seemed to also be on the vendor agenda with all our data being entrusted to third parties (like this blog and my emails). Ian Weatherhog and Mike Briercliffe waxed lyrically about how the PC was the root of all evil when it came to data security (he also spoke at our recent TechTalk event). I can remember far enough back when I accessed the old cloud i.e. our corporate IT server from a remote PC and the data could be viewed, but not manipulated. We used to say all this valuable data was "an inch from the desktop" and spent ten years going that final inch and start turning data into information, albeit with security and integrity compromised. Now we seem to be poised to unify the competing factions with the eventual promise of network computing and Larry Ellison's vision of thin clients that all they do is the final rendering.
I suppose it's only a matter of time before we all have enough certainty that "till death us do part" our data is safe and backed up in the cloud and not deleted when our credit card expires. Now that's what I call security.
Monday, 1 December 2008
Snow Report
‘Solutions for Business – funded by government’ is a package of business support to help companies start, grow and succeed. The launch event was fittingly held last Friday in a casino! Simon Hill from Yorkshire Forward explained how they have streamlined thousands of public-funded support products into a package of thirty. My take on it was that they have identified a set of product categories under which individual solutions would fit, which is not exactly the same thing! Like the fact that multiple inheritance in object-oriented systems is technically feasible, but not a good idea in practise, going forwards hybrid products that fit under two categories would disappear, which is perfectly sensible.
But let's remember this is just a conceptualisation of reality that dices and slices things to offer a palatable solution that hides complexity, maximised cohesion and minimises coupling (see my Keep it Simple Stupid post). For example, lets take business mentoring - it is valuable before and after investment but has been and probably will continue to be separated into investor readiness support and 'money with management'. And there's nothing wrong with that, but in another conceptualisation it could be brought together, but that would require closer coordination between organisations like Connect and the investment funds.
We all want things to appear as simple as possible, but as with systems biology, life introduces complexity as the thing evolves. That's not to say we shouldn't group together things - that's what an organ is. Eskimo's have twenty words for 'snow', because it's an important concept to them. Try telling them they don't need the other nineteen.
But let's remember this is just a conceptualisation of reality that dices and slices things to offer a palatable solution that hides complexity, maximised cohesion and minimises coupling (see my Keep it Simple Stupid post). For example, lets take business mentoring - it is valuable before and after investment but has been and probably will continue to be separated into investor readiness support and 'money with management'. And there's nothing wrong with that, but in another conceptualisation it could be brought together, but that would require closer coordination between organisations like Connect and the investment funds.
We all want things to appear as simple as possible, but as with systems biology, life introduces complexity as the thing evolves. That's not to say we shouldn't group together things - that's what an organ is. Eskimo's have twenty words for 'snow', because it's an important concept to them. Try telling them they don't need the other nineteen.
Friday, 28 November 2008
Something For Nothing
Grave concerns about personal liberties and freedoms are thrown up by the proposed national identity card scheme, but judging by the discussion at TechTalk 2008, advertisers are already tracking our every move. Andrew Burke, CEO of Amino Technologies and former CEO of BT Entertainment said that media companies would need to look at supermarkets who run loyalty card schemes so they know exactly what customers are buying and when. Already Google analyse email traffic to target advertising based on content and Phorn are seeking to strike deals with ISPs to monitor all Internet traffic to profile user interests.
One of the investment forum presenters, Prescient, have developed a electronic nose and a recent applicant to the Yorkshire Concept fund has developed a vision system to profile people by age, ethnic origin, etc. Maybe not perfect, but better than nothing. What then stands in the way of not only profiling people by their data traffic but also their personal traits as we stand in front of an advertising display or shopfront? Maybe I am getting paranoid, but the thought of being offered a voucher for body products or a discount on a zimmer frame based on my appearance or body odour sounds just a step too far in personal profiling.
One of the investment forum presenters, Prescient, have developed a electronic nose and a recent applicant to the Yorkshire Concept fund has developed a vision system to profile people by age, ethnic origin, etc. Maybe not perfect, but better than nothing. What then stands in the way of not only profiling people by their data traffic but also their personal traits as we stand in front of an advertising display or shopfront? Maybe I am getting paranoid, but the thought of being offered a voucher for body products or a discount on a zimmer frame based on my appearance or body odour sounds just a step too far in personal profiling.
Tuesday, 23 September 2008
Keep it simple stupid
Complexity and chaos surrounds us as we try to steer our organisations through these uncertain economic times. The Utopian solution seems to be simplicity and calm which has a compelling magnetism for those exhausted by the rough seas of change or the choppy waters of the stock market. So can we engineer simplicity in and complexity out of our lives?
As a former system designer I applied three simple principles to tame complexity:
1) Do as much as you have to and no more. Minimalism is good; don't add bells and whistles until someone says they will pay for them. Technical people always want to over engineer things.
2) Seek functional cohesion by solidifying related activities into one place or unit so complexity is hidden inside rather than exposed to the poor consumer of the service. It's better that every body does just one thing well rather than lots of people doing the same thing a number of different ways twice. I'm not saying redundancy is bad, rather replication is good!
3) Decouple things so there are not intimate links between components. If you then want to swap one thing for another the whole can be oblivious to the change as everything carries on working as it should.
The key is to hide necessary complexity from the end user/consumer, but remember doing clever things is difficult and complex otherwise everyone would be doing them. Removing complexity can have its costs and can be far from a simple matter. As Einstein famously said "Make everything as simple as possible, but no simpler". I'll take capably complex over stupidly simple any time.
As a former system designer I applied three simple principles to tame complexity:
1) Do as much as you have to and no more. Minimalism is good; don't add bells and whistles until someone says they will pay for them. Technical people always want to over engineer things.
2) Seek functional cohesion by solidifying related activities into one place or unit so complexity is hidden inside rather than exposed to the poor consumer of the service. It's better that every body does just one thing well rather than lots of people doing the same thing a number of different ways twice. I'm not saying redundancy is bad, rather replication is good!
3) Decouple things so there are not intimate links between components. If you then want to swap one thing for another the whole can be oblivious to the change as everything carries on working as it should.
The key is to hide necessary complexity from the end user/consumer, but remember doing clever things is difficult and complex otherwise everyone would be doing them. Removing complexity can have its costs and can be far from a simple matter. As Einstein famously said "Make everything as simple as possible, but no simpler". I'll take capably complex over stupidly simple any time.
Monday, 8 September 2008
Seeing Beyond The Obvious
Having got a PhD in business strategy, I must know what I'm doing, right? More accurately I spent three years trying to teach a computer to think strategically. Bad idea! The problem was seeing the bigger picture and having a holistic view ain't something that bits and bytes find easy to do. Neither is it that simple as an organisation gets bigger and more than one person has responsibiliy for driving things forwards. If this rings true for you, then tune into our webinar series that will kick of with a session on Business Planning for Growth on the 16th September.
Running a business is all about having a bigger vision that the various 'factions', however you have diced and sliced the pie operationally, can understand, buy into and get behind without necessarily being 100% happy. In my experience, a decision that one department loves and another hates in invariably the wrong one for the organisation as a whole. This is what you get when silo mentality and operation detail dominates. But if decision makers don't know what the overall strategy is or what constitutes success in the longer term, i.e. the organisation is rudderless and going nowhere fast because there is no bigger picture, then all they can do is make the decision that's best for them, right here right now.
Unfortunately, the correct strategic decision can be often less than optimal tactically or indeed downright wrong from a short-term perspective, so devolved decision making has its risks. Seeing beyond the obvious and doing the right strategic thing is what differentiates the long-term winners, but equally empowering employees to make decisions is also crucial to success. So not surprisingly this is a tricky balance to strike - and if you are running a business it's your job to do this!
After once canning a development project because it was the right strategic thing to do, my technical manager said to me at the time: "We are the thoroughbreds in this space and this decision sucks. Apparently, horses can't vomit, so pardon me for the cliche but I am as sick as a very refined parrot".
Remember, if you are a business leader, feeling bad that you have had to make the right but difficult strategic decision is better than feeling good about making the obvious and easy tactical one. But if you ain't got a clear long-term business strategy, do the latter then sign up to our webinar on the 16th!
Running a business is all about having a bigger vision that the various 'factions', however you have diced and sliced the pie operationally, can understand, buy into and get behind without necessarily being 100% happy. In my experience, a decision that one department loves and another hates in invariably the wrong one for the organisation as a whole. This is what you get when silo mentality and operation detail dominates. But if decision makers don't know what the overall strategy is or what constitutes success in the longer term, i.e. the organisation is rudderless and going nowhere fast because there is no bigger picture, then all they can do is make the decision that's best for them, right here right now.
Unfortunately, the correct strategic decision can be often less than optimal tactically or indeed downright wrong from a short-term perspective, so devolved decision making has its risks. Seeing beyond the obvious and doing the right strategic thing is what differentiates the long-term winners, but equally empowering employees to make decisions is also crucial to success. So not surprisingly this is a tricky balance to strike - and if you are running a business it's your job to do this!
After once canning a development project because it was the right strategic thing to do, my technical manager said to me at the time: "We are the thoroughbreds in this space and this decision sucks. Apparently, horses can't vomit, so pardon me for the cliche but I am as sick as a very refined parrot".
Remember, if you are a business leader, feeling bad that you have had to make the right but difficult strategic decision is better than feeling good about making the obvious and easy tactical one. But if you ain't got a clear long-term business strategy, do the latter then sign up to our webinar on the 16th!
Thursday, 14 August 2008
Academic Commercialisation: The Third Way?
In an earlier post, Fail Fast Fail Early, focused on healthcare companies optimising their pipeline development, I asked whether there was a better way of commercialising medicines. Well GSK and Cambridge University have come with an interesting alternative development model using “academic incubators” to optimise the early clinical development of new medicines.
Cambridge will dedicate a team of academic experts to develop drugs with therapeutic potential, as well as bearing some financial risk for which they'd be compensated if the programme is a success. GSK will provide operational support, access to its in-house clinical research and imaging facilities, and background preclinical data on the drug. The agreement is fully aligned with one of the key recommendations of the Cooksey Review of UK Health Research Funding that consideration should be given to alternative drug development models, such as Public Private Partnerships, to optimise effective collaboration between industry and academic sectors in the development of effective new medicines.
Whether this is "ground-breaking approach" or just a sensible way of outsourcing development of low priority orphan drugs is open to debate. It does however establish a joined up pipeline from academic research towards commercialisation that may university inspired projects lack - despite their efforts to bolt on commercialisation activities. Also the fact that the projects are GSK sponsored gives a commercial focus to the activity from the outset that will undoubtedly benefit the eventual business outcomes. As we have seen with the Enterprise Fellowship projects backed by Yorkshire Forward, having some commercialisation DNA and focus at an early stage is invaluable.
Cambridge will dedicate a team of academic experts to develop drugs with therapeutic potential, as well as bearing some financial risk for which they'd be compensated if the programme is a success. GSK will provide operational support, access to its in-house clinical research and imaging facilities, and background preclinical data on the drug. The agreement is fully aligned with one of the key recommendations of the Cooksey Review of UK Health Research Funding that consideration should be given to alternative drug development models, such as Public Private Partnerships, to optimise effective collaboration between industry and academic sectors in the development of effective new medicines.
Whether this is "ground-breaking approach" or just a sensible way of outsourcing development of low priority orphan drugs is open to debate. It does however establish a joined up pipeline from academic research towards commercialisation that may university inspired projects lack - despite their efforts to bolt on commercialisation activities. Also the fact that the projects are GSK sponsored gives a commercial focus to the activity from the outset that will undoubtedly benefit the eventual business outcomes. As we have seen with the Enterprise Fellowship projects backed by Yorkshire Forward, having some commercialisation DNA and focus at an early stage is invaluable.
Monday, 4 August 2008
Making Your Own Luck
Gary Player once remarked "It's funny, the more I practise, the luckier I get". So should a failed entrepreneur be given a second chance? The argument goes that you learn valuable learn valuable lessons from failure, so you should be more likely to succeed second time around. But others argue that experience gained from one failed business is unlikely to apply to a second, due to the unpredictability of chance. "You can't learn to win the lottery" No, but if you are lucky you can influence the amount you win (my tip, don't select the numbers 1,2,3,4,5,6 as 10,000 others have then!).
Getting into a position to profit from being a little bit lucky is probably was differentiates successful entrepreneurs, but no one is lucky all of the time. So whether you eventually profit from a bit of good business fortune is very much down to the experience of the management team. All you can do is deal yourself a good hand, but whether you win a particular pot or hole a specific putt is partially down to fate. Embracing this risk is what equity investing is all about. So if anyone says they have only been associated with success they have either are a one-trick pony or very, very lucky! In business, lessons are best learned from those who have been mainly successful...
Getting into a position to profit from being a little bit lucky is probably was differentiates successful entrepreneurs, but no one is lucky all of the time. So whether you eventually profit from a bit of good business fortune is very much down to the experience of the management team. All you can do is deal yourself a good hand, but whether you win a particular pot or hole a specific putt is partially down to fate. Embracing this risk is what equity investing is all about. So if anyone says they have only been associated with success they have either are a one-trick pony or very, very lucky! In business, lessons are best learned from those who have been mainly successful...
Monday, 9 June 2008
TechTalk Speakers
We've got a great line up for TechTalk which will be held on the afternoon of our Investment Forum on the 18th June in Leeds. Deidre Bounds Founder of i-to-i; Kevin Walsh group Executive Director of Kingston Communications; Jonathan Straight Founder of Straight plc; and Neil Gaydon of Pace plc.
The TechTalk afternoon allows you to hear these high-tech businesses leaders give their provocative thoughts on the challenges facing the sector today. TechTalk 2008 offers the opportunity for you to debate topical issues and share valuable knowledge and experience. Find out how they succeeded and what they feel makes for a formidable business opportunity.
Who Should Attend? Anyone with an interest in the technology scene! Whether you are a leader of an established or SME technology business or an aspiring entrepreneur, TechTalk is the perfect opportunity to develop strategies for success. Equally if you are an investor or service provider with a passion for developing and investing in innovative ideas, TechTalk will help you hone your strategies for success.
Registration for TechTalk, including lunch and the champagne reception, is £75 plus vat. To register online, please Click Here. Alternatively, contact Connect Yorkshire with your full contact details on email: events@connectyorkshire.org or Tel: 0113 384 5640.
The TechTalk afternoon allows you to hear these high-tech businesses leaders give their provocative thoughts on the challenges facing the sector today. TechTalk 2008 offers the opportunity for you to debate topical issues and share valuable knowledge and experience. Find out how they succeeded and what they feel makes for a formidable business opportunity.
Who Should Attend? Anyone with an interest in the technology scene! Whether you are a leader of an established or SME technology business or an aspiring entrepreneur, TechTalk is the perfect opportunity to develop strategies for success. Equally if you are an investor or service provider with a passion for developing and investing in innovative ideas, TechTalk will help you hone your strategies for success.
Registration for TechTalk, including lunch and the champagne reception, is £75 plus vat. To register online, please Click Here. Alternatively, contact Connect Yorkshire with your full contact details on email: events@connectyorkshire.org or Tel: 0113 384 5640.
Friday, 16 May 2008
Does Cream Rise To The Top?
The Richard Report has a major theme that brokering 'something' is best achieved by the market deciding who or what is best using the 'wisdom of crowds' rather than the seal of approval of the broker. But is it that simple?. At Connect, a key selling point of our service is that we help put forward the best propositions to investors so they don't waste their time filtering out the 'bad uns'. Can Web technology ensure the cream of the crop rise to the top without the broker being the ultimate discriminator of what is best?
How do you find 'good uns'? If you follow the natural selection approach, you need an innovation ecosystem that encourages mutations and experimentation and let the marketplace decide those that are best i.e. most likely to survive and hence reproduce. As Nobel laureate Linus Pauling said: “have lots of ideas and throw away the bad ones…. You aren't going to have good ideas unless you have lots of ideas and some sort of principle of selection.”
With MyDealMaker we are trying to develop this approach to complement and extend our physical pitching events. Within reason anyone with what they think is a bright idea can put up their profile. We can try to give some quality assessment based on our engagement with the entrepreneur. Have they gone through our Investor Readiness Programme? Have they taken the trouble to fill out a detailed profile etc. But where it gets interesting is if, as Richard's suggests, the portal offers the functionality necessary for the market or software itself to promote the best and demphasise the rest.
But lets not get too carried away with all this. Online screening is just that: its a filtering process that can reduce the many to a few based on something more than a one dimensional view of quality or who you stood next to in the queue for the food at a networking event. But just like you don't buy an house based on its profile on RightMove, entering into a meaningful relationship with a business advisor or investing in what appears to be a bright idea on paper requires a little more interaction than can be done online. Physical engagement is still needed to seal any deal!
So I'm with Doug Richard on this - the brokerage need to provide the marketplace first and foremost and this provision and any signposting ideally should not consume a signicant percentage of the transaction it facilitates. Online brokering portals that match those with a need with those best able to provide it have the potential to change the balance of responsibility between brokers, providers and consumers and more importantly improve the efficiency and effectiveness of the marketplace.
How do you find 'good uns'? If you follow the natural selection approach, you need an innovation ecosystem that encourages mutations and experimentation and let the marketplace decide those that are best i.e. most likely to survive and hence reproduce. As Nobel laureate Linus Pauling said: “have lots of ideas and throw away the bad ones…. You aren't going to have good ideas unless you have lots of ideas and some sort of principle of selection.”
With MyDealMaker we are trying to develop this approach to complement and extend our physical pitching events. Within reason anyone with what they think is a bright idea can put up their profile. We can try to give some quality assessment based on our engagement with the entrepreneur. Have they gone through our Investor Readiness Programme? Have they taken the trouble to fill out a detailed profile etc. But where it gets interesting is if, as Richard's suggests, the portal offers the functionality necessary for the market or software itself to promote the best and demphasise the rest.
But lets not get too carried away with all this. Online screening is just that: its a filtering process that can reduce the many to a few based on something more than a one dimensional view of quality or who you stood next to in the queue for the food at a networking event. But just like you don't buy an house based on its profile on RightMove, entering into a meaningful relationship with a business advisor or investing in what appears to be a bright idea on paper requires a little more interaction than can be done online. Physical engagement is still needed to seal any deal!
So I'm with Doug Richard on this - the brokerage need to provide the marketplace first and foremost and this provision and any signposting ideally should not consume a signicant percentage of the transaction it facilitates. Online brokering portals that match those with a need with those best able to provide it have the potential to change the balance of responsibility between brokers, providers and consumers and more importantly improve the efficiency and effectiveness of the marketplace.
Tuesday, 13 May 2008
Small but Perfectly Formed
When I was in merger talks with a larger company (OK read takeover!) I commented to their CEO that they had muscles in placed we didn't even have places! When things get big, do they really need to become more complex or does it go with the territory?
When businesses grow to more than eight people, holding company meetings in the rest room is no longer as feasible as it once was. Structure need to be put in place and when a job becomes bigger than one person, departments evolve.
The trick is to align related functions together and put in process orientated 'glue' to make sure the external world doesn't get exposed to (necessary) internal complexity. 'Join up thinking' and 'non-silo mentality' seems to be the in vogue phrases. Trying to have one department doing everything, so no glue is required, is about as bad as having individuals pulling in different directions and having loads of gaffer tape holding them together (which to be fair is what is invariably the end result of any growth phase for a business).
So I am not quite sure how to react to the government target of reducing 3,000 support projects down to 100 by 2010. Don't get me wrong, I am sure this can be done but why stop at 100? I thought 42 was the answer to life the universe and everything. But as Einstein said: Make everything as simple as possible, but no simpler.
When businesses grow to more than eight people, holding company meetings in the rest room is no longer as feasible as it once was. Structure need to be put in place and when a job becomes bigger than one person, departments evolve.
The trick is to align related functions together and put in process orientated 'glue' to make sure the external world doesn't get exposed to (necessary) internal complexity. 'Join up thinking' and 'non-silo mentality' seems to be the in vogue phrases. Trying to have one department doing everything, so no glue is required, is about as bad as having individuals pulling in different directions and having loads of gaffer tape holding them together (which to be fair is what is invariably the end result of any growth phase for a business).
So I am not quite sure how to react to the government target of reducing 3,000 support projects down to 100 by 2010. Don't get me wrong, I am sure this can be done but why stop at 100? I thought 42 was the answer to life the universe and everything. But as Einstein said: Make everything as simple as possible, but no simpler.
Tuesday, 29 April 2008
First Footing In The North East
The momentum behind the Connect network was given a lift in the North East with an inaugural Investment Conference held in Newcastle. Glenn Collinson, a co-founder of Cambridge Silicon Radio gave a keynote speech. CSR was a spin out from Cambridge Consultants in 1998 and was lucky to raise their seed funding before the technology bubble burst.
He emphasised that they started out with global ambitions and always believed as a team they could win against the likes of Intel by being more fleet of foot and innovative. They benefitted from Bluetooth being a royalty-free open standard and, as such, a great market to go for (and never having less than $30M in the bank having raised a total of $85M in VC funding!).
Glenn commented that being first is not necessarily good. Those that follow learn from your mistakes and the education/development of the market. Market pioneers take most of the arrows!
He emphasised that they started out with global ambitions and always believed as a team they could win against the likes of Intel by being more fleet of foot and innovative. They benefitted from Bluetooth being a royalty-free open standard and, as such, a great market to go for (and never having less than $30M in the bank having raised a total of $85M in VC funding!).
Glenn commented that being first is not necessarily good. Those that follow learn from your mistakes and the education/development of the market. Market pioneers take most of the arrows!
Wednesday, 23 April 2008
Creative Finance & Risk
The Creative Industries sector lies at the intersection between business, the arts, and technology. The innovative marriage of technological advances and intellectual capital provides the main source of sustainable wealth creation in this sector. Learning from experimentation and failure are key to achieving success and sustained growth. Many Creative Industries participants are subject to shifting fashion and new technologies pose a constant threat to existing activities introducing a high degree of business uncertainty. At the same time, this inherent dynamism and change is constantly opening new opportunities and threats. As a result, the Creative Industries tend to be viewed by investors as inherently high-risk while potentially offering high rewards.
We are currently undertaking a project to identify the specific risks relating to investing in the Creative Industries and how they can be mitigated. If any creative types (either brave investors or bright entrepreneurs) out there might be interested in participating in this research, please get in touch...
We are currently undertaking a project to identify the specific risks relating to investing in the Creative Industries and how they can be mitigated. If any creative types (either brave investors or bright entrepreneurs) out there might be interested in participating in this research, please get in touch...
Friday, 28 March 2008
Anarchy vs. Organisation
Mary Walshock, the founder of Connect San Diego, argues that an innovation ecosystem should be more like a rainforest than a plantation. We want to encourage cross fertilisation, experimentation and, yes, endure some failure if we are to find a new species of business that can thrive by doing things and solving problems in new, improved ways.
Can you project manage this activity or plot a linear path towards success? Once something emerges from the 'forest' that works, then the emphasis needs to shift towards control, replication and nurturing with a 'plantation' mentality to leverage value. These stages of a companies development are very different and the people that revelled in the early-stage anarchy may not be best suited to raising things in straight lines to regimented schedule.
Maybe like organising your Outlook folders, falling between these two extremes may be the worst of all worlds. Let me explain: have you every tried searching for an email in Outlook? If you organise your folders you have to search each one in turn. Its much simpler just to put everything in one folder and rely on a global text search a la Google. Being either totally anarchic or amazingly organised is the perfect state in Outlook, but anything either way is less perfect.
My Outlook analogy says putting a plantation grower in charge of cultivating a forest isn't the most productive approach, but isn't this exactly what happens most of the time? Is partial cultivation as much an oxymoron as organised chaos?
Can you project manage this activity or plot a linear path towards success? Once something emerges from the 'forest' that works, then the emphasis needs to shift towards control, replication and nurturing with a 'plantation' mentality to leverage value. These stages of a companies development are very different and the people that revelled in the early-stage anarchy may not be best suited to raising things in straight lines to regimented schedule.
Maybe like organising your Outlook folders, falling between these two extremes may be the worst of all worlds. Let me explain: have you every tried searching for an email in Outlook? If you organise your folders you have to search each one in turn. Its much simpler just to put everything in one folder and rely on a global text search a la Google. Being either totally anarchic or amazingly organised is the perfect state in Outlook, but anything either way is less perfect.
My Outlook analogy says putting a plantation grower in charge of cultivating a forest isn't the most productive approach, but isn't this exactly what happens most of the time? Is partial cultivation as much an oxymoron as organised chaos?
Thursday, 13 March 2008
Gender-Based Finance
Budget 2008 introduces a package of measures to support small businesses access the finance and resources they need to start up and grow. What caught my eye was the announcement of a new £12.5M capital fund to invest in businesses started by women.I have trawled the HMRC website to try to find out more about how is that going to work but to no avail. Most businesses are built around a team, not one individual. Can men be part of the management team and have any equity share? What if other outside investors gets involved that have more testosterone (chemical structure shown) than they should?
Plenty of companies relocate to access geographically-constrained finance. Are we now going to see the first sex change to gain funding? Surely there are better ways to encourage female entrepreneurs than this. Creating an ecosystem that nurtures and support people seeking to build a business would be a better use of this money than distorting the market in this way. Investors should be backing bright ideas and good people, not worrying about genetic makeup.
Thursday, 6 March 2008
New Beginnings
Seven of Yorkshire's most innovative companies were recognised for their enterprise at the Innovator/08 awards. Former politician Michael Portillo hosted the evening and presented the winners with their awards. Medipex took the Innovation Champion Award sponsored by Connect Yorkshire.
As one of the few people that has successfully made the transition from politics into the media, in his preamble to the prize giving, Mr. Portillio eluded to his 1997 election defeat and subsequent humiliation on a number of occasions, noting that failure offered new beginnings and that people that had only tasted success lack a certain roundness of perspective in their DNA. He also discussed the benefits of teamwork and camaraderie that those at the top might lack exposure to. Some pivotal moments in politics were the result of an isolation leader making fundamental errors of judgement, partly due to this isolation.
This has similar implications in business where the CEO can benefit from a sounding board for ideas and a sanity check on the direction he or she is taking the ship in. Our new Springboard initiative is worth a look with regard to this.
As one of the few people that has successfully made the transition from politics into the media, in his preamble to the prize giving, Mr. Portillio eluded to his 1997 election defeat and subsequent humiliation on a number of occasions, noting that failure offered new beginnings and that people that had only tasted success lack a certain roundness of perspective in their DNA. He also discussed the benefits of teamwork and camaraderie that those at the top might lack exposure to. Some pivotal moments in politics were the result of an isolation leader making fundamental errors of judgement, partly due to this isolation.
This has similar implications in business where the CEO can benefit from a sounding board for ideas and a sanity check on the direction he or she is taking the ship in. Our new Springboard initiative is worth a look with regard to this.
Tuesday, 26 February 2008
Not So Free Lunch
We were delighted so many of our sponsors and partners joined us at our annual sponsors lunch.
Over lunch we asked attendees to discuss the topic "Where should Connect Yorkshire increase its momentum and focus?" An Albert Einstein quote:"Make everything as simple as possible, but not simpler" always comes to mind when thinking about how to make the most impact with limited resource. My table didn't get much beyond debating the meaning of the word 'Where', but as someone new to Connect commented "Given that entrepreneurs can benefit from the activities of Connect pretty much for free, it should be a no brainer to become a member." If anyone in the blogosphere wants to have their two penny worth as to how the Connect network can be bigger and better, please feel free to add a comment to this post.
Over lunch we asked attendees to discuss the topic "Where should Connect Yorkshire increase its momentum and focus?" An Albert Einstein quote:"Make everything as simple as possible, but not simpler" always comes to mind when thinking about how to make the most impact with limited resource. My table didn't get much beyond debating the meaning of the word 'Where', but as someone new to Connect commented "Given that entrepreneurs can benefit from the activities of Connect pretty much for free, it should be a no brainer to become a member." If anyone in the blogosphere wants to have their two penny worth as to how the Connect network can be bigger and better, please feel free to add a comment to this post.
Friday, 8 February 2008
Nothing Ventured...
Deirdre Bounds gave a passionate talk at the Venturefest Yorkshire 2008 dinner. As a former stand up comic I expected a few more laughs, but she mainly focused on her journey from 'bedsit to boardroom'.
What was her take home message? Well mainly that if you have got an idea just do it, even if no one around you gets it: if you believe in yourself you can succeed in realising your vision. This was rather at odds with Ajaz Ahmed's talk earlier in the day where he was lamblasting government support agencies for backing 'lame duck' ideas that were destined to fail and that people shouldn't be given 'false hope' that they can become 'supermodels'
I must admit to being more with Deirdre on this one. Sure, we need to screen out the ideas and people that are just plain daft and applaud the ones that are sure fire winners (because they, like Deirdre, will fly without any outside help or an outside investor getting a slice of the action). But in the beauty contest that is innovation and enterprise, the winners and losers will sort themselves out in the marketplace (think dancefloor, not stage). Out there it's execution and the audience vote that counts: the wisdom of crowds, not the opinion of experts. In my experience, most good ideas start off looking pretty ugly or just plain daft to conventional eyes. As Deirdre says 'We need to encourage weird'.
What was her take home message? Well mainly that if you have got an idea just do it, even if no one around you gets it: if you believe in yourself you can succeed in realising your vision. This was rather at odds with Ajaz Ahmed's talk earlier in the day where he was lamblasting government support agencies for backing 'lame duck' ideas that were destined to fail and that people shouldn't be given 'false hope' that they can become 'supermodels'
I must admit to being more with Deirdre on this one. Sure, we need to screen out the ideas and people that are just plain daft and applaud the ones that are sure fire winners (because they, like Deirdre, will fly without any outside help or an outside investor getting a slice of the action). But in the beauty contest that is innovation and enterprise, the winners and losers will sort themselves out in the marketplace (think dancefloor, not stage). Out there it's execution and the audience vote that counts: the wisdom of crowds, not the opinion of experts. In my experience, most good ideas start off looking pretty ugly or just plain daft to conventional eyes. As Deirdre says 'We need to encourage weird'.
Wednesday, 30 January 2008
Building An Innovation Ecosystem: Rainforests vs Plantations
Prof. Mary Walshok the founder of Connect in San Diego gave an inspiring talk at the Knowledge Capital Annual Lecture in Manchester focusing on the elements that led to their region to develop beyond tourism, real estate and agriculture into a powerhouse of technical innovation. She emphasised the need for regions to recognise and develop the assets they have but also to address the gaps then connect things together. As she note: "Like in Particle Physics when things collide you get reactions". The Connect program was that catalyst that brought people together. She emphasised the importance of community over company, shared purpose and a "sense of place".
Another interesting observation was that an innovation ecosystem should be more like a rainforest than a plantation. In this environment there is more uncertainty, density and diversity where the hybrid ideas arise from cross fertilisation and serendipity more than any organised linear process. Once a new idea has formed and proved itself to have something new and beneficial to offer to the market that's where cultivation and organisation become important.
Another interesting observation was that an innovation ecosystem should be more like a rainforest than a plantation. In this environment there is more uncertainty, density and diversity where the hybrid ideas arise from cross fertilisation and serendipity more than any organised linear process. Once a new idea has formed and proved itself to have something new and beneficial to offer to the market that's where cultivation and organisation become important.
Friday, 25 January 2008
Something for Nothing...
Surely the best deal is the one that generates the greatest return on investment. But those apparently in the know keep telling me Proof-of-Concept funds can't make money. But aren't business angels tying to make money and they are managing their own mini -POC fund. If you can make money on a small scale why, I ask, doesn't this scale up?
If you watch Dragon's Den they are always looking for the largest percentage of equity they can get. But 100% of nothing is still nothing, so you could say that it doesn’t matter whether you get 20% or 40% (this has been the argument of a few VCs who seem to cut much more generous offers than the dragons do) given most will fail.
Surely the point is that for the 1 in 10 early stage deals that really do fly, what percentage you have of that one is very much the differentiator when you come to analysing the overall portfolio returns. Is the problem then that larger funds just aren't prepared to get down and dirty with regards to valuations whereas individual business angels are very much focused on getting more for less? The fact that an early stage business will often get the cheapest money it's going to get i.e. grant funding followed immediately by the most expensive in terms of equity investment does little to help the situation!
If you watch Dragon's Den they are always looking for the largest percentage of equity they can get. But 100% of nothing is still nothing, so you could say that it doesn’t matter whether you get 20% or 40% (this has been the argument of a few VCs who seem to cut much more generous offers than the dragons do) given most will fail.
Surely the point is that for the 1 in 10 early stage deals that really do fly, what percentage you have of that one is very much the differentiator when you come to analysing the overall portfolio returns. Is the problem then that larger funds just aren't prepared to get down and dirty with regards to valuations whereas individual business angels are very much focused on getting more for less? The fact that an early stage business will often get the cheapest money it's going to get i.e. grant funding followed immediately by the most expensive in terms of equity investment does little to help the situation!
Friday, 18 January 2008
Web 2.0 Startup - Plain Sailing
I attended the North West Startups event organised by Manoj Ranaweera in sunny Manchester - OK it was raining. Four interesting speakers. Stuart Scott-Goldstone talked about the legal aspects of a venture capital investment - necessary detail. Doug Stellmann of YFM Group gave some candid thoughts on investment from a VC perspective emphasising the importance of a stong management team that can react to change, admiting that very few investments follow closely to their business plan however perfectly crafted. The ability to sail through the trials and tribulations of a startup differentiates the winers from the losers. Paul Barraclough of Tecmentor talk on a subject close to my heart - crossing the chasm from early adopters to the mainstream and that very few companies find this plain sailing which reemphasised the need for agile management. Finally, Pam Holland ex-TeleCity reflected on her experience of staffing up a fast growth technology business - nice problem to have, but they didn't seem to have cracked the basic challenge of how to make more money the more you do. Spending money is a lot easier than making it!
On the Web 2.0 front (which was the main interest of entrepreneurs there) the prevailing view from the VCs was any application that you can code up in 3 months could be easily replicated in Bangalore or China, so from a professional investor perspective they would be unlikely to back it given so little barrier to entry. So think about creating something with a little more substance or have paying users before approaching a VC!
Wednesday, 16 January 2008
The Best Of Both Worlds
So Facebook has an open API that allows you to add-in your application and tap into the millions of users on the platform. What's so innovative about that? Microsoft opened up their Office applications in the mid-nineties to allow add-in components to be seamlessly integrated into the GUI to complement and extend their platform in niche areas. This was good for the vertical market developers who didn't have to try to duplicate this base functionality and good for Microsoft who could get even better entrenched into these markets.
Similar business models have come to the deep and murky world of relational databases with the ability to create new object types in Oracle via 'data cartridges' that appeared on the scene in the early noughties. So my crystal ball didn't have much difficulty in predicting this development as the Web matures - but as they say hindsight is 20:20 vision. The good thing about this iteration is unlike those that went before the loosely coupled nature of the Web means that these component-based solutions are unlikely to interact in negative ways, but equally you may be able to see the joins, but the Web has taught us its benefits outway these disadvantages.
I look forward to seeing more innovative mashups and better support for component-based Web development rather than everyone reinventing the wheel and having to develop the basic backbones of a Web application. However, the hoards of web development companies that are out there may not quite see it that way! The benefit is that horizontal platforms providing generic capabilities can be extended to do more vertical market things, so the consumer gets the best of both worlds.
Similar business models have come to the deep and murky world of relational databases with the ability to create new object types in Oracle via 'data cartridges' that appeared on the scene in the early noughties. So my crystal ball didn't have much difficulty in predicting this development as the Web matures - but as they say hindsight is 20:20 vision. The good thing about this iteration is unlike those that went before the loosely coupled nature of the Web means that these component-based solutions are unlikely to interact in negative ways, but equally you may be able to see the joins, but the Web has taught us its benefits outway these disadvantages.
I look forward to seeing more innovative mashups and better support for component-based Web development rather than everyone reinventing the wheel and having to develop the basic backbones of a Web application. However, the hoards of web development companies that are out there may not quite see it that way! The benefit is that horizontal platforms providing generic capabilities can be extended to do more vertical market things, so the consumer gets the best of both worlds.
Thursday, 10 January 2008
Selling Equity: The First Resort
Selling equity in your business is hard, expensive and like oil, it's not a renewable resource. If you have any other easier or cheap alternative source of financing your business you should take it, but equally if you don't, do you really want to miss out on realising your dreams by preciously holding on to it - which is what far too many people do.
In business, a smaller slice of a bigger pie is invariably bigger than 100% of nothing. But therein lies the rub: An equity investor is looking to invest in a business that is scalable i.e. it can grow beyond being a 'lifestyle' business. So if you are serious about changing the world, gaining an equity investment should be your first and highest priority, as this is your only realistic means taking your business to the next level.
Our experience is that you can't be too prepared and our investment readiness process is invaluable in putting the foundations in place on which you can confidently pitch for the investment you need. How much is usually the next question. The reality is you need to find a balance between seeking too little and too much. This is where a business plan with realistic cash flow projections comes in. You need to have enough equity funding to meet you maximum cash requirement to get your product or service to market. Once you start selling something and you (just) need working capital, your funding options are cheaper & more varied: Factoring, overdraft, loans, etc.
In business, a smaller slice of a bigger pie is invariably bigger than 100% of nothing. But therein lies the rub: An equity investor is looking to invest in a business that is scalable i.e. it can grow beyond being a 'lifestyle' business. So if you are serious about changing the world, gaining an equity investment should be your first and highest priority, as this is your only realistic means taking your business to the next level.
Our experience is that you can't be too prepared and our investment readiness process is invaluable in putting the foundations in place on which you can confidently pitch for the investment you need. How much is usually the next question. The reality is you need to find a balance between seeking too little and too much. This is where a business plan with realistic cash flow projections comes in. You need to have enough equity funding to meet you maximum cash requirement to get your product or service to market. Once you start selling something and you (just) need working capital, your funding options are cheaper & more varied: Factoring, overdraft, loans, etc.
Monday, 7 January 2008
Beating A Path To Your Door
Interesting post on TechCrunch on the top ten tips for startups. Not so sure about tip 9: "Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product."
The biggest mistake a startup can make is to believe if you create a better mousetrap, customers will beat a path to your door. Yes, if it’s a totally great or revolutionary idea maybe word of mouth will out, but the reality is that for us mere morals, we need to find a balance between developing an even better product and selling what we have.
Remember: out of 10 people, one will buy your product just for the hell of it (or they thought it was something it wasn’t); one will never buy it no matter how good it is; and the other eight could generally take it or leave it. How many of those eight you convert into customers, and at what cost, will dictate how successful you ultimately are.
Our FastInvest loan scheme is designed to give young technologies that push needed to get out there marketing and selling their product. Yes, make it better, but it's never too soon to start validating market demand and selling!
The biggest mistake a startup can make is to believe if you create a better mousetrap, customers will beat a path to your door. Yes, if it’s a totally great or revolutionary idea maybe word of mouth will out, but the reality is that for us mere morals, we need to find a balance between developing an even better product and selling what we have.
Remember: out of 10 people, one will buy your product just for the hell of it (or they thought it was something it wasn’t); one will never buy it no matter how good it is; and the other eight could generally take it or leave it. How many of those eight you convert into customers, and at what cost, will dictate how successful you ultimately are.
Our FastInvest loan scheme is designed to give young technologies that push needed to get out there marketing and selling their product. Yes, make it better, but it's never too soon to start validating market demand and selling!
Thursday, 3 January 2008
New Year Predictions
OK here goes:
Connect Yorkshire helps even more companies get investment ready and pitch for investment through its flagship investment forums, investment challenges and business plan competitions.
The rest of the Northern Way embrace the Connect model and it is rolled out in the North East and North West.
An online community of best practise, participation and support develops that brings together entrepreneurs with the resources to they need to help them succeed that extends beyond our traditional geographic boundary and the Web 2.0 community.
Yorkshire Forward announces a region-wide investment fund as a follow on for Partnership Investment Finance and the South Yorkshire Investment Fund that incorporates a much needed seedcorn element.
Component-based, service-oriented applications finally take centre stage with Web Mashups and loosely-coupled applications 'Web 2.0' increasingly replacing the monoliths of the past.
Connect launches its 'Springboard' initiative to help early stage propositions get their business plans into shape.
I finally access and use a Web site in a meaningful way through my mobile phone.
Connect Yorkshire helps even more companies get investment ready and pitch for investment through its flagship investment forums, investment challenges and business plan competitions.
The rest of the Northern Way embrace the Connect model and it is rolled out in the North East and North West.
An online community of best practise, participation and support develops that brings together entrepreneurs with the resources to they need to help them succeed that extends beyond our traditional geographic boundary and the Web 2.0 community.
Yorkshire Forward announces a region-wide investment fund as a follow on for Partnership Investment Finance and the South Yorkshire Investment Fund that incorporates a much needed seedcorn element.
Component-based, service-oriented applications finally take centre stage with Web Mashups and loosely-coupled applications 'Web 2.0' increasingly replacing the monoliths of the past.
Connect launches its 'Springboard' initiative to help early stage propositions get their business plans into shape.
I finally access and use a Web site in a meaningful way through my mobile phone.
One can but dream...Happy New Year!
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