Me & Silicon Valley comes to Cambridge

Last week I attended  Silicon Valley comes to Cambridge (SVC2C). The event brings together Silicon Valley, UK/European entrepreneurs and Cambridge University students to meet, lean and collaborate. I sat in on many of the talks over the three-day Cambridge conference. It was a very informative and enjoyable event with some great networking. My highlights were objectively knowing ‘When is it right to abandon your startup efforts’ panel, remembering your grand Vision after The ‘Keynote Speeches’ and meeting other founders at the Company Showcase.

 

 

Gut feel plus test and measure

The Panel described as ‘When is it right to abandon your current Effort? What scorecard should you use and how should you track progress? Monitoring, measuring and monitising…’ – this caught my eye because its one of the most difficult challenges for startup founders – Knowing when to quit!

Reid Hoffmann,  co-founder of LinkedIn and SVC2C co-chair, reminded us of the need to ‘Fail fast’. That way founders have time to start over again. However the challenge is we fall in Love and become obsessed with our startup. It becomes part of us.

Julie Hanna, Kiva Chair, talked about the need to be simultaneously both passionate and dispassionately objective. Use data to guide you. Of course this is difficult in the very early days with only limited data and a concept. At the beginning ‘Think it through crisply’ Reid said. Jose Ferreira, ‘iterate what you are doing right and wrong everyday’. Ultimately you’re trying to find a value proposition that is saving more money than you are charging. Only then are you onto a winner!

Make a difference

Each of the panelist in The ‘Keynote Speeches’ talked about where they saw their companies successful innovations making a difference in the future.  Mark Littlewood gives a full writeup of all the Keynote talks here. This got me thinking about my own startup and the Vision Simon, my co-founder, and I had when we first started Aware Monitoring. It’s so easy in a busy startup to loose sight of the ‘Wood, because of the trees’.

All the panelist had grand visions of helping to solve educational, health and green energy challenges.  It’s so important to bring real value to others and the world with your startup efforts. Even it they are small! Solve real problems your customers have, bring true value and they will love you for it!

People make a startup

I met some old friends (Martin and Richard from Psonar, Andrew Walkingshaw from Timetric) and new ones (John Snyder from Grapeshot, Adam Kingdon from i2O Water)  at the Saturday morning Company Showcase. It’s aways very helpful to share ideas, challenges and experiences with other startup/company founders. Even in these days of Social Networking, face-to-face networking is as important as it’s always been, thus Silicon Valley comes to Cambridge. Also, well done to Groupspaces for winning the SVC2C competition.

 

When summing up the event Reid said something that stuck in my mind, ‘A startup is like jumping off a cliff and assembling the airplane on the way down!’. It’s so true – you have to build your product quickly under pressures before the startup crashes and burns. It’s definitely a rush!!

SVC2C is an excellent event for learning and sharing ideas.  Sherry Coutu, Reid Hoffmann and all the other organisers did a wonderful job of bringing people together.

Innovation sucks!!

Innovation is extremely alluring to companies and startups. It offers so much potential. However innovation  takes mountains of time. You just can’t come up with a Facebook, Dyson or Ford in 5 minutes!! It’s simply not a light bulb moment. It can take 1000’s of  attempts. “I have not failed. I’ve just found 1000 ways that won’t work” – Thomas A Edison. Innovation is a gradual internal company and external market process.  This makes innovation very frustrating for the entrepreneur because the one thing they have in short supply is time! Innovation is awesome but it also sucks!!

Innovation has to build-up momentum and be developed over several or many iterations. This evolution of ideas can be within the same team, company or marketplace. It can even be ideas shared between different markets or countries. That’s the great thing about our modern economy, its survival of the fittest ideas. The key to unlock innovation is for the idea to be at the right time and in the right place.

I’m sorry, but time and time again I hear startups saving we are the next Facebook, Twitter, etc. In reality you need to know where are you in the innovation cycle – that ranges from innovation to commoditisation. Geoff Moore ‘Crossing the chasm’ is always a good book to read on this subject. The position in this innovation cycle dictates your actions, growth and timescales.

The challenge with innovation is that it takes eduction, thus the need for time. The educating of potential customers is difficult because people don’t really like change and risk. Companies, especially big ones, definitely don’t like change and risk. Education costs an awful lot of money whether with mass market consumer items or niche corporate b2b products. The marketing message needs repeating over and over and over again. First mover advantage is great but second mover can be better. Just look at Google (2nd to market) and Yahoo (1st to market) and who came of on top.

The trick is to get into a market niche on an upward curve, get running with the pack (competition) and then gradually innovate. As always it is easier to say than do!! Apple is a great example. The success they enjoy today with the iPhone popularity goes way back to 1993 with the failure of the Apple Newton. Apples’ iTunes which is intrinsically linked to the iPod and therefore the iPhone originally benefited from the downfall of Napster. These innovations have been brewing for many years and between many competitors.

The great thing about innovation is that it has unlimited possibilities. It’s brings the combination of creativity and exciting growth potential. Innovation is awesome but it takes time, money, careful listening to the market and mountains of persistence. One hit innovation wonders are rare and not the norm. All of this can be frustrating for startups because no one is in a rush except the startup and the one things startups are most short of is time.

Learning to fail: Startups aren’t really trying unless their failing

Your startup baby will fail at some point. Failure is natural. Its just like when you took your first steps. Failure is an inherent/systemic part of learning. The moment a baby tries to walk they will fall but they always get back up to try again. Will  you and your startup try again after  failing? Startup failures can be small or catastrophic. The thing is to overcome failures quickly. Lessons must be learnt. Otherwise the same failures will be repeated again and again. Failure will then become permanent.

Taking our first steps

Learning to fail from a startups first steps:

1. Step 1 – Fail to try – Some startups have  heaps of ideas but don’t actually implement a single one. Fear of failure may hold them back or they run out of enthusiasm as the reality of the challenge kicks in. Be prepared to fail.
2. Step 2 – Fail & learn – Startups fail all the time. Small failures can be an unused feature or a poor marketing campaign.  Constant  small failures are an extremely important business lesson. Use them. An old friend calls it “the MBA of life”. We have to learn to be entrepreneur’s and innovate through failure.
3. Step 3 – Learn & change – We are all at different levels of personal development. The important thing is to Know thyself. See your strengths and weaknesses. Learn to compensate weaknesses with others and let them bring out your strengths. VC’s and Angels look for well balanced teams for good reason.
4. Step 4 -Try again – If a startup is not getting customer traction re-align the service or product around customers real needs. If the startup won’t or can’t change, quit and move on. Startups often fail to engage customer needs.
5. Step 5 – Keep learning & trying –  Even when you have a successful startup pulling revenues ,  managing cash flow and  enjoying profits you have to  continue to  fail.  Any startup or mature business has to stay ahead of their competition. Successful Amazon boss Jeff Bezos still fails trying.

You and your startup aren’t really trying unless your failing. Failure does not mean taking all or nothing chances. Put yourself in a position where your experimenting with smaller manageable losses and keep trying. Churchill said: “Success is the ability to go from one failure to another with no loss of enthusiasm.”

Related posts:

• Learning is the source
• Knowing when to quit flogging a dead Startup
• There is a fine line between entrepreneurship & insanity*
• The spirit of Entrepreneurship
• Elevator Pitch 2.0: Are you Listening & Learning?

I knew it would be hard, but I didn’t realize it would be this hard.

I’m calling a ‘time of opportunity’ for London/UK internet startup industry

I’m getting very bored of being told we’re no good at Tech startup’s in the UK. I’ve calmed down since reading Paul Carr’s “I’m calling a ‘time of death’ for London’s internet startup industry” Guardian article, so this post won’t be a rant.  Admittedly Paul’s post is amusing , however he paints a very negative and bleak picture. If Paul is to be believed there’s no future for London/UK Internet startups. However, I believe there is hope and the UK Tech startup industry has great strengths.

Paul’s a journalist who once lived in London and is now housed in Silicon Valley. He believes “The London internet industry is increasingly, and terminally, screwed”. If Paul is to be believed shouldn’t we just give up! Why bother if  there’s no hope. While we are here lets cancel the 2012 London Olympics because the Beijing games were exceptional. There’s no way London could be the same. Just as we’re not Beijing, we are not Silicon Valley.

The Awesome Beijing Olympic opening ceremony drummers!! (Image source)

The investment funds sloshing around The Valley are huge compared to UK/European funds. The VC’s and Angel’s in the UK/Europe also tend to be much more risk adverse. Although these factors are changing  in the US with the credit bubble bursting. The UK’s limitations doesn’t mean we can’t produce a wonderful Olympics or make world class profitable web apps, we can. Huddle is a great example. Their ranked as one of the globe’s top 50 startups. Bebo is an excellent example of a very healthy trade sale. Sage a global leader was once a UK startup. The list of great UK startup goes on. Mike Butcher of Techcrunch Europe did a splendid job of correcting Paul on London’s startup profitability.

I and  many others agree that the Web 2.0 bubble is coming to an end. But the end is not death, it’s change. The Internet continues to deconstruct entire industries: advertising, music, newspapers etc. This change brings new potential innovation opportunities for existing and aspiring entrepreneurs alike. The Tech community has always been about and embraced radical change.  We are more adept at change than many other industries including Paul Carr’s Newspaper sector which Mike Butcher also pointed out.

The underlying Internet market continues to grow strongly. Ecommerce sales growth remains healthy even in the recession and the use of web applications are forecast to increase massively. The future of software is going to come from Internet based SaaS services and Open source. Again we have world leaders in the opensource sector with UK companies like Canonical and Alfresco. As entrepreneurs shouldn’t we take advantage of change to bring new opportunities. Or as Paul suggests should we give up hope and all the strengths that we have in the UK.

5 reasons to pick a fight with your biggest competitors

It sounds like suicide picking a fight with a much larger and established competitor (niche or mainstream). How can you possibly expect to win when they’ve more resources, customers and a mature product? You can’t, easily or quickly!

Rocky IV up against a much bigger and stronger competitor

However there are some good reasons to be compared and associated with the market leaders:

1. Customer knowledge – Customers have a clear understanding of what an existing product does. They can therefore easily pigeon hole your product into the same or similar category. “oh, your like ACME’s product”. In this way a sale is easier because less explaining is  necessary.
2. Free-riding education – You can ride on the competitors market education. Educating customers is very, very, very expensive and time consuming. Why not take advantage of someone else’s hard work and cash..
3. Price comparison – Customers will always want a price comparison. Competition is a good thing. Its good for suppliers because it grows the overall market. It also reassures potential new customers. ‘If this supplier is no good I can always switch to another one.’
4. Defecting customers – Unhappy or dissatisfied customers will need an alternative. Put yourself in that position and you will catch them. The crumbs from the competitors table maybe healthy loaves to your startup.
5. Out innovate – Find the weaknesses in the competitors offering and improve it with your own. Many a market leader has been toppled by a much smaller innovative company. Startups are better at innovating than the big market leaders.

A word of warning this strategy may also get you a bloody nose. The competitor has the lions marketshare and so you have to make alot of noise to be heard.  If you do get noticed by the competitor move quickly to establish a position of strength because if they attack it may be a killer blow. You may also start a price war which is ultimately no good for anyone except the customer in the short run.

Competition is a good thing. It demonstrates there is a need in the market for a product or service. Rarely is there an new opportunity without competition. If there is no competitors you have to ask yourself is there really ‘a market in this gap?’ As a small startup you have to out-compete your much larger rivals.

Battling against competitors really requires the Art of War. Strong knowledge, great tactics and an outstanding strategy is needed. Its not easy. Often startups have no choice. The odds are not on your side but that does not mean you won’t be successful. Startups are more agile than established bigger suppliers.

Ismael Ghalimi’s extreme deadlines that innovate

After writing an article for E20portal.com on Ismael Ghalimi ‘s Office 2.0 conference, I also wanted to share some personal reflections from an intriguing conversation with Ismael about deadlines and innovation.

Ismael Ghalimi

Deadlines are nothing new. However organising a significant event over a very short period (nine weeks) with limited resources creates what I’ve termed an extreme deadline. Ismael says the self imposed deadlines “forces productivity” and “pushes tools to the limits”. However the risks are high — unhappy paying customers and suppliers may result in a loss of hard earned credibility and reputation.

The Royal Air force Red Arrow’s Pushing the envelope

Being extreme is about pushing the limits or as Ismael said “Pushing the envelope” – a term used by aircraft pilots. Ismael referred to the conference as an “experiment”. By innovating the conference organisation into this limited time window, Ismael called it “outside of the thought zone”, rapid and effective decisions have to be made. If mistakes are made they can be corrected quickley or work arounds found. As the conference back-office evolves Ismael is also pushing the boundaries further to reinvent the conference attendee experience.

Ismael sees the future of conferences as: “branding being much more than having big conference booths”; “more involvement of panellist moderators”; “Social networking before, during and after the event”; use of “conference internet tablets”; “displaying the back channel conversations for all to see”; and “giving remote attendees a good experience”. He is putting some of these ideas into practice at the Office 2.0 experiment using Jives clearspace and this years free HP 2133 Mini-Note PC. Conference 2.0, as I called it, is trying to extend the social experience using social media for more audience participation and interaction.

The event seems to have got TechWeb’s attention, a larger conference provider, as Steve Wylie the TechWeb Enterprise 2.0 conference General Manager is on the conference attendee list. Interestingly Ismael is using the event as a networking and marketing tool for his other businesses, which include open source BPM software and serviced offices . Ismael said he runs the conference because “it’s fun” and he “loves people”.

Web and software firms like Ismael’s know all about meeting drop dead release dates. These deadlines can require additional emergency resources to be drafted in, planned features to be dropped and products that ship with bugs. As someone recently said to me JFDI (Just Feakin’ Do it – the acceptable version) when asked their opinion on the idea of the E20portal.com website. They said even if it is rough around the edges just get it out there and see what sticks.

A careful act holding onto time as demonstrated by Harold Lloyd

I think deadlines are very important to focus effort. However deadlines can cut both ways. They can help to bring action but they can also harm quality. It’s a careful but vital balancing act for any tech firm, particularly start-ups. Most entrepreneurs have limited resources, and time, so deadlines are a key part of effective productivity to get innovative products out the door.

The Death of Salesmen with “Power to the people”

How we buy things and how they are sold is continuing to change. Remember before we had Amazon, Ebay and forums to review and rate stuff. We used to talk to salespeople but now we are increasingly listening to each others opinions and buying on-line. We are now moving into a time where consumers (retail consumers and business users) can directly control the product design and features they want. This change has significant economic and organisational implications.

For many years on-line communities have been operating in the background. In 1998 Before Microsoft crushed Netscape in the ‘Brower Wars’ Netscape gave birth to the Opensource Mozilla project, which produced Firefox, now the most downloaded software in history. Against Microsoft Netscape’s browser marketshare went from 90% to 1% and today Firefox sits at 18%. Fundamentally consumers want choice and value products which they can have input into producing. Opensource is destined to grow much further with this user involvement.

Another example of this change is from the renowned innovation academic Eric von Hippel of MIT who believes the Threadless business model has “tapped into a fundamental economic shift, a movement away from passive consumerism” and he goes onto say “everything is moving in this direction”. In the Threadless model the customers design the products and serves as the sales force. Customers opinions tend to be trusted as they are real and honest.

The tables have turned with suppliers no longer gradually driving innovation but communities of consumer’s actively pushing innovation forward through participation. The idea of the ‘Wisdom of Crowd’s’ argues that groups are remarkably intelligent, and are often smarter than the smartest people in them. This theory is supported by academics such as Andrew McAfee of Harvard. Web2.0 is a another example because it has lead to Enterprise 2.0 which in turn is putting a spotlight on current management practice limitations and should result in management innovation to a more open structure.

With 1,407,724,920 Internet users the rate of change is increasing, however many of our existing firms organisational sales and marketing structures are unable to keep up. Firms generally understand the need for product, process and management innovation, however organisational hierarchies are not like consumer communities they are slow and careful. And so new organisational structures are formed within fresh new companies, that if successful, grow to become dominate forces. This is classic entrepreneurial economic innovation, however a point which really struck a cord with me at the Boston conference from Don Burke of the CIA was ‘at no other time has the rate of technological change been so rapid within a life time.’

The latest evolutionary organisational form seems to be a firm with no sales force and a marketing department focused on community building and relations rather than advertising or branding as discussed by Umair Haque of Harvard. Most importantly this new structure moves innovation out of R&D and puts it in the hands of the employees closest to the customers.

“Power to the people” – Citizen ‘Wolfie’ Smith

Today’s innovation challenge for many firms seems to lie with too much power with too few people. Perhaps the answer is in trusting employees to make and take the decisions, who are not afraid of making mistakes along the way. Some old wise firms will make the jump into the new model, however many won’t and the faces of our leading companies will continue to change at an even faster rate than in the past.

Are you listening to the marketing guys shock messages?

Our newspapers have made shock headlines into an art form and the Internet brings the marketing guys an increasing versatile method of delivering new shock and controversial messages. The Internet is much more targeted at specific groups than newspapers and brings the reader the option to rapidly and directly become involved with the conversation.

 

Sam Lawrence, a seasoned marketing campaigner, has provided a great shock message example by comparing Social Enterprise Software to the transformation innovation from 35mm to digital photography. Lawrence sees IBM, Microsoft and Oracle as the 35mm film ‘Goliath’ against his firm Jive as ‘David’. Retrospect is a fine thing and right now the analogy is stretching innovation imagination a little too far, however marketers have no time for non-existent future facts. This short low budget blog post certainly seems to have got tongues wagging with both IBM and Microsoft employees debating on Sam Lawrence’s blog comments. Lawrence’s timing is impeccable with Microsoft failing to muscle in on the Google Ad funded party through the Yahoo acquisition.

A particularly shocking and well timed piece of marketing was from Volkswagen with the ‘tough’ polo ad. ‘It was not’ an Ad the urban legend suggests. This viral Ad was at a time of heightened terrorist tension and if you click the link you can imagine how much of a stir the Ad created.

Even Harvard are getting into the viral YouTube act with Gary Hamel’s unashamed short and punchy book pitch proclaiming that we are using an out of date 19th century management structure in business today. You don’t find many books being advertised so effectively on YouTube. Hamel’s shock statement is based at a time when our western economies are working out how to maintain GDP’s through knowledge worker innovation. I’m sure Hemel’s marketing has helped put him into first place of the most influential thinkers.

The internet is a gorilla marketers dream offering a low cost and very effective way of at getting people to talk about shock messages. The choice to respond to these messages gives the reader a feeling of involvement, even if they don’t respond, and here lies the power of the ever increasing and evolving Internet marketing machine.

 

 

 

Refocusing less on numbers and more on quality creation

Over the last few weeks I have been discussing, overheard and read about Enterprise 2.0 Return On Investment (ROI). I’m familiar with this term having used it in the past to justify and overcome financial objections when investing in IT technology. ROI is a cost saving measure with the argument being: you invest in this product or service now; you will pay off the initial investment by this date; and then you are left with a reduced operational cost.

Firms invest in IT to reduce costs through increased efficiency or invest to increase revenues by gaining long term competitive advantage. In the 1990’s investing in an email infrastructure was justified on early mover competitive advantage and today email has become so commoditised it is seen as a cost of doing business. Businesses and some suppliers are attempting to put an ROI on Enterprise2.0 tools but history shows ROI does not work with collaborative tools.

Our current management approach to business teamwork projects is woefully ineffective as highlighted by the research in Susan Scrupski excellent blog post. Enterprise2.0 has the potential to bring valuable business benefits through increased team collaboration, however cost saving ROI IT projects are often seen as a more attractive option because of the short term measurable gains.

A typical project to innovate a process or product can be challenging to measure and has a high possibility of failing, let alone delivering an ROI. The result is firms choose not to innovate because of the risk of failure.  Sucessful innovation projects often come from the people on the ground who understand customer problems and needs. Enterprise 2.0 can bring competitive advantage through the firms often most expensive and unique asset, their people.

But how far do we go? Pampering staff seems to be a trend in software development firms such as Google with their free cafe, games rooms and other generous benefits. Compelling benefits are also being used by small firm such as Carsonifeid in the UK offering a Macbook/iphone and 4 day working week for new employees and 37 Signals also on a 4 day week will even  pay for your hobbies.

People are not machines that produce at a constant fixed rate and ROI does not work with them or the tools they use. Making a knowledge worker work at a continual high rate or long hours does not increase the employers return. The focus needs to be on quality and not quantity output. The time management guru Tim Ferriss refers to attention currency and the innate human ability to only have so many quality attention hours. Googles benefits are not just trying to attract the best quality staff, they are also providing an environment where the people have the energy and time to create together.

Knowing the numbers is key to any organization, however if the focus shifts to working overly by the numbers we can lose sight of our people and unhappy staff effect future profits. Because of the perceived long term and unclear returns many firms are unwilling or unable to take a more quality approach on teamwork. This is the challenge in justifying an Enterprise 2.0 management approach and the associated technologies.

Unlearning the technology bible to find transformation innovation

Last week I was challenged by a blog reader as over using Geoffrey Moore’s technology innovation curve. In 2006 Crossing the chasm was described by, Tom Byers of Stanford, as “still the bible for entrepreneurial marketing 15 years later” and only last month AIMM produced a  thorough 90 page report that uses the innovation curve categories to track the progress of Enterprise 2.0 technologies:

This report aimed to define Enterprise2.0 and uncover firms perceptions and positions on this emerging technology. Rather than summarize the report you can find views on Niall Cook blog post or CMS Wire ‘Organizations Still Don’t Get Enterprise 2.0’.

Moore’s technology innovation curve acts as a guide to past patterns of innovation and can shed some light of possible future patterns. The innovation curve has become so engrained for such a long period of time, in the timescape of the technology market, the real value is to be drawn from predicting the behaviour and actions of industry groups, who have faith in and play by the rules of a industry standard ‘bible’. I therefore think it is fundamentally important to understand the rules laid down by a gospel of technology innovation, before the patterns generated by these rules can be broken and transformational innovation realised.

By transformational I refer to a changing of the rules of the game as Google has achieved with their run away success ad generating model, much to the annoyance of Microsoft’s Ballmer referring to Google’s as a ‘one trick pony’ in 2007 and Microsoft’s change in strategy the same year, ‘We are ‘hell-bent on succeeding in ads’, Ballmer .   

Ballmer punching air

 

Naturally the ideas from Crossing the Chasm are not without there weaknesses and the book could do with updating as highlighted in an article in 2007 by Alex Iskold of Read Write Web, however it does offer us an platform from which to predict the cause and effect patterns of both customers and industry players. Players such as Microsoft and Oracle who hold the gateway to the convensional route of the mainstream market. My point is that to find truly significant innovative possiblities we need to understand how a market thinks and then unlearn all we have learnt to really innovate. As Einstein put it, “We can’t solve problems by using the same kind of thinking we used when we created them”