Entrepreneur success - building scalable and effective business in the new economy

Three rules to help your business compete successfully

Apple wheeled out the iPad this weekend in the US , early reports suggest they sold around 700,000 units , not bad in 48 hours.

Apple have got what you might describe as a loyal customer base. And that is down to Steve Jobs vision of understanding some core principles in attracting and more importantly keeping customers.

Principle one-Products don't sell, the experience does. People buy an iPhone, iPod because of the ecosystem behind it. Additionally with the lifecycle of many technology products being so short - around 3 years - renewals by recurring customers are vital to sustain growth. That means as fast as you produce product in parallel you have to build even faster the eco system behind it.

Principle two- Invest heavily in customer service. The satisfactory customer experience is the real market differentiator of any product or service in a competitive industry, products with great service win over products with bad service anytime. Example- Starbucks, dreadful coffee , fanatical following

Principle three- Your customers love innovation, especially when they are involved in the design. One area Apple excels in is innovation , most of which is driven through its customers. Think about the genius bar in iTunes, that was a customer idea from one of Apple's online forums. Establish your own social network site through Twitter, Linked In and open up to your customers with ongoing dialogue, make them feel they are part of your business, because they are the most important part.

The one that pays.

Wanted - a scalable business

The reward?  Get to do something world changing.

In my early Entrepreneur days I would get a little too fixated on the business rather than the idea. Of course it is critical to build a business that makes a profit and is not simply on an external fund raising contest, but you also have to keep your vision very firmly fixed on  being innovative and having ambition that wants to 'make a dent in the universe'.

After all that's the reason you started up in the first place- right?

And that is what made Apple re-invent music, as Google re-invented media.

The business I have founded aims to do just that. I am the poorest I have been since the age of 11, boot strapped and working the longest hours I have ever worked . But at the same time I am learning what it really takes to build a business that could change the world .

Here are 3 thoughts for you.

1. Start out with no corporate culture or plan, go with your ideas and work with people that are infinitely smarter than you at what they do. No hired guns please.

2. If your idea is good enough you can get by without funding. Find an incubator, like a big brother company that is prepared to back you because by travelling the same road you will be disruptors together

3. Build for  authentic prosperity where everyone wins. Your co stakeholders, your customers, and your partners should all work together with a common goal - to be the difference.

Dubai summed up in four letters

Dumb.

Most of EMEA, the US and Japan have been in the worst recession this century.

Everyone has blamed everyone else for the financial Apocalypse. Top three culprits have been the Banks, followed closely by the Governments, and latterly the consumers themselves. 

The common thread among has always been the leveraging of finance and property as the bedrock for economic growth. 

That's fine as long as the catherine wheel of prosperity keeps on turning. When Lehman , one of the hubs of the wheel fell off you had the metaphoric equivalent of the deck chairs being rearranged on the Titanic.

The last 12 months have been the end product of a decade which I call the Age of Decline.  

We all need the next decade be the Age of innovation if we are to avoid the boom to bust cycle that is becoming increasingly frequent.

Most of the focus has been on the US and EMEA as the catalyst for the meltdown that occurred. It's only been in the last month that Dubai has suddenly been grabbing all the headlines.

Welcome then to Dubai as a real contender for the country that best represents the Age of Decline. 

Here are some its outstanding contributions to the reversal of innovation.

Plastic economy funded artificially from toxic debt? Tick.

Reliant on practical slave labour to build a billionaire's playground in the desert? Tick.

A financial train wreck waiting to happen? Tick.

Zero concessions or tax breaks for new and innovative businesses? Tick

Dubai is no more than a mirage in the desert, constructed by a labour force that had more in common with the slave trade of a 100 years ago.

Which is why the timing of the completion of it's latest product offering is quite ironic.

The world's tallest building, to match one of the world's biggest debt mountains.

Its imaginatively called ' the Tower of Dubai', strike one for the marketing department.

Its selling points?

It will host world's highest night club and gym.

Now that's real progress towards the resurgence of Mankind.

Worse - its dumb growth, with no value.

Its the same dumb growth that brought the world its first 7 star Hotel, Hummer Cars, Reality TV and Big Macs.

Innovation has to be and will be the driver to smart growth. And smart growth will mean better business.

And that's why you have to ask yourself what does your business aspire to be ?

Everything Ventured- Nothing Gained

There's a hole in our bucket, in our bucket, in our bucket, there's a hole in our bucket in our bucket there's a hole.

Welcome to the Age of Decline.

Looking back over the last 10 years of so called progress -and yes I am going to include the businesses I have founded in this- we have pursued growth for growth's sake with almost nothing in the way of true value creation.

Obvious targets of growth for growth's sake?  RBS buying ANB, Warner buying AOL, GM buying any car manufacturer in Northern Europe, Oracle's acquisition of Siebel.

The drive for growth at all costs created bloated corporations, over inflated stock, obscene exit compensation rewarded for failure, rampant credit given and taken, but rarely paid back.

The US in particular piled company on top of company and giddying skyscraper of debt, which has now been dropped from a very great height onto the consumer.

I've written about this recently but would repeat- our own economy's back has been broken through debt.

 

Just think about this fact for a moment courtesy of the Times today.

'2009 was the worst non-wartime year for the British economy .

Not 1979, the Winter of Discontent, or 1976, the year that Denis Healey, another over-confident Labour Chancellor of the Exchequer, squeezed the rich till the pips squeaked, ran out of juice anyway, and went cap in hand to the International Monetary Fund.

Not the postwar 1940s, years of such bleach-boned, debt-saddled austerity that my first memories are all grey still photographs, of pallid Chesterfield faces heading from prefabs to patient, hungry queues for rationed bread.

Not even 1931, when the Great Depression hit.

The 4.75 per cent by which Alistair Darling expects the British economy will have shrunk in 2009 when the bells ring out the old year tonight will, according to the National Institute for Economic and Social Research, have been the steepest fall since 1921 when Britain was physically and materially drained by the Great War.'

There's a reality check.

And that's why I believe the business that pulls itself up by its bootstraps, avoid debt, understands the value of profit are the one's that will pull us out of the terrifying abyss that we are hurtling into.

I remember being told when I was on my first IPO road show raising capital for a software business I had invested heavily not to worry about making a profit, market share would ' see us get a much better valuation'.

Over the last 12 months I've had to take a long and very hard look at my own values.

 

This is what I have learnt. 

 

First- no more ‘ leveraging' debt to grow.

 

Second -my new venture is self funded.

 

Third- I have recognised that surrounding yourself with smart  people that want to make a difference instead of hired guns with only one agenda [their salary]  creates a culture of delivering what was promised.

And that means from a personal perspective recognising that the privilege of being an Entrepreneur comes with a hefty responsibility tag attached to it.

If I am fortunate enough to still be doing what is my passion at the end of the next decade,  then it will have been the year 2009 that made me what I have often talked about, but have still yet to become.

Someone who made a difference

 

Innovation number two for 2010-

Netbooks will gain in popularity and within a couple years will become the biggest segment of the personal computing market I believe. That is very good news for innovative companies who have struggled to monetise their application through the internet.
For example ss netbooks and smartphones and Web tablets take hold, content in all forms will become substantially more mobile-friendly than ever. Movies , shows, media will be as readily available on handheld phones as they have been elsewhere—for a price.
If you look at ITunes its obvious that people will pay for quality content. Going back to innovation number one in this thread which is the growth of mobile banking I can see how custom applications for the movement of money [ for example loans made P2P through a mobile] will really take off.

Top Ten Innovations to look out for in 2010.

Here is the number one.

Mobile money-

Its innovative and the banks do not control the market which means it will be accessible to all.

There are four billion phones, and only one billion bank accounts.The opportunity is view is to find a way for both the banked and the unbanked to participate in the mobile payment system.

Only 6 million use mobile phones across the globe for mobile banking, the market could be as high as 100 million in the next few years.
Innovation to make a difference.

Welcome to the new world order.

Is volunteering delivering what it is supposed to?

Volunteer Travel changes lives apparently. But whose lives are being impacted upon and can this impact possibly be of a positive and sustainable nature?

There is a world of difference, literally between what amounts to a cosy package holiday in a luxurious destination turtle watching and actually working in areas that are deprived of any economic stability [ not not the UK!] and ahve little or no means of building a self sustaining system to support the needs of people that live there. And we are talking of people that live on less than 10 cents per day.

Volunteer Travel is claimed to be of a life-changing nature for the individual traveller due to the volunteer pursuing work at the heart of a community, which is desired to help the latter reach an anticipated goal or support the locals in getting one step closer to it. A volunteer traveller could find him-/ herself teaching a language, caring for disadvantaged children, needy animals or the environment, while living the life of a local. Volunteers do not get paid for their work and thus are not and will not become a burden to the local economy. However many volunteer companies are making obscene profits from charging individuals to join their partner projects abroad and experience a culture from within for only a short period of time. Is this the flipside to the shiny volunteer travel coin or are such businesses and their volunteers responsible for gradual but sustainable change taking place in communities across the world?

Sustainability and responsibility are terms often coined when the value of volunteer travel is considered. But what does it mean to participate in a responsible and sustainable project? A volunteer project should not be about the nedds of the volunteer! A foreign country should not be seen a a training ground for gap year leavers to discover what they don't know .Volunteers that make a difference should be taken from a mature audience of individuals willing and driven to make a positive difference to others’ lives and surroundings while making good use of the opportunity of being part of a different culture and community rather than vice versa.

Businesses, as for instance i-to-i UK Ltd and Real Gap Experience for example who are clearly determined to make a profit should thus be obliged to make sure that they cooperate with local projects rather than imposing their own onto the community. This would encourage individuals to spend time abroad and help a local community. Volunteer travel should be about improving and opening horizons and done responsibly – in cooperation with the local community – and sustainably – on a regular basis with long term effects – it could, slowly but surely, help to make the world a better place and be a incredible life-changing experience for both the traveller and host community.

We reward allocation not innovation

There is a lot of talk about how the economy is starting to recover from its near fatal heart attack last year. What we have here is what is commonly referred to as the 'zombie economy', its an economy in a state of suspense neither living nor dead, no value is being created , debt is just passed from one bankrupt bank to another, we reward allocation not innovation.

That's why I've gotten involved with a number of social enterprises. This is one of the few market areas that positively encourages innovation to drive change in areas where it is most needed.

Yesterday I had the good fortune to meet a social entrepreneur who really is making a difference. Steve Sloan who is the CEO of Galvmed www.galvmed.org has earned an interesting reputation mainly because he secured a huge donation to his company through the Melissa and Bill Gates Foundation.

You want innovation? Think about this. Galvmed protects livestock and saves human lives by developing products and sustainable partnerships to help poor, rural farmers and livestock keepers around the world.

Animal agriculture is a considerable, but often overlooked, economic driver in the developing world. For nearly 700 million people living in poverty in sub-Saharan Africa, Latin America and Asia, livestock represent the most important source of physical, economic and social livelihood. Survival for these people depends on the health of their farm animals. Developing and ensuring access to vaccines and other animal health products is a key to increasing the productivity and value of livestock and improving the lives of farmers in the developing world

Animal-borne illnesses pose a significant threat to human lives in the developing world. Some diseases, such as porcine cysticercosis and tick-borne diseases, are zoonotic and can be passed from animals to humans.Farm animals represent a critical and often sole-source level of economic security for people in the developing world. People use their income from livestock to trade for food and basic health services. Successful livestock management forms a key stepping stone to sustainability and economic growth. Despite a clear link between livestock health and economic improvement among rural farmers, only 4 percent of official development assistance has been invested in agricultural development over the past 15 years.

This is where the so called brave new world we are headed towards has to focus. Helping to eradicate these issues will ripple throughout our entire economic structure , we must learn that the current imbalance of the world's wealth has been a major cause of the position we have found ourselves in.

Working for free

There's lots of noise coming out of BA at present. No,it's not the landing gear on the unlucky number 7 Airbus-  but it is the result of the BA employees being asked to work for free for a month.

Free? For a whole month? What outrage I hear you say. Now without wishing to beat an already [ very dead] horse like BA about their appalling customer service, lost luggage ,Terminal 5 Fiasco it does seem only fair to point out that the request from their CEO that the employees donate their time freely is not unreasonable?

Why. Well look at who is responsible for the mess that the company finds itself in. In fact it is is the collective responsibility not just of the Management team but of the entire workforce. And the price they pay? No pay. For a month. No big deal.

I've been working with a Not for Profit organisation , the only difference in their business model to BA's is that they are geared not to make profits for shareholders whereas clearly BA have managed that through incompetence rather than design.

And you know what? Almost all of the the Not for Profit organisation's employees work pro bono i.e. for free. And you know something else? It's a much more effectively run company.

I'm trying to figure out whether there's a lesson in there somewhere. Help me anyone..

Normal service has not been resumed

Economic spring time is in the air, or so the media would have you think.

The financial Apocalypse is no longer the threat to all Mankind, we can look forward to a new and improved world at stores everywhere whilst stocks last.

Welcome to Business 2.0, a leaner, hungrier, but more caring business where profits, and greed, and corporate social irresponsibility are all consigned to the past and ethically bankrupt companies have become just that.

Business leaders are going to create meaningful and authentic value for their customers and their employees. Governments will become the trusted leaders we elected them to be and countries will be at peace with one another.

All of this fantasy is being churned out from the same media that brought the Recession to a screen near you in the first place.

It's not as simple as that as there are many broken parts that should remain that way because they should not have been built in the first place.

And the most broken part of all ?

20th century business.

When you think about it in the last 30 years industry and business apart from a few notable exceptions has done nothing to innovate or evolve the human race.

Let's face it we haven't made any progress in flight, space travel, disease prevention, eradicating poverty, or the ecological mess that we have created. Sure we talk a good game, but any real progress made?

In fact 20th century business has been a bit of a failure, a let down in all respects. What 20th century business did do well is trivialise , debase, and enfeeble its target markets by producing crap products  alongside crap service which became the accepted.

Innovation, outside of Apple ,Nokia, Google and Dyson was a word not even recognised in the dictionary.

We have a chance now to change all that. If change in the way that we build businesses is to come out of the aftermath, then the internet is the most likely agent of that change.The most socially powerful business models that are already being spawned may mean that when we do get to look back on the real Business 2.0 we will see that innovation once more became the byword and standard that we all aspire to and live by