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This presentation has evolved from a talk I gave at Silicon Beach 2012, via Tallinn University of Technology February 2013 to this version for the Executive Business Centre at Bournemouth University on 230413. It is an introduction to the background and tools I use to help startups and early stage digital, creative and content companies build a robust business 'vehicle' to drive (sorry!) growth.
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Systematic Business
Innovation
Start-up Grow-upStay-up
10/12 30/35
Start-up Stay-up
10/12 30/35
Start-up Stay-up
•You’re drowning in paperwork -
especially financial
•Quality of work is starting to slip
•Cash flow is bumpy
•Gaps appear in communications
•Team morale is not so great
•You feel overworked & stressed
10/12
Is Money the Answer?
“The unfortunate truth is only one percent of (tech start-up) business proposals receive funding from
angel investors or venture capitalists or private equity” – Startup Addict Blog
So think what the percentage is for entrepreneurial companies that are NOT start-ups: agencies, content
producers, service companies etc.Businesses that don’t scale.
If money isn’t the answer – what is?
In 35 years I’ve not seen a
single early-stage company
that couldn’t be more efficient
as a business
Founders Focus Obsessively
on The New Thing They Do
While the business vehicle they’re building to make & market
The New Thing They Do just isn’t up to the job
It’s flimsy, home-grown, unstable, and an inefficient way to get from A to B
Product/Service
Process/ Workflow
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Structure
By ‘Business’ I don’t mean finance. I mean all the things that – together - enable you to generate revenue &
profits from your product or service.
I assume that you can deliver your product or service .
‘Business’ is everything else you need to do to create a profitable enterprise.
Home-grown business ‘vehicle’
Business inefficiencies
‘Leak’ profits from producing
& selling product
Not enough profit to reinvest
in growth
Business stays stuck in Start-Up
a home-grown business vehicle
stops you motoring
Poor project management so
jobs overrun
No ongoing job profitability
analysis
They’re ‘busy’ , have revenues, so think it’s OK
No money to invest in s@#t-
hot PM
End of year accounts show 5% Net Profits
agency that builds websites for retail clients
Flat structure: 2 founders + very
young team
Founders get jobs in & look after clients
No-one managing team so poor quality control
Lowers job profits, reduces their biz dev effort, slows growth
Founders have to step in to sort
jobs out
social media marketing/PR
agency
All early-stage businesses have – under the hood - these‘invisible inefficiencies’.
If you can identify these and reduce them, you can ‘find’ the profit to fuel
growth organically.
(what ‘funding’ often does is allow these inefficiencies to remain invisible)
JosephSchumpeter
“Creative Destruction”
Creative Destruction
“Creative Destruction…
incessantly revolutionizes the
economic structure from
within, incessantly destroying
the old one, incessantly
creating a new one.”
INVENTION
INNOVATION
They haven’t taken on board his distinction between Invention and InnovationINVENTION INNOVATION
They haven’t taken on board his distinction between Invention and Innovation
INVENTION + INNOVATION= ENTREPRENEUR
“This should be as demanding and exciting as inventing the thing you do”
Every aspect of it
An entrepreneur also innovates the entire business that creates &
delivers the new thing they do
When you
Invent and Innovate
it can produce
extraordinary success
But that’s not what most early-stage
entrepreneurs do
Systematic
Business
Innovation
A Business is a System
“A set of interacting or
interdependent components forming an
integrated whole”
“A set of interacting or
interdependent components forming an
integrated whole”
Product/Service
Process/ Workflow
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Structure
Product/Service
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
How do you grow a
business in a Systematic
way?
every detail, every element
must be building towards your
ultimate Vision
It’s like directing a film:
it’s a way of seeing and understanding your
business.
it’s about how you use your
own creativity to innovate
your whole business
Let’s get closer to the real world of running a business.
Let’s start by talking about burgers.
THE NEW THING THAT YOU DO
BUSINESS ENGINE
BUSINESS STRATEGY
BUSINESS ENGINE
BUSINESS STRATEGY
THE NEW THING THAT YOU DO
Deciding where you want to go as a business and planning how to get there
The mechanics of the business; how it functions efficiently day-to-day
THE NEW THING THAT YOU DO
BUSINESS ENGINE
BUSINESS STRATEGY
OPERATIONAL COMPETENCE
= the skills to execute on
The New Thing That You Do (The Invention)
Business Strategy isn’t developed
Business Engine is neglected
THE NEW THING THAT
YOU DO (Product/Service)
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Product/Service
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Start-up Stay-up
10/12
Benchmark where you are – with total honesty.
This is point A.
Draw your Vision.
This is point B.
Build an integrated Road Map
This is how you’re going to get from A to B.
Identify the true value in your business.
Build your pricing around it.
Bake innovation skills into the team leading the business.
Innovate your business model.
Innovate & build your business engine.
Get management information flowing.
Use it to make better decisions.
Separate operational from strategic decision-making.
With separate management and board meetings.
Develop the entrepreneur/s business skills & perspective
Develop a senior management team.
Empower them.
Let’s look at one in more detail.
I’ve chosen this one because it’s at the heart of the whole process.
Build an integrated Road Map
Q1 Q1Q4 Q4Q2 Q3Q3Q2
Example: an early-stage online jewellery business that is growing fast
& sees opportunities for it’s own e-commerce operation, partnering with the big online retailers and opening
operations in China
Build an integrated Road Map
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Marketing
Turnover/ Sales
Net Profits
YEAR
1
YEAR
2
750K
Team: 6
3rd party sites
(too?) flat
E-commerce range
94K
Basic Website
2 Founders (designers)
UK outworkers
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Marketing
Turnover/ Sales 1.5m
Net Profits 150K
Full-time MD
Free up MD 50%
Shanghai Warehouse
Bespoke Service
Multiple rev streams
Team = 15 people
Open in China
YEAR
1
YEAR
2
Team: 6
3rd party sites
(too?) flat
E-commerce range
94K
2 Founders (designers)
UK outworkers
750K
Basic Website
750K
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Open in China
Turnover/ Sales 1.5m
Mgmt team
Net Profits 150K
Full-time MD
750K 1m 1.35m1.25m1.1m800K 900K
Shanghai Warehouse
Bespoke Service
Multiple rev streams
Team: 6 Hire studio assistant
Hire designer
Hire sales/account mgr
Hire Shanghai head
Team = 15 people
Promote Ben to MD
Mgmt training Ben
Ben: build mgmt team
Ben: build mgmt team
Marketing
3rd party sites
(too?) flat
E-commerce range
94K
Basic Website
2 Founders (designers)
UK outworkers
Limit of flat structure
1. Benchmark where you are: A2. Draw your Vision: B3. Build a Road Map4. Identify real value & price accordingly5. Equip leaders with innovation skills6. Innovate your business model7. Innovate & build your business engine8. Get Management Information flowing9. Operational/Strategic decision-making10. Develop leaders’ business expertise11. Develop/empower management team
Don’t derail your business by thinking anyone can run one…
Invent and Innovate!
fromstartuptostayup.com
