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Of course nobody notices – there’s no photo opportunity! Peter Kerr Oct 07

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Naturally it has escaped the attention of mainstream media…

But, the fact is that two Kiwi IT companies are still in, and contributing to, the world’s largest IT project – the Square Kilometre Array (SKA) radio telescope. (See a press release here).

Thousands of radio telescopes to be built in Southern Africa and Australia between 2018 and 2024 will monitor and survey space, producing vast amounts of data.

It will require real-time analysis of 120 terabytes per second – the equivalent of streaming one million high definition movies at once.

This is a massive Big Data project, and will require new developments in both hardware and software.

A team led by Open Parallel including Catalyst IT engineers has devised and delivered the initial version of the Software Development Plan for how participants in the project will develop software and/or firmware to achieve design goals established for the SKA.

Now, Open Parallel’s director, Oamaru-based (yes, you’ve read that correctly) Nicolas Erdody has also been the inspiration and driver behind three Multicore World conferences (now in its fourth consecutive edition – Feb 2015, Wellington). These assemblies of global IT heavyweights are looking how to take advantage of massive computing power available through multicore computers (where there’s many many processors on one chip).

So far no one has effectively cracked how to write the parallel programs (coding) that takes advantage of this power.

But, by being part of the SKA project, Open Parallel and Catalyst have positioned themselves to both learn, along with others, and ride the inevitable wave of parallel programming, big data, cloud and green computing, and many more state-of-the-art technologies.

So what?

Well, if it comes to pass, there will be a huge opportunity for New Zealand to be at the forefront of what will be a whole new basket of knowledge and technologies around multicore and programming for them.

The opportunities for our IT sector(s) to be ride this parallel computing wave will be immense – way bigger than the movie industry, with much more potential to branch into different fields.

Naturally, Erdody and Catalyst IT managing director Don Christie aren’t part of SKA solely as their contribution to knowledge about our universe.

But they are taking a longterm view, positioning their own companies to be part of the knowledge creation for the project, and clearly identifying themselves as clever and competent operators in an ever-expanding field.

It is doubtful that either of them have any clear idea of where their involvement will lead.

However, their leadership and vision will in the near future be of immense benefit to our country. After all, what computer programmer wouldn’t want to live in New Zealand to be part of both SKA and ongoing developments in multicore and parallel programming.

Not that the government or media would have a clue.

It’s not something that has a photo opportunity.

It also requires the ability to think.


Name change signals expanded ability for patent owners to leverage their IP Peter Kerr Oct 01

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A name’s an important clue to how a company represents itself to the world.

So, the change to IP Nexus from IP Exchange represents a business and philosophical change for the Hong Kong based but globally oriented company.

Its founder and CEO Hidero (Hidi) Niioka got hold of sticK to remind New Zealand SME owners of the marketplace which aims to connect patent owners with others looking for the solutions the patents’ offer.

The Nexus (rather than Exchange) term seems appropriate for an organisations that’s grown considerably since first mentioned in stick in June 2012. (One definition of nexus is a connection or series of connections linking two or more things).

For startups, inventors, universities, SMEs and other entrepreneurs looking to use their IP beyond New Zealand’s shores, the continuing development of IP Nexus offers considerable advantages says Hidi.

Part of this built on three (new) pillars, compared to IP Exchange.

  • Ask an expert – post questions and get expert answers for free

  • Services marketplace – post jobs nad gets experts’ bids

  • Directory – search for specific technical or regional expertise worldwide

Hidi points out that while the NZ government (and many others around the world) promotes innovation, accelerator platforms and the like, there is a need to make related advice and services more accessible for those launching new ventures, especially those who are looking outside their home markets.

The goal of our new services is to make it easier for inventors, startups and other small businesses to develop their ventures and protect and monetise their IP,” says Hidi.

Signing up is free, so if you are just looking for basis advice, it won’t cost you anything. On the other hand, if you need specialised technical or cross-border expertise, you connect easily to the relevant professionals through a simple search.”

IP Nexus’ experts are able to answer some questions for free, and prices for services are negotiable beyond that. It has over 200 IP experts onboard representing a broad base of global and technical expertise from New Zealand and Australia, to Silicon Valley, Europe, Japan and China. It also has over 61,000 patents and other IP available for search.

Under the company’s model, patent owners can upload as many patents as they want for free for marketing to potential commercialisation agents such as IP brokers, law firms and interested technology companies.

Patent owners only pay a success fee of 4-12% is there successful sale or licence of the patent.

As is often pointed out about NZ patent holders, Kiwi businesses often completely ignore the option of selling or licensing patents overseas.

Given that most NZ inventions will also be applicable in other countries, IP Nexus is an idea worth exploring while protecting the patent. Check it out at ipnexus.com


Name change signals expanded ability for patent owners to leverage their IP Peter Kerr Oct 01

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A name’s an important clue to how a company represents itself to the world.

So, the change to IP Nexus from IP Exchange represents a business and philosophical change for the Hong Kong based but globally oriented company.

Its founder and CEO Hidero (Hidi) Niioka got hold of sticK to remind New Zealand SME owners of the marketplace which aims to connect patent owners with others looking for the solutions the patents’ offer.

The Nexus (rather than Exchange) term seems appropriate for an organisations that’s grown considerably since first mentioned in stick in June 2012. (One definition of nexus is a connection or series of connections linking two or more things).

For startups, inventors, universities, SMEs and other entrepreneurs looking to use their IP beyond New Zealand’s shores, the continuing development of IP Nexus offers considerable advantages says Hidi.

Part of this built on three (new) pillars, compared to IP Exchange.

  • Ask an expert – post questions and get expert answers for free

  • Services marketplace – post jobs nad gets experts’ bids

  • Directory – search for specific technical or regional expertise worldwide

Hidi points out that while the NZ government (and many others around the world) promotes innovation, accelerator platforms and the like, there is a need to make related advice and services more accessible for those launching new ventures, especially those who are looking outside their home markets.

The goal of our new services is to make it easier for inventors, startups and other small businesses to develop their ventures and protect and monetise their IP,” says Hidi.

Signing up is free, so if you are just looking for basis advice, it won’t cost you anything. On the other hand, if you need specialised technical or cross-border expertise, you connect easily to the relevant professionals through a simple search.”

IP Nexus’ experts are able to answer some questions for free, and prices for services are negotiable beyond that. It has over 200 IP experts onboard representing a broad base of global and technical expertise from New Zealand and Australia, to Silicon Valley, Europe, Japan and China. It also has over 61,000 patents and other IP available for search.

Under the company’s model, patent owners can upload as many patents as they want for free for marketing to potential commercialisation agents such as IP brokers, law firms and interested technology companies.

Patent owners only pay a success fee of 4-12% is there successful sale or licence of the patent.

As is often pointed out about NZ patent holders, Kiwi businesses often completely ignore the option of selling or licensing patents overseas.

Given that most NZ inventions will also be applicable in other countries, IP Nexus is an idea worth exploring while protecting the patent. Check it out at ipnexus.com


Should you bother with venture capital funding…the numbers suggest no? Peter Kerr Aug 20

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The scramble that many startups make to secure venture capital funding may be detrimental to the budding business’s health.

In fact John Mullins, writing in Havard Business Review’s blogs, makes the point that the vast majority of successful entrepreneurs never take any venture capital (his italics). Mullins is an associate professor at London Business School.

He gives examples from around the world, but the observations are almost undoubtedly true about New Zealand too.

He quotes venture capital investor Fred Wilson of Union Square Ventures.

“The fact is that the amount of money startups raise in their seed and Series A rounds is inversely correlated with success. Yes, I mean that. Less money raised leads to more success. That is the data I stare at all the time.”

Wilson’s observation demonstrates there are a number of serious downsides in raising capital too early, and that these drawbacks have profound implications at all stages of the investment cycle. I’ve summarised the five drawbacks to VC funding made by Mullins, who also provides some interesting links supporting these arguments.

1. Pandering to VCs is a distraction.

Raising capital demands a lot of time and energy, when an entrepreneur is better off convincing prospective customers to buy – or perhaps learning why they won’t.

2. Terms sheets and shareholder agreements can burden you.

To protect their own downside risk, investors will require what are often seen by entrepreneurs as onerous terms.

3. The advice that VCs give isn’t always that good.

Unfortunately, entrepreneurs will be very likely obliged to follow the VC’s sage ‘advice’.

4. The stake you keep is small – and tends to get smaller

If money is raised later in the entrepreneurial journey, with customer traction in hand, the startup owner is in the driver’s seat, and is much more likely to find a queue of investors outside their door.

5. The odds are against you

In the VC game the very few winners pay for the losers, so most VCs are playing a high-stakes all-or-nothing game. Such odds make it extremely questionable whether entrepreneurs should put their own business into such a play.

Mullins’ take home point is that especially in the early stages, a startup business is much better off being funded and grown entirely by its customers’ cash.

Outside funding is not the be all and end all – though it can quite easily be the unintended end of the startup.

The article also has some excellent comments (as you’d expect for a HBR type article which add further insights to Mullins’ observations).


Is the future for our sheep their milk? Peter Kerr Jul 16

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Being the farm raised boy I am, I’m keen on the idea of clever new and profitable products from our ability to convert sunlight, soil and water into them.

So, Blue River Dairy, the sheep milk products company which is over 10 years old, is something to keep an eye on.

It is the creation of Keith Neylon, a 60-something entrepreneur, who has had previous lives in deer recovery (owned 10 helicopters at one stage) and salmon farming (co-pioneered its development in NZ) among other things.

He was semi-talked into exploring sheep milk potential by a meat company chairman – and saw opportunity.

There’s sheep milked around the world – but almost all is consumed in Spain, Portugal, Sardinia (four million sheep for two million people) and their own country of origin.

There’s was also an Asian and China angle. Over 85% of these countries’ peoples are allergic to cow’s milk.

The resut has been over a decade’s worth of front loading all the expense of setting up a market to production entity, investing in plant, genetics, farms and an entire system to produce sheep milk products.

He didn’t do things by half during this ‘research’ phase. Keith spent three months on an Israeli kibbutz that was one of its top sheep milk farms. Some of the knowledge from these experts has been incorporated in BRD.

Now, year round (having perfected lambing five times in two years), 4000 ewes are milked twice a day.

A new drying plant in Invercargill receives milk that has had 85% of its water removed on-farm, and most of it converted to whole sheep milk’s powder, canned onsite, most as infant formula.

This sells at a considerable premium to cow’s milk powder, though as Keith explains, it is better .

Sheep’s milk takes a baby 30 minutes to digest, compared to four and a half to five hours for cow’s milk. It has 500% more vitamin D. It doesn’t make babies skin become rashed.

Currently, hundreds of thousands of cans are tied up on China’s borders as The Middle Kingdom sorts out an issue of what it considers to be too many (up to an estimated 2000) brands of infant formula). This will pass.

But Keith is more than confident that at least 10 million milking sheep would not be an oversupply and continue to hold a price premium.

He says BRD has the best genetics, allied to a retail market position that is way ahead of any other land-based product from New Zealand.

He envisages a revitalisation of the sheep industry based on their milk – and remember they still produce lambs and wool.

Another strong point in sheep milk’s advantages is that “you never get leaching off sheep country.”

Keith is proposing that farmers become participants in the opportunity through a franchise-like system (including the all-important supply of sheep genetics), in which New Zealand, and its reputation and image, deliver high value products to a growing market.

This potential is one reason Landcorp is seriously considering an sizeable investment in the industry – perhaps alongside BRD.

I was privileged to hear him speak recently in Wellington.

This is ballsy entrepreneurship (a 10+ year lead time!), that plays to our strengths.

One day I predict he’ll be acknowledged as the man who saved the sheep industry.

 


Local, thinks global and quickly gets asked if it is for sale Peter Kerr Jul 02

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Many Kiwis struggle to appreciate the size of the global internet market, and how to tap into it says John-Daniel Trask.

The co-founder of Wellington-based Mindscape (“We build fantastic tools for developers”) recently spoke at the NZ Entrepreneur Club.

As an aside, the messages/language on Mindscape’s web pages are a model of simplicity and appealing description. Check out the company’s ‘About’ page to get a flavour of how others should do it.

Business, and more particularly digitally-oriented business has been in John-Daniel’s blood since high school in Palmerston North, including selling a program on a disk that masked other schoolboy’s internet search history on their family’s computer!

Torn between doing a business degree or computer science degree at Massey University, J-D opted for a relatively open-ended computer course – and shoved in as business papers as he could.

He (easily) got a job at IT solutions company Intergen, and from day one was quizzing its bosses about revenues, sales, margins and the nuts and bolts of how it operated.

Not surprisingly he quickly rose through the company; and while he was doing it bought as many shares off other employees as he could.

Soon he was one of the largest non-founding shareholders, and the option of buying the fourth largest shareholder’s portion came up. This would’ve made him the largest non-founding shareholder of Intergen by a long margin. The deal fell through however.

J-D then quietly, and completing the deals all at once, sold his shares back to other employees within Intergen, pocketing a tidy return at the same time.

In 2007, along with Jeremy Boyd, Mindscape was brought into life, creating software development tools as its products, concentrating on Microsoft’s .NET environment.

Mindscape’s main product these days is ‘Raygun’, error reporting software which was launched in 2013.

This software has had exceptional growth – so much so that Mindscape received a number of inquiries whether it was up for purchase.

Instead, and boasting real growth and revenue, Mindscape recently went to the market and raised capital.

J-D and Jeremy Boyd still own 87% of the company – but given that Mindscape’s doubled revenues since April, investors are probably pretty happy.

He says that lessons learned along the way is not to become too scattergunned in its projects or offers.

“Put your energy into one thing,” he says.

He sees a new wave of potential in virtual reality, arguing that the present fixation on the visual component ignores the touch, sound and audio.

In the meantime Mindscape’s focused on its revenues, as this keeps its future options wide open.

“We could carry out an IPO, we could be attractive as an acquistion, or we could continue to make a lot of money,” he says.

This Entrepreneur Club talk was a great example of a well-executed business, firing on all cylinders.

Without doubt, the winner of the Hi-Tech Young Achiever Award in 2009 will do something else clever again – probably sooner rather than later.

Watch this space.

 


A buried treat in WordPress’s Terms of Service Peter Kerr Jun 26

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It’s in keeping with the spirit of WordPress that its Terms of Service are simple, freely available to be repurposed by others, and, the tiniest bit quirky.

WordPress co-founder, and part owner of its tech-tools parent Automattic, Matt Mullenweg, pointed out there’s a ‘here’s a treat’ buried in the ToS.

Speaking recently in Wellington, he reckons that so few people actually read these legal bits, putting in a hyperlink is a nice surprise for those who bother. Go have a look yourself.

The San Francisco based open source enthusiast was on a whistlestop tour around Japan, Indonesia, Australia and NZ, spreading the word and looking to add to the globally-spread development team.

The scarily young Matt seems pretty savvy and modest all at once. His photo and bio is buried, alphabetically on the Automattic page (though he did point out the pun on his own name in the parent brand).

Part of the savviness comes from a 1970’s computer science graduate dad who encouraged his then six year son to play with the home computer’s code in the late 1980s – with the proviso he fixed what he broke!

A fair bit of looking under the hood later in 2004, Matt was looking around for, and failing to find, simple blogging software or platforms.

So, along with Mike Little he built the open source, free, WordPress. They quickly realising they couldn’t do it alone, and encouraged others to come into development team.

As well, they set up Auttomatic.

He describes Jetpack as the site’s tool with the most promise. This allows plugins that are available on WordPress.com to be available on self-hosted WordPress installs, powered by the cloud.

More than 130 Wellingtonians attended the Shed 6 presentation, including a colleague Harry.

Harry can’t code, but he too was impressed with the open nature of what Matt’s helping create in the net, and dispersing it around the world.

With only 22% of the internet sites, there’s 78% to go says Matt.

His lofty goal is to democratise publishing.

He might just do it Harry reckons.

 P.S. – In case you can’t find the tasty treat, check out paragraph 16


Branding’s dark arts leans to build, measure, learn Peter Kerr Jun 18

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The dark arts of branding received an illumination when Brant Cooper spoke to a packed house at Wellington’s Lightning Lab.

The ‘Lean Entrepreneur’ co-author from San Diego popped in on invitation on his way to Australia, and talked about how startup businesses should also take a lean approach to branding – from day one.

This lean build, measure and learn approach to branding (also taken for the product creation and validation) – is defined as a two-way relationship that creates value for a customer.

“You’re in a relationship from the moment a customer is aware of you,” says Brant.

“By putting off branding, you’re already branding, and affecting that relationship.”

Along with Jeremiah Gardner, Brant’s writing a new book, ‘The Lean Brand’. The pair crowd funded its publishing, with 441 pre-orders, obtaining $23,020 from a target of $12,500.

Brant says the Madison Avenue types of branding consultants and experts traditionally concentrate on the artifacts of a brand, such as a logo, tagline and mission statement.

Where brand meets lean is working out what elements of your brand are needed to create value for your customer. This is done through validated learning – moving unknowns to knowns as is carried out for product development.

More so says Brant because initially, startups don’t know the value they’re creating, or for who they’re creating it. With customers comes the opportunity to learn what aspects of brand you should be concentrating on.

Ultimately, Brant says a business is after passionate customers. The aspirations that a business shares with a customer are its brand.

All this is encompassed in a story he says.

This startup story starts with questions such as:

  • Who are you?
  • Why do you exist?
  • Why should I care?
  • What is your rallying point?
  • What is your shared aspiration?

A brand can grow out of answering these questions, as a startup build, measures and learns, and uncovers the elements that provide an emotional resonance with a customer. In other words, experiment to discovering the emotional value of a startup product – hypothesis testing to validate learning.

Brant says startups should own their own brand design and not send this side of the business out to an agency.

“Entrepreneurs can and should own their brand creation,” he says.

“A brand development is not a black box to be owned by others.”

This self-effacing American, who got plenty of laughs during his presentation, will be doing no great favours for branding experts when The Lean Brand Book is published.

But, since under lean, brand is much more than its logo, such disruptive thinking will mean startups start branding right from the get go.

 


Lightning Lab II grows up – will its offspring make it to adolescence? Peter Kerr Jun 03

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Anyone that’s been around young children will appreciate there’s a heck of a difference between a one year old and a two year old.

A similar comparison is valid with Lightning Lab II, which last week had nine of its 10 starters from three months ago pitch to about 250 would-be investors, and a number of others who mostly filled Te Papa’s main theatre last Wednesday.

As LL itself says, it is modeling the way it works off TechStars and other USA originated accelerator initiatives.

But there’s a New Zealandness to how it is done.

So, as well as the added degree of presentation polish, one of the more notable aspects was, apart from three business asking for just under $500k each, the other six businesses were relatively low in how much money they were asking for.

This partly reflects there’s still more market validation and proof required, and also the New Zealand environment.

Often overseas startup accelerator businesses have already obtained some money (from friends, family and fools) before they begin the three month intensive mentoring and ‘is there a business here’ questioning process.

New Zealand accelerator startups at this LL tend to be less mature, and the degree of realism in the money pitch in bringing new investors onboard was one of the features this time round.

Naturally, since many of the pitches are as much about selling the sizzle as the sausage, there is a touch of scepticism required in the growth projections put forward.

But, without any due diligence, all the pitches sounded like they could – with the right combination of expertise, clear direction and luck – gear themselves up to grow.

And, rather than attempting to break down each businesses’ prospects myself, I’ll repeat Nicolai Thomson’s speculation. Nicolai, (Twitter handle, @nicolaithomson) is the founder of Lendyour.co.nz. Here are some of his, and some of his colleagues’ thoughts about the business propositions put forward at LL Demo Day.

He raises some interesting points, that investors too will no doubt explore as they look under the hood of these potential part-purchases.

In Nicolai’s words:

I don’t rate Twingl’s business model though I would totally use their product. They need to look at alternative monetisation and in the last 18 months I’ve heard their CEO twice and don’t rate his ability to spot a future trend, change and win fast enough when established companies jump on their un-patented mapping.

MishGuru, too reliant on Snapchat being a fad today, and limited audience using it. Snapchat will pass and be dead in 3 years. Their subscription plan is also fundamentally wrong as their target market is enterprise paying $10 a month. Every company will start on that level with little incentive to move to more expensive plans which would assure MishGuru can pay their bills.

Floc has a great concept but little future. Using Telco data is not going to be given to a brand new team with no reputation, and would be revoked the moment a controversial CEO or diplomat was tracked leaving their building after someone eyeballed then and identified their dot after hacking in to Floc systems. Never-mind the fact restaurants have legal obligations when it comes to employment and cancelling shifts before or on the day won’t fly for long in the name of saving the owner some dollars. Staff would likely leave and cause unnecessary headaches.

Coach Seek will be a safe bet, no spectacular exit so ideal for the risk averse of those investing. I like the product though maybe a touch too expensive starting at $49USD a month.

Cloud Cannon were my top pick, followed by CommonLedger.

CommonLedger will have a competition issue and will probably be best to position themselves to be bought out quickly. They will be overtaken by deeper pockets if their concept starts to take off. Their CEO gave the impression they are going to build a global giant and may miss a good return which some investors could be spooked by.

Cloud Cannon though probably have the closest disruptive product but I spoke to a designer friend last night and there are major concerns with SEO ability if you get quite messy code that it would deliver the site through. There is no comparison to original source code being indexed. This service cuts out the core web developers who provide the framework/CMS which is why WordPress has been so popular. If they can get SEO to be great, then it’s a winner. Again, won’t take long for others with resources to reverse engineer. Great business model though.

What I didn’t see from any of the teams though is a disruptive produce that carves out a niche which cannot simply be reversed engineered, or copied by teams with deeper pockets, more experience and crucially an existing customer base to test, and get faster feedback from. There were a couple of self-proclaimed engineers and maths geeks, however no one stated their competitive advantage was an algorithm that is one of the few things not easily replicated.

 

 

 


To business plan or startup plan? That is the question Peter Kerr May 20

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Just at the time I have no clue what to write, up turns this blog, It’s well worth repeating.

I’ve written about Nicolai Thomson and LendYour, a startup ” to be the place people come to rent”.

Here’s his very well written observations on the difference between a business plan and a startup plan…with the word rhetoric in the opening sentence.

By Nicolai Thomson, CEO, LendYour.com

Follow him on Twitter @nicolaithomson

Believe it or not, there is a big difference between a Business Plan and a Start Up Plan. The following stories come from experience and not rigid theory. Stories help illustrate points, and provide context by somehow firmly embedding knowledge in the real world, unlike rhetoric which can lack grounding.

I was sixteen and still at school when I started my first business in the UK. I designed jewellery and had it made and imported from Hong Kong, along with Indian and Brazilian style costume jewellery. This was back in 1999 so the few pieces I actually sold were at car boot fairs and markets. It was fun, but not a lot came of this business other than my sister getting a huge box of stock once I was through with it all. But still I collected my lessons and learnings.

Four years later, at age twenty, I started Executive Hospitality which later became taxiclub.co.uk. We created a basic website that could give you real-time taxi quotes driven by owner-drivers all around the UK. We also offered, minivans and executive cars in addition to normal saloon cars. We basically did half of what Uber does today, except back in 2003 so we were ahead of the game. We sold the company in November 2005 for an acceptable figure and it still operates today. I took off and travelled around the world for three months before deciding to start over in bonny New Zealand.

Although both experience were helpful and I learnt a lot, my fundamental mistake was having no Business Plan. Without well-thought-out visions and strategies the businesses floundered. We had no problems working out our short-term tactics, which got us short-term gain, but we had nothing to help us attain longer-term goals or even just a steady footing.

Too many people out there assume that a Business Plan is the first thing you should do. Don’t get me wrong, there is a place for a Business Plan, and it must be comprehensive, but if you are either thinking about, or have got beyond that to starting a business, then you need to start with a Start Up Plan. A Start Up Plan will give you time to think about the business without being bogged down in trying to work out financials or marketing strategies when you should be thinking about your vision and initial strategy.

How do you proceed with a Start Up Plan and what are the benefits?

First thing you need to think about is your vision, which should not fundamentally change unless there is a complete change in direction.

My latest venture, LendYour, started out as a simple marketplace website wanting to list holiday homes, motorhomes and boats, but that idea soon crystallised and we decided we wanted to be an international network providing mobile-first search, pricing, booking and review services for cars, vans, trucks and motorhomes — so, anything that drives on a road. Our vision, however, barely changed and has always remained “To be the place people come to rent”. Rock solid.

Do you have a grand vision for your business yet? If so, be sure to check your vision is not the same as what your product is meant to do. Your vision is what your legacy will say about you and your business. Richard Branson’s vision for Virgin is to ‘Improve society through the businesses we operate’.

Some may call this idealistic, but it reminds everyone that we’re here to enhance other people’s lives. In other words don’t be selfish, help others first. Imagine if every business in the world was there to enhance other people’s lives, and their actions were held accountable by boards and shareholders. This world would look very different!

Next is your strategy that is produced by thinking a lot about your goals and objectives. It’s OK and expected that these change often so don’t feel you are a dreamer that never does anything because strategy is the hardest, and takes the longest. It’s also what your product is. You should refer to your business idea as the benefit to your customer of using your product — don’t go around saying you are building ABC for the XYZ industry. Sell the benefits, not features because they are the things that a customer can relate to.

A company I have really enjoyed watching grow over the last six months is Groove. Their first description of the business focused on what they do, which quite rightly is “SaaS & eCommerce Customer Support”. It was bringing thousands of visitors to the site but did not get many sign-ups. Why? “… it doesn’t give me a single reason to do business with you” was the feedback.

Groove’s team then spoke with customers, asked their advice, and why they used Groove — a journey that could’ve happened at the very beginning.

The outcome and new message was “Everything you need to deliver awesome, personal support to every customer”. Conversions nearly doubled.

Perhaps building in Groove’s awesome customer support in to our software would be even more beneficial to my customers?

Think about your tactics last, as they could change daily or even hourly. Don’t be tempted to think about tactics until you have your strategy nailed. Tactics are ideas that turn your strategy into a business, which then absolutely requires a Business Plan, funding, sleepless nights and little social life.

I decided to apply the above Groove example to LendYour by describing our benefits to target customers and asking them, “If this product existed, would it be important enough that you would make it one of the top priorities for you or your company this year?”

The first client feedback shifted our strategy slightly, and after accepting and proposing that change he promptly said yes and committed to paying $25 a month for the basic plan. A sale! Talk about a confidence boost.

It’s only at this point that you need to think about detailed financial forecasts, sales strategies and marketing plans with your team.

Must haves of a Start Up Plan

Your Start Up Plan should be no more than 1 page long, and answer the following:

  1. What is the vision for your business? A good question to ask yourself is what’s the purpose of your business even existing. Be honest.

  2. Set your goals and objectives. Goals are not tangible things you can easily measure, whereas objectives are. Goals are also broad; objectives are narrow. This is how your strategies comes in to being, and are the two sentences on your Start Up Plan that you need to keep updating whenever your ideas change. Your objectives will reveal clues as to your competitive advantages too.

  3. Your team. Do a SWOT analysis on them. If you do not know what a SWOT analysis is find out. At this stage your answers to each can just be one or two words. Pretend you are in a large company, then ask yourself if you would employ the team you are heading up to launch this internal project you are writing a business case for. Again, answer honestly, and write down the concerns you would have because in a few months time you may have overcome those issues and its useful to have them written down to remind yourself of the progress you are making.

  4. Identify your three core markets or industries you are going to be involved in. This is where you go looking for your target customers.

  5. Identify what you can charge money for. Allow the answer to this question to influence your goals and objectives heavily. Neither of these questions has to be detailed at all, they are there for you to reflect on as your ideas change the strategy.

Once you have written this down, print it out and stick it on your wall somewhere you will see often. You are now ready to formulate strategies. Write them all down somewhere electronic and cloud-based so you can edit and add to them often. I use Evernote that has been absolutely amazing for this exercise. Every now and then I scroll down through my various notes about objectives and goals, growth, revenue, markets, or quotes I realise how far the business and my thinking have come.

Once you have those fundamentals it’s time to start refining that elevator pitch but don’t be rushed in to working it out until you have given due time to thinking about your strategy. If you rush, you may make mistakes and the probability of you going bust will be much higher than they need to be.

Don’t be afraid of spending an extra 2-3 months thinking and talking about your strategy to target customers. You may have noticed I have not talked about friends and family during the thinking period. Proceed with caution, because your ideas are going to change so often that you risk others close to you doubting your ideas and ability, which has serious knock-on effects to your confidence. Talk to the people who would be paying customers before friends and family.

Next, if you are up to it, write about your experience somewhere because it will be extremely useful to many people out there struggling to get to Start Up ‘first base’. Good luck!

Follow Nicolai on Twitter @nicolaithomson


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