On Internet Business

Epitaph for an Entrepreneur

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

Steve Blank has posted an amazingly honest and powerful statement, perhaps even a testament, on the difficulties he faced being a husband, father and entrepreneur. Like all personal stories, it will resonate with different people in different ways, but what I took from his life story of being a serial startup entrepreneur and a father of two daughters was three things.

The first was confirmation of what I already knew: it’s tough to balance work and family as an entrepreneur.

The second was his take on an epitaph. Thinking about what you want people to say about you when you die is a great way to establish your own priorities. Blank talks about how he found that visualising the kind of epitaph he wanted was one way of putting his work/life balance into a perspective that ensure he made the right decisions in both areas. The step beyond that is to turn your life priorities into your personal mission statement and to work on that with the same dedication and integrity as you do with your business plan.

The third thing I took from his statement is the value of personal support. I’ve found it essential to have peer support, to share learning and to bounce ideas and situations off a selection of people who know what the world of entrepreneurship is like. I get my peer support at the Entrepreneurs Organization and believe it’s invaluable to have an organisation that works with, for and in line with entrepreneurs and recognises their needs and what drives them.

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How to stop wasting time and focus on key priorities

Posted by Michael under Entrepreneur Resources

What is Teamly?

Not just another web-based tool is the answer. There’s a plethora of systems that are meant to help companies with time management. But Teamly aims to do something else: help individuals in companies become more focused and productive, and provide managers with a quick and easy way to see what their team considers their top priorities.

What makes it different from other task list software?

Instead of facilitating the creation of long lists which never get completed, Teamly works to keep individuals focused and effective and to allow managers to ensure their team is focused on what truly matters without micro-management or depending on top-heavy and bureaucratic HR systems.

It encourages employees to identify their top priorities and then share them with their manager and team-mates. Each Teamly user enter a maximum of 5 priorities per time period which can be as long as a month, a week or just a day.

Then the employee is sent emails, timed to allow them to review how well they did in achieving their priorities, and to define their priorities for the next period of time.

Managers are given a web-based ‘dashboard’ allowing single-glance management of their team’s priorities with access to deeper statistics on priorities completed. Individuals also get progress reports that can be printed or viewed online

How much does it cost?

Teamly is free of charge for one user and when charging begins, the site says multi-user accounts will be $8 per user, per month with the first month free – at present though, Teamly is still in beta and no charges are being made.

The Teamly team promise they will give users a month’s notice before they start to charge and that the Teamly charging structure will offer a pay-as-you-go cancel at any time system.

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Why Pre-pack Administrations are bad for business

Posted by Michael under Business Growth, Entrepreneur Resources

A pre-pack administration can sound like the ideal answer for a failing business, but is it really such a great solution for the business, and for the economy?

What is a pre-pack?

A pre-pack administration is a package that allows for the selling the assets of a company immediately after it has entered administration. In many cases, the previous directors or management purchase the assets of the company from the administrator and set up a new company. In a recent example, directors of Kiss Travel which collapsed in August, had bought assets from another travel company, XL Leisure group, which folded back in 2008, and which at least one director of Kiss had also been involved with at board level. The intention is to allow the administrator realise the greatest possible amount for the assets because the asset buying process allows for business continuity and the goodwill inherent in the company is both preserved and transferred. It is often the case that some or all of employees of the company transfer  to the new company, thus preserving jobs.

Why pre-pack should cease

The pre-pack system has rightly attracted criticism because it allows companies to continued without their creditors which gives, at very least, an appearance of failing to meet the minimum standards of business ethics. As a result, SIP 16 was introduced in 2009 to assist Insolvency Practitioners in pre-pack cases. It was designed to make the process more transparent to creditors and to ensure that fair value was obtained for the assets. However, from my personal experience, the opposite has happened because the pre-pack process removes any competitive activity around the assets being sold, because there is no scope for anybody outside the company to compete to buy them.

Pre-packs in retreat

In KBB, the trade magazine for the kitchen, bedroom and bathroom trade Danielle McCormick, a retail solicitor, has a different but equally uncomfortable view of pre-packs. She describes the pre-pack as a diet pill allowing failing companies ‘… to trim down on the unwanted calories in order to fit into next season’s mini, or ‘newco’ (new company)’.

But she points out those left in its wake are now fighting back.

1.  Landlords have won recent cases in which administrators of collapsed retailers were ordered to pay rent quarterly in advance, rather than paying rent weekly – clearly the latter gave them a massive advantage on potential outlay and cash flow. 

2. Banks are starting to reject pre-pack processes too – and because a pre-pack requires the agreement of the company’s main banker, this tougher line can stop pre-packs in their tracks.

3. Finally, HM Revenue and Customs appear to be intervening, they have apparently begun to ask for a winding up petition in some cases, rather than becoming an unpaid creditor following a pre-pack.

Pre-packs can be serial disasters

MPs have expressed concerns that it inadequately run businesses can avoid not only paying their debts, but the tax burden that should support the economy’s growth. For competitors it’s an even worse scenario – badly-run, failing, debt-laden and uncompetitive businesses are able to suddenly ditch their debts and return with a huge competitive advantage against competitors. This serial failure behaviour then adds to the pressure on financially sound and well-run businesses who are forced to compete against a pre-pack phoenix in a recession economy. The pre-pack process also prevents failing businesses being acquired by better-run and well-managed competitors

It is not right and the process needs to change.

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Posterous shows you the 6 things you must do to resolve a major customer service issue.

Posted by Michael under customer service

This is the email I received today from Posterous. This is a great example of how to deal with a major customer service issue.

As you’re no doubt aware, Posterous has had a rocky six days.

On Wednesday and Friday, our servers were hit by massive Denial of Service (DoS) attacks. We responded quickly and got back online within an hour, but it didn’t matter; the site went down and our users couldn’t post.

On Friday night, our team worked around the clock to move to new data centers, better capable of handling the onslaught. It wasn’t easy. Throughout the weekend we were fixing issues, optimizing the site, some things going smoothly, others less so.

Just at the moments we thought the worst was behind us, we’d run up against another challenge. It tested not only our technical abilities, but our stamina, patience, and we lost more than a few hairs in the process.

I’m happy to report Posterous is at 100% and better than ever. Switching to a new data center will help us avoid the type of attacks we saw last week, and the new, bigger, beefier servers will speed up the site and increase capacity. We were hit pretty hard, but we’ve come out stronger in the end.

While we were certainly frustrated, we know that no one was more frustrated than you. Your website was down, and I humbly apologize for that. Know that throughout these six days, restoring your site and your trust has been our number one priority.

At the same time, I have never been prouder of the Posterous team. Garry led the team in the server migration, Vince worked like a mad man until he passed out on his desk, and Jackson helped the community understand the impacts of some pretty technical issues. This week has been all hands on deck, and we had some pretty great hands.

We have great plans for the future of Posterous. Our team is stronger than ever, and we are laser focused on developing better ways for you to share your content online. Thank you for believing in us, thank you for trusting us, and thank you for sticking with us through the past six days.

–Sachin Agarwal

Cofounder and CEO, Posterous

Why is this such a good response ?

1. It is frank about the problem and the impact on users.

2. It explains what went wrong and why.

3. It explains what was learnt by the experience and how it wont be repeated in future.

4. It gives credit to the people that fixed the problem.

5. It adopts a positive tone.

6. It is a personalised the email. It is from the CEO (although not from his email address)

Well done posterous on the way you dealt with this problem.

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The EB5 visa program for entrepreneurs

Posted by Michael under Entrepreneur Resources, Leadership

EB5 is a visa program that offers permanent residency in the US for foreign entrepreneurs and investors. Under this scheme, entrepreneurs who create a new commercial enterprise or invest in a ‘troubled’ business in the US are entitled to US residency and eventual citizenship.

The purpose of the program

This visa preference category allows immigrants to enter the United States in order to invest in a new commercial enterprise that will benefit the US economy and create at least 10 full-time jobs or to invest in a troubled enterprise. Essentially it’s a preference system to boost the current economy or drive new growth.

EB5 Criteria

To qualify for the new business entrance you must:

1. Invest or be in the process of investing at least $1,000,000 or $500,000 in a designated target areas.
2. Benefit the U.S. economy by providing goods or services to U.S. markets.
3. Create full-time employment for at least 10 U.S. workers.  This includes U.S. citizens, Green Card holders (lawful permanent residents) and other individuals lawfully authorized to work in the U.S, but not you, your spouse, or children.
4. Be involved in the day-to-day management of the new business or directly manage it through formulating business policy.

Troubled business investment criteria are that you must:

1. Invest in a business that has existed for at least two years.
2. Invest in a business that has incurred a net loss, based on generally accepted accounting principles, for the 12 to 24 month period before you filed the Form I-526 Immigrant Petition by an Alien Entrepreneur and that loss must be equal to 20% of the business’s net worth before the loss.
3. Maintain the number of jobs at no less than the pre-investment level for a period of at least two years.
4. Be involved in the day-to-day management of the troubled business or directly manage it through formulating business policy. 
5. The same investment requirements of the new commercial enterprise investment apply to a troubled business investment ($1,000,000 or $500,000 in a targeted employment area).

What are the drawbacks?

1. The EB-5 visa program is currently due to end in 2012 and average time from application to approval is six to nine months so it’s necessary to allow enough time for your application.
2. You may find the administrative load heavy – a vast amount of paperwork is needed to maintain your green card status.
3. Many people have found they need to hire a legal specialist to complete their application and this can add substantially to the cost of the programme.
4. Unlike Europe where tax payments depends on the country where you reside, the USA charges income tax on all US citizens and permanent residents based on worldwide income irrespective of where they live.

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The future of blogging: Tumblr v Posterous

Posted by Michael under Business Growth, Online Retail, Social Media

The Guardian newspaper has been considering the future of blogging – and the answer depends on where you stand.  According to their social media mavens, for the big tech blogs like Mashable and TechCrunch, there’s no contest, it’s Wordpress all the way, but for the amateur blogger, and those who are time-short and twitterate, two mobile blogging systems are racing up the popularity stakes – but which is best: Tumblr or Posterous?
 
To a certain extent it depends on how you respond to each platform – both are simple to use, each has advantages and disadvantages, and each requires you to learn a few new tricks to convert your old blogging behaviours to new micro-blog ones.

What’s new in blogging?

Posterous has been running an aggressive campaign to seduce users who are familiar with blogger and wordpress systems, as part of which it’s just gone live with a Wordpress blog important which means that old blog content established in a Wordpress platform, can be grabbed, along with comments and tags, and dumped straight into a Posterous account. On the downside, it doesn’t mean that you can transfer your URL structure and that means you can lose quite a bit of your ‘Googlejuice’ – the mojo your site has created through links to your blog.

But when you look at the usage stats, rather than the functionality, there’s no doubt that at present, Tumblr is leading the field. As PC Magazine puts it, when you’re ‘fatter than Twitter but thinner than Blogger’, you’ve positioned yourself just right for the average user!

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Startup Support in Profile: Microsoft BizSpark

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

This global programme aims to let startups in the software based industries really boost their development efforts by providing three key benefits, for free!

What You Get

1. Software – startups who enrol in the programme are given free access to Microsoft’s development tools and platform technologies
2. Support – meaning that network partners around the planet are on call to offer advice, networking and development synergies
3. Visibility – a worldwide audience of potential investors, clients and partners are linked to the startups through Microsoft’s virtual networks.

There are other benefits too, such as technical training and access to Azure, Microsoft’s own cloud platform for problem-solving.

Are You Eligible?

To fit into the programme you have to:

• Be in the software development business
• Have existed as a commercial entity for fewer than 3 year
• Be generating annual revenue under USD 1 million. (and see the note below for regional variations and fine print details)

How To Join Up

You can sign up BizSpark through a valid BizSpark Network Partner or a Microsoft BizSpark Champ – either of which can provide you with a BizSpark enrolment code. The entry into the programme is free, but you will pay a USD $100  fee when you leave after three years.

What’s In It For Microsoft?

Well, they get in on the ground floor of a lot of innovative software based development, they hope that startups will go on to license themselves through Microsoft, and they benefit from offering peer-to-peer exchanges to the next generation of commercial enterprises which could lead to useful synergies and cooperative ventures for them.

Small print

Microsoft say that:

[a] Startups cannot be in the business of providing services to others such as hosting, web agency, system integration or outsourced development.
[b] Startups who are actively engaged in software development but have not yet completed the formalities of establishing a business are also eligible for entry into BizSpark.
[c] There are local variances calibrated to economic conditions in the startup’s place of business, below. If a Startups’ place of business is not listed below, then the revenue limit is USD $1 million.
USD $750,000 China
USD $500,000 Greece, Korea, Malaysia, Poland, Russia, Spain, Ukraine
USD $250,000   Egypt, Pakistan, Thailand, Turkey, Vietnam 

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Business profile: Slydial

Posted by Michael under Business Growth

So, what use would you make of a free voice messaging service that connects you directly to someone’s mobile voicemail? 

It’s an interesting question – there are good reasons for using a system like Slydial, and less good ones, and Slydial are open enough to list some of the ‘shadier’ uses in their Frequently Asked Questions, but if you have a service-centred business, for example, Slydial has a real benefit for you.

Say you want to let a series of customers know their order has shipped, but you don’t want to get into long conversations with all of them? Using Slydial means they get a totally personalised message but you control the length of the call and the information conveyed – it’s bespoke but you’re the only one who gets to do the speaking!

How it works

In most cases the person you’re slydialing just receives a new voicemail alert around a minute you leave your message, although with some mobile phones, the recipient’s phone gives a half ring before going to voicemail. Several reviewers have tried to catch it out, but nobody yet has managed to grab their phone before slydial slips over to messaging.

In the USA you can just dial 267-SLY-DIAL (267-759-3425) to use this service completely free, but for the advanced features such as the apps for iPhone, BlackBerry and Windows Mobile smartphones (and to avoid the advertising that precedes each usage you make of the service) you have to pay a small monthly fee.

What is it good for?

Slydial has a list: you might be short of time, wishing to avoid a painful, embarrassing or tough conversation, playing the field, wanting to pass on some complex information without having to get through the necessity of the person on the other end interrupting or trying to take notes as you speak and you don’t want to have to text it all, you might want to speak without interruption or to convey a message to somebody who is on holiday or in a meeting but who would benefit from having an update on a situation that’s too complicated for a text.

The Slydial downside

It’s simple – the person you’re calling has to have a U.S. mobile phone number that isn’t a pay-as-you-go, the callee also has to have voicemail on their phone and it doesn’t work with google voice, youmail or other similar third party systems. So for UK users, as of now, there’s no way to incorporate the Slydial experience into your domestic life.

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Business Profile: Groupon

Posted by Michael under Business Growth, Online Retail

Groupon is taking the bargain world by storm. The company offers a single ‘Groupon’ daily in each of the cities it serves, and the groupon (contraction of group coupon) is based on an online assurance contract that contains a tipping point algorithm. This means that if a certain number of people sign up for that day’s offer, then the deal becomes available to all of them, but if the tipping point isn’t reached, nobody gets that deal. Retailers love the concept because it means their risk is massively reduced and Groupon profits by taking a share from the retailers. Groupon, which bought out its European rival MyCityDeal a couple of years ago, has 11 million subscribers in 22 countries and is available across the UK in 37 cities from Aberdeen to York.

But now the model has evolved from single daily offer per city, per day into something called a Personalized Deals initiative which means that subscribers in several US cities will get deals tailored to their personal tastes and previous purchase record. As the Groupon blog puts it, ‘Personalized Deals will start out dumb, but like a baby dipped in some sort of mutating ooze … get smarter quickly. As Groupon gets to know you better, we’ll target your inbox with scarily accurate deals and scarily accurate hand-drawings of you.’

Marketing to the Individual

What does this mean? It’s a huge change in the nature of marketing, allowing retailers and service providers to increase the number of deals made, but with no control over who they’re made to. That power lies in the hands of the intermediary (Groupon) which uses the details supplied by its subscribers to avoid wasting their time, which is one of the biggest complaints people have about advertising and marketing – when it’s done via mass media, it reaches many more markets than the target ones.

This also allows Groupon to have more masculine deals on offer to men – while women have driven the growth of Groupon through social networking, the masculine market can be better serviced through less ‘sexy’ but more man-friendly offers, like power-tools and hardware deals.

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Measuring Your Life

Posted by Michael under Leadership

Professor Clay Christensen was asked to address this year’s Harvard Business School graduands. They weren’t interested in exploring how to apply his principles to their careers, but to their whole lives and his speech revealed how he has applied the management theories and principles he’s developed over the years to his own life.

First he told the students that the important thing was to use the tools and that good management theory was in teaching people how to think, not what to think. In turning the tools of theory on themselves and reflecting on their own life, plans, ambitions and ethics, the students were encouraged to find what actions would lead to their desired results … and what careers would fulfil their wildest hopes.

Christensen offers three questions to elicit the right choices:

1. How can I be sure I’ll be happy in my career?
2. How can I be sure my relationships with family and spouse will be an enduring source of happiness?
3. How can I be sure I’ll stay out of jail?

And he points out that while the last question may seem flippant, it’s not – two out of the 32 Rhodes scholars in his year have been to prison and one of the architects of the Enron scandal was a classmate of his at Harvard. As he puts it ‘These were good guys – but something in their lives sent them off in the wrong direction’.

So what is the overriding purpose of management? According to Christensen, it’s about building people, not businesses. A career in business isn’t about buying and selling but about building up the self esteem and abilities of others.

Strategy is often considered to be a primary process of management, but Christensen says that it’s all too common to see business leaders with broken homes – they didn’t set out with a strategy of becoming divorced and estranged from their families, but that’s how they ended up and it’s because they don’t focus on using strategy to drive their personal lives the way they did their business. He spent an hour a day thinking and praying about his own purpose in life and it had led him to a career and family life in balance.

He reminded students that strategy serves no purpose unless it has adequate resources – and that high achievers tend to invest their resources in what gives them immediate feedback. That can mean the response of hitting targets and meeting deadlines takes precedence over investing in family and outside interests, but in the long run, that leads to failure because if you invest less resources in the things that matter most, you starve them of value and vigour.

Then there’s the point of culture, and underutilised tool in the management kit. He says that while many businesses and relationships have to start with power to ensure cooperation: they must have rules and penalties to make employees do what is necessary, but as the business grows, the culture of following procedures and setting priorities develops into a culture which means that in family and business alike, treating people with integrity and confidence will build those qualities into the culture of your relationships.

In dealing with marginal costs, he told a personal story about extenuating circumstances. He had been in the Oxford University basketball team which made it to the finals of a UK contest. The finals were held on a Sunday and he had vowed never to play games on a Sunday, so he refused to play. His religion was more important to him than a game, even a final. His teammates were shocked and tried to get him to break the rule because it was such an important match. He refused. Today he believes that if he had once allowed ‘extenuating circumstances’ to encourage him to break the rule, by making one small decision in favour of expediency rather than deeply-held beliefs, he would have been constantly presented with other examples of why he should bend or break his rules and that could have led to ending up in a very bad place, like some of his former classmates.

He also pointed out that choosing the right measurement tools helped establish a good life – if your life is filled with decisions that help others, as well as you, the dividend will be a good life, but if your life is filled with decisions that help business, not others, and not necessarily you, you’ll end up with a good business, but not necessarily a good life!

Harvard Business School photograph courtesy of Patricia Drury

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