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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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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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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Giving feedback to improve business performance

Posted by Michael under Business Growth

Heather Townsend has an interesting article at Real Business on how to give feedback to a poorly performing team member. She has five key tips to making feedback work for you, the recipient and their team:

1. Don’t shy away from the conversation – Townsend says the longer you leave it, the tougher it gets to open the discussion. Also, I’d add, the further you are in time from the event that caused the need to give feedback, the more likely it is that both you and the recipient of the feedback will have begun to forget the details of what happened, allowing them to get into denial about the situation and you to start to feel insecure about your own memory of the event/situation if you were present.

2. Be specific – Townsend recommends using the Situation – Behaviour – Outcome approach, which is a good way to establish the grounds for feedback. You need to state the situation in which the behaviour occurred, and outline the behaviour which needs to change before describing the outcome you require. As an example:

Situation – a busy day in the office when everybody was under pressure
Behaviour – the person was heard speaking rudely to a client on the telephone
Outcome – In personal terms this person needs to recognise her pressure levels and manage her own well-being by taking regular short breaks in high-stress situations. Professionally, ensuring she uses a script for the calls she makes means the person can avoid losing her temper and get through calls without losing her cool.

3. Be clear about what you and don’t want to happen – using a technique described in Crucial Conversations, Townsend outlines how to handle a feedback session: “I’m having this conversation because I want to see you be more successful in meetings. I don’t want you to think that I’m getting at you, or for you to think that I think you’re incapable. I do want you to be listen and digest this feedback carefully – and I don’t want you to dismiss the feedback as not important. I am giving you this feedback because I want to see your career develop further in this firm, and in my opinion, changing this behaviour will have a positive impact on your career development.”

4. Listen to the reaction – defensiveness, undue emotional response or an attempt to avoid the conversation, means you need to make the conversation safe again, before you give more feedback and you do this by restating what results you do and don’t want to happen.

5. Work with the other person’s agenda – Townsend says that feedback works best your purpose is supportive, so talking to somebody when you are in a bad mood with them is counterproductive, because you need to be able to see the benefit of giving constructive feedback, not just wanting to let off steam.

I’d add that what you do before, during and after the feedback session can make a substantial difference to how your feedback is received and how the person you’re talking to handles the need to change their behaviour:

• Prepare yourself by making sure you’ve double-checked facts and positions (perhaps the employee was dealing with a personal call, not a work one, in which case your feedback needs to be about time use in the workplace, rather than rudeness)
• Deal with excuses calmly but factually – and don’t fall into dealing with the excuse rather than staying focused on the behaviour that needs to change
• Make sure people can make the changes you are asking of them – this may mean providing training or a mentor, setting a target that will be monitored or just something as simple as giving them a go-to person if they feel they are slipping back into an unacceptable behaviour – the role of the go-to is to provide a safe space in which the individual can explore why they aren’t keeping up their performance so that if they need something further, they have identified it before they go to their line manager or mentor to request further support to maintain their constructive change.

Photograph by Stan Random under a creative commons licence

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What motivates people at work?

Posted by Michael under Business Growth

When I was studying Management the key research that described the role and function of motivation was the work of Maslow.

His hierarchy of needs was the classic model by which management designed the processes that were supposed to lead to greater productivity.

Daniel Pinks looks at motivation in a different way in an entertaining clip that is, in itself, evidence of how thinking differently can lead to different outcomes – it’s an example of using mastery, technology and imagination to change the face of business presentations.

What Pinks explores is the way that a wide range of studies show that paying people more to do better work doesn’t achieve the desired result when that work ceases to be monotonous physical effort and requires intellect and complex thought.

Instead, once you ask people to do more sophisticated tasks to achieve their bonus, they actually do LESS well when the incentive of meeting their ‘hierarchy of needs’ is used as a motivating factor – ie if they are offered more money on a sliding scale, they actually perform less well.

So what factors can lead to better business performance today? They are factors relating to personal satisfaction are and achievement:

Autonomy – the desire to have control over our thinking processes. It has been proved in several studies, including some run by MIT, that when you free up employees to think for themselves, they come up with fixes, solutions and improvements in the workplace – not because they want a bonus for a good idea, but because given the chance to make things better, they often focus naturally on improving workplace performance because it’s a big and important part of their lives

Mastery – the inbuilt need to get better at things may be an evolutionary advantage; individuals like to develop their skills, whether it’s the time it takes them to complete a Rubik’s cube or the ability to play a Chopin sonata on the piano. This drive towards mastery is innate and can be harnessed to improve workplace performance when linked to autonomy: people want to improve, but forcing them to improve destroys their autonomy and makes them resistant so you need a balance that recognises these two drives working together with the third

Purpose – having a big purpose helps people want to do better. Money is not a big purpose for many people and ‘more money’ doesn’t inspire a lot of people to get up and do something. Purpose comes from believing you’re doing well in helping make something better – just doing well in a business that is not making something better (or may be making something worse) demotivates the individual so businesses need to look for ways to be ‘good at being better businesses’ as well as just for ways to ‘get better at being in business’.

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Use a bit of monkey business to replace performance appraisals

Posted by Michael under Business Growth, Leadership

Recently Cameron Herold told me about an interpersonal review process he calls Monkeys Looking Sideways, which he’s described in detail on his blog.

He uses it in place of the standard 360 degree review process because he wanted to build teams that were able to enjoy and even embrace healthy conflict. He also wanted to increase trust and good communication between individuals.

Essentially it’s based on a story he heard at a seminar years before. It was about a group of monkeys sitting in a tree. The top monkey looked down and all he could see was smiling monkeys looking up. But every monkey further down the tree had a very different view!

So he used this account to create a verbal, real time, 360 degree feedback exercise from group to individual. To use it you need at least a half day, preferably a full day and a pad of sticky notes and a pen for each individual taking part.

You start with the review of the most senior person, the team or group leader, or CEO

Each person in the group writes down the top 5 things that the person being reviewed:

a) Should continue
b) Should improve on

That person says in their seat but everybody else stands up, one at a time, and reads out their sticky note. They start with the positives and then move on to the aspects that the person being reviewed should work on.

The person under review can only either say thank you or ask a clarifying question., they can’t debate, explain or excuse themselves.

Then all the notes are stuck to a flip chart and the individual being reviewed is given them to type them up and use them in their personal development meetings over the year.

The process is repeated for each person in the room and takes around 45 minutes per person.

Herold says it produces more valuable feedback than any other review process.

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Angels Den

Posted by Michael under Business Growth, Entrepreneur Resources

The popularity of TV programmes like Dragons’ Den has led to renewed interest in the role of investors in new business – but the co-founder of Angels Den, Bill Morrow, says that his organisation, which connects fledgling businesses seeking funding with high net worth individuals looking for investment opportunities, hasn’t always benefited from linkage with the TV show because some entrepreneurs fear being ridiculed and humiliated by their potential ‘angels’ but – he claims, nothing could be further from the truth.

How does it work?

Business angels are people with some money to spare and a naturally adventurous nature. From his own experience when seeking Angel funding, Morrow saw that the traditional process of engaging with business angels was overly complicated and too costly.

His online business, Angels’ Den, allows his team to react fast to customer feedback which makes them flexible and innovative. This means that the more than 2,500 Angel Investors and 10,000 entrepreneurs who are registered with Angels’ Den are given a more reflexive service in which both advice and funding can be swiftly exchanged.

Before joining up, SMEs and entrepreneurs are invited to attend a free Business Funding Clinic to work through their proposal and ask questions about the nature of business funding. Then, when businesses become members, they are ‘led by the hand’ through the process of putting together a proposal to Angels. Around a fifth of those registering as business have already found an Angel – which Morrow says is ten times the national average. The services offered range from advice clinics to Speed Funding and private meetings organised by regional managers.

What does it cost?

There’s a £799 (plus VAT) registration fee and then, once you achieve funding from and Angel a 5% success fee.

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