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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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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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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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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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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What bosses believe and why it matters

Posted by Michael under Business Growth, Leadership

Robert Sutton has been pondering what bosses believe at the Harvard Business Review, and he’s produced some thought-provoking articles that explore what a good boss does, and doesn’t, do. Here’s a digest of his research:

• He or she recognises that he or she has an imperfect understanding of how he is to work for, and that the way he or she does things is as important as the things he or she does. He or she also knows that his or her power over others can lead to imposing harsh behaviour on staff that he or she isn’t even aware of. Finding the balance between asserting ‘boss behaviour’ and less assertive behaviour is one of the key skills of a good boss.
• A good boss, according to Sutton, knows that it’s getting the boring everyday things right that leads to success, even if the media only focuses on success that comes through ‘breakthrough ideas’ or weird magical methods. Similarly, little wins are the key focus, as they allow the team to see progress every day – big ambitious goals are important but not a daily concern.
• Protecting staff from outside annoyances is one of the responsibilities of the good boss, as is knowing when he or she is going wrong and pulling themselves back from overconfidence that leads to a business nose-dive.
• Leadership tests are common, and one of the most important to the good boss is what happens in a business after somebody makes a mistake. Another crucial leadership test is the process that a boss goes through to destroy bad ideas, and to eliminate the many good ones that aren’t key to business success – in other words, in Sutton’s own language: bad is stronger than good. It is more important to eliminate the negative than to accentuate the positive.
• Perhaps one of the most interesting phrases he uses about the ‘good boss’ is “I aim to fight as if I am right, and listen as if I am wrong — and to teach my people to do the same thing” which is a fascinating concept, although it’s not clear how Sutton thinks fighting and listening come together in good leadership (perhaps he’s saving that for his book, due out in September).

Goals and why good bosses may ignore them

And he’s dug deeper into the topic in exploring Big Hairy Audacious Goals, those management objectives made famous by Jim Collins, which many managers believe are the only measure, and means, to business success. Sutton dares to argue otherwise, suggesting that while ambitious goal-setting is a key feature of effective leadership, the best bosses don’t use the BHAG as a daily tool because:

1. The goals are too obvious to need restatement (there’s no need to explore the big goal, but the subgoals along the way are worth assessing for clarity and commitment)
2. As a weapon they’re pretty blunt (BHAGs don’t allow daily successes, while breaking them down into the little steps along the way can let a team celebrate mini-successes on a regular basis as they move towards the big goal)
3. As a target they’re too big (it’s scary to be told to double your sales, for example, but breaking down that process into steps and talking it through removes fear and replaces it with a coherent outline to follow).

And I’d add a final thought from my own experience: I am accountable and responsible for the success and failure of my people. If someone in my team doesn’t achieve their objectives, more often than not it turns out they weren’t adequately set up to succeed.

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The New Experts

Posted by Michael under Business Growth, Leadership

In May I had the great pleasure of hearing Robert ‘Bob’ H Bloom speak – since then, I’ve been lucky enough to read his excellent book, The New Experts.

The central premise of his book is that, owing to the internet, buyer behaviour has changed completely. It’s a detailed exploration of how the relationship between business and customer has changed and what makes consumers into the ‘new experts’

Essentially, internet-empowered buyers have four lethal weapons that they can use:

1. instant access to information about a potential purchase
2. almost unlimited choice
3. real-time comparison of price offerings
4. pleasure in ‘victory’ over the seller using the first three weapons

These four weapons mean that customers no longer have loyalty – they don’t care who they buy from or where the seller is located, as long as they ‘win’ the deal

Loyalty versus Preference

Loyalty was the behaviour of trusting a person or brand to provide a product that met the buyer’s needs at a reasonable price and Bloom says it is obsolete.

Customer preference has replaced loyalty and cuts into the buyer’s thinking at four decisive moments in the purchasing period

• the now-or-never moment
• the make-or-break moment
• the keep-or-lose moment
• the highly profitable multiplier moment.

How To Respond

Exceptional companies will master the behaviour of the New Experts and reward them by delivering the joy of victory that the buyer is coming to take for granted. This mastery will allow those companies to make greater profits at the expense of those who have been relying on a loyal customer base that is being eroded. Managing the expectations of the New Experts requires a company to have:

• Top down commitment to create an exceptional experience that generates customer preference.
• Total organisational alignment to ensure this happens.
• Reliable metrics to assure relentless improvement in customer conversion at every decisive moment.

Robert Bloom is worth listening to – he’s had a fantastic success in creating business growth, starting with a local advertising agency he turned into a successful national agency, then he moved on to creating growth strategies for some of the world’s largest companies and brands including BMW, l’Oreal, TGI Friday’s, Whirlpool, and T-Mobile.

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Entrepreneur’s resource: Smarta.com

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

Smarta.com describes itself as a ‘support platform’ which aims to provide a single location for business owners and entrepreneurs to connect, learn and do business. Founded by Shaa Wasmund, formerly a boxing promoter for Chris Eubank, who went on to work for Dyson and Bebo, it offers a range of services, all for free, that support the work of business leaders and active business people.

What makes Smarta special?

The fact that it was founded and is run by entrepreneurs makes it a smart social networking system for business leaders as well a non-stuffy way to learn, share and network.

What does it do best?

1. Smarta’s list of 100 most exciting businesses of the year is a great resource for what’s hot and what’s not, in the world of entrepreneurship.
2. Learning the way you like to is essential for time-limited business leaders: being able to choose from written bite-sized guides, short videos, wikis and online events allows everybody to find a swift chunk of business wisdom in the form that suits them best.
3. Being able to ask the whole Smarta community for an answer to a business question.

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NACUE in profile

Posted by Michael under Entrepreneur Resources, Leadership

The National Consortium of University Entrepreneurs may not be well known at present, but like the Ivy League colleges of the USA it might become the nursery in which Britain’s future business leaders are raised. This national organisation aims to support university enterprise societies and student entrepreneurs so that entrepreneurship grows across the UK

As a grassroots organisation it aims to encourage university students to focus on enterprise as part of their education and development. It’s a communication hub for enterprising graduates and a contact point for exciting early-stage start-ups in the UK.

By opening communication channels, facilitating the development of new societies, providing cutting-edge national programming and supporting enterprising students and early-stage start-ups engaged with university enterprise societies, NACUE fosters an enabling entrepreneurial ecosystem to stimulate the growth university entrepreneurship.

National recognition

Real Business Magazine has heralded NACUE as a ‘Champion of Entrepreneurial Britain’ and it was also the winner of the 2009 ‘SFEDI Enterprise Champion Award’,

Run by student entrepreneurs for student entrepreneurs

Back in 2008, Victoria Lennox created the concept of NACUE and established it at a meeting with twelve university enterprise society leaders including: Oxford, Cambridge, Imperial, London Business School, Oxford Brookes and Kings College London. There are many programmes and projects that intend to support innovation and entrepreneurship in the UK’s brightest young people, but most of them are not student-led and therefore have a conceptual and age distance from the students they aim to influence. NACUE intends to remain grass-roots by ensuring that students themselves have a clear role in its organisation and direction, while senior and special advisors bring a greater range of perspective and experience to the body as a whole.

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Business Leader profile: Askar Sheibani

Posted by Michael under Leadership, awards

Born in Azerbaijan, Iran, Askar Sheibani arrived in the UK in 1972 to study engineering. He had no spoken English but his intense competitive streak and willingness to take risks led him to qualify as an electronics engineer even though he could see that he wouldn’t achieve what he wanted in the electronics sector due to what he describes ‘… as a lot of discrimination back then.’ But it wasn’t just discrimination that made him want to strike out alone. His first years in electronics showed him that many organisations were caught up in ‘politics that stifle you rather than motivate you’ so when he spotted a gap in the market, he set out to fill it..

But his efforts to create an environmentally, swift and efficient hardware repair centre in the UK were not appreciated by the industry, the government or his bank!

Sheibani had recognised that the lack of a UK based hardware repair centre meant repairs cost more, took longer, and had to travel long distances. He thought that it was obvious that a local repair base would reduce cost and turnaround time, as well as cutting the environmental burden. The DTI did not agree – the adviser he spoke to said British businesses preferred sending products back to their manufacturer and that Sheibani should stick to his job and not take risks.

His bank also refused funding because they thought it too and unviable. But he was not deterred – he invested £50.00 in a second-hand shed which he installed in his back garden and turned into a tiny workshop. His friends and family felt his plans were insane particularly as he had a young family. Sheibani was also told that his business would be ‘destroyed’ by the big manufacturers who would object to him taking business away from them.

His business, Comtek, now has a £10 million turnover and units in Wales, Holland and Germany as well as England. It’s repaired more than 2 million items for customers like BT, Orange, Siemens and IBM. It was the winner of the 2010 Green Business of the Year award at the Fast Growth Business Awards.

And twelve years after he founded Comtek, the Secretary of State for the DTI asked him to join the Ministerial Advisory Board – advising the very department that had rejected his entrepreneurialism

And his advice for entrepreneurs? Very simple: ‘No matter how many barriers there are, how many people try to de-motivate you, how many people say it can’t be done, it can be done. If you’ve got the passion, go for it. Don’t let anyone tell you that you can’t do it.’

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