Systematic Business Innovation for Startups
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This presentation has evolved from a talk I gave at Silicon Beach 2012, via Tallinn University of Technology February 2013 to this version for the Executive Business Centre at Bournemouth University on 230413. It is an introduction to the background and tools I use to help startups and early stage digital, creative and content companies build a robust business 'vehicle' to drive (sorry!) growth.
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Systematic Business Innovation for Startups
- 4. Start-up Stay-up â˘Youâre drowning in paperwork - especially financial â˘Quality of work is starting to slip â˘Cash flow is bumpy â˘Gaps appear in communications â˘Team morale is not so great â˘You feel overworked & stressed 10/12
- 5. Is Money the Answer?
- 6. âThe unfortunate truth is only one percent of (tech start-up) business proposals receive funding from angel investors or venture capitalists or private equityâ â Startup Addict Blog
- 7. So think what the percentage is for entrepreneurial companies that are NOT start-ups: agencies, content producers, service companies etc. Businesses that donât scale.
- 8. If money isnât the answer â what is?
- 9. In 35 years Iâve not seen a single early-stage company that couldnât be more efficient as a business
- 10. Founders Focus Obsessively on The New Thing They Do
- 11. While the business vehicle theyâre building to make & market The New Thing They Do just isnât up to the job
- 12. Itâs flimsy, home-grown, unstable, and an inefficient way to get from A to B
- 13. Product/ Service Process/ Workflow Leadership/ Management Business Model People/ Skills Marketing Turnover/ Sales Net Profits Structure By âBusinessâ I donât mean finance. I mean all the things that â together - enable you to generate revenue & profits from your product or service. I assume that you can deliver your product or service . âBusinessâ is everything else you need to do to create a profitable enterprise.
- 14. Home-grown business âvehicleâ Business inefficiencies âLeakâ profits from producing & selling product Not enough profit to reinvest in growth Business stays stuck in Start-Up a home-grown business vehicle stops you motoring
- 15. Poor project management so jobs overrun No ongoing job profitability analysis Theyâre âbusyâ , have revenues, so think itâs OK No money to invest in s@#t- hot PM End of year accounts show 5% Net Profits agency that builds websites for retail clients
- 16. Flat structure: 2 founders + very young team Founders get jobs in & look after clients No-one managing team so poor quality control Lowers job profits, reduces their biz dev effort, slows growth Founders have to step in to sort jobs out social media marketing/PR agency
- 17. All early-stage businesses have â under the hood - these âinvisible inefficienciesâ. If you can identify these and reduce them, you can âfindâ the profit to fuel growth organically. (what âfundingâ often does is allow these inefficiencies to remain invisible)
- 20. âCreative Destruction⌠incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.â
- 22. They havenât taken on board his distinction between Invention and Innovation INVENTION INNOVATION
- 23. They havenât taken on board his distinction between Invention and Innovation INVENTION + INNOVATION = ENTREPRENEUR
- 24. âThis should be as demanding and exciting as inventing the thing you doâ Every aspect of it An entrepreneur also innovates the entire business that creates & delivers the new thing they do
- 25. When you Invent and Innovate it can produce extraordinary success
- 26. But thatâs not what most early-stage entrepreneurs do
- 28. A Business is a System
- 29. âA set of interacting or interdependent components forming an integrated wholeâ
- 30. âA set of interacting or interdependent components forming an integrated wholeâ
- 34. How do you grow a business in a Systematic way?
- 35. every detail, every element must be building towards your ultimate Vision Itâs like directing a film:
- 36. itâs a way of seeing and understanding your business.
- 37. itâs about how you use your own creativity to innovate your whole business
- 38. Letâs get closer to the real world of running a business. Letâs start by talking about burgers.
- 39. THE NEW THING THAT YOU DO BUSINESS ENGINE BUSINESS STRATEGY
- 40. BUSINESS ENGINE BUSINESS STRATEGY THE NEW THING THAT YOU DO Deciding where you want to go as a business and planning how to get there The mechanics of the business; how it functions efficiently day-to-day
- 41. THE NEW THING THAT YOU DO BUSINESS ENGINE BUSINESS STRATEGY
- 42. OPERATIONAL COMPETENCE = the skills to execute on The New Thing That You Do (The Invention) Business Strategy isnât developed Business Engine is neglected
- 43. THE NEW THING THAT YOU DO (Product/Service) Process/ Workflow Structure Leadership/ Management Business Model People/ Skills Marketing Turnover/ Sales Net Profits
- 46. Benchmark where you are â with total honesty. This is point A.
- 48. Build an integrated Road Map This is how youâre going to get from A to B.
- 49. Identify the true value in your business. Build your pricing around it.
- 50. Bake innovation skills into the team leading the business.
- 53. Get management information flowing. Use it to make better decisions.
- 54. Separate operational from strategic decision-making. With separate management and board meetings.
- 55. Develop the entrepreneur/s business skills & perspective
- 57. Letâs look at one in more detail. Iâve chosen this one because itâs at the heart of the whole process. Build an integrated Road Map
- 58. Q1 Q1Q4 Q4Q2 Q3Q3Q2 Example: an early-stage online jewellery business that is growing fast & sees opportunities for itâs own e- commerce operation, partnering with the big online retailers and opening operations in China Build an integrated Road Map
- 59. Q1 Q1Q4 Q4Q2 Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Marketing Turnover/ Sales Net Profits YEAR1 YEAR2 750K Team: 6 3rd party sites (too?) flat E-commerce range 94K Basic Website 2 Founders (designers) UK outworkers
- 60. Q1 Q1Q4 Q4Q2 Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Marketing Turnover/ Sales 1.5m Net Profits 150K Full-time MD Free up MD 50% Shanghai Warehouse Bespoke Service Multiple rev streams Team = 15 people Open in China YEAR1 YEAR2 Team: 6 3rd party sites (too?) flat E-commerce range 94K 2 Founders (designers) UK outworkers 750K Basic Website 750K
- 61. Q1 Q1Q4 Q4Q2 Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Open in China Turnover/ Sales 1.5m Mgmt team Net Profits 150K Full-time MD 750K 1m 1.35m1.25m1.1m800K 900K Shanghai Warehouse Bespoke Service Multiple rev streams Team: 6 Hire studio assistant Hire designer Hire sales/ account mgr Hire Shanghai head Team = 15 people Promote Ben to MD Mgmt training Ben Ben: build mgmt team Ben: build mgmt team Marketing 3rd party sites (too?) flat E-commerce range 94K Basic Website 2 Founders (designers) UK outworkers Limit of flat structure
- 62. 1. Benchmark where you are: A 2. Draw your Vision: B 3. Build a Road Map 4. Identify real value & price accordingly 5. Equip leaders with innovation skills 6. Innovate your business model 7. Innovate & build your business engine 8. Get Management Information flowing 9. Operational/Strategic decision-making 10. Develop leadersâ business expertise 11. Develop/empower management team
- 63. Donât derail your business by thinking anyone can run one⌠Invent and Innovate!