Entrepreneurs

Entrepreneurs and Criminals…maybe it is quite a fine line…

I was delighted to meet the very interesting Sheena Leaf in Exeter on Friday. That’s Sheena in the photo. Sheena was originally a psychiatric nurse and these days is working on a project in Devon called “The Entrepreneur Inside”. It’s a project that aims to deliver entrepreneurial education to prisoners and Sheena’s part way through a prison pilot that will connect offenders with business professionals and a regional university business school to uncover legitimate entrepreneurial potential.

This is something that’s never occurred to me before – although a cursory Google search identifies a couple of serious academic research studies comparing especially drug barons & gang lords with entrepreneurs.

I find this a fascinating idea – as it’s all to do with circumstance and life chances as well as morals. On the flight back to Belfast on Friday evening I jotted down a few thoughts of my own about what some of the similarities are. This is what I came up with:

· We all like ducking & dealing – although perhaps we call that negotiation

· We all like to make money – sometimes even just for thrills

· Both sets lean towards being manipulative and control freaks – again we probably call that negotiation

· We all resent being told what to do & like to be our own boss and make our own independent decisions

· Everyone has a healthy disdain for the competition (there’s a famous story from a non-Disney theme park who used the objective “Kill Mickey” internally)

· We all work hard to make ourselves indispensable to our customer base and we all want “addictive” products to sell

· Both of us like spotting opportunity & backing “horses”

· We all monitor and respond quickly to market trends

· We both have a strikingly different risk profile than other groups of people

· We all like to break the rules although we tend to do that by using armies of professional advisers to look for legal loopholes.

Interesting eh? I’d welcome your thoughts on this & I wish Sheena every success with her ground breaking pilot.

So you wanna be a startup CEO…5 qualities you absolutely need

Being a startup CEO seems to be an attractive occupation right now and one that the press & certainly Hollywood makes look pretty easy as well as fairly glamorous. I thought I’d write a blog about my own views on the necessary qualities people need to make it through to the other side. Please note that being the CEO of a startup requires a different set of qualities to being CEO of a mature & established business and indeed, that sort of experience may well be a hindrance in a startup environment. Also it’s no accident that the photo of Paul & me above shows us in a casino setting – there’s a lot of luck at play as well – so don’t feel too bad if your startup is one of the 50% or so that fail in the first year.

I’ve seen other bloggers make great long lists of these but I’ve distilled mine down to 5 main qualities:

1. RESILIENCE – this is the big one. It’s also a quality you should look for in a business partner or in your team members as you recruit them. The official definition of resilience is an ability to bounce back into shape. In reality in a work setting it means being able to continue functioning & making sensible decisions in the face of adversity – which could be a one off event (like a disaster) or longer term (like always being tired from working 16 hour days consistently). As part of this quality I would include not bleating about how miserable you are & making your colleagues feel bad as well – there’s nothing worse than that. Resilience is what you need when the 10^th bank you’ve spoken to that week won’t lend you money & you don’t have enough to cover payroll right now, it’s the quality that makes you get up at 3am to go & catch a plane to London even though you only finished work at 10pm last night, it’s what makes you sit down & start working on another response to tender when you’ve just had a rejection letter in from something you thought was a dead cert. In summary, this is the quality that keeps you going & you either have it or you don’t – so be honest with yourself. At the end of the day, having the stamina & energy required to make a new company a success should not be overlooked. The amount of sheer hard graft is savage & impossible to communicate to anyone that hasn’t been there.

2. READING PEOPLE AND SITUATIONS – you need to be naturally good at this and it’s the quality that stops others from pulling the wool over your eyes. First up you need to have a gut feel about how things are going for the company – you should be able to just tell, a bit like second sight. You also need a natural ability to read your markets and know what products are right, when to launch them, etc. Other times you use this is in appraising ideas (which you do on an hourly basis in a startup) and rapidly sorting them into good & bad, negotiating, making decisions (most of the time with a serious lack of information), recruiting people, choosing partners and so on.

3. OPTIMISM & POSITIVITY – if you don’t have this alongside being the keeper of your original vision, don’t expect anyone else to believe in your company and that goes for both team members & people outside. I don’t mean blind belief but I do mean being confident and using a bit of spin when you need to. By that, I don’t mean lying to your team about stuff – it’s more about protecting them from many of the stresses that they don’t need to know about as they have no ability to influence the outcome & it will only distract everyone. You need to be able to absorb all of this burden and put a smile on your face and your best foot forward at all times.

4. RISK – I’m unsure if this is a quality or not but being a startup CEO and being risk-averse do not walk along hand in hand. You will borrow large sums of money, you will guarantee those loans against whatever tangible assets you own, you will take major decisions without any of the information you need never mind would like, you will fail at stuff over & over again. If you are unable to compartmentalise & shut these things away in a place where you don’t think about them – you aren’t cut out for this life. It will make you ill & paralyse you with fear.

5. LEADERSHIP & VISION – your team needs to look up to you & your customers & other stakeholders will hopefully admire you & what you’ve achieved. You need to keep the team on track, communicating the shared vision to them over & over again so that no-one ever loses sight of where you’re going, you need to be able to pull off what I call “Take my hand & walk with me into the abyss” when you only have half the story yourself and you need to be able to keep it real – no-one wants to work for a CEO that never does any work themselves.

I hope this helps any of you that are thinking about going down this route yourselves. It’s hard work & unrelenting being in or heading up a startup but it’s also deeply satisfying and a lot of fun. Always interested in hearing your views so post your comments up below.

Pitching for investment any time soon? – some dos and don’ts

Yesterday I was part of the IntertradeIreland Seedcorn judging panel chaired by Intertrade’s CEO Liam Nellis – that’s a photo of the two of us taken last week on the steps in Stormont. Also on the panel were Taxback.com’s Terry Clune, Xing’s Bill Liao & e-synergy’s Fergus McIlduff. Over the course of the day we watched 6 pitches as if we were an investment panel, then scored the companies & selected winners to go through to the next stage of the competition.

I thought whilst it was in my head – because I know a lot of my friends & associates are entrepreneurs who are no doubt entering these sorts of competitions or pitching for investment – I would scribble out a few dos & don’ts for anyone that’s interested:

· Work hard to distil your value proposition & get it out there early in your preso – remember that the investment or judging panel will be seeing loads of companies, often in a short space of time

· If you have a tangible product & have brought samples, pass them round early in your pitch

· If you turn up with a colleague, which is a good idea, only one of you pitch – it hardly ever works to try & share the pitch between you so let the person who’s best at presenting do it; also do try & behave as if you are a team

· Don’t ramble & do stick to your allotted time – it’s annoying when people go over time because they either haven’t rehearsed enough or because they spend too long telling you irrelevant stuff

· Use some pictures or graphics in your presentation to bring it to life

· Don’t use a video that’s longer than a minute

· If you’re very early stage, think about your sales and marketing plan – it isn’t enough to state the market opportunity – you need a go-to-market plan that hangs together

· Don’t argue with the panel – it just makes you look bad

· Be honest when answering questions

· Know your numbers back to front and the assumptions behind them – expect to get asked about anything that isn’t self explanatory

· If you’re referring to high level numbers in your presentation, make sure you have identified what they are – are they £s, people, units

· Include some innovation – you don’t have to be an inventor – it might just be something unusual about your business model or your presentation that makes you stand out

· Keep your pitch consistent with any business plan you’ve already submitted

· Finally – don’t use corny or gimmicky presentation techniques unless you are very certain of your delivery capabilities – they can be excruciating to watch (think Angelcot woman on Dragon’s Den insisting on singing…)

I know there’s a lot out there about this stuff for entrepreneurs but I thought I’d take 5 minutes out to share my take – interested in your comments so keep ‘em coming.

Entrepreneurs are story tellers…so says Doug Richard

I’m so glad that I took yesterday out to attend Doug Richard’s excellent “Starting & Growing a Successful Business” lecture in Letterkenny. Learning Pool’s now an established business (when do you stop being a startup I wonder?) but most entrepreneurs have one eye on the next opportunity – it’s part of our condition…

Doug’s a man I could listen to all day. He sounds exactly like the wonderful architect Frank Gehry (a Toronto man who’s also lived in LA for a long time) and he doesn’t mince his words. I knew a bit about Doug already & I expected him to be like his reputation – ferocious, blunt to the point of rudeness & flashes of vitriol. Instead – he’s a caring pussycat trying to impart his vast experience of being an entrepreneur to those folks that are just starting out. Impressively, as part of his School for Startups social enterprise, he’s spoken to 7,600 entrepreneurs or would-be entrepreneurs in the last 2 ½ years. He says he does it to show it can be done & to prove the government wrong – he thinks the way UK government supports & starts new business stinks. I think most startup businesses we network with (and there are an awful lot of those) would wholeheartedly agree with him. So – he’s a sort of energetic entrepreneurial avenging angel.

What impressed me most was his ability over the course of the day to really add value & give advice completely on the spur of the moment to people in the audience with businesses as varied as stainless steel catering equipment, online bridal directories, health clubs, micro-breweries, logistic businesses & distributors of artwork – so it must be true – business really is just business and entrepreneurialism can be learned – you don’t have to be born to it.

Doug’s written plenty of stuff & there are loads of good & free resources on his School for Startups website including his excellent blog – so I’m not going to regurgitate all that stuff again here in my blog, Instead – I’m going to give you the quotes from Doug that I liked enough yesterday to write down – just to give you a flavour of the day and a flavour of Doug Richard. Here we go:

Entrepreneurs are not born; babies are born

Some businesses can simply not succeed; entire industries exist that do not make any money (example he gave was the airline industry with the exception of our friends at Ryanair)

Some industries are harder to make money in; you need to know what industry you are in

A brand is a residue of what’s left; it’s a promise – you need to have a promise that you’re offering

Simple businesses are the ones that are most likely to succeed; but everyone does too much in their business – it’s human nature

You should make your promise accurate & narrow – how narrow can you get?

The story you tell as a young business is the most important thing – often you have nothing else

Entrepreneurs are defined by the story they tell

Risk & reward walk up together in a perfect continuum

Look elsewhere for tomorrow’s today (advice to go & check out other countries when looking for a business idea)

Government makes the measurable important instead of the other way around

You must delight your customers & exceed expectations – even by just a little – this will create word of mouth

If you’re building product, think about how you can include whimsy (he used the example of Apple’s “bounce” when you scroll to the end of the menu – utterly unnecessary but Steve Jobs felt it should exist)

Your family & friends are there to support you when you’re wrong so don’t ask them to appraise your new business idea

There is no conversation with a prospective customer that is too long, they are all too short

Every company should write a short profile of who their customer is – write it as a story – give them names

Most business expenditure is not driven by need but by ego (e.g. company cars)

Adults should only be rewarded for accomplishments, not for trying hard

Entrepreneurs are on a journey of discovery not invention – all the answers are already out there

Don’t stop at Page 1 of Google when you’re doing market research – there’s value in the long tail

You make more money from having an innovative business model than you do from having a great product or service

Business models matter & you should think about yours

Don’t overlook affiliate marketing (if this is your bag, Doug runs an 8 hour class on this alone)

Take the first offer – it might be the last offer!

Product doesn’t have to be better, it just has to be different (example used was skype – although of course it is also free!)

Just ask your minority customers why they don’t buy more from you (what a blindingly obvious idea – thanks Doug – we’re doing it)

A patent is not protection, it’s a hunting licence to protect (talking about the costs of defending patent breach)

No-one has ever started a company in Silicon Valley & ended up with what they thought they would – they are all Plan B companies

In an entrepreneur, resilience is so important (as an aside – in the very first conversation I ever had with Paul McElvaney many years ago, I asked him how resilient he was. It’s something we as business partners return to from time to time to make sure we’re still resilient as – yes – you really need to be)

It’s a very, very rare business that succeeds with just one person – there needs to be a team

You have to be optimistic to be an entrepreneur

There were a few “funnies” as well that I noted – please be warned that there’s a small bit of bad language coming up:

I don’t speak “local” – when he couldn’t understand a few of the strong accents in our Donegal audience

I’ll take better, I’m good!

We don’t use the phrase “poison chalice” in the USA (talking about being Chairman of the Tory task force to review SME support in the UK)

I’m saving you an entire MBA today

Thanks for the validation…I was a bit concerned. I know I’m obnoxious (to a member of the audience that told him he believed he was right about something)

On software development – Imagine selling a fridge where in v1 it just holds stuff

On Google rankings for your company – Do you know what we call the second page? – Siberia

On competitors – It’s not that you’re paranoid, they’re after you; they want to rip off your head & piss down the hole

On being an entrepreneur – Resilience, overcoming adversity, survival – they all pale into insignificance if you’re an asshole

In conclusion, a fab day where we learned a lot and Doug even made up a word – perfical (a perfect vertical). Don’t miss him – he’s brilliant, warm & very well informed – and he’s running one of these again in Dublin on 16 Feb & a Belfast date is to be announced. Come along with your questions & expect him to challenge you – he isn’t your mum & surely you’d rather know if your baby’s ugly. I guess you want to know what I asked him don’t you? I asked him how he decides on the one investment he chooses each year from the 3,000 business plans he receives. He was candid & admitted that there isn’t a “one” from the 3,000 – he decides what the next big thing is & goes hunting for a company to invest in. All I can say is I hope he has an urge to invest in a public sector online learning community – come talk to me if you do Doug!

10 fabulous things that have happened in the last 4 years

#teamlovely has been celebrating Learning Pool’s 4^th birthday for the past week or so – just look at that cake in the photo. There’ve been many times in the last 4 years that the achievement of this milestone seemed like a tall order – but resilience has always been the order of the day round here so we’ve just kept our heads down and carried on plugging away. A rather frightening statistic is that 75% of new start ups have crashed & burned by the end of Year 3 – so it’s good to be in a successful minority, especially during the current global economic recession. As we reach the end of our celebrations, this has got me thinking about the highlights of the last 4 years for Paul & me (this blog is a bit selfish for which I apologise now). Here they are in no particular order:

1. Getting to see Bill Clinton in Derry this week – that was cool & so was he (disappointed you didn’t mention “digital” Bill – ah well)

2. In the early days, making a snap decision to go ahead & build Modern Councillor whilst crossing the West End of London in a taxi – it’s been a roaring success ever since

3. Also in the early days, receiving a Letter of Offer from one of the Belfast VCs and turning it down – twice!

4. Blagging our way in to spending 45 minutes with a Director of Education in Capitol Hill & listening to his sage advice

5. Reaching the final of the 2008 All Ireland Seedcorn competition and having a great night out with our team

6. Following on from No 5, our team meeting Jerry Kennelly (founder of Stockbyte that was sold to Getty Images in 2006 for $135m) at the Seedcorn awards party and having him tell us we have a great company, to keep doing what we’re doing & not to take any investment (thanks Jerry!)

7. Holding a launch party in Johannesburg in Nov 2009 at the UK Trade Commissioner’s residence and having lovely Baroness Glenys Kinnock, Minister for Africa, as our keynote speaker

8. Being overjoyed when Donald Clark approached us and subsequently offered to join our board as a non exec director (great to have you on board Donald – #teamlovely loves you to bits)

9. Welcoming 200 people to our annual conference at London’s Royal Mint on 12 May 2010 and receiving their fabulous feedback

10. Being one of Deloitte’s Rising Stars at the end of 2009

11. Knowing that we’re well on our way to building the biggest & best public sector online learning community in the world

OK – so there were 11…here’s to the next batch!

Two Heads are Better than One – 10 pros of having a business partner

The photo above is me with my own business partner, Paul McElvaney. It was taken a couple of summers ago & we’re sitting on top of the world – ok – it’s the Giant’s Causeway but it feels like the top of the world when you’re there…it’s a much better photo of Paul than it is of me but I love it nevertheless because we’re both laughing and the sun’s out.

This week we were over at Belfast’s Start VI talking to some early stage entrepreneurs about their plans for their new businesses. This got me thinking about the whole business partner debate – to have or have not – so here are my thoughts on this subject:

1. If you’re dreaming big with your start-up you should think about finding a business partner – unless you already have proof that you’re superhuman. Our business, Learning Pool, has grown from nothing to 50 people and £3.5m turnover in 4 years. That’s a lot of work whichever way you look at it.

2. Partners should have complementary business skills – it’s the 2 + 2 = 5 effect. In our case, Paul’s far more technical than me & has a project management background whereas I come from an accountancy & legal background. Having said that – both of us are immersed in our chosen sector and we can both sell – that bit’s important.

3. Two people means you have more ideas for brainstorming and (at least) two views on opportunities and risks; you can also learn a lot from each other.

4. If there are two of you, chances are you have a much bigger network than one person and you just know more stuff and have more experience to draw on between you – so you can make better decisions than a person trying to figure it out on their own. There are many decisions that Paul & I make every day on our own but there’s also a lot that we decide upon jointly via a process of debate & brainstorming between us – it’s hard to understand unless you try it…and you have to be prepared to not always get your own way.

5. It makes the business more “formal” in those early days – if you were by yourself chances are you wouldn’t bother with monthly management accounts or you’d be more lax over expenses or you wouldn’t write so much down. This early discipline stands you in good stead when you start to scale.

6. Two people can cover a helluva lot more ground – business requires a lot of travel, pitching, attendance at events, socialising, networking. It also makes it easier to get away for a bit of a break.

7. Your partner’s there for the bad times – when you don’t win a contract you’ve pitched hard for or when the bank says No – but also for the good times – and it’s great to have someone to share with. A new business is like a rollercoaster ride and having a partner to bounce off & share stuff with & who picks you up when you’re down & vice versa flattens out some of those crazy peaks and troughs.

8. Most entrepreneurs are control freaks so it can be hard working so closely with another person, especially at first. They do say that you have to work at your business partnership like you would a marriage and that’s true. You have to be prepared to be completely open and honest in a way that you will not be used to – not even with your family or your spouse/partner. Your business partner will know more about your personal finances and even your personality traits than your close friends or family do. You will have seen each other make unpalatable decisions and behave ruthlessly and you will have exposed that darker side of your nature to each other. Once you’ve accepted this it is slightly comforting.

9. There’s some practical reasons when you’re starting out – like having more working capital as there are two of you or having more places to get hold of start-up capital.

10. Having a partner makes you more resilient and it makes you work harder – as you have someone else who’s opinion you care about to prove yourself to.

My own experience of this has been incredibly positive. Paul & I work well together. We both work hard and put an equal amount into our business in terms of effort and expertise – that’s important too – I don’t know how it would work if one partner felt short changed by the other but I guess it would be uncomfortable and unsustainable. We have a lot of laughs along the way and there’s a great deal of healthy competitiveness and “sport”. There have been some really bad days on the journey but there have also been some amazing highs and I wouldn’t change things for the world. I’ve ended up with a friend that I would trust with my life without any hesitation. And that’s a big deal.

I’ll leave you with a quote from John D Rockefeller “A friendship founded on business is a good deal better than a business founded on friendship”. Bit of food for thought in there. I look forward to your comments friends & readers.

He made me what I am…

…even though he will deny it! Dr Bryan Keating (pictured above at Learning Pool’s office earlier this month) is one of the reasons I moved from London to Northern Ireland, 10 years ago at the end of this month. I left my safe job as FD of CIPFA’s commercial subsidiary IPF. I’d worked at CIPFA for what felt like 100 years or more. It was cosy & familiar and I’d recruited and collected a high performing team around me over the years. As an organisation, we hit all our targets & were able to predict with a high degree of certainty what we’d be doing for the next 3 – 5 years. Life was easy.

What could be stranger than leaving that environment to become a dotcommer – working for one of Belfast’s high tech VC funded start-ups? Drenched in uncertainty, constantly seeking funding, moving the goalposts every day, handling our tricky VCs, managing our quota of prima donnas (every tech start-up has them!)…Bryan was the person that calmly showed me how to deal with all of that & more. Take my hand & walk into the abyss – sometimes that’s what you have to do.

He coached & mentored me when I needed it with sensible advice and his practical and so friendly way. Bryan shared with me his wisdom and told me his stories – the kinds of stories every fledgling entrepreneur needs to listen to and hear. We had a few adventures & met some great people (and some not so great people) along the way, burned the midnight oil when we needed to and we had a lot of laughs.

Bryan gave me confidence and encouraged me to go on & become an entrepreneur myself and for that I will be forever grateful to him. It hasn’t always been an easy journey but it has been challenging and fulfilling. If I hadn’t met him when I did, that would definitely not have happened for me. He is a great man and over the years I have learned so much from him. Even now, when I have an important decision to make, I calmly ask myself what Bryan would suggest – and I’m able to think it through in my head. I usually carry a few of his crazy diagrams in my handbag, scribbled quickly on a napkin or the nearest scrap of paper as he explains something, and I look at them from time to time & reflect on the advice he’s given to me. I carry some of his words in my head and repeat them to myself from time to time like a mantra. I find myself saying some of those same things now to my own young team.

Bryan – thank you for everything that you’ve done for me and for everything you’ve done for the hundreds of other start-ups and entrepreneurs that you’ve helped and encouraged along the way – we appreciate you and I don’t know where we’d be without you!

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