Innovation to Products to Ventures

Unfair advantages - why technology startups need them

Richard A D Jones — Fri, 29 Jun 2007 21:23:00 +0100

I love the phrase "unfair advantage." Peter Crouch is a striker at Liverpool who towers over defenders and so gets more than his fair share of headers. I always look for the same thing in startups (and I don't mean tall people). Read on for more about the different types of advantages and how you can develop some for your technology company.

Startups and the trials of being an entrepreneur

Richard A D Jones — Wed, 23 Aug 2006 11:26:00 +0100

I think this should be the motto for entrepreneurs and those involved in startups...

It is not the critic who counts,
nor the man who points out how the strong man stumbled,
or where the doer of deeds could have done them better.
I think this should be the motto for entrepreneurs...
The credit belongs to the man who is actually in the arena,
whose face is marred by dust and sweat and blood;
who strives valiantly;
who errs and comes short again and again;
who knows great enthusiasms, great devotions;
who spends himself in a worthy cause;
who, at the best, knows in the end the triumph of high achievement,
and who, at the worst, if he fails, at least fails while daring greatly,
so that his place shall never be with those timid souls
who know neither victory nor defeat.

Theodore Roosevelt

How many prototypes did James Dyson make of his cyclonic vacuum cleaner before he succeeded? Scarily the answer is Five thousand!!

It's about where you are as well as what you are selling

Richard A D Jones — Mon, 14 Aug 2006 00:18:00 +0100

I was in a strange conversation today. Someone was asking about UK broadband opportunities and I told them it's a blood bath. It really is horrific with free broadband offers appearing (if anything is ever truly free). So why are my business partners and I are so keen on broadband in Eastern Europe. Broadband is broadband right?

Well, the difference is the adoption curve. You probably know this already but there is a profile of sales over time that starts to build slowly, then accelerates before flattening out again. This s-curve is seen in many industries. Sometimes your product or service can re-juvenate itself by finding a new niche or set of users and a second s-curve builds on your original one. Tricky but good if you can do it.

In broadband, we can see in the UK that we have achieved near saturation and companies are being forced to givie it away 'free'. However, countries in Eastern Europe have very low penetration and so are only at the start of the s-curve explosion.

This doesn't make it easy but it does mean that you can learn from what has happened in other countries and use strategies that have worked.

Real innovation requires real customers

Richard A D Jones — Sun, 30 Jul 2006 14:32:00 +0100

I get to work with a lot of new companies and corporate ventures and, you know what, they frequently have no clue about what a real customer wants. Cambridge (the UK one) is a great place for technology innovation but even the smartest people don't always understand about having a real market. They have the “Field of Dreams” view about customers - 'if I build it, they will come." However, this mistake isn't limited to startups - I worked with a European electronics multinational and I couldn’t believe their approach to innovation.

The division I worked with produced equipment for automating factories - essentially like computers with input and output connections to make machines work. Here were two classic conversations with them.

"Good news Richard - we have done a deal with M****** (identity masked to protect the innocent) and will be distributing their single board computer series. Our arrangement means we will have the same market price as them."

"Okay. What do you mean by market price?"

"Our list price is identical to their’s."

"Hang on," say I, "our normal customer gets a discount of 10% whereas M****** give a discount of 30% as standard. Our real market price to users or distributors is going to be significantly higher than their’s. In what way do you think that is market pricing?"

....silence....

Real innovation is more than brainstorming

Richard A D Jones — Thu, 27 Jul 2006 11:05:00 +0100

The most tired management story on the planet is how 3M came to make the Post-It pad. Remember - man uses not very sticky glue to put bits of paper in his hymm book and eventually has to ..... oh I can't even bear to repeat it.

For every great idea that someone 'games' through the barbed wire and trenches of internal barriers, there are thousands that die a slow death in cupboards and desks.

Never work with idiots and.....people you can't get on with.

Richard A D Jones — Tue, 25 Jul 2006 16:26:00 +0100

Ten years ago, I had a discussion with a friend who was a serious rower. He's not Sir Steve Redgrave but understands what it takes to win. His assertion was that teams don't have to like each other to perform. In fact they can downright hate each other and still do the job. It was alleged that Eric Cantona would never pass to striker Andy Cole at Manchester United for example.

At the time I wasn't convinced that the sporting metaphor could translate to business. I'm certain now - he was wrong.

It's about customers (stupid!)

Richard A D Jones — Thu, 30 Mar 2006 09:18:00 +0100

When someone has to persuade you about why you need a service then you probably don't. Need is pain. When you have something that is really inconvenient in your life then you recognise a solution when someone shows it to you.

Sick of the shower burning your bum when someone flushes the toilet - you need the .......

Worried about losing your family photos from your laptop, then you need the ..........

If there is not a 'selfish benefit' to a company, one that you understand intrinsically, then you probably don't want to buy the product and I don't want to help it grow and succeed (because it won't).

How to spot a crap technology startup - 1 "We don't have any competition"

Richard A D Jones — Wed, 16 Nov 2005 08:34:00 +0000

Here are the signs of how to spot if you are talking to a startup company that is doomed. Might be a bit harsh and an exageration but I bet I'm right almost all the time on this. Here is the first thing they say that should make you run out of the door screaming.

Pay or play - licensing mistakes and how they cost you big time

Richard A D Jones — Mon, 31 Oct 2005 23:37:00 +0000

Okay you've sold your idea to a big company for $1 a unit they fit it to..... and they make millions each year. Just before you start driving away in your Ferrari though, you realise they aren't building any units with your baby incorporated. What's worse, you can't get the idea back from them. You've been caught in the pay or play trap.

Maximising the return for your startup

Richard A D Jones — Sun, 30 Oct 2005 16:57:00 +0000

One of the most interesting problems in a technology startup can be figuring out where to enter the value chain. This real example shows the thinking needed to maximise the return for your company.

An electronics company had a revolutionary component for mobile networks. Thinking traditionally - they would be sold to form part of an assembly made by another company that would be sold to a systems integrator who would deliver the network for a mobile operator.

The overall savings in a network rollout by using this product would be in the order of 100’s of millions of dollars – by allowing the removal or down-speccing of other systems.

Physical interfacing of your team

Richard A D Jones — Tue, 11 Oct 2005 18:36:00 +0100

This is really simple but works. Think about the processes involved in going from innovation to product/feature delivery. If they are supposed to work closely together then put them close together. Is that it? Okay not quite.

To maximise the interactions between different groups, try to increase the size of the physical interface between them. I'd say that in English if I could.

Maybe an example will help - doubt it but worth a try.

If you have a development team and an industrialisation team say - then don't design the office so they are separated. See if you can set it up so that as many people as possible are next to someone from the other department. I don't mean mixing them up completely as you want each group to still function well on their own. I just mean think about how you can create long borders between groups where colleagues from the different groups can talk.

How do you make better decisions? Get senior management out of the process!

Richard A D Jones — Fri, 07 Oct 2005 14:25:00 +0100

When your project has reached a decision point, do you really want to wait until the management team can assemble? Are you sure they will have time to get to your part of the agenda? You've probably been in a project that gets bounced from at least one meeting and has to wait. The key here is to remove senior management physically from the decision making process.

Customer related costs and how to manage them (1 of many)

Richard A D Jones — Tue, 04 Oct 2005 14:08:00 +0100

There is some simple wisdom about having customers. It costs 10 times as much to acquire a new customer as it does to sell to an existing one. Then, with a strange lack of gratitude, a happy customer will tell between 0 and 3 people whereas an unhappy one will tell more than 10 people of their negative experiences. These figures were created before the advent of email, Internet forums, blogs etc. so I can only assume the picture now is even more extreme.

As part of the cost of having customers, support can make a big difference to the profitability of companies like ISP’s, ASP’s, software companies – in fact most companies that are driving towards low revenues per customer. These companies need to focus on operational excellence and hence low cost customer support.

Strong spin-outs and weak parents can be fatal

Richard A D Jones — Fri, 30 Sep 2005 22:41:00 +0100

Corporate venturing is a difficult area at the best of times. However, creating spin-outs from a weak parent can be fatal – no matter how good the new venture. I suggest you sit comfortably and don’t read on if you are of a nervous disposition.

How to assess projects - simple weighted averages

Richard A D Jones — Tue, 27 Sep 2005 21:09:00 +0100

This approach provides a simple way to compare the 'attractiveness' of different candidate projects.

Matrix organisations

Richard A D Jones — Sun, 04 Sep 2005 18:24:00 +0100

I love matrix organisations. I love seeing them done well and I take secret pleasure at seeing a group of intelligent people in an organisation occasionally tie themselves in knots with them.

Portfolio Management and Tyrannosaurus Bossus

Richard A D Jones — Sat, 03 Sep 2005 18:29:00 +0100

Part of the point of having portfolio management processes and, in particular, decision making criteria is to ensure that individual projects are not derailed

The informal innovation process

Richard A D Jones — Sun, 21 Aug 2005 17:51:00 +0100

The difficulty with trying to create purely formal processes for innovation is that you can lose the clichéd “water cooler” effect of accidental generation of ideas through chance discussions, meetings and exchanges of information. However, relying purely on your personnel to generate enough good new ideas is near suicidal for a business.

Consistency in leadership – say how you intend to work and stick to it

Richard A D Jones — Mon, 01 Aug 2005 18:32:00 +0100

People are cynical animals. More so perhaps in Europe than in the United States. When someone starts in a new role, they will not just take what they are told about fresh starts, new ways or working or anything at face value. They probably don’t believe it’s going to happen and wait to pounce on the first outward sign that the person involved is not actually doing as they said they will do.

Secrets - and why they're bad for you

Richard A D Jones — Tue, 26 Jul 2005 17:23:00 +0100

I meet companies that frequently say they want to keep a low profile, stay under the radar and other phrases that mean they are hoping that no-one will notice what they are doing for a while. Forget it!

Instant messaging and strange communication effects

Richard A D Jones — Mon, 04 Jul 2005 18:16:00 +0100

It is amazing to see people who work quite closely together using some form of instant messenger (IM) to talk to one another. Software developers seem to like this best – as if the fear of human contact might be too much for them. It’s got benefits.

Why corporate ventures fail 3 - Good people won't join you

Richard A D Jones — Wed, 01 Jun 2005 13:44:00 +0100

Okay so you might struggle to get someone from the company to join a new venture for reasons already discussed. So, it's easy isn't it. Get someone from outside. But can you attract them? If you want someone good, and I mean really good - then can you offer them: rewards equivalent to those they would receive in a normal startup

Lots of customers already does not equal venture success

Richard A D Jones — Wed, 25 May 2005 08:28:00 +0100

It was 4 in the morning and I stood over a smoking set of sales targets for a software venture within a top 10 company. It all seemed so reasonable. The huge sales targets got red penned and the numbers in the sales plan were doubled.

Why corporate ventures fail 2 - "Where's the lifeboat?"

Richard A D Jones — Sat, 21 May 2005 13:43:00 +0100

Okay you have been following the fast-track in a big company. Your reviews put you as a future big-hitter and now someone has identified you as a key element of a new internal startup/venture. So what's the problem?

Struggling against the culture

Richard A D Jones — Sun, 24 Apr 2005 13:25:00 +0100

An independent start-up has plenty of issues but there are some unique ones for ventures within larger companies. The simplest thing an independent company can do is make a decision. Yes, the VC's may be in and controlling/frustrating/helping the board but you can make a decision pretty fast. Compare this to a multi-national trying to create a new venture.

Why corporate ventures fail - part 1 (of many)

Richard A D Jones — Sat, 26 Mar 2005 12:11:00 +0000

When companies try to generate new revenue streams in the form of ventures, there are a number of serious issues that experience shows can limit their success

Innovation partnerships - co-innovation

Richard A D Jones — Sat, 26 Feb 2005 17:38:00 +0000

Relationships between companies have been changing for the last 10 years plus. Suppliers in car companies have moved from ‘Just In Time’ delivery of components (or Just In Trouble occasionally) to being made responsible for complete sub-systems of the cars. They no longer just