I made a fairly big mistake with my company at the start, I tried to segment functions in the company too fast. Maybe it was my business education, maybe it was books like “The E-myth Revisited,” and certainly it was my lack of management experience, but I tried to keep my area focussed on business development and away from technology for which “I have a CTO.”

But startups don’t work this way and the entire reason for working in a team is that you share the work and hopefully create synergetic effects (1+1=3!) in the process.

And the truth is that even as for non-technologist like myself (I am a geek though) designing products is not so hard.

I had a discussion with an industrial designer (my all time fav. people to hang around with) concerning the term ‘a perfect product.’ Her field understands the term as a product that functions perfectly, I choose to add “for the customer” to that definition.

The start of product design is always to ask: “so is this cool for people?“, meaning will they like it, do they need it, will they pay for it? I don’t think all question can be answered from the start, except the one of “is this cool?”

A very big part of entrepreneurship is sales, and as they say: you have to believe in what you sell. Easier when you already have a product, I’d love to sell Apple computers for a living, but when the product doesn’t exist, you have one of two choices: one, you design the product yourself, starting with “is it cool?”; two, you trust that your CTO can design something cool.

That’s not a problem, except for one thing: is cool something we decide or the market decides? It is of course the latter and one bullet point in an entrepreneur’s job description missing from that of the CTO’s is keeping a close eye on the market.

Therefore, product design is absolutely something entrepreneurs cannot delegate! And on that short note, I’ll leave it.

All my entrepreneurship diary posts can be followed under the tag ‘Vincent’s eDiary.’ I don’t write about what we do as a company on purpose, but you can always ask in the comments or via the email address on the right. Picture courtesy of The Esoteric Church (of all places!).

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Just a quick shout out to all you smart people out there. For a cost analysis, I’m trying to build several alternative cost-structures, but preferably in an outliner-like format. I’ll go into what I mean in a second, but if you can think of anything, please comment or send me a mail on techiteasyblog (at) Google Mail.

What I want is a combination of this:

And this:

And what I’d like to do with it is drag & connect different modules together and have it auto-add the end-sum when multiple modules are linked.

Any help appreciated, thanks! I have no reward for you at the moment, except if you’re in the Netherlands or I’m in your country, I’ll take you out for a drink and I will definitely pimp your site in this blog post if you include it with your awesome answer!

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Having reached a personal milestone, part 5 of my entrepreneurship diaries, I should mention that it’s very pleasurable and useful for me to write on these topics, and I hope it’s the same for you. In this post, I want to briefly address the issue of uncertainty in early stage technology companies and how that affects management.

As I mentioned before, I was asked to join this company as CEO after consulting them on the commercial applications of this exciting new technology. Joining a year later, we had a good understanding of the strengths and weaknesses of the current organisation. During the consulting stage, I wrote a business plan with a fairly clear time line (to me and our sponsor), but it wasn’t being executed upon as required. One of my the deliverables I set myself was therefore to get development back on track, which not only respects the resource boundaries (financial, human, technological) we face, as well as sends out the signal that we are a serious business.

One thing I keep hearing over and over from entrepreneurs is that you have to be comfortable with ambiguity. And that is absolutely true. We continue to iterate on ideas based on changes in technology, customer and partner feedback, and our own ideas, something that would drive any sane man crazy, but we have to keep it under control. The best way that I find to do that is continuing to develop the vision of where we are going (the strongest motivator I can imagine) and maintain a loose type of project management that gets us to that goal.

I call this project management, as it deals with schedules, milestones, and resource allocation over a period of time. Uncertainty is an important factor to consider in this. In a large company, chances are you’re dealing with a predictable environment, in an early stage startup this is not the case. Getting a tighter schedule in place continues to be a challenge we are working on, however I find that being alert, flexible, and adaptive all the time contrasts with the more stable art of project management. Please correct me if I’m wrong, in which case present a solution also! Of course, there have to be thresholds in place, which to me is very much defined by risk assessment.

Regarding risks, let me start by saying that not all risks can be addressed, which is why being comfortable with ambiguity is so important. And second, there are many different types of risk, technology, financial, market, etc., but one usually outlines the thresholds that you have to respect. In my case, I see this clearly as market risk, as nothing matters if your customers aren’t buying… however, this really is not something to take for granted.

In medicine for instance, which is traditionally patent-based and largely dependant on a complex regulatory process, you have a 15 year window, of which you can spend up to 12 years developing your super-innovative cure. Clearly the technology risks outweigh the market ones (note: this ignores the rise of generic, cheap, knock-off drugs). In the web-industry, on the other hand, it’s perfect for rapid prototyping, it’s hard to protect innovations and easy for competitors to clone them, and it makes much more sense to push out your products asap. That means that there can be plenty of competition and the risk lies in grabbing sufficient market share to make a (sustainable) profit.

In our case, we are not as “high-tech” as medicine and not as “high-market” as web-development, in the sense that we face both market and technology risks. However, I see market risks as more important and try to align both market & technology approaches together. As an example, one of the things we did several months ago, was demo our technology to the general public and to selected partners. After the experience, we interviewed them thoroughly on their experience, as well as their initial expectations. We want to make sure that people don’t expect something different than what we deliver and that our product meets and exceeds their expectations. That gives us a clear view of where we want the product to go.

On a technology level, that presents us with certain thresholds in terms of “the experience” and price-points. And whenever we face a technology change, whatever solution is being developed, it has to fit within that end-picture the customer expects. That also overcomes the problem of black-box development, which is not uncommon in technology development.

So, that’s more or less how we continue to develop the vision for our company and the project management that supports it. We started with a lucid dream of producing great technology. We demoed initial versions and tried to align our vision to the needs of our users. And we end up (hopefully) building what our customers want and pay for. I would love to do this in a web-environment, as that really makes prototyping so much cheaper and quicker, but we do the best we can with our not so intangible technology.

All my entrepreneurship diary posts can be followed under the tag ‘Vincent’s eDiary.’ I don’t write about what we do as a company on purpose, but you can always ask in the comments or via the email address on the right.

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Both ’startup’ and ‘entrepreneur’ are terms that immediately evoke an often false reaction from an audience and I would personally prefer not to describe my work using those words. In the following post, I write about three associations in regards to entrepreneurship, one positive, one negative, both somewhat false, and one what I see entrepreneurship as really: just a job. As usual, these diary posts, which I try to write in a short amount of time, are produced with minimal editing. I hope it makes sense. All my entrepreneurial diary posts can be followed under the tag ‘Vincent’s eDiary.’ I don’t write about what we do as a company on purpose, but you can always ask in the comments or via the email address on the right.

The popular associations
The word entrepreneur has two popular and a third upcoming association. One association is negative, that of a risk-taker and in some ways a loser—this would be more in a European context where job-security is highly valued. The other is positive, that of a potential Bill Gates or Steve Jobs, i.e. the smart entrepreneur who sees a big opportunity and has the drive, intelligence, and access to other resources to make it very big.

Of these two, the latter is what we are all aiming for, but realistically that applies to less than 1% of entrepreneurs today (using the very broad definition of someone that starts anything from 1-man webdesign company to an ambitious cure for cancer). The first association is also a misunderstanding of entrepreneurship, as entrepreneurs are not blind risk-takers, or at least they shouldn’t be. I would say and hope that it applies to a minority of entrepreneurs also.

The third association: a career-choice
The third association is that of an upcoming trend: entrepreneurship as simply a job. You’ll find plenty of job-adverts with “entrepreneurial attitude a plus” or similar in the job-description, a term I hate just as much as the often mis-used “business development,” standing for just B2B sales.

Added to the job-description part comes that there are plenty of entrepreneurial courses and full academic programmes available to the public, one of which I enjoyed, though I know from personal experience that that doesn’t make a person an entrepreneur.

A third factor contributing to the ‘entrepreneurship is a job’ association is easier access to the marketplace. I’ve had some online discussions with Cecil Dijoux on this blog about today’s technology culture in the context of enterprise software development, and there is as much a democratisation of software-/web-ware development, as there is of other increasingly “low-tech” industries. (As a side note: My definition of low-tech is a technology something has very low barriers to developing it.).

I think that the abundance of resources (not just) in regards to programming, to very well developed (internet) distribution methods for getting products, tangible or intangible, out to customers, as well as more-and-more programmes for funding/assisting startups, means that entrepreneurs have access to a better developed funnel where it comes to their profession of gathering resources and marketing their products.

That doesn’t make it easy, and actually brings other challenges like being one tree in a very large forest, but it does mean that it can be seen as a type of job.

Now, what is there not to like about the word ‘entrepreneurship’?
Maybe it’s a personal thing, but I feel very uncomfortable telling people I meet that I’m an entrepreneur. One, I do see it like a job, a job that I have to do well, and nothing special really. The term ‘entrepreneurship’ makes it sound fancy, which it is not. Two, I’m a European and I do feel the same association that many Europeans have to the word, which is that it’s “less than a real job.” Rationally, I don’t think that’s true, but emotionally I have found myself feeling the following initial reaction more than once when someone comes up to me and describes himself as an entrepreneur:

“Get a job, you hippie!”

Add to this that a startup is not a company until it makes money, and an entrepreneur is not an entrepreneur until he makes money doing what he does.

So I think the term ‘entrepreneurship’ is glorified, perhaps invented to make entrepreneurs feel like they’re doing something special, same as the term ‘Artist’ or ‘Inventor.’ Art isn’t art unless the audience considers it so, and people have invented plenty of mousetraps that are now collecting dust in a garage somewhere.

Suggest something new please
I’d like a new term for what I do and maybe you can suggest one. It should perhaps be related to a startup, which immediately summarises what is happening: A company that is starting up and isn’t there where it wants and needs to be yet.

The problem is that an entrepreneur is not always in the same class as a startup. He can be 50 years old and have a long and successful career behind him. Would you call him a “starter,” a term often used for people fresh out of college applying for a job at Consultant X or Multinational Y? Generally, entrepreneurs are responsible for the activities that happen in a startup in order to make it a success. Their chances of success increase if they have prior experience, resources, and networks to build upon, that make it easier to access the three pillars of “starting up,” as I’ve summarised in the picture above.

In regards to the above, I personally like to describe my work as “I’m running a small company and we’re developing a new product X,” but that is also a bit of a mouthful.

The other side of the coin is that entrepreneurs are in (desperate) need of marketing, where glorification does play a part. I read somewhere that entrepreneurship can be described as the process of developing something irregardless of resources currently in possession. That suggests a pitch is necessary, and perhaps already being termed an entrepreneur helps getting a foot in the door. I doubt it and it would personally bother me if that’s all it took, but I’m smart enough to realise that we “entrepreneurs” need to do whatever it takes to acquire resources, as long as it fits our code of ethics of course.

So, entrepreneurship, yes or no? I don’t like the term, but I may be stuck with it. If I come up with something more apt, I’ll let you know. And same for you please!

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This post is part of a series, a diary of starting a business if you will. It follows part 1, the decision of becoming an entrepreneur.

One thing I found out is that it’s hard to put your responsibilities down on paper… there are so many!!! There is of course a basic job-description, which more or less sounds like that of a project manager/pull-the-rabbit-out-of-the-hat magician: “make it happen that we go from this thing on paper to the product in the hands of customers.” “Make it happen” is a super-loaded phrase, which can mean countless things.

There is a continuous struggle between micro-management and keeping the overview. Micro, because it is your responsibility that every (little) thing is carried out by your employees (if you have them). Overview, because You the entrepreneur are The Organisation. There is a third struggle that shouldn’t exist really, that between your professional life and your personal life. I’ve come to the conclusion that the only way to do this thing well is to focus on it exclusively. Friends, family, love, …blogging… it’s a nice luxury to have, but it comes second place.

The responsibility of an entrepreneur are thus: have a goal and make sure that everything is executed to get to that goal.

In a technology company, there are matters of technology and business (really, in what business except for strategy consulting isn’t there a mix of “technology,” which can mean anything from cooking to software development, and the commercial side of things, which is meant to pay for everything?). What I found was that as someone with a business background, who sort-of-kind-of has an idea about product development, and has a better grasp of business development, I still can’t let go of the reigns of product development entirely.

Product development ties in directly with business development. People are unwilling to pay for something that doesn’t exist and similarly our budget is supposed to last us until we have something worth paying for or investing in. Therefore, as an entrepreneur I have to make sure that product development stays on track. The absolute best way to do this is to have a capable product development manager in charge. The truth of it is that startups by their nature are resource-poor, which includes tripple-A product development managers (probably employed at multinational X or Y somewhere), and there is a lot of learning/training on the job. Learning/training means that the (hopefully) existing product development manager (in our case yes) still has to be managed, through schedules and regular meetings. In any case, product development is in its conceptual stage a very brainstorm-friendly activity, which means the more the merrier. But ultimately, a startup must get beyond this stage, respecting the entire resource-poor situation that a startup usually faces.

So, responsibilities of an entrepreneur as far as the technological product development is concerned: If you have a product development manager, you have to make sure that he works under the realities of the business. If you don’t, which I imagine many 1-person software startups operate under (as well as those lucky strategy consultants), well then you have to do the job of product development as well, keeping a close eye on the business realities.

OK, the business part of things. My role is fairly well-defined here as I come from a business background and approach startups from a business perspective. Assume that role 101 is having a firm grasp on everything that goes on, which can be phrased as “where are resources (people, time, money) being expended at and is it wise to do so.” This entails having a good budget plan and sticking to that.

Role 102 is to build the business, which I call business development, but that often gets confused with sales as that that is what it says in job adverts. Business development is the building of the business, which includes sales, but also includes building the company and all that entails.

So, we are trying to get from point A to point P, how do we go about it? If product development is about turning an idea into a product, business development is building a business plan into a business. Business plans are total BS unless they contain validated information. Some key-chapters in business plans are the market overview, the market approach, the time-line, and the financial need to meet all these objectives. Business plans can serve as a. cannon fodder, b. a plan of approach, c. one of several signals to attract investment. For c. no investor will take a look at your business unless you have a plan of approach (b.). On that plan, there should be a time-line, which you are following (predictability!) and there should be a goal: the market you are targeting and your approach.

The market section of the business plan presents a big problem for technology entrepreneurs. Because (non!) customers often don’t know what they want. I can ask a target group “what kind of air do you like to breathe?” and it wouldn’t surprise me if a significant number of responses would say: “I like to breathe air that smells like perfume.” OK, that’s a terrible question, but what I mean is that people sometimes make up answers that have nothing to do with reality (that said, both the perfume business and the fast-food industry have made lots of money from essentially selling air that smells good. Scent is also plays a very important part in memory, but I digress…)

What I’m a big fan of is validated market data, which is data gathered from actual customer experience with your product or part of it. That brings forth another problem of a bias towards early (and over-excited) adopters, something which the book “crossing the chasm” deals with, but is really not something that I think is realistic to address at an early stage, except that validated market data can also come from experts in the markets you are targeting.

The implication is also that product development is again completely tied in with business development which leads us down the path of rapid prototyping, another practice that works great in software / on the web, not as easily (though not impossible) with hardware. In any case, the experts in this area most well-known today are:

• - Steve Blank, who wrote “The Four Steps to Epiphany” and is currently hosting the excellent Stanford’s Entrepreneurial Thought Leaders seminars (btw. Steve Blank also writes a great blog on customer-focussed development, which I’ve only just started reading.
• - Eric Ries, who authors the blog Startup Lessons Learned and has some great articles on responsible (=lean) development.
• - And Donald Reinertsen, who wrote an incredibly dense book called “Principles of Product Development Flow,” a book which is clearly an authority in the field, but which I cannot recommend to any sensible entrepreneur with a 60hr/week schedule. Those principles, by the by, number in the 100+.

As well as of course Toyota and plenty of other experts out there, I’m sure, many of which are referenced by the people mentioned.

I think that it can safely be said that task 3 or a sub-task of business development is working towards the customer, the lifeblood of a business.

There are other tasks of course, which have to do with human resources, legal work, accounting, etc. Some of which can be outsourced, some of which can be done half-heartedly (oh no, I didn’t say that), some of which are really-really important, etc.

All these tasks, however, require a certain authority. The entrepreneur’s responsibility is to either be an authority on a task level or to be sure to work with authorities, either in the company or in an (informal) consulting fashion, so that they are carried out responsibly.

Task 4 can thus be entitled: be an authority on the tasks that need to be carried out or have access to one.

So, a whole can of worms starting a company can be and it is vital that it does not interfere with the single most important thing that you must do as a human being: be healthy! Health is part sleep, part exercise, part food, part love. There is no yin without yang and vice versa. Thus forget everything I said about personal life being no. 2. The best is if it reinforces what you do in your work. Health leads to happiness and happiness leads to optimism: a key-quality in entrepreneurship if there ever was one.

So the responsibilities of an entrepreneur summarised:

• 100: keep your eye on both sides of the court: the goal & the resources needed to get to that goal
• 101: align Product development with Business development
• 102: always validate your market data by staying close to your customers
• 103: be an authority on the tasks that need carrying out or have access to one
• 104: stay healthy and happy.

This was written in a single session with minimal editing. I hope it kind of makes sense. Part 3 of my e’diary will be on the topic of: can you prepare for entrepreneurship? As I have a master in entrepreneurship, I thought it might make for an interesting perspective. All my entrepreneurial diary posts can be followed under the tag ‘Vincent’s eDiary.’ By choice, I’m being mysterious about my company. If you have questions, feel free to comment or write to me via the email address on the right.

Picture courtesy of Be The Dream.

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Dear everyone,

I am extremely happy to start off this new year by introducing a fresh face on Tech IT Easy, Anand Kishore Raju, who will be blogging with us in 2010. His main areas of focus as a blogger will be greening the internet, carbon footprints, energy and power figures of the internet and web2.0.

Anand is currently working as a Research Engineer at Telecom ParisTech (ENST). His area of research focuses on the Energy aspects of the Internet, what the scientific community calls “Green Networking”. His efforts are directed towards making Computer Network Science aware that processing, moving and storing bits has a cost in terms of energy and in terms of the Carbon Emission Footprint.

In the past, Anand had also worked at Collaborative Systems Group (ColSys) at Bilkent University, Turkey, where he developed a taxonomy for user properties, influence factors for feedback quality in web 2.0, existing and novel models for deviation types and their detection. He also holds a degree in Computer Science and Engineering and aspires to join HEC in near future.

Anand joins a smart team of collaborators, some of which also work in green computing and many of which share an interest in this important topic for sure. As such, please join us in welcoming Anand to the team and I hope you enjoy reading his words on Tech IT Easy!

Happy New Year,

The Tech IT Easy team

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I’m always fascinated by business models, i.e. at how entrepreneurs and companies put together services in order to make money from them. I’d call it the source code of business if I hadn’t seen the other source code in Luxembourg —legal and accounting—but arguably that’s more like binary code, i.e. 99% unintelligible.

Sarah Lacy writes about SMSONE, a ultra-local news provider in India similar to Outside.IN, a Union Square Ventures funded US-only company that provides news updates via the web. SMSONE does it, as the name suggests, via SMS. And it spreads through a franchising model, working with local entrepreneurs that pay a franchise fee and also collect a share of the advertising revenue from locally focussed businesses. It is able to do this because of something that apparently doesn’t exist in the US (but does in Europe): receiving an SMS in India doesn’t cost the recipient anything.

When reading about this, I was immediately reminded of a similar business model employed by a Dutch entrepreneur in Russia, Ms. Annemarie van Gaal, founder of Independent Media, a company that distributed Russian versions of magazines like Cosmopolitan, Marie Claire en Good Housekeeping (source). When she spoke at the Star entrepreneurial seminar in Rotterdam a year ago, she told us about how she differentiated herself from the competition (paraphrased as I haven’t got my notes with me):

The trouble with getting your magazines distributed in Russia was that you had to pay quite a lot of money (some would call it bribes) to companies that would then take care of it… badly. Instead van Gaal decided to do it differently. She would hire street kids to distribute her magazines, similar to the gold days of newspapers: the newspaper boy.

If you read Sarah Lacy’s account on Techcrunch, you’ll see that SMSONE does it similarly, hiring local kids, often without much education, to take care of distribution. Doing it via official channels is likely a nightmare over there, and centralising distribution kind of defeats the purpose of micro-news.

It’s a different way of thinking, which many of us westerners don’t have. I mean, would you entrust your products to a beggar on the street or to a street musician? Not only is it probably against the law (except if the government does it), we pride ourselves on our super-organised infrastructure, where anything from temp-workers to interns are there to provide companies with a flexible workforce, and anything from printing presses to mobile internet exists to produce and distribute your stuff.

Of course, I wouldn’t just leave you with these two examples. In the beginning of 2008, Boston Consulting Group published a study of “local dynamos”— domestically focussed companies, which use creative business models to capture value from emerging markets that are filled with challenges, like lacking infrastructure and low-income consumers. The map below shows how widespread these companies are.

Some very interesting examples are mentioned, like:

• Shanda, a Chinese gaming-company, that, in order to combat software-piracy, focusses on providing interactive services through gaming, services that are impossible to pirate. And to overcome a lack of a financial infrastructure to pay for online services, they work with pre-paid cards.
• Indian CavinKare, which sells cheap sachets of shampoo through small local retailers, while using educational marketing to teach customers how to use their products.
• Goodbaby, which targets the many 1-child families in China, who are both willing to spend more on their child than multi-child families would, but are also in need of education.
• Amul, an Indian food-and-beverage-marketing-organisation, which collects and pays for milk locally, while tracking all operations via satellite and uses ERP solutions to make analysis based on the data and gauge whether future supply needs to be increased or decreased.
• Wimm-Bill-Dann Foods (Russia), which works extensively with local partners, and has devised leasing schemes for expensive machinery to boost their production and is able to serve 280 million consumers nation-wide.

The BCG, of course, takes the stance of its customers, Western companies, and the study is mainly aimed at how multinational companies (MNCs) can replicate 6 of these dynamo’s advantages, in order to compete with them. They are:

1. Customising to local needs – which involves first understanding these needs, and then meeting them.
2. Devising innovative business models that overcome local challenges – a logical follow-up to the last point, how to make money from the info you gained.
3. Leveraging the latest technologies – meaning that these emerging economies are less burdened with traditional infrastructure and quicker on the uptake of more affordable, newer, and easier-to-spread technology, e.g. mobiles.
4. Benefiting from low-cost labor and overcoming shortages of skilled labor – there’s two ways to look at this; a local workforce will be better equipped to interact on a local level, a highly-trained workforce will be better equipped to run a business. Tough call.
5. Scaling up fast – Russia, India, China, Brazil, etc. are all giants with the promise of huge rewards when you capture them. Many of these dynamos grow quickly through both through acquisitions and building up their network of suppliers and distributors.
6. Sustaining long-term hypergrowth without imploding – this kind of follows on to the last point

Some of the Western companies mentioned, which have managed to compete on a local level, include:

• General Motors, which has adapted its luxury-liners to meet the demands of its Chinese customers, who are usually sitting in the back;
• LG, in China, which has learned that the audio-quality of its televisions is more valued by its customers, who often reside in noisy environments;
• Carrefour, which has started to work with local municipal governments in China, as these don’t meddle in their operations like local dept. stores would, and are able to provide access to prime locations;
• Perfetti Van Melle, in India, a candle/chewing-gum manufacturer, which has found local means to advertise, interacts frequently with local partners, and has adapted its products to local tastes;
• and Yum! Brands, which owns Pizza Hut and KFC, and has adapted its menus to meet local Chinese tastes, started a new food-chain aimed specifically at the market, and uses its international expertise to integrate IT, lean supply chains, and a higher level of food standards into their offering.

It shows the value of out of the box thinking in terms of reaching people, and I believe that traditional “Western” thinking should long ago have been thrown out the door anyway, particularly in light of the troubles that media-, automotive, and financial industries are going through. We are in the flux of disruptive innovation and only those quickest to grasp new technologies and ways of thinking are able to survive another day.

No shortage of lessons on that from entrepreneurs in emerging economies…

Vincent out

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I hate breaks in anything I do, blogging, work, sports, love, etc., because it’s always harder to return back into the zone. Similarly, I already knew subconsciously that it would be hard to return back to blogging after the proposed hiatus. Routines are good and when they are moved aside, they get replaced by something else.

The human body is a machine and everything, from hours in the day, to food and exercise, to making money, to relationships, are all pieces in the machine of life. There’s only so many hours in the day is a well-familiar phrase to most of us and reflects the difficulty in balancing different activities and responsibilities, with some just falling off the map.

I am not saying that I plan to stop blogging, but I do think that we all need to make choices in our lives which will affect other, previous ones, like domino blocks.

Dynamics…

I just bookmarked a blog post on delicious on forming sales teams in a startup. It’s a good one and you should all read it. As I tagged and bookmarked however, I immediately thought, hey, I’m pretty sure no one on my company will read it. Why? Maybe because we already figured it out… Maybe because we figure stuff out as we are doing it… Your choice.

Blogging or any kind of writing for public purposes brings several complications to business people:

• it is public knowledge, meaning that the competitive advantages are slim: I don’t think this is a major factor, as most innovations are combinations of different ingredients that may or may not be public knowledge. Great artists steal, as they say.
• Writing is processed explicit knowledge from something that was previously implicit and needs to be made implicit again by the reader for it to be useful in a practical context: I’ve written about the knowledge-generating company and the knowledge spiral twice before. Another phrase, “You can’t help yourself, because your *self* sucks!” also comes to mind.

It’s the latter that represents the greatest challenge to authors and consumers of their work. I’ve also previously written about the benefit of formal education, which, I think, tries to recreate the knowledge spiral, turning explicit knowledge into the implicit kind, to be used by students in their work later on.

The dynamics of business is that there are expenses—YOU, the team, the office, etc.—which need to be recuperated by your work—the work you do for customers, after which they pay you. It leaves very little time for reflection, e.g. through blogging, etc., and for making things explicit, e.g. through blogging, etc.

I’m still a big fan of Michael Gerber’s E-myth revisited, which is really about writing that franchise manual for your business, so you can both understand the processes happening in your company, and expand on those, by more easily passing on knowledge. It’s Taylorism, of course, or Scientific Management, or any of the other management methodologies that followed in the past century.

But these activities require time, time which people inside organisations usually do not have, and hence prefer to outsource to outside consultants, who then need to make their knowledge explicit and again implicit in the minds and methods of their clients’ organisation.

It’s a real nightmare for people (like me) who think to much and always aim for something higher. And who want to blog. And who want to do good business…

Thoughts?
Vincent

(Picture courtesy of Fisica & Psychica)

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It’s been a while since I wrote about food and retail, an area that I still like (and actually find much more interesting than tech or simple business), but which I’ve put on the backburner for now. I don’t like Starbucks as a business nor as a coffee, for a number of reasons that I will elaborate on in this post, but I do like that the company, back under the helm of Schultz, is undertaking some new initiatives.

Reasons why Starbucks bothers me include, most of all, that it is not a coffeeshop with a European target-audience. We Europeans have plenty of choice and tradition in terms of coffee, and I have no problem finding a place of atmosphere with some kickin’ coffee at half the price of one of those Americanos (which, btw. taste terrible). The only attraction of Starbucks is for me as a take-away place, but that was not really the aim of the business, as described in Schultz’s book.

Starbucks was meant to be a “3rd Place,” a place where people can temporarily reside that is not their office or their home, and that is where Starbucks, in my opinion, fails. It should also not seen in isolation from other chains, like McDonalds, Subways, and the many “CloneBucks’s” that have arisen since the writing of Schultz’s book—it is basically a manual for how to start your very own Starbucks and, apart from its partnerships, it’s a low-tech business. Right now, when you enter a Starbucks in say, Cologne, Germany, it will look exactly the same as the one in Paris, France, and that act of replication already devalues the concept in my eyes. All Starbucks Cafés are very clean-looking, unlike a Hard Rock Café for instance, which doesn’t make them all that much better than a McDonalds (Café), which serves coffee equally well.

End complaints about Starbucks, a chain I had all but given up on.

The most depressing part of this business is the ease at which McDonalds managed to replicate its basic features, ……… but let’s not forget that the Starbucks people aren’t stupid and learning goes both ways. Clearly, McDonalds (another business, I’m a fan of) has strong process-advantages, which are also quite apparent to the observer and can be benefitted from by outsiders. Something that, it turns out, Starbucks exploited and will hopefully lead to a more efficient machine of a business, while (hopefully) placing the focus back on the “3rd Place” idea.

And now, it has been revealed, Starbucks is trying to get back into that game with its “community coffeeshops initiative.” While I don’t think that this will drastically improve the Starbucks offering, I do hope that it allows for more creativity and individuality down the road.

That said, there is still a lot of room for “3rd Places,” also in terms of building chains of them, they just need to be better designed to actually be a 3rd place. From books, to music, to zen-gardens, people like me are still looking for the equivalent of what was before probably known as the “gentlemen’s club,” by I mean, in an entirely un-sexist way, a place where you can go and relax, alone or with friends.

Starbucks seems to have gotten lost on the path and retreated down to the level of commoditization. It make me wonder if perhaps these types of qualitative initiatives simply cannot be undertaken quantitatively, without losing too much in the process.

Vincent

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Read today about a new service in the Netherlands that is doing very well. It’s called doehetzelfnotaris.nl, which translates roughly as ‘Do-it-yourself Notary,” and has already attracted 13,000 visitors since it launched 2 weeks ago (for NL, that’s a big deal). By allowing you to automatise certain services, like preparing the contracts and wills, it claims to save you 30% of the price of having a notary take care of these things. Needless to say that during these financial troubles, people like it when they can save some money.

At our financial trust, I’m currently filling out a pretty long survey from the Luxemborg statistical office (STATEC) regarding our level of “internetisation.” It’s not easy being digital in a world where you often deal with highly sensitive data, sometimes coming from individuals who do not like dealing with you through digital means. The very word “Trust” in our company description, already forces you to ask the question: can clients trust us using digital communication?

The answer is in most cases No. Go to any bank and try to get significant things done and they want you to sign for it. Same with notaries (and doehetzelfnotaris.nl does not automatise the signing part). The financial sector is particularly stuck in what I would call “the old world,” though not, I would say, without good reasons.

My question to you is:

• is there such a thing as fool-proof communication, which cannot be falsified by any means?
• Is there a surrogate for being there in person and signing your name?

I don’t know of any, but I always assume that our readers are smarter than me.

Chime in, if you can.

Vincent
(Picture of a Robot Accountant. Waah!?)

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I have hardly any time today, catching up on the week, which is terrible for the creative spirit. So, as a 15 min. therapy, where do good ideas come from? Here are 4 areas that I can think of:

Exploration / Rest: Spending 3 days in Paris and 2 days celebrating the national day of Luxembourg was great for thinking about life, discussing various topics and plans, and brainstorming ideas. It is in a way the anti-thesis of working life, which is focussed on making you into a machine, constantly moving, constantly following a routine, and not breaking out into new creative patterns. Ease of Implementation: Ideas are often abstract and need a lot of work to make them useful.

Iteration: This the primary way that companies innovate, by constantly developing routines, slightly adapting them over a long period of time, until version 2, 2.1, 2.2, 2.infinity, etc. It is why (consumer) products are the way they are. Ease of Implementation: when you actually have new ideas they face the challenge of breaking existing patterns that are cemented into operating companies and more difficult to change. Still, new ideas are often based on practical data and should thus be more easy to implement.

Deconstruction: This is what I call the Sherlock Holmes way or the “where have you last seen it?” way. You are faced with a problem, e.g. finding something you lost or figuring out how an electronic device works. The best way to do it is to break it down into small steps or pieces (deconstructing) and then reconstructing the reality again. In technology, you might also call this reverse engineering. Ease of Implementation: much like iteration, it is based on realities that already exist. Ideas are often better than what came before, because you’re an outsider, taking something apart and throwing away the junk. Ever lost a piece of text you wrote due to your computer/software crashing? I guarantee that your version 2 will be shorter, more to the point, and better.

Conflict: I was discussing this with Jeremy this weekend, regarding the building of teams that can challenge each other. It’s a destructive and constructive process all at once and I think the benefits usually outweigh the risks. Ease of Implementation: It’s difficult to find that kind of talent and the right mix, so I would say that implementation is not easy. It should however be at the top of the agenda of any organisation who wants to be an innovator in its field.

Other ways to come up with fresh ideas? The floor is yours!

Vincent

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It’s funny how our thoughts evolve from one day to the next. Which reminds me that we need to adapt our About page to reflect that a little more, as it’s about 2 years old. My thinking about Always-On Devices comes from a simple pain that I feel when I miss “a moment.” Sometimes I wish that I could… well Andy Warhol in Miraclemen phrases it much better than me.

In Alan Moore’s & Neil Gaiman’s graphic novel, Warhol’s existence is not painted in a very colourful light (pun intended). He has been resurrected as a machine into a society where money no longer plays a role and is very depressed. So his ability to record everything is really not very meaningful to him. Having only read this part of the comic last night, already my sentiments about Always-On are changing towards… and what would it accomplish?

I recently visited an Art Exhibition of independent artists in Maastricht and tested out a little what an Always-On Device would look like to me. I used my camera, a Canon 870 IS, as a recording device, which I held in front of me while walking through the crowd.

I managed to capture the people experiencing an exhibition, a piano player who was adding atmosphere to a room full of art, just hypnotically playing a few notes over and over. What actually intrigued me the most, I captured maybe two dozen miniature sets for the Maastricht Opera house. It was very surreal, the sets which were made out of cardboard and wood mostly, were 3-dimensional, and I was floating with my camera device around it and through it even, capturing it all at angles never deemed possible to me before. As if I was my own film-director.

Of course, apart from the disappointing battery-life on my camera, clearly not designed for video-recording, and the occasionally funny looks that I got, the real challenge is to make that data actionable—a big priority in everything I do. It is a matter of transforming the raw footage into a tight package that can be consumed by others, and the question is really, should this be the responsibility of the creator or of the consumer…?

With us having reached and surpassed the age of the mashup, it makes less and less sense to continue to try and re-invent the wheel, rather delegating that task across far more… interested people (in the area of video-editing at least), of which there is no shortage, as long as the tools and the specific community exists. Clearly, that kind of methodology requires a lax attitude about copyright.

To recap, so that it doesn’t seem like I’m entirely floating in thoughts, an Always-On Device would need:

1. A willing human recorder
2. A recording device designed for capturing experiences
3. A way to process that information into “usable bits”
4. A favourable legal environment
5. And a willing consumer

I’ll leave the question of “do we even want it?” for smarter people than me to decide. In the mean time, I will continue my search for point 2 and 3 on that list (more on this blog, if successful).

Until after Paris,
Vincent

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We’ll be migrating Tech IT Easy from wordpress.com to a self-hosted solution these coming days, so I won’t be posting much, I don’t think. In the mean time, here are a few things flying through my head.

Men can’t get away with this !!

Jason Kottke pointed me towards an anti-fashion-industry trend lead by some women: the wearing-one-dress-slightly-altered-day-in-day-out-trend. Somewhat jealous, because it seems so efficient (and thus manly), but I don’t think men can get away with doing something like that, do you? Then again, men also don’t look quite as attractive…

Factors influencing the ‘virtual office’

I’ve heard several stories of entrepreneurs setting up their companies that they can operate it independently from a location, and if you’ve read some of my posts on “designing companies” and mobility, you know that I feel very strongly about doing something similar. In VAT-law, there’s the rule that you can’t locate your VAT-payments to a VAT-friendly country if you’re doing significant business in the VAT-unfriendly country. I’m guessing it’s quite similar with virtual offices. If your business activities tie you to a particular location, than that is a ‘tax’ that you have to pay.

Since there are plenty of smart tax-lawyers around who know their way around the loop-holes, perhaps it’s time for some ‘expert-consultants’ that help entrepreneurs become location-free?? The 4-hour workweek guy comes to mind.

On building (corporate) Knowledge Centres

I grew up in a library, one which my father built, so I may have a different perspective from people growing up in the more digital, paper-free world. But, to me, libraries are magical and comforting. One of the first things I did, moving to Luxembourg, was to move many of my books here (with more on the way) and asking my boss whether we can set up a library.

More broadly, a library to me stands for building and storing knowledge, whether for individuals or groups, and is a source of creativity, innovation, and also trust. Large consultancies are most famous for doing such things and if you saw the virtual universities some of them have train their staff, you’d be amazed.

No great point to this story, except that I hope that as an entrepreneur/manager/CEO you’ll also consider how to improve the lives of your employees sometimes, as well as consider that your company, which is essentially a living organism, will only benefit from having more knowledge inside of it.

On that philosophical note, I.. am.. out.

Vincent

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Background: This is an advice that I am giving to someone, who is a traditional artist. She paints and tries to sell her paintings. By writing this down for you, the public, I don’t think I am revealing critical information, in that it is a common sense approach to building a sustainable business. It does not address two critical factors: the intellectual property (which is the art) and the marketing (which comes in part from quality and in other part from choosing the right sales channels).

Here is the situation: I like (her) paintings, but they are very work-intensive. Each painting can take anything from 2 weeks or more to produce and the end-price reflects this as well. In today’s economy, in any economy, this means that there is a segment of the population that will not be able to afford it it. Museums, who display art worth millions, have overcome this problem quite elegantly, by selling posters and postcards of these art-pieces. Countless other art-industries are based on turning a singular piece of art into mass-produced widgets. Similarly, I think it is much more efficient, for more reasons than the work alone, to do something similar for the independent painter. Again, I don’t think this is a trade-secret or anything; the quality of the art and the sales channels are most critical aspects.

In any business, there are two types of cost. These are fixed and variable. Fixed costs are often significant costs and difficult to remove. A workplace is a fixed cost, so is some of the material used to produce a painting. Variable costs are smaller, often more flexible costs, incurred regularly. Paint would be such a cost and you can affect the cost of producing a painting by using different paint. It’s not quite as easy to change the workshop you work in from painting to painting.

Following is the action-plan:

1. Find out what the total fixed and variable costs are for producing a painting and x amount of reproductions (e.g. 100 posters). In other words, list all the costs in a nice Excel-sheet or piece of paper and add them up.
2. Divide the total costs by the number of posters you want to sell. Those are the costs per product.
3. Decide how much you want to charge per poster. If you or the market decides that this price is below your cost, then there is something wrong with your formula and you are making a loss. If, on the other hand, your price is above your costs, you are doing well.
4. Now… find out how you plan to sell the amount of posters you decided on…

Some … pause in that last point because how can a business man or woman really know that these are the sales they will make? My advice is therefore to keep costs as minimal as possible at the start, focussing a lot on developing the actual sales process.

That’s it really! And it reflects how hard it really is to go from having an idea (and preferably also the skill) to a profitable business. From a right-brained creative approach, you have to do some left-brained accounting, and from a product-focussed, perhaps introversive approach, you now have to become outgoing, market-focussed, and sell. Not easy!

As with all big projects, from writing a thesis to climbing a mountain, it’s my opinion and what I have learned so far, that it is always better to break it down into simple steps, see the relationships between different processes, and understand how the whole project is put together.

I always welcome discussion, so if there is an error in my logic somewhere, please, please contribute through a comment!
Vincent

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The “Captain’s Chair” is what I call the chair of the entrepreneur which always has to be filled and which sits prominently in the middle of the office and all the business being conducted within. It comes out of the simple evolution from running a 1-man show, and then hiring on more people to do the work. It also has a lot to do with how sensitive the service is that is being released, and when customers expect services to be at the same level of professionalism that the initial founder has always displayed, it is understandably hard to let go.

It is also a trap that is being written about in plenty of business “self-help” books and is, in my opinion, best solved through designing processes to be as failure-free and as simple as possible. In other words, like the preparation of a McDonalds hamburger, which is a scientifically designed factory process.

One public example of the captain’s chair phenomenon is Micheal Arrington’s Techcrunch, which has, until recently, always been run out of his own apartment, and even today he is (I believe) the no. 1 editor and certainly the no. 1 PR guy. In no other media publication of that size (in terms of readership numbers, not company size) does the founder take such a prominent and involved position and, physically and mentally, I’m sure, it is taking its toll on Arrington. Similarly, I know several small companies, where this is a problem, with similar consequences on the founder.

This is not to say that doing the opposite is necessarily a good thing. As perhaps the case of Starbucks showed, which recently had to ask its original founder, Howard Schultz, to return to the captain’s chair, sometimes an organisation can forget the original values it was based on and do some silly things. In Schultz’s case, I have actually always blamed its problems on his book, which was essentially a franchise manual for anyone who wanted to set up a coffee-shop, and which might have also inspired McDonalds to basically become an affordable Starbucks alternative for the masses. A story for another day, but I think the current Starbucks model is doomed and Schultz will have to redesign the company’s business model from scratch.

There is certainly a careful balance that needs to be maintained when designing a company to both expand a business’s reach, without losing the heart of the business. Together with the simple process of “preparing a burger,” you need to instil the values that also lead to the “smile” that accompanies the sale of the burger and leads to a satisfied customer (and his return-visit).

Designing companies must thus, in my opinion, be a rich process, involving the founder(s)’s, the employees’, and customers’ input, finally leading from the single business to the chain of businesses serving all customers equally or superiorly well.

Vincent

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