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.

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

As is usual when I take a long break from writing, my blog posts end up becoming insanely long. Take it as you will, but I’ve tried to make it as coherent a post as possible. P.S. this is a post written under de cover of my “leave of absence,” which means I still write, but less frequently. – - Vincent.

A good friend of mine, Zihni Ozdil from the Netherlands / Turkey, Historian Extraordinaire, is now publishing his wisdom online. If history, politics, and culture (“beyond the superficial”) is something you find interesting, I encourage you to check it out. On his site, I found an article entitled ‘the real Evil Empire,’ which, ignoring the provocative title, deals with the interesting topic of the cold war and the ‘demonification’ of Russia and communism at that time.

Yesterday, I had an interesting discussion with some Canadian Swedes that moved to Florida with their kids and had trouble finding a school. The only way, it seemed, to guarantee that their kid ended up in a good one is to have an A-class school in your district (which you can find via a website that profiles attendees according to race and economic background… wow…) and to have paid your electricity bills. It worked out well for them, but clearly suggests the underlying problem of a long-term selection bias.

Last night, meeting the Canadian Swedes, where I was also in the company of a Russian and a Japanese, I noted that it was strange that while both Russia and Japan, being superpowers in their own right, have infamously challenging education systems, which result in some pretty smart people graduating from either country, the US does not seem to follow that pattern, at least not at the high school level, and certainly not across all demographics. Yet, by all accounts, the US is a superpower, if not the superpower of this and the last century.

My post today is not about comparing countries’ education systems, it’s more about the strategic purpose of education. Many people don’t know this about me, but I don’t vote and I don’t generally care about (regional) politics. To me, our planet should be one country, where anyone can move and work anywhere, and services don’t have to be moved just because you physically moved  XX km/miles to another country. But I do recognise the power of competition and how that can lead to excellence. Versus a ‘group think’-like mediocrity where everyone just tries to be like everyone else and no one exceeds. So, in a way, I endorse a system of divided regions, because I think it leads to competition and thus excellence.

Education plays a strong role on the competitive advantage of nations, as it does in certain companies. Last year, applying to a lot of consultancy companies and working as one myself, I was struck at the importance that the accumulation of knowledge plays in this industry. If I were to start my own consultancy, continuous education of the staff would most certainly be a cornerstone of the business strategy, because knowledge is your product as a consultant.

I know that this thinking plays a strong part in government circles as well: how to make your/our country as strong as possible, not (just) in military terms, but in the sense of knowledge, mostly measured by the no. of graduates and the no. of patents that are published every year (as well the commercialisation thereof, which doesn’t go quite as smoothly).

I know that the no. of graduates coming out of Chinese universities is tremendous, and the no. of patents coming out of US ones is among the highest in the world also. So clearly, the US, superpower extraordinaire, is doing something right. I don’t however entirely understand why the primary/secondary school system is so abysmal then in the US. My only explanation is that, in academic circles, there are no national boundaries, and a Russian researcher can just as well (if not better) produce patents in the US as anywhere else.

There are other dimensions to the US superpower status as well, of course. It’s a military superpower, it is a cultural superpower (in terms of films, music, and literature), it has a large consumer-base. These three dimensions—safety through military strength, an easily adopted culture, a consumer’s paradise—also have the effect that they serve as an attraction point for outside academic or other talent. And while other countries may have strong educational bases, the other aspects are perhaps ignored just a little too much, still making the US a prime export location for knowlegde.

In the strategic literature, there is the concept of the resource-based view, which stipulates that company strategies are nothing more than a collection of resources, some of which are internalised and some that are not. I think that in the context of the US and education, the resources that must be internalised are those that lead to the commercial exploitation of technological advantage, which sounds abstract, but basically means making sure that the best technology/knowledge is produced in-house and generates economic benefits in-house as well.

But there other resources that must most certainly not be held onto in-house. These include standards, which facilitate the assimilation of knowledge. In education, the standards that we use are the bachelor-master-phd system, which can easily be studied in different combinations and locations. And text-books, which as many students know, are often from US-origins.

In many ways, the cultural exports from the US—movies, music, literature—are nothing more than the spreading of a standard, that of a language and a way of thinking, which makes assimilation of outside talent easier. And as long as that outside talent is used for the benefit of the US, in the form of patent exploitation, the US benefits, even if their own primary/secondary education system is quite uneven.

As mentioned, I don’t care about politics, country-differences, or governments. But if my logic is correct, I wonder if a metaphor exists for commercial superpowers, i.e. companies that are market leaders and remain so by attracting the greatest talent and finding ways to turn that into economic benefits.

Organisations are not complete economies like governments are and also have the benefit of being mobile—by law they are considered single persons, which have residence, pay taxes, etc. just like everyone else. So, as long as they obey the law, they can choose where they stay and choose to ignore local conditions, much like, I theorise, some governments do, instead focussing on the bottom-line: attracting excellence and turning that into profit, while keeping ‘unnecessary’ expenses as low as possible. Well, at least that is the stereotype of an organisation, while pressures have certainly lead some to adopt a more socially-responsible attitude.

Clearly, the question of talent, whether attracting or training it, remains a vital one for both countries and organisations. But I don’t think there is necessarily a correlation between talent and local conditions.. at all.. though local conditions do play a part in the quality of life, or lack thereof, which affects the talent’s in question desire for a certain location.

Vincent out.

(Picture courtesy of thehindubusinessline.com)

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)

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!?)

I once asked a friend how one of my clients should improve their sales technique for a technical product, knowing that his company is very successful at what it does. He, himself a “sales engineer” (i.e. a technical sales guy), found the question very difficult to answer.

I had to reshape the question to “so, how do you guys sell your technical products?” And then he was able, with full vigour, to tell me how they do it. It should be mentioned that market plays a strong role here; my friend works in a very niche business, while my client suffers from powerful competition.

I’m starting to loose my naiveté, as far as crowd-sourcing is concerned. This easy-to-communicate world we live in, sometimes makes me forget that, just because we can ask, doesn’t necessarily mean that we should. Technology may have changed, but people’s brains, psychology, and business principles have not, at least not at that rate.

My general stance these days is that, no matter what context you talk in with people, you should always assume a complete lack of imagination. Instead, by either spelling it out, or better, by asking the best interview-question in the world “tell me about YOU!,” and then extracting what you need from that, is much more effective.

It’s as Jeremy advised me to blog when I started here, Keep It Simple & Stupid (K.I.S.S.). Even though I have ignored that lesson at times, it’s a good one to follow in this all-too-unsimple world.

Apart from crowd-sourcing, the same, incidentally, applies to:

• selling people stuff: spell them out exactly how your product/service benefits them!
• applying for a job: spell them out exactly how you will make them money!
• and everything else.

Want to make the world a better place? K.I.S.S. it!

Vincent

If I ever succumb to the temptation to blog like I did last night, feel free to shoot me. Now, back to our regular programming…

Last week, I wrote about having heroes in your craft and how I found it noteworthy that some examples are more effective than others in everyone’s path to self-improvement. I attributed it to the vague concept of compatible brain-patterns, but really I think it’s a much more simple idea. The reason that my writing heroes have an influence on my craft is because I practice it. In other words, there is a right mix of idea and execution (I would call it semi-right as there’s much room for improvement).

There are plenty of blog posts about this. Most well-known to me is Derek Sivers’ blog post about the “execution multiplier” that makes ideas more or less valuable:

AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO- EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.

More recently, Sarah Lacy wrote a post on Techcrunch, entitled “Is Execution More Important than Vision?,” where she differentiates between entrepreneurs that are visionary vs. those that are good at execution. In other words, she categorises people as either fitting in the one or the other.

What is clear from all of these is that ideas unapplied are essentially worthless. Which to me means three things:

1. That if you have ideas in an area that is difficult for you to execute on, you’re probably better off focussing on areas where you can execute them.
2. Or, that it is equally important to find the right resources (skills & knowledge, network & team, money & customers) for your idea as it is to have the idea.
3. That you ultimately need to move towards a system of rapid iteration or rapid prototyping, because, as we all know, ideas are ideas, and the reality will more often than not change your original product idea. The quicker you can test them out and improve them, the better your chances of making a commercial success.

It’s a bit of a leap from my post about writing heroes to executing entrepreneurial ideas, I know, but I think it makes sense.

Vincent

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

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

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

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

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

Inspired by the Grasshopper podcast on Venture Voice.

Har har,

Vincent

First, what I love about business plans. I contains four elements very close to my heart: Writing, talking to people, innovation, and entrepreneurship. That is not to say that writing business plans is a fun activity that should be taken lightly. The crux of writing a business plan is that it needs to be executed upon. And that is where the complication arises.

One of my last freelance projects was amazing fun and in two ways very rewarding. Financially, because the investment that followed it, far exceeded the more than generous fee I was paid. Creatively, because my involvement lead to a lot of focus product- and strategy-wise, and we developed what I thought was a clear timeline as to the execution of the plan in different phases of product and market development.

But, as mentioned, writing a plan does not mean that it reflects the reality. I was reminded of this again, listening to a venture hacks podcast on “pitching hacks” (you can watch and listen to the presentation here). Business plans are worth squat, because a. there’s a lot of them, and b. the proportion that is executed upon is fairly small.

In theory, business-plans serve as a way to make the strategy of a young company explicit. Kind of like Gerber’s “Franchise manual” for startups in the E-Myth Revisited, it allows you to solidify what you do while you’re doing it. But, I don’t think it automatically leads to a (better or actual) business…

…

Those three dots is where I stopped writing some three weeks ago, and I have in the mean time developed my thoughts further on this. I think that the gist of good business planning is taking ownership of the project. And the single most important key-component of the business plan is the timeline section. And the single most important action as an entrepreneur is to already have at least 10-30% completed of that timeline.

In other words:

• if you’re an entrepreneur you should write your own business plan: you cannot outsource this!




• The most well-developed section of your plan should be your timeline: as conservative and realistic as possible!




• The best way to illustrate the value of your plan (and timeline) is to already be following it: actions scream much louder than written words!

If those three components are in place, I think that the world of business planning and entrepreneurship would be a much better place.

End braindump…

Vincent

Addentum: The problem of multiple agendas! I should also add that another complication is that plans are written with a singular vision in mind, perhaps alternative scenarios are included, but it still very often reflects a singular approach to “doing things.” But… many companies are composed of multiple people, who may or may not have multiple agendas. I still think it can belong to taking ownership of the idea, in the sense that the plan is worked on together and perfected until everyone agrees with it. But more often than not, the business function is delegated to certain individuals, meaning that this isn’t the case.

Working at a financial trust means that many companies that you meet make a bad first impression. Because they come in the shape of ca. 1-10 binders and unless you love handling paper, reading balance sheets and legal documents, and breathing dust, you just won’t like it much. Luckily, reading binders isn’t part of my job description, even though I do it because I want to understand how this business works from start to finish. But, to keep my sanity in check, I try to mix it up between a. doing the (boring) work, b. keeping the overview, and c. doing work that I love.

After writing my work-life balance post some weeks ago, I decided to do one thing from the start: I would keep track of all my professional activities in Excel. Another thing I did was to colour-code each activity and note down how much time I spend on it each day and week, in order to track patterns. I am now in week 7, meaning that I have some meaningful data about this.

While I’m not going to share this data with you because I think it’s entirely irrelevant to your life, I will share some lessons that I learned from my experience so far:

• Tracking you time requires a certain kind of discipline, as well as a kind of heuristic thinking: a. you need to continuously do it; b. you don’t need to be entirely precise on whether you spend 15 min. more or less on something (I track each 15 min. in my sheet). P.S. Nothing inspires you to keep such a list as much as being paid by the hour (which is how I started with this habit).
• Asking lot’s of questions is the single most useful thing to do if you want to improve your job-satisfaction: The last three weeks, I was busy analysing a number of companies through their documentation, in French. A complete Nightmare! However, spending just a few hours with someone that has been doing this for years, meant that I quickly learned what’s relevant and what isn’t.
• A person is only really efficient a few hours per day: OK, I should already know this as a freelance consultant who charges by the hour, and you probably know this too. But seriously, track your time during one week and you’ll know this is absolutely true.
• A person is more effective at doing the stuff he/she loves than the stuff he/she doesn’t: Again, kind of an obvious point, but I can see through my time-tracking that job-satisfaction goes down and procrastination goes up after just an hour or more spent on non-enjoyable activities. I, personally, hate admin work, but love anything involving creating or learning. Productivity adds more value to the company so try to find an alignment between the stuff that you love and projects for the company you work for. Outsource / delegate the stuff that you hate / dislike / makes you procrastinate more.
• Expect a 30% return on investment on a todo-list: Meaning that for every 10 items you write down, you’ll probably manage 3 in the short-term. With a few exceptions, I generally find that those todo’s that don’t get handled are usually not that important anyway / sort themselves out automatically / have a longer due-date. P.S. I finish every day composing thoughts about what needs to be done the next day(s).
• Pay attention to how you spend the rest of your time: Work isn’t life and life isn’t work. And how you spend you life will very much affect your work. Things to track include amount of sleep every day, exercise, diet, and learning. Regarding the latter, I keep track of the (study) books that I read, podcasts I listen to, and blog-posts I write. While diet, sleep, and exercise is relevant to productivity in the short-term (that day, that week, that month), learning affects the long-term. I think a good ratio is 10-20% of time that should be spent on the latter, of course mileage may vary.

That’s it for today, hope it added some value to your life and that it made you open an excel sheet to track your time. If you need a template for setting up your own schedule, drop a comment or send me a mail.

Vincent