Steve Parks's blog
The Lean Startup
Without doubt the challenges for entrepreneurs are intense at the moment - but the opportunities are still there, and those that get their business quickly in the right shape and doing the right (focused) things will come out the other end stronger and more successful.
I've been doing a series of posts on what it takes to achieve this, and in this one I'm looking at the concept of Lean Startups.
'Lean' was developed by Toyota as a way of massively improving their business, and its since been successfully applied in many industries.
So how can you apply the ideas in startups?
Here's a collection of articles you need to read!
http://startuplessonslearned.blogspot.com/2008/09/lean-startup.html
http://venturehacks.com/articles/lean-startups
Here's a slideshow of a presentation on the subject:
And here's an audio podcast of a speech on the subject:
A lot of food for thought here. What are the key ideas you pick up from it all?
Having a Laugh
In these trying times I've decided the best thing to do is to try and laugh about it - so my latest venture is a satirical news website for the UK.
Take a browse at www.news42.co.uk, and (although its only in live testing yet, so there aren't many articles) please do tell your friends and colleagues about it.
It's designed to poke fun and bring a wry smile rather than to make money. Some things you just have to do because you want to!
Book Title of the Year?
I'm browsing the business book section in Borders - and look what I found!
That's one way of approaching the subject I suppose - but I guess it's best not to leave it lying around on your desk.
Don't Let a Crisis Go To Waste
Since writing my last post about the Obama campaign, I've just come across a great quote from his new chief-of-staff, Rahm Emanuel:
"You don't ever want a crisis to go to waste; it's an opportunity to do important things that you would otherwise avoid. In 1974 and 1978 we never dealt with it, and our dependence on foreign oil never changed."
I love this quote.
In a crisis, like the current economic problems that are probably impacting your company in some way, the first priority is survival - but it is then a real opportunity to make changes that you would never get round to making, or couldn't get away with making, in the good times.
Everyone knows times are tight, so maybe now is the time to really cut back on waste of time, money and resources. Maybe it's time to implement a tougher credit application and credit control procedure and attitude. Maybe it's time to become a firmer manager (but still fair). Maybe it's time to demand more from your suppliers (in return for being a great customer) - or shop around for new suppliers.
Maybe it's even time to change what you do or how you do it?
Or what's the equivalent for your business of the foreign oil that the USA is so reliant on? Who outside the business is able to put a squeeze on you? Make a change, and make it now.
What would you really like to change about your business but have never got round to?
Use the current impetus you have to solve problems to make these changes too.
Don't let a crisis go to waste.
Can We Learn From Obama? 'Yes We Can'!
Whatever your political persuasions I think everybody is to some extent impressed by the way Barack Obama organised his campaign, and how he is now organising the transition.
I should say upfront that I'm a great fan, but I do believe that we can all learn a lot of lessons from him and his team.
He is about to become Chief Executive of USA plc - and by anyone's assessment this is a turnaround of a failing organisation. So how is going about this?
1. In his campaign he was very clear about the scale of the problem, and very open that he did not have a magic answer. Any solution would be difficult, and would require sacrifices and hard work he said.
2. Despite the depths of the problems, he campaigned on a very aspirational message - 'Yes We Can'. I loved the simplicity of this, and the emphasis on 'We' rather than 'I' - so many politicians' campaigns are about how 'I' will do this etc.
3. He didn't work himself into the ground. So many people in campaigns like that, or in management of crises, work around the clock and get more and more exhausted - reducing their effectiveness. He took time for his family, to go to the gym, to visit his sick grandmother and more. He had a rule that he didn't work on his many plane trips - he'd use the time to read widely, taking in new ideas, and to think. You reduce your effectiveness dramatically when you allow yourself to get too tired, so everything starts to take longer and you make mistakes. Make time to relax and keep fit, it's extremely important. You can't fix the organisation if you're also breaking down!
4. He built clearly defined teams, with clear onjectives. During his campaign he even had a team specifically preparing for what to do once he'd won! As a result, the day after he won he launched a website at www.change.gov to set out his agenda in detail and invite ideas from the public. It's fascinating browsing that site.
5. He's been very open about the whole process. You can find photos on flickr, videos on YouTube, lots of details on his website at www.barackobama.com, and on the new www.change.gov website. People are fascinated by it, and reassured by the openness. It signals a real change.
6. He emphasises that everyone needs to do their bit. His websites actually set out what that can be.
7. He mobilised millions of people to get behind the change in small ways, rather than just focusing on the people around him who could do a lot. He had more volunteers than any other campaign, more donors than any other candidate in history.
8. He used the power of public speaking to inspire people. He wasn't embarrased to set out to inspire - something many people are very hesitant about.
9. He's focusing his, and everyone else's, attention on the main problem. He had big plans for healthcare and education - but he has made it clear that his original ambitions have to wait until the economic problems are fixed - that is priority number 1. Every failing organisation has one or two key things that are the big main problems. You can't do everything well at the same time, so just focus on those.
I'm going to watch Obama's presidency with interest, and try to learn.
What do you think? Have you learned anything from President-Elect Obama?
Thought for the Day: Chasing Rabbits
I heard an old saying that I knew, but had forgotten, earlier today:
If you chase two rabbits, both will get away
I'm guiltier than most of always launching off a new idea or project, and spreading my time and attention too thinly over many things.
Particularly in the current climate, it's focus that will get results.
FlyingStartups.com relaunched
For the last couple of weeks we've been working on a major relaunch of the FlyingStartups online community I run for entrepreneurs.
The website supports my books for entrepreneurs, and allows members (it's free to join) to share ideas, experiences and advice.
Entrepreneurs keep a regular diary of their progress in starting their businesses - and those make fascinating reading.
I first launched it back in 2003, so it's great to see the community still going strong.
Visit the site at: www.flyingstartups.com
'Beat the Crunch' Workshop
I'm pleased to announce the first of a new series of FlyingStartups training workshops.
Beat the Crunch is a day-long session in which I, and professional trainers, will examine how to get yourself and your business in the right state to survive and even thrive in these difficult times.
We'll draw on advice from entrepreneurs who have been in tough situations before, the ideas in my books, and the shared experiences of the delegates.
The workshop is in central London on Saturday 22nd November 2008 with a special offer for those who book before the end of October. Book your place now! I'll look forward to meeting you.
Survival - The VC's Advice
The Silicon Valley blogs have been buzzing over the last few days with details of a number of presentations and letters to hi-tech companies by their venture capital backers. These presentations were designed to inform CEOs about the outlook for the economy, and share the experiences and advice of the investors - all with the intention of helping their companies survive.
I'm going to summarise them here, because they give a very interesting and insightful perspective - and some great advice.
Sequioa
Sequia Capital is possibly Silicon Valley's most respected venture capital firm. They've backed many of the web's best-known companies from their first steps.
Last week they held a meeting for the CEOs of their investee companies - with the intention of delivering a short sharp shock.
Here are the slides from the presentation:
The analysis in here is fantastic - and well worth studying in depth. But the key messages are:
- This is not a short term problem. Prepare for tough years rather than months. Don't expect bumper good times to return for 15 years.
- You need to make sure your company is cashflow positive.
- You need to cut costs (but smartly - my addition), reviewing salaries, using commissions and other performance incentives - and using zero based budgeting (more in a later post on this).
- Focus on only the genuinely valuable and likely sales in your pipeline, get rid of the noise.
- Spend every dollar as if it were your last.
Benchmark Capital
This VC firm has lots of similar advice, but it was particularly interesting to read them quoting a CEO they know who went through the dotcom crash...
Recently, I spoke with an entrepreneur who as a CEO during the dot?com crash and oversaw a headcount reduction from 130 to 28 (through two major layoffs), and eventually back to profitability and an IPO. If you think a 10% layoff is tough, imagine laying?off 78% of your employees. It is one of the hardest things I have ever seen anyone do. I recently asked him how that experience has shaped the way he ould advise people on running a startup. He had a list at the tip of his tongue (included now):
1. You don
Survive First - Then Seek To Prosper
The gravity of the economic crisis will not have escaped you. You're probably well aware that there is no quick fix and we're in for a long hard couple of years.
But this doesn't mean entrepreneurs should despair, panic or get out of the game. Imagine if lots of pipes burst creating a big flood - and all the plumbers decided to give up?
It's entrepreneurs that the world is relying on to get out there, run their businesses, employ people, create real value and fix the global economy.
The small-minded managers in big businesses are going to get it all wrong. That's guaranteed. They'll cut spend on marketing, training, product development and quality. They'll run big voluntary redundancy schemes in which the best people will choose to leave because they are the ones that can see opportunities elsewhere - so the big companies will be left with the poorest performers. They will drive cost down, with a short term benefit, but a huge long term price to pay - as well as further impacting the current economic crisis. And they'll have a big payoff waiting for them if they mess up and get booted out.
So we're all relying on you - the big thinking managers in small businesses. You're the ones that actually make things, do things, and serve people.
Entrepreneurs do need to respond to the current situation, ensuring the survival of their businesses - but then they need to be quick to respond to the opportunities that present themselves in any adverse situation.
This will be the time to hire great talent at affordable rates. This will be the time to get great deals from suppliers, and on new equipment. This will be the time to get ahead of your competitors.
Over my next few blog posts I'm going to be looking at the different aspects of the threats and opportunities, what it takes to ensure a business survives - and how to find the new opportunities.
In the meantime here's a summary from the BBC of the events that led to this economic crisis.
I Feel The Need... The Need For Speed!
I have spent today as a guest of RBS Invoice Finance (thanks guys!) at the Palmer Sport corporate driving event at Bedford Autodrome.
There's been some networking - but most time has been spent on the track in one of 9 performance cars - including the Jaguar XKR pictured above, which I absolutely loved.
I'm not the most sporty or competitive person in the world, and I'm not a petrolhead - but I managed some very respectable lap times, and overtook quite a few of my fellow drivers much to the approval of my instructor.
In the Jaguar XKR my best lap time put me 13th out of 85 people there on the day.
Mobile Blogging
The last few months have been extremely busy - so the blog has suffered.
We've just added a feature to this site that allows me to submit blog
posts from my PDA wherever I am, so I'll be blogging more regularly, and
also from wherever I am on the move rather than waiting 'til I get back
and finding the time!
Weekend Reading
I've been catching up on my blog reading over the weekend and here are a couple of articles I found interesting that I wanted to share:
The New Yorker: The Permission Problem
Stick At It to Win
Seth Godin has a good blog post on the virtue of patience for entrepreneurs.
He's aiming it mainly at web startups - but I think it's true for anyone starting a business or launching a product - and I've mentioned it in my books many times.
Bye Bye Mr Bond
As I write this blog post I'm enjoying a steaming mug of smooth tasty PG tips tea - available in all good supermarkets.
I'm tapping smoothly away on my Dell Inspiron laptop (available at www.dell.co.uk), sitting at a practical, cheap and easy to assemble desk from IKEA.
Right, what was I going to actually say?
Designed to Fail
There seems to be a link between business success and good design.
A lot of people think design is just about pretty graphics, but it's actually about usability, effectiveness, and consumer satisfaction - and getting a vital competitive edge.
And so many businesses ignore design, or get it badly wrong - and then fail.
A Good Egg
Last week I had the privilege to meet an unusual entrepreneur called Mike Harris. You might not recognise his name, but you'd definitely recognise the names of some of the businesses he started: 'First Direct' and 'Egg'.
Government Downturn Humour?
Does the UK government have a sense of humour?
As the country's economic problems begin to bite they've appointed a new member of the Financial Services Authority.
His name? Mr Pain.
Think I'm kidding? See the press release for yourself.
Long Time No Blog
Well it's been a month since my last post here - but what a month! - and for that I apologise. Here's some of what I've been up to:
1. My companies in the Red Group have been very busy, and I've been recruiting a business manager to run them day to day.
Enterprise White Paper: Business Innovation
This is the fifth and final of the Enablers of Enterprise detailed in the report, and I believe it's the most important in unlocking the latent potential of the existing entrepreneurial businesses in the UK, let alone encouraging the growth of future firms.
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