James Caan (for me the most plausible and likeable of the Dragons Den crowd) has generously offered his book “The Real Deal: My Story from Brick Lane to Dragons Den” for free in a downloadable Apple app that also includes a whole section on useful tips including cash flow, growth and raising finance.
I am finding the book really interesting and easy to listen to and,so far, would recommend it to anyone interested in success stories and some good principals to maintain when starting up a business. The additional tips in the app are good, if albeit sometimes a little basic – but perhaps that is what we need sometimes. Back to the basics.
The authors of this article (link below), Karl Stark and Bill Stewart suggest you ask yourself 8 questions to really stress test your business concept. Actually, The Genesis Genie believes these are also worthwhile questions for organizations that have been running for a while and may be struggling in this economic climate. The questions are:
Who are the ideal customers?
Does it already exist?
What is the customer doing currently?
What is the all-in cost of the current solution?
What asset or capability are you bringing that is unique?
How will competitors react to a successful launch?
What is the business model?
How can you test and learn before building the entire structure?
At Genesis, we would suggest two further questions:
Is this cash viable on a stand-alone basis
That is: will you need to borrow / invest before you are in a positive cash-flow situation; or can you “boot-strap” it. That is can you survive without an injection of cash (and what is your contingency plan)?
How are you going to persuade your customers?
Either to switch from their current solution or buy into a brand new concept.
The article is short and worth reading as the authors elaborate on each point together with some rationale.
Lastly, if you are serious about getting your business underway, you should have an objective audience listen to your responses to your questions and offer some challenge. Most entrepreneurs are passionate visionaries which is a wonderful characteristic – but can sometimes blindside us to issues that are contrary to our vision. This is a role that The Genesis Genie can play – mail or call us now for a no-obligation discussion of how we can help.
Here is a great story about a 9 year old boy who shows true entrepreneurship. Not only is the story inspiring, it is guaranteed to bring a smile to your lips. The video clip is 10 minutes long but trust me, it is time well spent.
Not only is it a fun video, it is also full of good lessons for entrepreneurs too. What you take out of it may depend upon your personal context, but for me some of the entrepreneurial qualities Cain displayed were:
Working in an area that was his true passion
Creative use of what is it hand if other resources not available
Dedication to the business – even when things go slowly
A keen understanding of pricing points and how to up-sell a customer
A focus on the experience he was creating – not the financial returns,
Constant innovation – but within a clear strategic direction (cardboard arcade machines)
An infectious enthusiasm that inspires others to help.
Please visit our welcome page to find out more about The Genesis Strategy Genie and how we can help you live your dream.
Saras Sarasvathy, a professor at Duke University, undertook some research to see if entrepreneurs thought, acted and decided differently. Her conclusion was that this is the case. At its most basic level, she says that rather than set a goal and work out how to get there, entrepreneurs start with the means at their disposal, collaborate with others and go on a journey to see where they end up. Her work has attracted much attention and is taught in many entrepreneurial courses the world over. The process is portrayed below (you may need to click on the picture for a clear view):
I have read her research papers and various other materials, but the best explanation of her process I have come across is displayed in this video from the University of Gallen:
The 10 myths of entrepreneurship
So, through trial and error, together with discussion with stakeholders and customers, and a clear understanding of the means at your disposal, you develop a new product or business even if your original goals need to shift substantially in the process.
At Genesis we have a view on Saras thinking – although it may go a little against the crowd at the moment. Although I am not certain how academically robust was her research, intuitively there are some great ideas embedded in the theory. Base your business on your own means (including competences), spend more time experimenting and market testing (than in-office analysis), share your ideas and get inputs, … these are all good. They also dovetail nicely with other entrepreneurial thinking such as that of Alex Osterwalder (Business Model Generation) and Steve Blank (The Start-Up Owners Manual). These concepts are particularly useful when dealing with “fuzzy” markets where you have really new products or are developing a new market or market niche.
Where do we think this could be dangerous? Taken to its extreme, we believe the process could lead to laziness and sloppy thinking if it is used totally outside causal thinking. We accept that a new start-up is not the same as a microcosm of a large enterprise, but there are some excellent analytical tools and strategic thinking that can play an important role in the entrepreneurial process. From the humble SWOT through Porters competitive strategy and on to Christensen’s disruptive technology – all could guide the process (depending on the venture) and could also help to reduce risks of ending up in the wrong place and/or with the wrong product.
Furthermore, one of the things that we believe is a characteristic of great entrepreneurs is to persevere and continue far beyond the point when other more “sensible” people have thrown in the towel. That attitude does not sit well alongside the idea that goals can be changed whenever things seem to be going against them.
Our conclusion, Saras has begun an interesting “movement” and there are many important principles that should be used in the “0 to 60mph” phase of the start-up. But do not throw the baby out with the bathwater – recognize that causal thinking, modelling and other scientific business principals can enhance the effectuation process.
We are about to launch a new company: Mashauri Limited aimed at helping entrepreneurs through the process from start-up to stable business where we have cobbled together a mixture of the types of thinking discussed above. We have produced a process that we believe will really enhance the entrepreneurial journey and greatly increase the chances of success. If you are an entrepreneur in the early stages of start-up and would be interested in trialling the product, contact me at firstname.lastname@example.org to discuss it.
There are some brilliant authors who write about strategy: Porter, Prahalad and Hamel to name a few. But I am constantly amazed at how timeless is the advice of Peter Drucker. I was re-reading his work on strategy and entrepreneurs the other day in a book called The Essential Drucker (click on book to see contents) which is a collection of his best essays. The essay I am discussing today is called Entrepreneurial Strategies, which came from a book he wrote in 1985 – when only a handful of people had even heard of the internet.
Although one must consider the concepts in the light of today’s environment where technology and other conditions have changed the playing fields for entrepreneurs, the four strategies that he suggests are as applicable today in Silicon Valley as they were in the manufacturing era in which they were written. Below is a summary of his set of entrepreneurial strategies:
“Being fustest with the mostest”
That is being the unchallenged leader in your field – and staying there. Would this be Facebook in its early days? Or Pinterest? They certainly started that way and have attempted to maintain dominance even if the field is cluttered with would-be successors. Blackberry was another example here with its mobile email system. Peter Drucker recognises it as a potentially highly rewarding strategy but also warns it is the most risky – and it is often a challenge to maintain the position.
Creative imitation: “Hit them where they ain’t”
Instead of designing something brand new, try to exploit potential opportunities of someone else’s innovation – but who have failed to exploit the opportunity to date. The teenage son of a friend of mine takes apps designed for Apple and converts them into apps for the Android – and makes a fortune. I am not debating the morality (or even legality) of this, but it is an example of this type of strategy.
Creative imitation: entrepreneurial judo
Here the entrepreneur tries to succeed in a market which someone has created but for some reason is not concerned about. The two examples used are where an organisation develops a product but does not capitalise on it through arrogance; or where an organisations simply picks out the high profit sector of the market and leaves the rest. Many companies operating at the “bottom of the pyramid” (such as mobile phones in Nigeria) are operating here and finding ways to make money and provide a valuable service.
Finding and occupying a specialised “ecological niche”
This is where a company obtains a practical monopoly in a small area that, in itself, does not offer much incentives for others to compete in, as it is too small and/or requires highly specialist skills. An example is an Israeli company (Givun Imaging) that makes ingestible video cameras (fits into a pill) and allows Doctors to see the inside of the intestine of their patients.
Changing the economic characteristics of a product Here the entrepreneur takes an existing, well-known product and positions it differently in the market through better adapting it to the customers requirements such as changing the pricing model and so it is generally based on the premise of creating new customers for an existing product (Drucker mentions 4 ways of doing this in the article).
Netjet may be an example of this whereby it puts the use of a private jet within the price range of executives who could not afford their own jet.
In the essay, Drucker considers the risks and downsides and opportunities of each strategy with examples. He explains how a strategy may actually be a mixture of several of those described individually. He also discusses how different strategies require different behaviours on the part of the entrepreneur and require a different type of innovation.
As part of the Genesis Strategy Genie process we discuss and challenge entrepreneurial strategies with this type of thinking, together with tools such as the Business Model Canvas. The work is useful to organisations doing well, but who would like to grow more rapidly as well as companies suffering low or negative profits who would like to see how a shift in strategy or focus can cause a quick turnaround.
If you would like to review and possibly strengthen or refine your strategy, please contact us for a no obligations discussion – either go to the “RUB THE LAMP” link in the menu or the “Genie for entrepreneurs ONLY” link and you will be given a route to contact us.
Below is a link to a brief summary of Drucker’s essay, but I strongly recommend getting hold of a copy of the book and going through it in detail – or speaking to someone at Genesis and finding out how to put the theory into valuable practice.
Chris Zook and Jimmy Allen have just written a book called Repeatability that discusses how to maintain profit growth in the face of great turbulence. Their conclusions around strategy are as important for small and medium-sized businesses as they are for large businesses.
The book resonates well as it has many similarities to work in which I was involved while at Braxton Associates, under the leadership of Tom Doorley III, where we developed “The Growth System”. This was a system designed to help organisations grow – and it was based on research into organisations that had successfully grown consistently over an extended period of time – something that very few (probably less than 15%) manage to do. It is nice to see that Repeatability shows the concept has stood the test of time – which adds another more-ironic meaning to the book name.
The main similarity between the books (Tom also published) is that of having an incredibly in-depth insight into one’s success formula (core competency, basis of competitive advantage, … call it what you will) and ensuring one gets better and better at it. Further, the entire organisation is in support of this formula and the underlying principles are “hard wired” into the enterprise – from back-office to front-line operations.
The Repeatability book commenses with the challenge of complexity and that 85% of executives questioned, named complexity (broadly) as the number one barrier to them in achieving their goals. This is compounded by the speed with which the world is moving, making strategic decision making more important, more urgent and more difficult!
Bringing these two ideas together, the way to grow consistently even in the face of this complexity and uncertainty is to have a clear strategy – and the essence of this strategy is to have a crystal clear understanding of your point of differentiation or competitive advantage – and then consistently optimising its usage in applying it. This is done through hard wiring it into your organisations processes and system; and understanding how it ultimately adds value to your customers .- which is what will define your market.
The experience of Genesis and many other top strategy consultancies around the world is that a surprisingly large number of companies do not understand the basis to their competitive advantage – or at least lose sight of it as they scramble into new markets and products to hit profit targets and flagging revenues.
The Genesis Strategy Genie is designed to assist organisations to help them work through the exercise of clarifying and optimally using their point of differentiation. Please drop us a line or call us if you would like to have a no-obligation conversation about this topic – and do not miss our Genie launch special offer: details at 110% money back offer.
He begins by explaining that as organisations grow, the need to think more strategically increases – but it is often not that easy for operationally focussed owners to make that move. We fully concur with this view and is, in fact, one of the motivating ideas behind the development of The Genesis Strategy Genie, our tool to help small and mid-size organisations create or renew their strategies.
He then gows on to give the “6 habits” of strategic thinkers with explanations and some examples.
Although Paul runs Decisions International, a competitor of Genesis Management Consulting albeit in a different geography, we have great respect for his publications, and encourage you to click on the link and read this article. It is short and to the point:
If you are in the process of thinking about formalising your strategy, or perhaps renewing it in the face of the many fundamental changes that have resulted from the economic turmoil of the last 5 years, please have a look at our latest product: The Genesis Strategy Genie. We may well be in a position to support you in this task.
This is a useful article from Eric Ries who discusses how to try to reduce unnecessary costs when starting up a business. Although some of his earlier remarks may challenge your thinking as they do mine, when you get into the detail of the article itself, he puts across some useful lessons.
His two personal examples demonstrate how easy it is to over-engineer a product or a business before one has a clear understanding of exactly what is your service, who you are selling to and what is your basis of competitive advantage. Strategy 101? Perhaps, but an awful lot of organisations (large and small) lose sight of that.
Although he calls it “lean” start-up, to me it is more of a design approach to developing new products and strategies: idea > prototype > test > refine with an iterative loop in the last 2 elements before investing too heavily in the final product. But no matter what it is called – it is good advice. Click below to read article:
The reason we have decided to promote this article is because the thinking demonstrates some of the pitfalls of not thinking strategically or not having a clear strategy based on real customer needs and market dynamics. And these are the type of things we can help you with when developing or refining your strategy.
So have a look at our latest on-line tool: The Genesis Strategy Genie (click on genie below) and see whether the genie might help you put “strategy – at your command”.
Genesis Management Consulting is an organisation with a mission of
“improving lives through better decisions”
Our history is in classical strategy consulting and we long ago recognised that the essence of strategy is making a number of critical strategic decisions that shape the direction and future of the organisation and guide it in its striving to reach its objectives.
For this reason, we are developing a set of products that assist organisations in taking strategic decisions. They are designed to be run remotely (web, phone, screen-share, cloud) and are supported by a range of technologies. In this way we are able to deliver an exceptionally high value solution at a cost significantly below that which is generally associated with some of the more traditional offerings.
We have named this range of products “The Genesis Genie” for obvious reasons. The first in the series to be launched is The Genesis Strategy Genie aimed at mid-sized organisations. Below are a number of publications that tell you more about The Strategy Genie – starting from a short 2 page overview through to, for those that are considering investing in The Genie, a 13 minute video.
Note: If you are viewing from your iPad or other tablet, you may not be able to see the presentations and/or video embedded below: In that case, to view, simply click on any of the links immediately below:
If you would like to discuss this further, please contact Simon Gifford at email@example.com for a no-obligation initial meeting to explore if the Genesis Strategy Genie may be appropriate for your organisation.