Posts Tagged ‘Business’

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So many articles in the broadsheets about people leaving London and their reasons why, some real and some spoofed for comic effect. It stirs up many emotions in people, given the pressures of modern life and the increasing ratcheting up of costs of sustaining a family and a young business in London. I moved here in 1976 from NI and lived first in Guildford a commuter town in Surrey, then Belsize Park in North London, mixed with time in Silicon Valley off and on since 1987. Now I am back in the countryside of Wiltshire, I have built start-ups in both London, Silicon Valley and in the rural areas of the UK, so I think have an interesting perspective.

So let’s get real the better opportunities for creating a team, cutting deals and getting funded are in London, simply by the volume of people, networks and funds to plug into. In my last start-up we were based in Clerkenwell and by that stage of my start-up experience knew how to slipstream all the players that created opportunities to make a name for yourself. But of course if you are less experienced and maybe never going to be the number one or two in your global market space, it can be the opposite, a more daunting, alienating place where you feel you are not at the party.

There is definitely an inner game feel to London and some just do not ever get the invites to the inner sanctum of top-level VC funding and all those cool Pitching events at Downing Street and the Palace. That, if it is happening to you, even though it is all around you in London can make you feel like a failure. Very few actually make it as a tech start-up in London, although from all the column inches, blogs and networking events devoted to the space it is difficult to see through that veneer. My calculated guess is that 98% never get funded beyond family and friend’s rounds, of which only 30% of the 2% that do will survive and maybe you will remember 3 brand names that did win in 10 years time.

It’s a tough game and takes real stamina, resilience and experience around you to make it, and that is without taking into account the negative macro events that can wipe you out like Lehmans and the periodic UK/Global market crashes every 5/7 years. But of course if you were looking at the start-up world in a logical and reasoned basis you probably are not suited to the crazy world that we entrepreneurs inhabit. Yes you must really believe as a founder beyond all the negative pushbacks that you are right about your product/service and must keep the idealist attitude alive.

So you can fail in London too, and it is why most British start-ups fail in Silicon Valley as well because the competition there is even more fierce and the money game even more aggressive than in the UK and most are not tough or experienced enough to compete on equal terms. But you are in Cardiff, Bath, Bristol, Birmingham, Manchester, Newcastle, Edinburgh, Glasgow, Belfast and Dublin, what chance do you stand cut off from Boris’s gleaming Tech City? Well it depends a lot on what level you are playing at, what your goals are and how you set about creating your own networks.

There are great start-ups out across the UK and Ireland, bright people with bright ideas, but the thing that defines a winning company is the drive to reach the goals that are set day one in the business plan. If you are out to build a global company at some point you are going to have to go where the big deals are being done, be it London, New York, Frankfurt and San Francisco. This does not mean that you have to move the whole company from the low-cost base you might have established but it does mean a lot of travel and nights away connecting to the networks that open the door to enterprise clients and the funding that follows those early big name wins.

It requires a concerted effort as well not just dipping in and out every 90 days as I see so many companies doing, the people in the big city networks won’t take time with you and create that continuity of connection if they do not sense your committment to the cause. There is no easy or quick way of doing this, the hours day and night have to be put into this programme. If you are lucky you may find key experienced champions in those networks that like you and your company and will get alongside in accelerating your access and growth. It is certainly a lonely thing to do on your own and it never does any harm to have someone watching your back on the circuit when travelling and running hard.

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It all starts so well, swimmingly in fact, you as the young Founder/CEO blazing a trail with the latest technology making a major impact in the market. So you have a founding team, perhaps with engineering, operational and financial skills to match and balance your business and marketing bias. Seed capital provided by a couple of names in the industry that have helped not just with the money but really opening up the network. They in turn after some key wins have introduced you to a particular venture capital company and you have closed an A round giving you the rocket fuel to enter the US market.

You have filled out the board room, one of the private investors, a representative from the VC, a Chairman like figure that the VC recommended with long experience of your sector, an experienced VP of sales from one of the established brands, and of course your co-founders. The board meetings are purposeful and you are learning lots of new stuff, even more so at the dinners and lunches that follow as you bond with the board members. So it all feels good, they are great support, you can ring them up any time to pick their brains and of course they are beginning to learn a great deal more about you, your ambitions and capabilities.

You are running flat-out managing the team and company during the day, catching up with the administration and contract detail in the early evening and hitting the event circuit for product exposure later on. This gives you little time to gain a perspective on where you really are, how committed people are internally and what conversations are going on about your company elsewhere that you are not directly involved in. As Andy Grove at Intel said “Only the Paranoid survive” well he was talking about a bunch of things to do with change, but it is a good line to focus on. At some point come hell or high water things will change and you better be ready for them.

What you have to understand is that you as Founder/CEO are on your own, despite the appearance that you have all these people around you that are seemingly becoming friends. In business you have acquaintances, fellow board members, maybe colleagues, but let me assure you no real friends. The reason being people in this particular adventure have vested interests, keeping their jobs, supporting their families, growing the share options, enhancing their shares, flattering their reputations and most of all limiting risk. Now that might come as a shock, you have started a company with these people, won the early deals together, travelled in economy together, built event stands to the wee small hours together and shared many a dinner and drinking session.

But when the day dawns when the company hits a major blip and it will, the pressure will build and when it does, strangely you will find that the buck stops right at your door. So what is the point I am making here, why am I in some way stating the blooming obvious, yes you are in charge. It is easy to lose sight of it, that’s why, you have all these players around you, a buzz of interplay going on. An adrenalin pumping speed of movement, which makes the silence that accompanies you at last when on your own at midnight, wondering what happened, wrecking your brain for the solutions, even more deafening.

Even if they all in the end do turn out to be great people and continue to support, just be ahead of all of this, be prepared, build your own trusted support team and be slightly cynical throughout …. Just in case.

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I was at a recent event out in the sticks from London for a change, technology based and all about the future of a particular layer of mobile development. Something that might affect all of us in the future and as I looked round the room I was struck by the fact that 90% + people there were over forty if not fifty years old. It made me think, is it true that when it comes to the big moves in the game the decisions and politics that shape our world at that level are still made by older grey men?

The magazines and blogs would have us believe that the movers and shakers of the technology world at this time are all young men and women reinventing that world and beginning to control the levers of power in that setting. In small numbers that might well be right and hopefully that will continue to grow as it is a healthy platform to build on. But from many years of negotiating deals on a global basis, it has always been clear to me that when the big decisions are to be taken it seems to return to a table with either one powerful older man or a board of older males, very rarely women to make the final sign off.

Now it is not for me in this piece to fight the cause for this to change, rather it is to accept at this point that this might be the status quo and how to deal with it. When I talk to founding teams of growth companies most of the time there is a certain naivety about who or what they are going to have to deal with over the coming years. They want to do deals, partner and expand internationally but seem to be leaving it to trust that the people that they have to engage with will be similar in thought to themselves. Now this might be true for a limited number of cases within that shiny new circle of emerging players, but when you look into who they will have to deal with on a regular basis as they scale that certainly changes.

That optimism and idealistic approach that has galvanised their companies and belief that others across the table are there to help them grow will be shattered at some point. As they continue to underestimate the nature of big business and a set of long-established rules for playing in that pool, increasing numbers will find their ambition blunted. Well we won’t deal with these people or type of companies I hear them say, well good luck with that, given when you trace back the lines of power to the centre how much control of markets these people have.

A better strategy would be to wise up to the reality of global business, learn the rules fast and begin to accept that not everyone has their company’s best interests at heart when working closely with them, internal or external. Numerous up and coming companies over the years blast out major PR announcements about global deals with big names either in direct sales or joint venture plays. Only for me to discover as I do when generally picking up the pieces afterwards, that the majority of the margin created has stayed with and will continue to stay with the big name player involved. This cannot always be avoided, this is real life and the pressures from larger players can be enormous, but it does not need to be the norm if handled with the right knowledge, attitude and experience on board.

There I was in the gym just doing my usual routine. A set number of exercises blending cardiovascular work with strength building over an average of fifty minutes with a warm up and down of a few minutes either end. This routine had built up from experience over many years of in the early days training to play professionally, then in later years just keeping a level so that I would not hurt myself while playing against generally younger opposition. Just a local gym, nothing fancy, the same faces mainly that mostly know why they are there and what they are doing. But the rest, well I wonder when they are going to hurt themselves given the lack of knowledge of how to approach even the simplest of tasks. Now to be fair the majority are perfectly happy, content to be there and that’s good, better than not being there at all.

But there are a few you can see who with a little bit of feedback and thought could be getting a real lift in return on the time spent there. In fact the real gain for them would be reducing the time they need to spend there, concentrating on quality rather than quantity. Well bar the occasional input from me, if they welcome it, I will leave that to the professionals, which in this field I am not. But it did make me think about the age-old question, in the wider context of my years of business management in the technology markets, whether professional experience at the C level will most of the time trump natural talent, enthusiasm, energy and the will to win of young executives in growth companies?

Well if we are to believe the PR in the trade press there are plenty of success stories of young men and women knocking it out of the park. Building and scaling companies with wonderful business cultures that they just have the spark and vision to drive forward. That is good of course celebrating success and inspiring others to do the same, the entrepreneurial world we live in today. But the reality is for every photo shoot or video that is featured there is a massive counter balance of executives at companies where they have soaked up all the research, books, magazines, network meetings on being a player, but are stalled in the process of recreating that dream for themselves, why?

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Now this can be for a myriad of reasons which I am not going to cover in this article, the question for here is if they were trained professionally themselves, or had professional experience around them as a reality check or guidance would more of them be progressing? I meet a lot of entrepreneurs across the TMT markets and through my trusted networks across many other industries. The theme I see is them making basic mistakes time and time again that comparable professionals removed from their business life’s early on. Now it is impossible and maybe not necessarily a good thing to have these young executives be totally insulated from mistakes and it might toughen them to find out the hard way a few times the consequences of their actions. But if you don’t know what you don’t know, how can you learn on the job in a small company?

But it does seem that some of those more basic things which can really put a company at risk could be easily avoided if the support and feedback was readily available. Growth companies move at a pace where all the bases are difficult to cover especially when you are consumed at the bleeding edge of your market. While there will hopefully always be the superstar exceptions, having a blend in a team, the founding team’s natural talents alongside hardened players has got to be a good thing especially when fighting on multiple fronts. It is the balance of instinctive skills and professional experience in a business which will in the end win in most fast growth situations.

Noticed that some of my circle were still chasing the MBA prize, and wondered is it really as big a thing as it used to be, and more importantly does it still have a positive effect on your career. Well I am sure as these people are intelligent  they would not be there in the first place if they had not reasoned yes, given the cost and time spent. From my point of view I believe it is the process of the MBA rather than the outcome that is always the win, it is the network created off the back of the travelling and the course that really gives you the lift.  

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