No relation

Having spent the last few years on planet startup after taking a pod from the corporate mothership, one thing that continually strikes me is the high level of superficiality that abounds down here. I was even recently asked by a friend for advice on how to deal with it and fortunately having faced this before and also studied it I was able to give some useful advice which I’d like to share.

The first thing to understand is that you’re not alone, superficiality is a natural human response to your time being fragmented by just so many separate demands, you end up observing the chaos and only cherry-picking the easy immediate stuff that you can get instant satisfaction from and the important stuff gets left behind. You’re no longer working 9 to 5, it’s now 24×7 whenever you’re not exhausted, you’re overloaded and your in-tray is never empty. The switching between fragmented tasks can become quite a substantial overhead absorbing much of the time that should be spent doing productive work, and at the extreme it absorbs all of it, so you end up standing still. It’s a very different thing to having the clear periods of uninterrupted focus that you may have experienced in other roles.

So firstly let’s appreciate that this is simply the norm in the startup scene, we’re all now more connected than the Borg and we all suffer from superficiality. We just need to adjust our tactics to deal with the territory.

Mintzberg

Henry Mintzberg described this as a superficiality trap and fortunately also outlined some time management principles that can tackle it. He’s a very well respected Management Scientist and you’ll easily be able to find much more information on this subject online.

Time Management a.k.a. Work Smarter not Harder

Firstly you need to consider and reflect on whether you really are applying your time productively and not just fire-fighting, being stressed or putting easy low-priority tasks over the urgent ones in order to feel productive, come on be honest.

Secondly, develop your own personal way of dealing with fragmentation and superficiality using these basic principles:

• Be organised and disciplined or you’ll get overwhelmed
• Prioritise your work, hit the few things that really matter first, the easy stuff you can do anytime; in a crisis pick the half a dozen things that need doing and just do them, forget everything else
• Structure your time and activities; use your calendar, a spreadsheet, prioritised lists, a mind map or whatever you feel comfortable with but get it all in there so it’s visible and can be managed
• Negotiate your commitments, don’t let others drive you, you should control your time; turn off your email and phones to create time to focus, you don’t really have to get back to everyone immediately
• Have a work plan and review it regularly, say every few days
• Delegate where possible to save time, you really don’t have to do everything yourself especially when so many people in the startup scene are happy to help out

I hope you find this useful, it’s standard on any management course but I know a lot of young Entrepreneurs who are too busy to take one right now…

4joy

Recession ahead ?

I’m one of many Entrepreneurs building their own small part of the UK Government’s new TechCity, effectively a Silicon Valley for Europe. The OECD has warned that the UK is on the brink of a double-dip recession, the Euro has been under threat for some time now and we hear doom and gloom stories every day. Unsurprisingly the question of how this will affect us comes up quite often in discussion. My immediate reaction was pretty negative, the usual thoughts about a recession limiting the availability of capital, dampening growth, reducing opportunities etc…

However, after a little research and thinking more deeply about this, I am convinced that it could be a boon provided we work out how to take advantage of it:

You’ll get your act together, you have less to play with so you’ll improve your game and consider your choices more carefully, focusing on clear revenue models and not experimentation. Anyone with an interest in your startup including your customers will help to make sure your business idea works as they need you more.

There are more opportunities as larger companies struggle with inefficient processes that are no longer economical, opportunities open up for new, low-cost, and efficient online services.

Customer’s are eager for ways to save money and spend a lot more time online looking for the best deal. Startups often deliver lower cost services to undercut the established players. Free, monetised indirectly is a common feature of disruption and hard to beat if you already have a legacy of technology to support and significant fixed costs.

There’s less competition as larger players focus on in-house cost cutting and redundancies instead of exploring new market opportunities. Reduced revenues make it harder to invest in innovation.

It’s easier to find good people, it halts the brain drain to other industries, people feel less secure in their jobs so are prepared to work for less or free to improve their skills, and more talent comes onto the market as work thins out.

Business costs reduce, office space, equipment, services, all get cheaper as your suppliers reduce their costs to keep your account. Offers, discounts and better terms all become the norm.

Finally, here’s a list of nine companies that started in a recession including IBM, Microsoft and Apple. Big enough for you? I rest my case.

iColumbus

Christopher Columbus was not just a great explorer, he was also a great entrepreneur. He convinced the king of spain to give him three ships (capital) and crew (a team) to explore the oceans and find new trade routes (a startup) , he subsequently found the Americas and the rest is as we all know, history.

Explorers are adapted to searching for value

I constantly come across two types of personality in the startup world, explorers and caretakers. Both want to work together to create great companies but it is the explorer that has the optimal approach to fit the task of searching uncharted space for value opportunities. The caretakers see this as another project that must be planned in the conventional way and de-risked. This doesn’t work, you can’t apply a systems approach to an unknown space that has yet to be explored, and one where the team will need to pivot often in search of opportunities rather than follow a project plan. Columbus didn’t have a chart to get to America, just the resources and support he needed to give him a high probability of success.

It worked for Google

Consider Google’s first funding in 1998 of US$100,000 from Andy Bechtolsheim, co-founder of Sun Microsystems, given before Google was even incorporated. There was no business plan or accompanying figures, just a great idea and a sponsor with vision. No caretaker would have ever handed the money over.

A startup is really a quest

Conventional corporate thinking doesn’t work here, startup business plans should be more like an explorer’s chart, unfinished, and changing. I’m not suggesting that anyone should be rash, just that putting together a conventional plan with figures to please the investors may make everyone think the project is under control when it’s not, I’ve seen plenty of failed projects that had beautiful plans.

Conclusion

Not only must entrepreneurs think of themselves as explorers but those they rely on must understand this too, and that means adapting conventional planning to the business of value exploration.

Qui audet adipiscitur

PlayGen's addingplay cards

I went to the Technology Strategy Board’s Innovate ’11 conference this week and in the digital section I met PlayGen, a company that specialises in games and gamification. They didn’t give me a pen, mints or a t-shirt, but they did give me a pack of their addingplay cards. The Cards are basically a great gamification brainstorming tool to add play to anything you like, so as a New Finance entrepreneur I thought I’d try them out on finance.

The following sections represent their recommended process where at each stage you pick a few cards of the right category and then work out how you might apply the ideas on the cards to your chosen topic. It certainly got me thinking.

1. Decide the topic and audience for your game

How about digital wallets as the topic and the general public as the audience

2. Define player motivations - Pick 2 motivator cards and describe the main reasons to play the game

Card 1: Free – we all love something for nothing. Freebies are an incentive to start and keep playing

Ideas generated: the wallet  is free and you get paid for using it, the more you use it the more you get paid, you get credit for staying in the black and for staying digital i.e. minimising any ATM costs

Card 2: Affiliation – The need for social interaction, influence and cooperation

Ideas generated: the wallet is social, you can share your transactions with friends, make shared payments (pay the bills together?) compare and share prices and best deals

3. Define your victory conditions - Pick 1 or 2 victory conditions and describe how players succeed

Card 1: Race – Competition between players to be the first to reach a certain goal.

Ideas generated: rather than amassing the most money which is obvious, how about the player with the most co-operative connections wins or the player with the most efficient running account wins i.e. whoever uses it best, wins

4. Set the rules of the game - Pick up to 5 game mechanics and describe processes to play the game

Card 1: Reward Schedule – Determines when a reward is given to the player, activated by a certain time or action

Ideas generated: players are rewarded for staying totally digital for a given period, no cash or cards

Card 2: Levels – A section of the game in which all player actions take place until a certain goal has been reached

Ideas generated: the player must pass a certain number of transactions to get to the next level, or reach a number of social connections, or benefit the most friends with great deals they’ve found

5. Make it social - Pick up to 5 social mechanics and describe how players interact with each other

Card 1: Customisation – Providing the ability to personalise aspects of the game world, enabling players to express their identify to others

Ideas generated: how about financial avatars instead of visual avatars, profiling the users spending patterns, collaboration with others and digital usage

Card 2: Communal Colaboration – The Action of players working together to create something, fulfilling a need for community and belonging

Ideas generated: Communal spending, sharing costs, peer to peer services

Conclusion

All in all a lot of fun and very thought provoking, I can easily see this being a great tool for a group workshop, I’ll be trying that next.

p.s. you can buy your own cards here on Amazon

Finance is being disintermediated. The old finance value chain is giving way to direct connections between providers and consumers. Large monolithic finance companies can no longer own content, distribution or even their customers. Peer to peer lending, microloans, lending clubs, donation sites, knowledge networks, personal finance managers, virtual currencies, you name it, every area is under scrutiny and Entrepreneurs are seeking out inefficiencies that they can address with new mobile and web technologies.

So how do you join the party?

Here are a few suggestions to help you create your own New Finance startup:

1. Treat the customer as an individual. Users do not want to be treated as a mass. Give them respect and they will pay you back in feedback, loyalty and more. Do what Amazon have done, but do it for finance, mass customise the user experience.

2. Hand over control. Your users know what they want better than you do. Let them tell you, let them decide what features you deliver, democratisation leads to quality.

3. Hand over the information. Be open, you can’t control the information anyway. The days of bamboozling customers in order to sell products are ending, so focus on better value and efficiency and provide the information that goes with it. The customer will find your service on its merits.

4. Simplify. Old Finance has been hacked up over several decades. It’s become messy and inefficient, use this opportunity to deliver a new simplified and streamlined service that reduces friction and costs and opens up the market. The technology enablers are already here.

5. Make a lot of it Free. You don’t need to charge at every single step. The most efficient marketplaces are free, drop the heavy transaction costs and use the Internet’s potential to leverage Free in a way that makes your service profitable.

And good luck too if you do have a go

I often use the term “New Finance” c.f. New Media, some also call it Finance 2.0, most people get the idea but I thought I’d explore the theme in a little more detail. What’s the difference between old and new and how do you create the new, is it as simple as throwing all that’s Web 2.0 at it? I don’t think so, anyway here are a few ingredients that you’ll need:

Deconstruction

The world of atoms is obviously old finance, that’s easy, so that’s paper statements, ATM’s, the cashier and so on, but what about digital versions of these? If the user experience remains substantially the same and doesn’t leverage the features of the new digital medium, then surely that’s still old finance in a different guise. I see stock ticker tapes on iPhones, the original paper ones originate from the 1870’s! You’ll need to deconstruct old finance to get new finance, not just digitally re-platform it.

Customisation

If you went through the Wikipedia Web 2.0 tag cloud you’d find very little that has been embraced wholeheartedly by finance, it’s just too generic, doesn’t comply with the regulations or presents unacceptable risk. Social networks are for socialising, it’s hard to use them to provide financial services. Twitter is fun but everything a Financial Adviser tweets is potentially a ‘Financial Promotion’ and  covered by strict regulations however benign it may seem. Finance is fussy, if you want to deploy Web 2.0 then you’ll have to customise it.

Regulation

Finance is unusual in that you can launch your new platform in good faith, perhaps to improve the efficiency of communications between market traders, and find yourself going straight to jail without passing go. Your brilliant new share tips site is really an insider trading site, welcome to a heavily regulated sector. You’ll need to engage a compliance expert preferably at the ideas stage, your solicitor may be able to help too, either way a sanity check on your idea is required. If the regulations are not clear, then press the regulator for a policy decision, not easy but unfortunately essential if you’re planning to break new ground.

Happy baking