Archive for the ‘Enterprise’ Category

What is the point of Dragons’ Den

August 23, 2008

OK, so I’ve not posted for a while, but this just popped into my head. What is the point of Dragons’ Den? I’m sat watching plucky entrepreneur after plucky entrepreneur troop up the stairs for my ridicule and entertainment, and I’m thinking – Does this do any good at all?

A New Opportunity!
On first blush a few years back when the series started, I and many others took it on face value, and thought “hey this is great, another opportunity to pitch to investors”, but lets consider for a moment how good an opportunity this really is. Generally the valuations offered are extremely low and therefore the entrepreneur who will be donating their blood sweet and tears into this business often end up losing out, of course the contacts and networks that the Dragons have bring exponential value to the business, so for a few that are truly in the right place at the right time, it can work. But there are other ways to get Angle Investment as it’s otherwise known; which brings me the second point.

They Thought What!
There are other ways of funding a business fact, proved fantastically by the inventor of the Bedlam Cube, and it may take a few tries to perfect the plan and the pitch – so why risk suffering the near fatal blow that public television viewing so efficiently delivers. Is it really sensible to take your fledgling idea and risk it getting sent up in flames, to the point that no ordinary investor will look twice? Of course this raises another point that cannot escape mention; that as business advisers are so easy to come by – why do so many people get caught out by frankly elementary holes in the plan, model, or numbers (even as much as asking for the ‘wrong’ amount as happened on the last episode)

But it teaches us how to pitch, right?
Er maybe, maybe not – you have to remember that we only see circa 90 seconds of the pitch, which is 3 mins long and we defiantly don’t see all the questions – so we get an ‘edited for entertainment’ cut of the pitch/discussion so whilst one can defiantly draw some important points it doesn’t necessarily show us exactly what a pitch is like. Also there is this whole ‘no notes, no slides’ thing going on, where did this come from? sure PowerPoint via TV is not great viewing and having someone thumbing through notes doesn’t get much better, but it would give those who needed a few aide memoir’s something of a stater for ten, and again in most regular pitches no-one is going to flat deny you notes or slides; although they will judge you if you have too many notes or boring slides – as well they should. so we learn how to do a dragons den pitch – but in other circles that’s just going to look under prepared or over ambitious!

But it’s entertaining!
Er OK, yes it is entertaining – but some people (you know who you are) find big brother entertaining; and I’ve always been under the impression that Dragons’ Den was meant to be more than entertainment, and certainly not at the expense of some of the most dynamic and driven people in our society.

And then it hit me!
That last point, “the most dynamic and driven people in our society“. What Dragon’s Den does so well, so most magnificently, is show us that being enterprising, taking control of our hopes and dreams and doing something, is both possible and normal. The program shows us the slice of our society that makes us successful, the slice that creates wealth, value, and jobs; and it backs that up with the all important caveat; that dreams are great, reaching for the sky is what you need to do – but you must have your feet on firm ground whilst you do it, you must take heed of common sense.

So when you next join Peter, Theo and the rest of the… (whats a collective term for dragons?) anyway, when you next watch them laugh some plucky entrepreneur out of the den, remember the courage and determination that has brought them there, and hope that some of that rubs off on the rest of us.


Starting Your Operations

March 15, 2008

One thing that didn’t really get mentioned to us when we started the company was the importance of processes and establishing a common way of doing things. Six years on and it’s a key part of what we do. I was at a Scottish Enterprise event last November about focused on achieving an exit, and one of the first things that was mentioned was that to sell the business you had to be able to leave – and that means processes and infrastructure.

I can’t help you on the processes that are specific to your business, but I can give some pointers on the things you might do to create an infrastructure from which you can grow, and most importantly manage the business in fast and efficient manner.

The first thing for me that starts a businesses infrastructure these days is Email. Do not underestimate how important it is to have an email system you can rely on and work with at speed. Using RescueTimer I’ve worked out that some days I can spend upwards of 2 hours on email alone and I’m sure that I’m no where near the top of that scale. Also you’ll receive hundreds or indeed thousands of messages (many of them spam), and you’ll need a system that can deal with the load, filter the junk, and find you the message you need when you need it regardless of how long ago it was sent.

To that end I implore you; do not just signup for the default email server from your ISP or domain host, we did and for years we suffered email outages, unusable webmail, and unstable outlook installations (did you know that outlook has problems with data files larger than 2Gb?)

There are some excellent options out there now, the first that come to mind are Google Apps, and ZOHO Office, the former TPLD use intensively, the latter I’ve only read about, but it always features as Google Apps’ closest competitor. The best thing is that they are both free, and they both include the next few things on my list; shared calenders, and online documents.

Once you have your email system running you’ll need to do some actual work (ok, email is work too) these days there are two ways of working, traditional files or persistent online systems (like Google Docs) I think most business need both. Files are required where the document you are working on is either too complex for the slimmed down online systems (your finances are probably a good example) or you are working towards completing the document as an external asset that you are going to send out. Persistent files are great when the information is going to live and breath forming part of a large knowledge base for the company – Again this is where corporate wiki’s like Google Sites, ZOHO wiki and other similar systems can be used with excellent results.

But you still have to buy Microsoft Office right? Yes, but there is a reprieve for tech companies that work with MS software, even at an arms length. Check out the Microsoft Action Pack Subscription, this allows MS Partners to subscribe to MS software for under £200, you get 10 licenses for almost everything, and upgrades as soon as they are available.

There is one important app I’ve not covered so far. Task and Project Management systems, the best way to ensure that what should be getting done is getting done, is to track it and review the whole system on a regular basis. There are loads of great ways of doing this, at TPLD we use Agile/Scrum and we use it for almost everything – which for us means a lot of post-its. However you may decide to go with a more high tech approach; if you do there are loads of online systems, many for free, to choose from from systems aimed at individuals like Remember the Milk (my personal favorite) and Todoist, to full group Project Management systems – as we don’t use these extensively I’ll not recommend one, but they are not difficult to find and neither are opinions on which one to use.

I guess the main focus of this post is that when you are setting up a new company you are not just creating a business but you are creating an organism, and you have to think about how it’s going to function, and it’s very easy to think that you’ll get it sorted one day once the business is up and running – but think for a moment, these are the things that you need to get it up and running in the first place!

Scottish Institute for Enterprise Business Plan Competition

March 9, 2008

So I’ve just helped to judge the SIE Business Plan Competition, as usual the standard of ideas was extremely high; but also as usual there were a few that hit all the right buttons; enough to win.

There wasn’t one overarching reason that covers all those that didn’t win, it was specific to the opportunity, as the only way you can really judge one plan against the next plan is first on it’s (and the teams’) ability to meet the objectives set out in the plan, and second on the scale of the opportunity.

I’ve helped with the competition for the last 3 years and entered it as part of TPLD twice, in 2002, and 2003 when we were runners up. Given those experiences I’ve put together a quick list of the errors I’ve seen once or twice that if avoided may give a team next year a slightly improved odds!

Too Early
For some the competition may not have come at the right time during the pre-start stage, this is nobodies fault by any means, but those teams do need to recognise that it may have been too early and simply take the judges advice and council on board.

Where’s the Value
A few times we’ve seen teams simply present a technology (often disruptive) or a very broad idea. That technology or idea may well be a world beating opportunity; the possibility of turning the team into the next Google, if the team were not missing one thing – Value. The general mistake here is not focusing on one particular customer group, and if you don’t know who your customer group is you can’t work out what value you are going to deliver, either in increased income or decreased expenditure. A great way to start this kind of presentation is…

  • Problem
  • Impact on Customer (what is it costing them)
  • Your Solution (very briefly, see the next section)
  • What Saving you will deliver (and maybe how long that will take)

Now you have my attention!

Leading on from the previous point it can be very tempting to talk about what you are comfortable with – your technology (or your product) – and gloss over the business. Generally wasting a large portion of your 25 mins with the panel with tech demos; If necessary give a very high level overview of the value of the technology then suggest we ‘put it in a black box’ and discuss the business – then, if the business discussion pans out, you can come back to the tech!
I can speak from personal experience here back on 02/03 we spent hours talking about Games Based Learning, because it was difficult to grasp but once grasped interesting to talk about – leaving little time for anything else!

Ability to Execute
We’ve seen a couple of teams were they unfortunately didn’t convince us for one reason or another that they may not be able to execute the plan (hence why the presentation is paramount). Often these would be software companies (but not exclusively) where the software was still to be developed and had a very long feature list, probably a very small team and timeframe for development – or if they were outsourcing the development for a very low fee.

Uninspired Business Model
On occasion we get a really strange mix in a team, were there is a great idea, but the actual business model, the way of generating the cash, falls way short of what is required to make the maximum of the opportunity. Doing something interesting and slightly unusual is often required to really set one business apart from the rest or to emphasise the value. This can sometimes be down to disparities in the teams ability (meaning a very difficult conversation at some point) or simply an over focus on the idea rather than the business

Numbers Numbers
If all of the above pans out the panel will get around to your numbers, or sooner if it’s the kind business were justifying a large proportion of Capex (or prolonged period of expense) up front is required. As hopefully we’ve all learnt from Dragon’s Den, you do need to know you figures and not just know them – Know that they’re right!! Putting together financial forecasts can be a daunting task, I’ve been doing TPLD’s for 6 years and there are so many aspects to cover – but this is one area where help can be sought, a person doesn’t need to understand every aspect of your new quirky technology or product to help you sort out your numbers – use your advisers!

And Finally…
In a very few cases there simply is not an opportunity to go after, so everything runs from there – there were not many of these amongst the finalists we saw on Saturday; all I can hope is that they know who they are and that they fully understand their plan and the risks before putting their cash in!

It’s important to remember that the teams only get 25mins with the judges in person and at best that again when each judge reads the plan – and to that end it can be very easy to forget to mention those gold encrusted points that would result in a little ‘x’ next your name on the list. So use the time wisely don’t waste it with useless information and detail*, and get the point how are you going to make a profit, who from, what are you doing for them, and why you!

*Don’t tell us who your banking with – It’s not going to win you the competition.

By the way if you were one of the finalists reading this and you don’t win on Wednesday, don’t dispair – Keep Fighting, TPLD entered this competition and Dare twice, not winning anything the first time around ; Just work out why you didn’t win and move forward – Drop me an email if you think I can help.