Archive for the ‘strategy’ Category

Why We’re Ditching Strategy – And Taking Up Business Hacking

Tuesday, June 14th, 2016

We Say: “Our Upstart programme trashes traditional growth planning and uses an agile model for business planning.”

We’ve had enough.

No, really. It’s 2016. We’ve all seen how value is now being created outside of traditional industrial structures in high-growth companies using business models which are enabled by digital.

But theUpstart LOGO 0 01 copy process of planning for this growth hasn’t moved on.

If you’re taking iron ore and creating steel, or finished product such as cars, yes you need a strategic five year plan. Capacity and resources are all planned on an industrial scale. But what happens in the post industrial age when you want to scale up a digital product or service? Upstart Strategy Dead

Models such as Uber and Airb’n’b rely on extracting meaning from data, not extracting raw materials from the ground.

Planning in the knowledge economy is uncertain at best and at worst impossible. When you have no proof that the market even needs your product before it’s been conceived, you shouldn’t ever be planning in a traditional business planning way.

And when success does come, there’s little or nothing in the management textbooks about how to handle that exponential growth which digital services see when they hit the sweet spot of product / market fit.

So what to do?

Where does the start-up or scale-up business leader go for tools and frameworks?

Through our experience, we’ve learned from growth stage companies who are creating services rapidly. We implicitly understand their agility and ability to iterate and pivot quickly.

We see them applying the Build > Measure > Learn cycle to create services in a short space of time. And we’ve found that you can use the same approach for creating and iterating your strategy.

And that’s what Upstart is about.Product_Strategies

Working with small companies in different areas we’ve evolved a model which turns traditional strategy consulting on its head. Fundamental to this approach is breaking down the business of strategy into individual problems. And then solving them. One by one.

We believe this change in approach is as revolutionary to the development of high-growth companies as the application of agile tools has been to product development.

In coming weeks we’ll be sharing how we use low-cost and no-cost tools and techniques to create and reveal value. And how Lean Startup author Eric Ries views our approach.

Five (and a half) Things We Learned About Starting Up – From Wahanda’s CEO

Thursday, January 21st, 2016

Failure, money, people and self-disruption are just part of the daily diet of a startup CEO. That was the message from the founder of Wahanda, the European startup which has established and dominated the market for online booking of hair and beauty appointments, now rebranded as Treatwell as of this week.

Lopo Champalimaud, Wahanda’s founder and CEO spoke to an audience of startup founders at an event organised by investor and accelerator Forward Partners, and touched on his success and failure in his diverse career. It’s one which includes doing online market research back in the dial-up of days of the mid-90s and crystallising the hair and beauty opportunity while working at lastminute.com. Chances are you weren’t at the talk in London’s Old Street, so here are 5 just 1/2 things for startups which we think are worth writing home about.

1. It’s about people, people, people

The old retail maxim is that it’s all about location, location location. For start-ups, replace “location” with “people” and you’re pretty much on the money. “90% of an entrepreneurs job is to get better people around you. And keep them there” says Lopo.

2. Money is more than just money

When you’re bootstrapping an idea, it’s tempting to think that any money is good money. However the value of investors and the knowledge and contacts they bring is probably more important than the Dollars or Yen they bring to the table. “Money is not all the same colour” he said, explaining the majority sale to Japan’s Recruit Holdings last year.

3. Investors can be blind. Like really, really blind

WahandaOpportunity2 Once the market had been built, it was easy to see why Wahanda was an opportunity waiting to be capitalised on. Underused inventory in suppliers, strong and regular customer purchase patterns and a marked absence of digital tech facilitating transactions were key drivers for a market waiting to be disrupted. Investors, with biases towards what they knew, had a hard time getting it. “This was a 100bn Euro market but investors couldn’t see it. In music, billions have gone into it but the market is shrinking.

4. You can disrupt yourself while you’re disrupting others

Wahanda underwent three pivots in four years. The biggest change came in 2012 when the daily deals market, which had powered the company to growth since 2009 was in danger of running out with both suppliers and customers being promiscuous among different deal brands. Lopo convince the board that they needed to exit deals and move to a booking engine based product which he had been developing quietly in the background.

“We were killing 80% of our business” he says. “We did not have a booking business at that time. “ After a wholesale revamp of the management and operations, the revenue returned to where it was after eight months or so.

5. Market place businesses are difficult to build

While everyone chases “the next Uber or Airbnb” across beauty, health sport leisure and fitness, they need to understand the complexities and challenges of building a marketplace” business which he says is “almost always driven by supply.” Customer acquisition, merchant acquisition, tech and brand and among the key challenges these businesses face at the same time.

5 (1/2) People Again – A No “A**holes policy”

And lastly back to where we started, It’s about people but also how you treat them. Paraphrasing Jack Welch, “the worst people in (mainstream) businesses are the people who make the numbers but have the wrong attitude. They never get fired.” He has a strong no assholes hiring policy and empowers his hires. “if you hire people as adults you have to treat them like adults.”

Flat Whites and Finance – Disruption on the Doorstep of London’s City

Wednesday, April 15th, 2015

Why Financial Services in London are over-ripe for disruption.

We say: The financial services sector – from huge exchange providers to personal lending – is overdue for disruption because there are inefficiencies from legacy practices, no unique asset or resource at the heart of the business and massive latent demand for cheaper access to the services on the part of the public. Regulatory and compliance issues will not prevent this taking place.

Step out of the London Underground at Old Street and two distinct and separate worlds meet your eye. 

Look southwards down City Road and you’ll see the gleaming towers of the City of London, the traditional centre of financial services for the UK. Cast your gaze a little further East to Shoreditch and you’re looking at a very different world, one populated by a tight network of digital startups, design companies and grass-roots entrepreneurs.

IMG 5922It’s taken for granted that the City and its legions of suited traders, financiers and insurers are a major driver of the UK economy. However according to one of the UK’s leading economists, it’s the bearded, exotic coffee and craft beer drinkers who run the country’s startups who are now massively transforming the economy right now.

And the two worlds which previously rubbed up against each other but remained separate ,are about to collide and unleash a wave of disruption on the economy, argues Anthony Hilton, journalist and commentator. 

In a recent business briefing, Hilton argues that the existing growth figures on which we base our  preconceptions are hopeless for understanding the size and scale of the transformation going on before our eyes. Hilton draws on the ideas put forward in The Flat White Economy, a recently published book by controversial economist Douglas McWilliams (1),currently on sabbatical from his job as chairman of the Centre for Economic and Business Research.

“The Growth figures are wrong.” says Hilton, pointing instead to the yearly double-digit surge in travellers using Old Street station and the 32,000 companies registered in the EC1 postcode since the 2012 Olympics.  

“In and around Old Street you have the most colossal dynamic digital economy right now, says Hilton.”More jobs have been created in EC1V than in the whole of Leeds.”  Digital is already the 5th largest sector in UK, larger in revenue terms than the oil and gas or motor industries and will represent more than 15% of GDP by 2025.

“The UK has embraced internet in a way no other country has,” noting 14% of retail sales now come from digital channels.  Hilton used a convenient shorthand to conflate digital activity with Old Street – the economic growth is driven by digital activity in regions across the country. But it’s not for nothing that the area around Old Street is called Silicon Roundabout, and Google Campus and Tech City have offices on or within a stone’s throw of the unlovely traffic island. 

Only in London

The digital economy has taken root in London for a number of reasons, argues Hilton, citing McWilliams. Eurozone stagnation and lack of opportunity in Southern and Eastern Europe has led to an Influx of digital  talent from the continent.  More than half of those employed in the digital economy are are non-British. 

It happened around Old St, Shoreditch and Hackney, due to the cheap accommodation close to centre of town, where young unattached talent can live the outdoor life in exotic coffee shops and workspaces. Thus is borne the flat white economy, where techies fuse work and play. 

In a smaller tighter and more networked version of the Bay Area in California, demand and skills come together, and the network effect of physical proximity creates a critical mass of digital activity.  

What does this mean for the rest of the UK economy? 

Firstly, it means that the exponential speed at which the entrepreneurial digital sector can grow is leaving larger, linear companies behind. Established players take a long time to innovate – they have a vested interest in status quo, argues Hilton – and within their structures, innovators and innovation get squashed. 

And for FS?

Zooming further in, the implications are most acute for the financial services industry. According to Tomas Philippon, professor at at Stern Business School in New York, this sector has seen no improvement in efficiency for the last 100 years.  Philippon argues that despite domain specialisation and the expected gains from massive IT investments, the FS sector has continued to take around 2% of all net flows into and out of the business over the last century.  Low rent accommodation for startups butts up against the City's glass skyscrapers

“When flows double financial services fees go up pro rata. All increases are captured internally.” says Hilton, arguing that the increasing burden of regulation and the $10bn annual cost of compliance has taken a significant proportion of this. 

Financial Services – You’re Next

Given that digital has disrupted media, personal banking, personal fitness, retail and just about any other sector you can name, and Financial services have remained relatively untouched by the digital revolution “it’s only a matter of time until financial services get disrupted, says Hilton. “We can expect that  flows will shrink.  Banking is a essential a high cost way of getting money from a to b.  There’s no reason that the entire stock exchange can’t be on something like eBay.” 

In fact the disruption has already begun. Tech accelerator Seedcamp is seeing an upsurge in applications from startups looking to disrupt an area of FS, from solving the challenges of Bitcoin liquidity to enabling customers to manage their own Exchange Traded Funds (ETFs). In Canary Wharf, where many FS giants now house their operation, accelerator Level 39 is an accepted part of the FS innovation landscape.

And this clash is likely to be the focus of Disrupt Finance, taking place on the borderline between Shoreditch and the City on April 15.

In every industry which has been disrupted, incumbents have consoled themselves with the fact that they have a unique asset which protects their market position. Music producers took refuge in their copyright laws in the fight against Napster; travel operators consoled themselves with superior advice and knowledge in the face of internet search, now taxi drivers are feeling smug about their “knowledge” while Uber erodes their business. Regulation and customer trust are now the twin factors which the FS business believes can save it.

Given the history of digital for destroying traditional structures, it’s a given that the impact of the flat white economy will be felt in the towers and streets of the neighbouring City. Those existing players which recognise embrace and co-operate with the inevitable disruption will stand to gain most. But for all involved it’s going to be the next chapter in how software ate the world.

(1) At the time of launch of his book, McWilliams was due to face trial over allegations of assault and stood down from his role at the CEBR.

Orientate First, Then Navigate

Saturday, April 11th, 2015

It has to be one of the most frustrating moments of the digital age.

Orientate firstImagine you need to get somewhere, fast. You fire up your GPS-enabled smartphone and open your favourite mapping app.  Yet while you wait for the details of your immediate surroundings to load, all that appears is a tiny blue dot on an empty screen. Right now all you know is you’re….somewhere. You might as well be nowhere.

Frustrating isn’t it? There are strong parallels with the sense of bewilderment felt by organisations who are about to launch into transformative change.  It doesn’t matter whether they’re spurred into action by competitive threats, regulation, disruption from digital upstarts or a spontaneous and genuine desire to innovate. Suddenly, there’s a desire to get somewhere fast. 

But without the immediate context of where you currently are, how can you tell if you’re taking the right or wrong path?

I recently had the privilege of working with a behavioural psychologist who used the phrase “orientate to navigate ” in the context of helping service users to achieve specific goals. It stuck me as a great guidance for the first steps around that desire to launch into transformation.Navigate to your goal

Whether we’re talking metaphorically about moving towards a distant personal goal, finding your way though the innovation maze, or literally about the real world challenge of getting to your next meeting, the idea is are the same. Setting a goal is only as useful as knowing the starting point of your journey. 

So what how can you load your own map of where you are? 

You might want to achieve a transformational goal, but how do you navigate the realities of you corporate culture? What is the degree of risk aversion in your organisation ?  What are the skill sets you have in house and how will you use them to your advantage ? Do you have the time, budget and support you need from top down and bottom up?  By framing these questions at the start of this journey you can begin to build up a picture of your surroundings.

By learning to orientate before you navigate, you can set realistic and achievable timescales for reaching your goal.

Why I’ve Pre-Ordered Tiles

Tuesday, August 6th, 2013

OK. I’ve put down money on a product which isn’t even made yet.

Brave, rash, maybe even foolish.

But when I get my Tiles I know they’ll be good. If you don’t know, they’re little tags which use Bluetooth Low Energy and can report their location remotely. You can also locate them on a map via an app, in much the same way that iOS finds lost devices.

Here are just five reasons why I’m excited about these little slivers of plastic.

Tile hero shot black

1. I lose things. Whether it’s the fact that I’m male, approaching the age where I have “senior moments” or having a permanent cognitive deficit, I’m never sure where things are. Tiles fulfil a need – the universal and everyday need to find things. For that reason I’m admitting them into my personal space.

2. Tiles fit in with my digital life. The app will enable me to access information about their location in a way I’m used to accessing info.

3. Tiles will crowdsource the location info. The Tiles network helps find other lost tiles without compromising your personal info. That has to be a great model for collaborative services in the future.

4. The founders Mike Farley and Nick Evans are also self-starting the funding. Going direct to potential backers and buyers they’re selling the first batch direct and raising the money direct. Not a VC or hedge fund in sight. Just Amazon payments and a direct route to the customers. There’s nothing to stop anyone doing this. These guys did it.

5. Tiles bridge the physical /digital divide. So far most of the great ideas and disruptive plays have been in the digital space, notwithstanding a few funky players such as Evrything which connects products to the web and social. This is the start of the internet of everyday things for everyone.

Bottom line – Tiles will change my life, but I’m betting on the launch of Tiles to be a moment which will change the way we view the connection between real world objects and digital.

In the meantime the nice people at Tile are going to update me on the progress and I should get my batch by Christmas. Until then I’ll be leaving my keys in a place where I can find them, or as usual, “crowdsourcing” location info the traditional way by calling “anyone seen my keys?”