1. When will we run out of cash?

Take the current position in the bank; calculate the cash-implications of all costs and investments you committed to. Then you calculate all the sure revenues (that is for services rendered and products sold, not future sales). Put all these costs on a timeline when they are due. This will show the date your new venture will run out of cash if you can’t find new money coming in. This date is a very specific instrument on managing costs. When you look at expensive decisions, especially the ones with a longer commitment (hiring staff, renting a building …) this shows you how much time of existence you put in the balance.

Besides that, it keeps you (and your team) focused on those things that bring in fresh money…

2. What’s our Sales Funnel (really) worth?

When all goes well, you know who you can and will sell your products and services to. Every opportunity to do business in the future should be recorded somewhere. No fancy and expensive systems needed, but you need to evaluate where you are with the sales. If you understand the values of a good CRM, you could use one of these systems (but take into account they might come with a cost in acquiring and maintaining – impacting your first metric).  You could have a look at methodologies such as Solution Selling, to evaluate where an opportunity is, and how much chance you have in sealing the deal. This could be as low as 0.02% chance if you just met the person yesterday at a cocktail, and be over 50% if he called you to tell that he will order from you. Once you evaluate all opportunities, you know what is coming to you in new business. Look at metric 1 and know if you are selling enough to keep the door open any longer.

When evaluating the funnel, be honest with yourself: all enthusiast salespersons will believe that anyone they have met will buy one day. Look at your past success rates. If you make this too optimistic, you are fooling yourself and your company.

Understanding the funnel value will allow you to reverse engineer the sales process and show you how many hits you need on the websites, to get a certain amount of subscribers to your services for example. If you are in a classical sales model, these metrics will give you an idea as well in how effective you are. If you have sent out 50 quotes and made no sale, you know that you need to look into the reasons why this conversion is weak.

3. How productive have we been lately?

We all have goals in operations. It’s not easy to make a generically applicable model for all startups. In your organization, try to understand what the elements are that differ you from the rest and what the elements are that ensure your current (and future) success.

The objective of this exercise is to understand what makes your operations valuable for your customers. Some of this metric will be based upon your feeling and recent experience. No need to do a survey amongst all your customers to value satisfaction if you hear them often and know (by asking, not guessing) how pleased they are with what you offer. If you have systems in place that support your operations (product sales, support systems, incident management, timesheets – you see where this list goes) take the relevant outputs as a metric.

Shared Secrets?

If you hope that your team is feeling your will to succeed, share these metrics. Don’t forget to explain WHY these metrics are important, AND that using them is a way to focus. Beware however on how you deliver these messages. If you tell a member of your staff that you will run out of cash in 7 weeks, you need to bring the message showing what actions are taken and how the sales funnel is important. If you fail in explaining this, staff might understand from your words that they are on a sinking ship – and that’s not the message you are aiming for, right?

In the keynote speech on the cloudexpo, we heard a lot on the technical architecture, the scalability and we even had an exec from microsoft showing some code on a slide for 7000 business people. And that is where it became obious that the technology people are once again not dealing with the ones we hope will ny these cloud services: the customer.

If we (all that believes the cloud is a part of the future in computing) should now start to explain customers what it is and how their business will benefit from it. If the industry fails to do this correctly, we will have another sentiment of non-completed expectation (see also euro, y2k, dotcom and the other promises that would make business better by another newer technology…)

Let the evangelisation start! the customers deserve it, and the industry needs it…

Take for example the people that are selling in the B2B-space and that target small and medium enterprises. I believe in that market, that’s why I have started several ventures that targeted the small and medium enterprises. When selling to small businesses, you typically will have extremely critical customers that are on the other hand appreciating good products and services. There are no huge decision blockers, as the owner or the management can decide relatively fast.

So I’m pleased every time a starter, founder or young entrepreneur comes to see us with a business vision that goes further than the first border they encounter. But these fine folks are still a minority amongst the companies I encounter day to day. When you take for example the Flemish market (the northern part of Belgium, and for the ease of this discussion, we add the Brussels region to it), we have about 6 million people that live there and we have about 388000 small businesses, including 230000 that are self-owned. That leaves you with 150000 companies that have between 1 and 49 employees, or not even 30000 that have between 10 and 49 employees (1). In the whole of the European Union, we have 23 million small businesses (2). (For your information: In the USA, you have about 27,5 million small businesses, half of them employing at least one person.) (3)

Imagine yourself selling vegetables on the local farmers market in your town, but only selling your product to men that have a green sweater and a beard. No doubt that would be in most cases a stupid business decision. So I am having more and more trouble in understanding business people that have great ideas and products, but that make the choice to not sell it to a market within reach – not even in a future stage of their existence…

This is not a call for blind and reckless expansion. It is a small call to action, when evaluating the success and the next stages of your venture. If you consider yourself an entrepreneur, you must ask yourself the question if and why you should (not) stop at the border. This is not a request to all of you, updating the business plans to now include 23 million potential customers. But at the very least you should, in the roadmap of your company make the decision why you should go internationally (or why not). And if you don’t, you should answer yourself, and the stakeholders in your venture, the question why you are ignoring millions of potential customers, that are within less than15 hours driving (if you ship your product) or within 2 time zones (if you deliver a service).

Borders are no stops for your business, they represent new challenges, and new opportunities – and isn’t that one of the reasons why you became an entrepreneur? Take that into account, and add the fact that most European Governments have programs in place that will help you with advice and money to expand (FIT, AWEX and Brussels Export if your are a Belgian Entrepreneur, or trying to do bsuiness with/in Belgium are only a few examples)

Or do you think we have this all wrong? Let us know via the comments on this article.

(1) figures belgian social security administration

(2) figures by the European Small Business Alliance

(3) US Small Business Administration, figures of 2009

Bit strange however when he told me about all the changes he would now make in the company…

I have witnessed this behavior before. Some people that run startups think the battle is over once results have changed colors. It’s still a startup, it still lives because of the good care-taking of the startup, and there is no reason to change that:

• If it’s the chaotic culture that got you trough the first phase of existence, it might be the power that maintains the growth. Now is not the time to start drastically changing your operational culture.If you need to tune, go easy, one step at the time. Change management is a fine art.
• If good cash management was a key success factor in the survival, this effort should not stop now. Stay sharp and conservative when spending money (I will come back on this when talking about metrics in startups in a later blog). Explain your staff why you don’t start spending (even when we are making a profit)
• If the effort of your staff has made it possible to become more profitable, and you believe that you must now spend some money: they might be the first to think about. Celebrating success is one of the most important activities in any organisation, and now might be the time to thank all that brought the great venture to this important stage in its still fragile and yound existence. But I believe that you can do this in so many different ways than just giving them cash…

A newborn baby will have different needs than the child you leave for the first time in daycare, but it still needs CARE and still is extremely fragile. Having the first cash coming in might be a more dangerous situation for the company, than the time we were all creative and could do without, as soon as you stop managing the start-up way, and think to soon corporate spending has arrived.

If you accept it still is a startup now, you’ll find that corporate life will come one day – in the future.

European telecommunication giants are preparing to fight Google over the data traffic and bandwidth that is consumed due to YouTube videos, according to a new report from the Financial Times. Their goal: to have Google pay them for the bandwidth YouTube and its other websites consume.

The metaphor of the bullfighter comes to mind. The enraged bull (or a herd of bulls in this case) storms – with bloodshot eyes – towards the red cloth. His only goal is to hurt or kill his fluttering menace, his only weapon: brute force. The fearless bullfighter plays along and taunts the beast a little more. When the thousand kilos of bovine meat have closed to a mere few inches, the matador swoops away, raises his sword and elegantly, but decisively, stabs the beast between the shoulderblades. The fight is over. The bull has become victim to its own rage and shortsightedness.

So too will the story go for tradional telcos. Yes, they are absolutely right: internet companies like Google move gigabytes of traffic through their copper pipes. And they *should* be paid for this! The enraged telcos stab furiously at Google; frustrated because they still don’t understand internet business and only see their revenues and margins decline. All they know is how to charge for landlines and interconnections, and by God, that is what they’ll do. They’ll charge Google more than they ever charged before!

And Google will pay them… and play them; and it will take ownership of the consumer. For Google, it will be a bargain: pay the telcos for bandwidth usage, and then turn around and offer their services plus connectivity for free to the consumer! Instant lock-in. Google will stab the telco by taking the end-user away from them. For every Euro they demand from Google, they’ll loose hundreds of Euro’s in end-user subscriptions. Worse even: as soon as Google has control over enough end-users, they will be able to play the telcos against each other. Telefónica,  France Telecom and Deutsche Telecom will have to earn the *right* to provide internet access for Google… And that will be the end of the bullfight; until another matador comes along and challenges the incumbent.

It is the typical herald of innovation and change. Just as an upcoming breeze announced the arrival of Mary Poppins, so too can we deduce the arrival of imminent change by the giants and incumbents who put their heels in the sand and try to push their old model more violently than ever. Was it not Einstein who said: “Stupidity is trying the same thing again and expecting a different result…”?

Patents are necessary to protect the investments a company has made, but when patents become a weapon against (literally) millions of poor people, we might consider more creative ways to protect our interests. And that is precisely what happened last weeks: several large pharmaceutical companies have announced initiatives that allow patients in poor countries (most of them being located in Africa) to access medicines, while the commercial interests are still covered:

1. GlaxoSmithKline announced, according to The Economist, a couple of weeks ago that they would waive patent restrictions on their most important AIDS-medicine called Abacavir. Producers of generic drugs can now sell medicines based hereon in poor countries. This comes on top of an earlier announcement that GSK was sharing outcomes of research and patents related to HIV with their rival Pfizer. Both companies believe they can benefit from this deal and accelerate the drug development.
2. Novartis announced to collaborate with the Institute for One World Health to develop a drug that will cure a kind of diarrhea, that is amongst the most important causes of death for children in poor countries
3. And the one that surprised (or pleased?) me most, was the fact that the Bill & Melinda Gates foundation supplied the money to develop software to analyze all patents database, which are not at all in the same standards and therefore difficult to compare, to allow a better collaboration between researchers of medicines all over the world. This initiative, called the Global Initiative for Open Innovation, is initiated by Cambia and the Queensland University of Technology (Australia). Their idea is that if collaboration is not working, greater openness will.

When Koen Pellegrims and myself started Agyx, we made a strong commitment to understand and help in initiatives that work around open innovation. We still do. As far as people had understood what open innovation is all about, we had mostly negative comments:

• “Open innovation would never work.“
• “No company will even open its patents database to the world.”
• “No enterprise can afford to hope that the crowd will make their innovation work.“
• “We are market leader, open innovation will not be for us”

and so on.  I’m happy to see that open innovation, in various forms, is now becoming a part of doing business in this age.

Things that make me hopeful:

1. large corporations seem to understand that letting a continent die, is not good for business in the future;
2. open innovation is seen as a weapon in doing better business, not as an invention promoted by freaks;
3. when entrepreneurs are willing to think on larger scale and long term, new dynamics appear for them;

Koen Blanquart

In response the earlier problems with train tardiness and customer complaints about lack of information, the company has released -a mere few weeks later- a new website. Railtime.be allows travellers to quickly lookup expected arrival times of trains and informs the customer about issues and calamities on the railway infrastructure.

Sounds great, and it would be, if the website were at all usable on a mobile device! With powerful smartphones and high speed mobile networks, I can understand that Infrabel hasn’t developed a separate website for mobile phones, but the least they could do is check compatibility with some of the most common devices. The issue is the neat-o Javascript textfield that helps web-users find the right train station through autocomplete. This textbox doesn’t work on my HTC (Windows Mobile 6), nor on my girlfriend’s Blackberry…

So, the key takeaways for Infrabel (and others): 1. Ask yourself: who are your customers? 2. Where and when are they using your service? 3. Build solution. 4. Check that solution meets criteria 1 and 2!
(unless of course, your just aiming for a publicity stunt and not really trying to help customers…)

Stallman’s point is that in cloud computing, information is not free (‘free’ in the sense of liberty, not ‘gratis’). The application provider has full control over your data and you don’t have unlimited access to it. If the supplier should go bust, you lose your data. He argues that people choose convenience over freedom. I argue that it is becoming impossible to keep all your data at home and that often data becomes more valuable when it is kept by others.

First of all, we accept similar systems in other domains without thinking. If we were to follow Stallman’s train of thought, all of us would have to keep our money at home, take courses in investment banking and trade our shares and bonds ourselves to get a 3% return on our savings. Oh, yes, and we would of course need to buy vaults to protect the cash from disasters such as fire or burglars. It is not only more practical to bring it to the bank, it is also safer and it becomes more valuable.

The same goes for data: more and more business models are built on the concept of user-generated data and the increase of its value through the network effect. YouTube would be non-existent if people kept all their videos at home.

The main difference between data in the world of cloud computing and our money in the bank is legislation. Now I’m usually not an advocate for additional laws and rules, but our data is becoming almost as valuable as our money, so it should be protected by laws. One of the things the current financial crisis has learned us is that governments will go to great lengths to protect the money of the common man. If they would see that the common man’s data is equally important, then they could take appropriate measures to keep it free as well…

• people ready:
  • the way customers decide
  • the way partners market
  • the way microsoft markets
• differentiation: Microsoft confirmed again that they are willing to help differentiate partners better. These days we have three levels (registered, certified, gold certified)  of partnership in several competencies. It became clear again that Microsoft will work further to help customers choose the partner that can help him best. The main measures for this concept will be around customer satisfaction, technical and business dept, the investments made in the business.
• profitability and growth
• evolve with “software + services” (or “S+S” as it is referred here)

More information has been made available to the customers of The Antena Group.

One of the nicer demos was the use of the PDA-phone with windows mobile, where the user could, from within the mobile outlook application, query the information on the Sharepoint server behind the corporate firewall. The exchange server acted as some kind of a proxy server for the search and returned the results and the file back to the mobile device.

By use of this mechanism, the user does not have to worry about the fact that the data is not present on the PDA.

And of course, when data is brought to the PDA, Microsoft has understood that a whipe of the device is not just a feature: it’s a necessity. And the version we had in demo here, had a full featured whipe available. It seems that the BlackBerry served as the good example to the marketing team of this new version.

Microsoft showed that the ISV-partners do have now 18000 applications (line-of-business apps) available for Windows Mobile. Microsoft is still advising its partners to hunt for the clipboard-users as best targets to deliver mobile applications (via PDA, tablet, or other devices)

(Presentation given by Laura Johnson and Steve Doe at WPC08 in Houston)

More information has been made available to the customers of the antena group.