Lately I’ve been studying the difference between new business models that improve on the current model of how an Industry does business Vs a business model that is so different compared to what the industry is currently doing, that the existing players are unable to take them on because doing so would admit that the model and strategy that they currently rely to deliver results is no longer relevant. As such by reaching far out past incremental improvements in strategy and model adjustments, an entrepreneur can create an uncontested field where they can thrive in the fledging years. Ofcourse as their success grows others will replicate their models, however the initial period of an uncontested market means margins that allows them grow at supernormal rates.
The below lecture by professor Clayton Christensen (HBS), of the Innovators Dilema fame, gives great insight to competitive markets and strategy when faced with the 3 year mark after the introduction of disruptive business models.
It’s rare in these day and ages that you get to read a business book that really causes a shift in thinking, It’s because these rare gems exist that It’s worth reading the other mediocre books just to find them.
The Benevolent Dictator by Author Michael Feuer, is a no-fills book that doesn’t deal with the theory, but the facts of what Michael did to turn a business into a 5Billion (USD) company. All nice and an interesting read but where this book really sets itself apart is in what happened next – Feuer sold the business and decided to do it all again, but here’s the good part during THIS economic recession. This isn’t a historical account it’s fresh and actionable ammunition.
The timing of this experience is why this book is on my must read list for start ups. Banks aren’t playing ball with their customers and frankly many can’t be trusted anymore, so VC’s and Angels have more suiters to their money whilst being very cautious. Feuer offers his experience and insights as to how he found and executed a start up in this new, never seen before business environment. By using clever financing such as vendor financing under what he calls the “stalking horses” – the investors or partner that when someone see’s their involved want a piece of the action. For example any company that Warren Buffet invests in sees a boost as copy cats follow in to raise the share price, known as the “Warren Buffet factor. So rather than look for any investment, target investors with a “rifle rather than shot gun approach” and this books tells you how to do it.
So what exactly is a Benevolent Dictator? As a start up business or any business in start up mode (Virgin is renowned for always being in start up mode despite its size), A Benevolent Dictator is one who is willing to just get on with making the decisions. It’s not to say they don’t rely on staff input but a decision should rarely be a reason for slowing down progress to get to a goal. Staff have their career’s to worry about if they make a wrong move, think civil service – usually the most dangerous think one can do is make a decision on your own because a group decision offers a shared responsibility if it doesn’t work out. As a leader you have an obligation to make a decision and go with it. If it turns out to be wrong you can always reverse it. Once your company grows, empower your leaders to make these decisions also, mistakes are usually cheaper than paralysis by analysis.
The book is an insightful, enjoyable and actionable read from a person who has done it all and is doing it all again.
The Benevolent Dictator is available in Amazon and all good book stores.
Disclosure: This book was gifted to me as a pre-launch copy, no affiliate links, no payment or requirement to review have been made.
This morning Google announced a new project called “Getting Irish Businesses Online”. I was fortunate enough to be included in Googles case study as an example how Zatori has successfully mastered the e-commerce experience.
Taoiseach Enda Kenny popped over to Googleplex Dublin for the launch with two other ministers, which shows great support and intent for Irish businesses.
The atmosphere was refreshingly positive with a mix of fledgling entrepreneurs and industry experts, mingling alongside Googlers, politicians and the obligatory press and twitterati.
The initiative designed to get more business moving into the digital market place online and to start doing more business via online. Blacknight are offering free .ie, .eu or .com domains for a year, hosted and there is a basic website site creator tool available for those who want to get a quick online presence. I’ve been told it takes an average user with no experience in design about 20 mins to set a site up with the tool, which is impressive by any measurements.
Featured in the Photo’s (to the left) Ronan Harris, Director of Sales at Google Ireland and (below) Brendan Harris of Dillion Solicitors with myself.
Hopefully this initiative along with some talks arranged by the local enterprise boards will add a huge amount of new businesses to the online sector in Ireland. I’d strongly suggest for those that are in business with no online presence and could benefit from one that they should take advantage of the immense opportunity this program and hopefully with the power of Google behind the project you can learn from the best in the different fields of going online. I’m hoping to get involved with speaking at some of the events in the different regions and if possible I’ll try to make sure that they get put up online so that the most people possible can benefit.
In the mean time check out the site and what’s on offer.
When businesses have too much supply or perishable products, they often turn to the likes of Groupon or Facebook deals to stimulate demand. The deal generally works on the basis that the customer can get an extreme deal, on something they would not otherwise be buying. The business pay Groupon / Face book a large chunk of the realisable amount so the business only generally gets about 25% of the regular selling price. Saying that Starbucks and other big firms have been able to use this model to stimulate demand and make money on the back end. So could we as a country do the same???
The answer is surprisingly yes in my opinion. So lets assume the country is a private company with a mission to create jobs and make profit – big stretch I know but bear with me. As a marketeer here’s how I’d structure the deal for maximum effect.
The Irish Gov own 25+% of former state airline Aerlingus and the Majority of our hotels have less than 50% occupancy due to the government incentives to create them. Now the Irish Government is effectively broke at the moment, so assuming it was a business with cashflow problems, part of the remit would be not to spend any cash. Impossible you may say? Not really, I’ve done it many times! The government has other assets it can barter with.
Remember the remit create jobs and bring money into the country. To incentivise the airlines and hotels to come into the scheme and give free seats and rooms – the government can barter PRSI credits which is a tax on jobs. In other words the airline and hotels can reduce their outgoing expenses in exchange for using a perishable good that would otherwise not be sold. So for no upfront costs they could get airline seats and places for the tourists to stay, these tourists then spend lots of money while in the country, called the back end potential. Which eventually makes its way to the government in VAT and income taxes. The tourist sector will need to hire more staff to cater and entertain the visitors to the country so more jobs are created. Hotel owners fill their rooms without any upfront investment either, sell the residents food and beverage; all while increasing staff numbers and decreasing PRSI costs.
The beauty of this model, is that is sustainable. Groupon and Facebook deals are geographical target-able. Every week they could target a town or state in a different country. We could turn them off for St. Patrick’s day when demand is high and ramp them up to all of the USA for the quiet January period.
Seth Godin, One of my favorite marketeers and “the Ultimate Entrepreneur for the Information Age” according to Business Week gave a talk about the importance of getting to the finish.
It got me to think about why I’m an obsessive finisher. If I sit down to watch a movie and it’s the worst in the world, I’ll sit through it. I don’t own a TV for one simple reason – If I start watching a program I’ll stay there till its done but if I don’t start watching it, i’ll never miss it.
Being an entrepreneur is easy, you get an idea, develop it and build the business. It’s the building the business part that tends to get everyone caught up, “The Resistance” as Seth calls it in his video. So focus on what needs to be done to get you to your finish line, in time everything else will take care of itself.
Well, erm, in fact yes! TD Luke ‘Ming’ Flanagan is in the papers today for openly being a drug user and pro-legalization. Not only that but he grows his own stash.
Surely another blow to the Irish international reputation today comes when one of the newly elected TD’s who’s job it is to run the country makes statement that he grows cannabis and intends to continue breaking the law. Is this really the attitude we need to steer our ship out of a recession?
If I thought an employee of mine was taking drugs which negatively was effecting the business, there would be (and its in everyone’s contracts) mandatory drug tests. Where does the public sector get off putting up with this non-sense. Regardless of the reasons one might like to legalise cannabis, it is currently is considered production of Class C drugs which is illegal. It’s a black and white issue.
On another note, one of his campaign promises was to give back half of his €90,000+ salary to the tax payer. I’d say this was quite the incentive for people to vote for him, unfortunately he’s changed his mind about this as soon as he was elected and decided to spend it on projects in his constituency. Seriously these are the people we’re relying to help us out of recession??
I can honestly say when I went the the polls this year my attitude was who’s likely to do the least damage. Sad but true.
Today is the launch of my latest venture TheMobilityShop.ie – which is a specialist daily living aids business selling wheelchairs, bath lifts, walkers and other products which enable the elderly, mobility challenged and those recovering from an injury. We stock a full range of products including many of the products preferred by the HSE and industry leading or award winning ranges. Over the coming months we intend to work with our client base to build upon our range to increase the solutions available online and to offer new products to the market currently not available in Ireland.
Zatori has also taken on two new staff in the first month of 2011 and I’m expecting this to be our best year yet so hopefully there will be some news and announcements coming soon.
As always I’m keen to hear your thoughts on the new site so let know on Twitter or email, or you can post below.
Ireland has been hit this week by a series of scammers who call unsuspecting people to inform them that their computer or app has a problem, they ask you to visit websites which may disable your antivirus by containing viruses. Please be aware this is not Microsoft and Microsoft never call customers if there is a problem with your computer, especially one you didn’t know you had. If you we’re dupped into give your laser or credit card details, cancel the cards immediately and notify the issuing bank.
At the moment the scam is using the business name CISTRON, but no doubt soon after this post is published they will start using a different name.
The real Mircosoft released this description of the manner in which it describes the rough layout of the calls, based on thousands of complaints.
” * A cold caller, claiming to be a representative of Microsoft, one of its brands or a third party contracted by Microsoft, tells the victim they are checking into a computer problem, infection or virus that has been detected by Microsoft.
* They tell the victim they can help and direct them to a website that then allows the scammers to take remote control of the computer.
* The cold caller will then spend some time on the computer trying to demonstrate where the ‘problems’ are and in the process convinces the victim to pay a fee for a service that will fix the computer.
As with any cold call scam the best proceedure is to hang up the phone and pay absolutely no attention.
So for the last two months i’ve been traveling in Asia and India, as always I find traveling gives a unique opportunity to get ideas and perspective.
One of the big take-aways from this trip is that when needs become musts there is a tendency to do less with more. It’s got me thinking that maybe the role of an entrepreneur is to self discipline and limit resources with the specific intent of gaining the maximize ROI in terms of operational efficient.
Gary Chang is a great example of how limited resources mixed with smarts can be an awesome combination, transferring his 330 square feet apartment – into a 24 room luxury pad!!
Another example of this is Jugaad in India. In the rural communities you see many home made vehicles called Jugaad, these are self made vehicles which run on a pump meant for agricultural use. A family can rely on the engine for their transport, then use the same engine for lighting in their house if needed and when the waters come to pump water around their farm our out of their house if there is a flood.
So the question is do you have facilitates or assets that could be used beyond their current state? Could a night club on Dublins expensive Stephens Green be easily transform into a clothing shop during the day when its not being used, simply by applying some of Garys principles from the video?? Think of the synergy and imagine how much value could be created that at the moment we are just ignoring.
“It’s just the way things are done in our industry”, it’s an easy justification to almost any non-productive practice. Be it why banks need to close their doors before their key target market (the 9 – 5 employed) can utilize their services or why Lawyers operate a burn them out mentality with the not so occasional overnight shift, when it would be more productive to have twice the number of lawyers working half as often (and you’d probably attract all the best ones if you did).
Sometimes the stupidest reasons for businesses start-ups to do anything is the exact reason they do it. “I can’t understand why my competitors do it this way so I’d better go ahead and copy them or I’ll look like I just don’t get it”.
Its also why insurance companies let you fill in big long forms online to get a quote only to deliver you to a page saying they can’t make an online quotation. But you should try their phone support (although it’s not open right now), but hey their computer intranet might have some super secret information not available to the website or they might just waste another 10 minutes of your life…
These examples are so common place we start to not even notice them anymore but it always makes me think of the classic Henry Ford Quote: “If I had asked people what they wanted, they would have said faster horses.” Sometimes we just need to change the rules of the game altogether.
