Gender-Based Finance

Budget 2008 introduces a package of measures to support small businesses access the finance and resources they need to start up and grow. What caught my eye was the announcement of a new £12.5M capital fund to invest in businesses started by women.

I have trawled the HMRC website to try to find out more about how is that going to work but to no avail. Most businesses are built around a team, not one individual. Can men be part of the management team and have any equity share? What if other outside investors gets involved that have more testosterone (chemical structure shown) than they should?

Plenty of companies relocate to access geographically-constrained finance. Are we now going to see the first sex change to gain funding? Surely there are better ways to encourage female entrepreneurs than this. Creating an ecosystem that nurtures and support people seeking to build a business would be a better use of this money than distorting the market in this way. Investors should be backing bright ideas and good people, not worrying about genetic makeup.

Beating A Path To Your Door

Interesting post on TechCrunch on the top ten tips for startups. Not so sure about tip 9: "Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product."

The biggest mistake a startup can make is to believe if you create a better mousetrap, customers will beat a path to your door. Yes, if it’s a totally great or revolutionary idea maybe word of mouth will out, but the reality is that for us mere morals, we need to find a balance between developing an even better product and selling what we have.

Remember: out of 10 people, one will buy your product just for the hell of it (or they thought it was something it wasn’t); one will never buy it no matter how good it is; and the other eight could generally take it or leave it. How many of those eight you convert into customers, and at what cost, will dictate how successful you ultimately are.

Our FastInvest loan scheme is designed to give young technologies that push needed to get out there marketing and selling their product. Yes, make it better, but it's never too soon to start validating market demand and selling!

Yorkshire Means Business

Nice to see former Yorkshire Post Business Editor David Parkin's new venture hit the streets (OK its virtual equivalent!) this week. http://www.thebusinessdesk.com/ aims to bring news, information and events about and for the business community based in Yorkshire. Needless to say I have signed up for news alerts and it will be interesting to see how this venture progresses versus more traditional publications, not least the YP!

As with my previous post on monetising online communities, the key to such a venture will be how to produce content at reasonable cost and in the business model who pays for what, when. I am sure he has done his numbers -particularly as Colin Glass is his Finance Director!

Developing an Innovation Strategy

Rob Hulme from Smith & Nephew spoke at the first of our Business Fitness workshops in Hull on developing an innovation strategy. He emphasised their strategy has moved from closed innovation to a more open approach to embrace ideas from outside. Another of his themes was the concept of teamwork and cross-functional approaches noting that breakthroughs often occur at the interface between two disciplines.

A interesting observation was on the competing pressures of Process & Bureaucracy and Passion & Anarchy that a company needs to find an appropriate balance between to maximise its potential. Too much bureaucracy and innovation risks being stiffled in favour of the status quo. But equally too many mavericks trying to change and tinker with things then chaos reins.

This complemented my discussion in the previous session on Business Strategy & Planning where I focused on the chasm between Visionaries and Pragmatists. Visionaries are by definition more driven by passion and a quest for radical improvement, whereas Pragmatists are looking for more incremental, managed evolution to improve the current situation. Most managers coming from larger companies have these pragmatic skills in spades, but may lack the open mindedness and willingness to experiment and even fail that sets out the visionaries from the rest.

There are four more seminars in the series which promise to be equally inspiring! Click here to find out more...

What Is The Optimal Length Of A Queue?

There is a fine line in business between having satisfied customers and happy ones. If all your customers are too happy you are probably not charging enough for your product and service or indeed doing too much for them for too little. This can be a difficult habit to break, but can be the difference between success and failure.

Early in my career I worked for a software company that everyone loved, they just didn't make any money and were taken over by another company that did. The only difference I could make out between the two was the one that was successful charged their customers for everything they could and should. The other went out of its way to keep its customers happy, but didn't charge them enough for the privilege.

Do you want to be liked or respected in business? If it's the former, you probably think the answer to the question posed is zero. If it's the latter, a better answer is three...

That Original Idea

As we embark on our InvestorQuest Challenge, we ask are you like John Nash in A Beautiful Mind (looking for that original idea that will be the basis of your business, rather than just delusional). Surprisingly, good ideas for a business are often less than original and are often pretty simple. In 1978 (yes, nearly thirty years ago) I wrote a program to play blackjack, so you could blame my 'idea' for all those Internet betting sites out there today. Simon Nixon, the founder of moneysupermarket.com, had a brilliantly simple idea to provide consumers with independent comparison of insurance products that he took from inception through to a £1B stock market flotation.

What differentiates those that succeed is often not the idea for the business, but their single minded focus to exploit an idea and find an addressable market for it. Turning a fledgling idea into a marketable product is the key and so is avoiding the pitfalls along the way. That's why when asked whether an investor is more interested in the idea or the management, often the answer is the latter. Good ideas are surprisingly plentiful, it's the ability to execute that maketh the business. That said, you need an idea!

Don't Trash The Competition

Marketing is all about differentiating yourself from the competition, but what's with the current spate of adverts that lead on what's wrong with your competitors, rather than what's right with you? I was always told never to speak badly of the competition when in the company of customers. "I couldn't possibly comment" says eons more than any direct insult ever could.

This seems to be a bank thing. Nat West and Nationwide are both running TV adverts parodying a fictitious bank that doesn't listen to its customers and employs morons. Maybe it's just me, but I can't help thinking the only association created is precisely the unintended one.

Has anyone done any studies on this? Put viewers in a room and show them the employees in the advert and ask who they work for. My guess is that there will be a significant correlation that isn't the desired one. Surely, a marketing agency is spending millions of pounds on this without thinking this one through (surely, it doesn't work like that?). Or just maybe mud does stick to the slinger...

Work On The Business, Not In It...

The Prime Minister, Gordon Brown, has curtailed his holiday in sunny Dorset to rush back to Downing Street following the outbreak of foot and mouth disease on a British farm. Is this driven by a need to be seen to be doing something from a PR perspective or does the CEO of UK Plc need to work on his delegation skills more?

Any good CEO has to balance involvement (interference?) in operational matters against taking a more strategic view. Delegate to little and too much weight lands directly on his/her shoulders. Delegate to much and risk the fate of Metropolitan Police Commissioner Sir Ian Blair by being accused of not being in control.

A key stage in any business is when the CEO can focus on working on the business, rather than in it. This requires that a management team is assembled that can take primary responsibility for operational matters. Sure the CEO might be the best person to do everything and make every decision (which he probably had to do to in the early days), but he or she has to sleep sometime (and even take the odd holiday).

10 Things Not To Get Wrong When Building A Technology Business...

At the i-techpartners academy event at Daresbury, Richard Veal from New Mind reflected on what he had learnt (the hard way!) in building his business, a lot of which resonated with my own experiences:

1. There isn't a shortage of work to go around - collaborate, build on the work of others and stop your techies insisting on reinventing the wheel.
2. Ideas are cheap and surprisingly plentiful, it's implementation that's hard. It also helps to focus on one idea, so select the right one!
3. Don't believe your own hype: success is not necessarily replicable and equally if you fail at first, try and try again.
4. Being an MD is a lonely place - you need advice, mentoring and an external perspective.
5. Generic business advice is useful, but specific advice is invaluable from someone who really understands your market/technology.
6. Get your organisational structure right as soon as you can. An average employee in the right structure (and motivation) is better than a good employee with the wrong one.
7. Build in scalability into your business model from day one; it's hard to retrofit.
8. You will need twice as much time and money as you thought you would!
9. Networks are important to long term development. External focus is needed to understand the wider picture and assess impact internally.
10. Success is specific, run your own business - it's your story, write it.

See also my top ten tips on raising investment!

Girl Power

Library House reported some depressing statistics this week in their newsletter. Comparing the numbers of male to female business leaders, Library House demonstrated that women are not just lagging behind in the career stakes - they seem to have fallen off the scale all together.

The article left me wondering where all the girl power had gone.... The low lights of the article included that 95 per cent of the chief executives at venture-backed companies were men and even worse, in 2006, 97 per cent of newly appointed chief executives were men.

Despite being woefully out numbered the stats did point out that when a women was in the driving seat the company performed better. Female chief executives delivered higher revenues using less capital and the average company run by a woman had annual revenues of €12.5m last year compared to €11m for those run by men! Hooray - a ray of light.

So where has all the girl power gone? Since working for Connect Yorkshire I have often wondered why the technology business sector is so dominated by men. Very rarely do we come across a female entrepreneur and even less likely is a female investor. You only have to turn up to one of our Investment Forums to see just have out numbered the girls are.

Maybe it's because in the past there have been few role models. Women who have taken on the business world and really succeeded without being viewed as cold hearted (or of having an unhealthy obsession with shoulder pads) were few and far between.

I certainly do think that the generation of female 20 and 30 some things now coming have the positive role models needed and more critically have the confidence to know that they are just as likely to achieve as their male counterparts. Coupled with flexible working conditions that make it easier to achieve work/life balance I hope that when Library House repeats the stats in 5 - 10 years time it will show a completely different story.

Hot science, cold commerce

We spotted an interesting article - this weeks Science Business Viewpoint . In it Domenico Valerio talks about the lessons he learned whilst starting-up a gene therapy company. Domenico is now a general partner in a new Dutch venture capital fund, Aescap Venture and also gives insight into the kind of entrepreneurs he’s now looking to fund.

The top tips we picked up on are:

Know the strengths and weaknesses of your technology
Don't be a scientific entrepreneur with your heart lost on the technology, be more of an entrepreneur than a scientist

Work with the best
That includes investors, as well pulling together a top management team and passionate staff

Say no to the second best
Even when there is pressure for the business to grow, don't take on second rate employees

Create a culture in the company that is business-like
Understand your customer from an early stage. Licensing activity may be a difficult strategy to adopt but the benefits are not just about generating cash. It can give you an insight into your customer's perspective that you may not other wise get until it is too late.

Accessing the right finance

We take calls every day from entrepreneurs wanting to know what funds they can access for their growing businesses. Sometimes they might be able to get their hands on a grant but mainly its bank finance, loans or equity investment that are their better options.

Our workshop next week with deal with this subject and help will be on hand to explain exactly which options you should be going after.

Accessing Support and Funding and Due Diligence by Investors starts at 4pm on the 16th May and will be held in Leeds.

Hook a Business Angel

Do you know how to write a business plan and hone your executive summary in order to get the attention of an investor?

Find out how potential funders will view your business plan, what they look for, and how to ensure they get beyond the first page at the Connect Yorkshire’s next workshop.

Practical Business Plans and How to Hook an Angel

Wednesday 2nd May 2007
The Headingley Suite, Crowne Plaza Hotel, Wellington Street, Leeds, LS1 4DLN
4:00pm for 4:30pm start, finishing at approximately 6:45pm

This is the first workshop in Connect Yorkshire’s forthcoming Investor Readiness Programme in Leeds. Enrol on all or any of the free events and benefit from our unrivalled expertise in helping technology and knowledge-based companies, like yours, raise finance - whether bank, grant, loan, venture capital or business angel.

The programme is a series of six free-of-charge workshops, all to be held in the evening in Leeds with a buffet.

If you have a great business idea but face a funding gap these workshops will help you protect your idea, refine your business plan, hone your sales pitch and, generally, make the most of your proposition. Maximise your chances of raising finance and do all you can to ensure your business achieves its potential, register now for all or any of the workshops.

We look forward to seeing you there!

I'm blogging whilst on Myspace, YouTube, Facebook, Bebo, Linked In....

Victor Keegan of The Guardian wrote an interesting piece on blogging in yesterdays edition.
In it he discusses a survey by Technorati indicates that the expand of blogs and bloggers continues, with an estimated 70 million weblogs! However the uptake has been at a slower rate than antipicated and that blogs haven't taken off in the way that social networking site such as Myspace have.

With over 170 million members of Myspace and 5,000-plus videos uploaded to YouTube every day blogging is lagging behind. Victor sees this as a preference to communicate directly with others who have similar interests and opinions rather than just sticking a weblog out there in the internet universe for any man and his dog to read. We couldn't agree more.....

Connect Yorkshire has recognised that online networking is a powerful force and will soon been provide busy entrepreneurs with MyDealMaker. The portal will be an online networking space that will provide technologists and investors with a way to make contact and forge deals. It will have with all of the web2.0 facilities you could wish for! Watch this space.

Yorkshire Forward Bioscience Awards

Prof. Heinz Woolf spoke after dinner and made a number of good points. According to Prof. Woolf, people who generate ideas may not be the best ones to sort the good from the bad (from a commercialisation perspective). What they need is input from a good 'editor' - someone who understands science and business, and has the scars to prove it! This involvement may be quite limited, but key to choosing the good ideas and driving them in a commercial direction. Once a proof of concept is achieved, someone then has to run with the idea and dot the i's and cross the t's. Again this may need someone else who is more operationally orientated: a details person. Rarely is one person good at doing all three (or interested in them). Indeed, it may be a mistake to try to make academics into entrepreneurs by asking them to cross over from being a generator of ideas to a running a business. Food for thought! The dinner was good also.