Can start-ups really change the World?

10:11 AM

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In start-up land it seems that the "advice de jour" is that you must be "changing the world" or you are likely to bore the heck out of people or catch the wrath of the many bloggers that inhabit start-up land.

This past week the blog World was ripe with posts and comments from Techcrunch50 with a fairly heavy leaning or lamenting that the current round of participants were not "trying to change the world" You are supposed to be changing the world.

This idea of changing the world has long been echoed by venture capitalists, who along with the standard "we invest in teams, profitable business models" often say you must be changing the world. Guy Kawasaki, a well known advisor and speaker has even named his Blog - How to Change the World.

So can start-ups really change the World and what is the World?
  • If you are a desk jockey working for the man, then your world is that constrained space you are dying to get out of so you might start that first business to escape one World and create a new World for you and your family, which for a lot of people is a pretty important World
  • If your World is a particular passion like social service than you might create a business that makes a huge difference to those that you are passionate towards. Take for example Kiva, these founders had a passion for helping people rise from poverty and they significantly advanced the process for micro-lending, which has made a huge difference in the World of those people. Kiva has lent millions of dollars, which is really only a fraction of the billions that have gone into fighting poverty globally, but does that mean they have not met the game changing threshold because they are not the number 1 or 2 lender on the Planet fighting poverty?, of course not.
  • If your World is the Planet Earth than you might create Facebook but of even with 300 million users it's not really the whole World it's just a subsection of the 6 billion people on this planet who happen to socialize in a certain way, so is it really changing the World?, well given that it is the number one social network for people who socialize that way, then I guess so at least for them.
The challenge with using the term "World" is that it is generally used to mean all encompassing and huge and that is, as with many things, a bit of a distortion. I think what people really should be saying is "don't be incremental" best articulated by Tim O'Reilly So, here is my advice:
  • Don't leave that desk jockey job in an IT services company and start another IT services company that is cheaper or more responsive because you have less overhead and you are excited to work for yourself on the weekends
  • Don't copy Kiva's micro-lending model and make a few improvements to the Web interface
  • Don't just make Facebook applications so that you can gain access to their vast user base
Think about what you can do to make some really significant change to a particular World however big or small that World is and don't confuse your World with someone else's World.

And finally, always remember, as a start-up your World changing business may not be big enough to intrigue a venture capitalist or escape the wrath or boredom of the esteemed judges, advisers and angel investors that like to hang around the start-up world and that is fine.

Just make sure that you understand the World that you are in and your place in it and act accordingly.

Ed Loessi

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Buying enterprise software where the innovation is happening

5:16 PM

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In a recent article on ZDNet titled Survey: More SaaS development in 2009 it was noted that "More than half of all developers around the globe will work on Software as a Service (SaaS) apps this year", which means that if you are a buyer of software and you are not actively looking in the SaaS market for new solutions to your software needs you are likely to be buying less innovative solutions, which is not a good strategy.

It's really a pretty simple premise; innovation for a business comes from one of two things; the first being your ability to come up with a unique idea and target a chosen market and second the ability in most cases to harness the resources; the people and software/technology tools to get it done.

So, ideas, well that is up to the leaders in the company and the market will soon let you know what they think about your idea. The best people to implement the ideas will be sought after and brought into the company and that is a huge focus and no one is interested in the un-innovative person but often times technology is thought of differently, people like to use terms like 'safe' or 'proven' which we all know is secret code for 'not innovative'.

Many times you see companies that pride themselves on having the best ideas and going after new markets. These same companies spend huge amounts time trying to find the best people, the people with the best ideas, the newest methods, so why would they then sabotage all of that innovation by implementing old-school technology?

It's simple there are a lot of old-school technology providers that still have to milk the huge investments they have made in building their solutions and guess who they are going to be milking?

Now, some might say that new technology is unproven but guess who is making that new technology? odds are it is the best and brightest that used to work at the big 'safe' vendor, the person who said 'hey there is a better way' but to whom their big vendor employer said 'hold on we are not done getting a return on our investment'.

So from 2009 forward the writing is on the wall, half of all innovation in software is now taking place in the SaaS arena, if you want to be leading the innovation in your market now is the time to bring in SaaS solutions and engage those best and brightest who are creating the newest and most innovative solutions.

Ed Loessi

A comedian who understands the iterate or die business model

11:53 AM

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Harvard Business Publishing had a great article called
Innovate Like Chris Rock most people are aware of Chris Rock as a comedian but when you see him talk about how he creates comedy on a 'global scale' you get a sense for how smart he really is and what is really involved in creating anything on a global scale.

So here is what he does:
  • He writes up some ideas on a yellow pad
  • He goes to a small local club and tries it on 30-40 people
  • He throws out the things that just don't work and iterates until there is a good 45 minute set
  • He progressively exposes the comedy set to larger audiences, providing value along the way
  • Finally (and what most people confuse as being the start) he shows up on HBO as the calm, cool, relaxed provider of world-class comedy
What he does not do:
  • Sit in a room by himself or with one or two others and create and deliver entire sessions
  • Work to get it perfect before he lets the world see his creation
  • Take initial negative feedback and toss out all of his ideas and start from scratch again
In the end even though Chris is a world class performer he still works it through a process but not a process that stifles the innovation!

In our business we battle this sort of thing all the time as do our customers; those being people who are trying to propel their organizations away from antiquated thinking by embracing newer and better technology strategies and revenue models as well as those who are creating new software as a service products and services to offer to enterprise and government entities.


What they battle on a regular basis is the mentality of "we gotta get this right", "don't do something until you can show all of the ramifications", "that's not how we make money today" and the long litany of similar and no less spine chilling words used to protect the silos and fiefdoms that can exist in the world of enterprise and government product and service providers.

What happens is that people throw out sage advice like 'proper planning and input from everyone will ensure success' or 'make sure to check with so and so', when in fact so and so is the Chief of No and more No.

Now to be fair organizations that operate like that probably did not start out that way but as they got bigger and 'smarter' (the MBA way) they stopped iterating and replaced iteration with planning and project plans and approvals and internal experts as the best way to innovate and get things done when in fact, it yields some of the least innovative outcomes that are humanly possible.


What I am increasingly finding is that it is virtually impossible to find anything in business that would not benefit from an 'Iterative Process" and that virtually every success story works its way back to companies and yes comedians that work that way.

When I talk about an iterative process and their are many versions of the idea I mean a process that:
  • Makes it easy to get started
  • Makes it possible to get to a first version of a new product or service in 30-60 days
  • Is understood to be a continually evolving process that demands improvement based on actual customer feedback not just the internal noise of an organization
  • Has as its number one goal to achieve something new; new revenue, new markets, new thought leadership
To be sure this is a specific view, one that works for our company and our customers but it can be iterated by others, so take a stab at that and iterate the definition for yourself.

Rest assured if you are working in organizations that are unable to implement an iterative process or if you are providing a service that is not created using a iterative process you are likely to fail in the short-term (as a new company) or wallow in mediocrity as an 2nd or 3rd tier player in the industry that you are in.

So take it from Chris Rock, iterate or die!

Thanks,

Ed Loessi

Matching business and IT priorities is child's play

8:45 PM

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In our company we are often working with business people to create software solutions before their internal IT department has been called on (sometimes because of the fear of doing so) but inevitably if the idea is strategic someone from IT will need to at least pass an eye over what is happening to see how many rules we are breaking.

The big challenge is that often the business manager struggles in relating what they/we are trying to do with the "strategic IT plan" (the thing it must do in order to get the idea through the gate) and the whole discussion can go completely off the rails really quickly.


So, I was reading a brief on a newly released Gartner EXP Report. In the report they had this interesting table (below) and it got me thinking of a common assignment that my elementary school children do where they have 2 columns of words and they try and match them such as the word 'City' in one column and 'Boston' in another.

The idea is to match up the two words because they belong together. Now looking at this table I thought "Hey this would be great, let me create an easy way for a business person and an IT person to tie their priorities together, so that they could easily see how and when they are in fact actually pretty close to talking about the same thing".


Here is an easy example:

The COO really wants to improve business processes this coming year.

The CIO says "That's great we have been looking at upgrading the ERP system and there is plenty of scope for improving business processes in that area"

The CIO says "I've got scope this year to advance our business intelligence capabilities".

The COO says "That's great we know that business intelligence will really improve our ability to attract and retain new customers".

To a certain extent this is really simple and maybe that's just the point. As children we learn to connect ideas and words together via a simple relation but as we get older we get more rigid in our definition, always looking to get the exact meaning established so much so that we fail to see when we are actually talking about the same things and trying to achieve the same goals.

Give it a shot see if you can get your priorities matched!

From Gartner EXP Worldwide Survey



Top 10 Business Priorities

Rank

Top 10 Technology Priorities

Rank

Business process improvement

1

Business intelligence

1

Reducing enterprise costs

2

Enterprise applications (ERP, CRM and others)

2

Improving enterprise workforce effectiveness

3

Servers and storage technologies (virtualization)

3

Attracting and retaining new customers

4

Legacy application modernization

4

Increasing the use of information/analytics

5

Collaboration technologies

5

Creating new products or services (innovation)

6

Networking, voice and data communications

6

Targeting customers and markets more effectively

7

Technical infrastructure

7

Managing change initiatives

8

Security technologies

8

Expanding current customer relationships

9

Service-oriented applications and architecture

9

Expanding into new markets and geographies

10

Document management

10


Ed Loessi

Value Management Strategy

12:46 PM

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Just before the holidays I wrote a Blog post on the Faulkner Technologies corporate Blog about Value Management Strategy. Over the last few weeks I have talked about this idea within our company and with a number of our customers and potential customers. The short version is below and I feel like if you can embrace the idea you can make a tremendous impact in any area of a company.

The General Idea:

‘Value Management Strategy’ is defining the key value points in your business and, through a continuous assessment process, getting yourself and your teams to focus on the most valuable customers, opportunities, contracts and services.

The main components of Value Management involve two simple ideas - 'Initial Strategic Value' and 'Ongoing Strategic Value', and they can re-define how you measure your business.

What this really means is that any thing that you do has to have an initial strategic value point it cannot be done simply to show effort, it makes no sense to build a sales pipeline just to show that you have added to the numbers of prospects, it makes no sense to develop new products or introduce new business processes simply to create change, you must be able to define and then measure the initial strategic value of doing things within a business.

This is also true in an ongoing sense. If you have an initial strategic value idea then you must have any ongoing strategic value idea. As we often find out even the best laid plans change and you must be able to look at the things that you do or the customers and products that make up your business to determine if the game is changing.

To make a quick point, value management strategy does not involve trolling your systems for financial or numerical data to try and paint a picture. This is not a question of business intelligence; it is a process of asking questions of the people who are as close to the activities as
possible within the company.

It's as simple as having the sales person answer questions about a new opportunity or customer or having the account and contract managers answer questions about the general performance of a customer or an ongoing contract. By measuring value in the form of basic questions and answers you serve to create a mental dialog within the business and this mental dialog makes it easy for people within the company to keep themselves on track.

To read the expanded version you can go and DOWNLOAD a short white paper with more examples on this idea.

Thanks,

Ed

Ed Loessi