Thursday, September 25, 2014

Nothing since 2002? Why is it so hard for start-ups to scale?

This might be a small point, but it seems worth making based on a pitch workshop I gave at London's Google Campus for TechHub.

If scaling is the single most important capability investors look for, it's not just a technology issue. Even if you have a great idea for a start-up, it's a much better idea to get some business experience to make sure you can run the company before quitting your job and going full time. Another alternative is to get a founder with a lot of business experience to run it for you, of course. Otherwise, how will you grow?

Resist the urge to take money - as a loan or in exchange for equity - before you have a team that can make it all work in the long haul. HBR said it in 2002, and it's still true - a successful business requires a lot more than innovative thinking. See Why Entrepreneurs Don't Scale.

Just as an example of why founders might want to reread this old chestnut, back to my workshop.
We had a class-wide debate on behalf of a founder's concern: would investors respond poorly if he told them that the company was 5 years old?*

Some participants suggested that the founder shouldn't tell investors the company's age - 5 years is when you exit, they said. Why haven't you raised funds before?
I voted with the other half the class who said that it's an advantage to have bootstrapped. It gave the new company time to develop the technology and client base before selling any equity. It shows commitment to your business, they said (and I agree), and you're in a better negotiating position with a higher valuation.
Here's my conern:

A very smart, accomplished, internationally experienced group of people had a heated debate about whether or not to take a cash infusion.

But the management team's ability - or inability - to grow the company didn't even come up.
Did I mention that article from 2002?

Thursday, September 18, 2014

A day with Jane Goodall and her remarkable team

I am led the closing workshop for Jane Goodall's Roots and Shoots in their week-long residency at St. George's House, Windsor Castle. So I spent yesterday morning observing and listening to see what they might need in terms of skills at presenting their business proposition to corporates, partners, governments and volunteers.

When I've work with global charities, group dynamics can be fraught. Individuals mean well, but when given short periods of time together, their main concern is getting problems solved in their own countries rather than having a concern for the overall organisation -- or for each other.

Quite to the contrary, Roots and Shoots is a case study in how to do things right. Individuals from all over the world, with vastly different projects and challenges, talked for 4 hours about solving problems together. In fact, much of the time was spent finding ways to make sure they do things as a group - not to preserve the brand in a superficial way - but to make sure the work itself continues to run with the highest possible integrity.

Jane gets a lot of credit. At 80, she doesn't seem to have slowed down with her work - both as evangelist and on the ground. Jane is no figurehead - she continues to inspire and support her team in-country in a hands on way. She also vets those who grow her charity and Institute, and that has paid off.
Those in the field have accomplished what seems like superhuman feats in short periods of time. And with very little infrastructure, both as an global organisation and as national offices, they maintain connections with each other all over the world to improve they do their work as individuals and as a group.
One quick example: In South Africa, there is programme that helps children learn about how to treat animals by conquering their fear and making them more aware of animals' needs. The result has been not just healthier pets and livestock but more confidence in children. It's been repeatedly demonstrated by a new willingness by children in this programme to stand up for their beliefs in school.
Over lunch, everyone exchanged connections - to their own funders and other resources - that could help others start, develop, or expand similar projects around the world.
It's hard to convey in a short post the breadth and depth of impact that these individuals have had on their communities and countries - or how fast they've grown the organisation through love of people, animals, and the environment.

Definitely worth checking out, as is the Jane Goodall Institute, and I'm looking forward to help them tell their stories.

Thursday, September 11, 2014

The financial benefits of diversity: Women improving the bottom line of VC firms

There has a lot that has been written on the financial value of new perspectives when organisations put women in roles of leadership. However, lately, there seems to be increasing evidence that VCs are leaving money on the table by neglecting to include women's perspectives in their investment choices.
Perhaps the most obvious reason is that with no women around, it's hard to understand of what female customers will spend money on. Women investors clean up here, as Inc's article says they "profit from others' clulessness".

Bloomberg said last year that VCs that back women-led companies do much better than those that don't. This is becoming increasingly true as women help each other in the start-up world and beyond. Fortune agrees. Gender bias in male-dominated VC firms tends to examine women founders in ways that miss the where the value is.

If this is true for start-ups, imagine what women in leadership could do for the bottom line of organisations with the infrastructure in place to reach enormous markets. Corporates, take note - and while you're at it, hire some qualified women to help take your business forward.

Thursday, September 04, 2014

STEMS: Good for kids and industry

In my 7 years in London, I've seen two ministers in charge of education who seem almost entirely unqualified. Ed Balls was a finance guy - and Gove doesn't seem to have much more experience than he.
In New York City, when the Board of Education was disbanded, decisions went to businessmen as well. Wouldn't it make sense for someone to have done a job before they manage others doing it?

Despite the top leaders, this UK government does indeed have a few smart programmes, probably created by experienced civil servants. Two are programmes around STEM (Science, Technology, Engineering and Mathematics) and STEAM (the same, but the A stands for Arts).

(My friend and client, Tamsin Fox-Davies, now working and writing for Constant Contact, says a kitten dies every time you use an acronym. STEM and STEAM do so much good that they are bound to be exceptions.)

Both STEM and STEAM are equally useful for kids who want to go into industry and industries who will eventually want to hire them. And when industry gets involved, the combination of academic and commercial assets make the programmes more likely to spur on the economy.

Here's an example:
The Medway Science Centre Partnership is a growing community-led group, based in the relatively deprived Medway area of Kent. This group is supported by a number of local institutions, most notably The University of Greenwich and Medway Council. The aim of this group is to develop a Science Technology Engineering and Mathematics (STEM) education centre that will ultimately act as a hub for consolidating and promoting STEM activities in the area, with the purpose of supporting education and raising local aspirations.

Medway has a strong heritage in technology and in particular engineering, however, following the closure of the Naval port in the 1980s, the area has declined, leaving a real need to promote the benefits and opportunities in science, technology and the environment to children.

The area covered by the proposed centre covers a substantial population; within the proposed catchment of our centre there are:
· 170,586 Primary pupils in 680 Primary Schools
· 147,689 Secondary pupils in 136 Secondary Schools

Such a centre would therefore have a significant impact on STEM and environmental teaching in Medway, and the wider Kent area, which is relatively lacking in suitable resources. The centre would be of benefit both directly to the students, but also as a source of continuing professional development for teachers, and we have received strong support from a significant number of teachers in the area. We also hope to provide a conduit by which local science and education students – from the nearby universities: University of Greenwich, Kent University and Canterbury Christchurch University – can obtain a first experience of public engagement on these important subjects.

Medway Science Centre Partnership has been working with the EU-funded Recreate project to host a month-long, free, science and arts festival in the POP gallery within the centre of Chatham. This “Medway Science Centre Partnership presents” festival, will host a number of science-of-art themed exhibitions throughout the month of September 2014. This festival will be run along the theme of “The Beauty of Science” and will feature local and national artists and science communicators, with individual exhibits rotating on a weekly basis.

A particular focus of this period will be the “Hands On Science” weekend, where for two days the gallery will be converted to a hands-on science centre, free and open to the public; and featuring a variety of activities similar to those that will ultimately feature in the permanent centre, once established. Activities for this weekend will include: science-education shows by the London Science Museum’s internationally renowned engagements team, hands on science activities and meet-the-scientist sessions run by researchers from the local universities, scientific face-painting and exhibitions of science-art.
Anyone interested?
They would welcome anyone who is interested in getting involved and supporting the project, from business who would like to sponsor aspects, to volunteers in any capacity: @MedwaySciCentre