Anyone who's followed my blog over the years will know that I'm a bit of a F1 fan (see Hooray for the smaller F1 teams back in 2007).

Today we saw a historic moment when Brawn GP, risen from the ashes of Honda, made it a one-two in Australia.

For me, it illustrates perfectly the opportunity for new business in the current economic climate as smaller, more nimble businesses can take advantage of change and outmanoeuvre more established brands.

Whilst Maclaren and Ferrari had their eyes on the championship race last year, Ross Brawn at Honda effectively scrapped their car and started working on building a race winner aimed at the impending rule changes for 2009.

He saw a change in the market and took full advantage of it while his competitors were focused on getting every ounce out of their current model.

Think about these elements in relationship to businesses in the current economic climate:

1) Change - just like the rule changes in F1, there are huge changes happening right now. For many it means a fundamental re-think of their business model. Larger, more established market players find change difficult are always slow to react.

2) Ownership - When Honda pulled out it presented Ross Brawn with an opportunity for a management buy out. No doubt, it wasn't easy, but it enabled a small private company to leverage the R&D might of a world-leading manufacturer.

An interesting article in the Sunday Times today "Picking Over The Scrap" forecasts that "huge numbers of firms and assets will change hands" in the coming months and years. That level of new ownerships will introduce changes that offer a excellent new business opportunities.

3) New Entrants - not only was Brawn GP a new entrant, it pulled in Richard Branson and Virgin into F1. Whilst ING and RBS wind down their sponsorship over the coming seasons, other sponsors will take their place (particularly as F1 looks to reduce its costs). New market entrants bring new opportunities.

So, whether you're a F1 fan or not, buckle yourself in as 2009 looks set to be both a disruptive and entertaining ride.

Labels: new business development, start-ups

It's always good when you pick up an interesting new phrase. My latest came from a prospect when we were planning their new business campaign: "Conquest Business"

As soon as I heard it I thought, "ooooh, I like that!"

Anyone who's been involved in new business sales will instantly get it too. New business is just that - a conquest.

Unlike selling existing products and services to existing customers, new business is the hardest business to win.

I liked it so much I've updated my new business matrix:

This matrix shows the different types of new business. Selling in the right-hand quadrants is always tougher (and more expensive) than selling to existing customers. Most of our work is focused on the lower right-hand quadrant, which is classic new business (shown above as "conquest").

Occasionally we get involved in real "Pioneering" new business, particularly with start-ups. This is where you're selling new (and usually unproven) services to new customers or clients. This is pretty much as hard as it gets.

It never ceases to surprise me when I'm talking to an entrepreneur who has a service that no-one has ever paid money for and they think it's going to be a walk in the park to win new business. Which is the right attitude for the entrepreneur, I guess, but they're always taken aback when we're less enthusiastic; we know that it's never that easy.

"First mover advantage" always sounds good when you're pitching for investment. But when you're selling to an un-educated market that has no idea about your service (and often about the problem it solves) and you've got no real examples or references to point to... it's a different matter.

How can you spot a pioneer?

They're the ones with the arrows in their back.

Labels: entrepreneurs, new business agency, new business development, start-ups

Just thought I'd post about an event I'm attending on 10th June called Being Digital.

The format is based on 22 successful mashup* events and, as I've attended a number of shorter formats in the past, I'm excited about this full day event.

Being digital is all about debating the issues that matter when delivering and designing a digital mashup service.

The event has seven themed debates on advertising, identity, content, location, social, retail and search across the important platforms of web, mobile and TV. In each theme there will be leading demo companies showing why it is real and how advanced some actually are.

A couple of our clients are also attending, and another client chaired their TV 2.0 event last year so I know from experience it provides excellent value.

No big company slide deck - just real cutting edge stuff.

A must for any digital entrepreneur. See you there!

Labels: entrepreneurs, networking, new business development, start-ups

I get approached by a lot on online business looking to outsource their ad sales.

Well, I say outsource their ad sales but, basically, they don't have any to outsource.

What they all really mean is... "I want you to sell advertising for my unproven Web 2.0 business but I haven't any cash to pay you".

There's a great article in today's Sunday Times The new dotcom boom which gives some insight into this.

Whilst drawing some parallels with the last dot-bomb bubble, most notably the growth of start-up networking events, it's recognised that there are a some differences this time round.

Today, it's typcial of Web 2.0 start-ups see their exit through a strategic buyer rather than an IPO. VC activity is up but no-where near the feeding frenzy heights of last time around. One reason could be that it's so much cheaper to actually start up a Web 2.0 business today.

"Lastminute used to cost millions of pounds every year in technology," says Hoberman [Brent Hoberman of Lastminute.com and wayn.com]. "Now it is far cheaper." How come? "Moore's Law. Everything becomes cheaper and faster." Can you set up for 20,000? "Absolutely," says Clegg [Judith Clegg of the Glasshouse, the company that runs Second Chance Tuesday]. "Less, perhaps."

Add this to the fact that most Web 2.0 start-ups' business model is based solely on advertising revenues and you start to see why we get approached by so many people to sell advertising on commission.

The problem is that none of these start-ups have anywhere near enough traction to make a CPM model pay. So, to fill the void, there's this vague idea that someone can just make a few phone calls and drum up a quick ad deal for their "next big thing".

Sure, ad spend is moving rapidly online. However, as the article points out "with lots of social networking sites all seeking advertising money, some kind of shake-out is due."

Web 2.0 businesses typically work on some low value/high volume model (which could be be that a directly listing fee, monthly or annually subscription or CPM ad revenues). The trouble for us is that these models just don't work well with telesales (which needs at the very least a medium value proposition) unless you're prepared to buy business in a land-grab.

If you're looking to self-fund and grow covering your sales costs (outsources or in-house) from revenue then you either need a higher value offering or a small number of partnership deals which will bring the long term revenue scale you need.

So, now you know, please... stop calling me ;-)

Labels: new business development, sales outsourcing, start-ups, telemarketing agency, telesales, venture capital

I was recently reading Randy Komisar's "The Monk & the Riddle". It's a great book and provides an fresh perspective for entrepreneurs on starting a business in Silicon Valley.

In the book, Komisar talks about the different type of CEO needed at each stage of a business.

First you need a "Retriever", able to fetch together the founding team and resources. Next it's the "Bloodhound" who sniffs out the market and sets direction. Thirdly you have the "Husky" who pulls the company towards it's goal.

I thought these were all great metaphors for the different types of interim sales manager that you need at different steps in the evolution of a business.

It also reminded me of an article I posted on Ecademy back in February, Are you a "Renaissance" Salesperson or "Coin-Operated Rep"?.

This looked at how you need different types of salespeople at each stage of a company and/or market.

Renaissance Reps were the visionaries. Enlightened reps were interested in refining the sales process and, finally, "coin-operated" reps (I love that phrase) do what you would expect... go out and fill the order book.

One of the things I see most often when speaking to clients about outsourcing sales is that they fail to understand the type of salesperson they need for the stage they are at.

Hiring someone who simply wants to sell "by the numbers" when you haven't got an established and repeatable process is always going to fail. At best, they'll burn through your prospects and then retreat defeated.

Of course, as Komisar points out, that's when you'll need the last category to pull you out of the deep stuff... the Saint Bernard.

Labels: entrepreneurs, interim sales management, sales, start-ups

In a recent article "MBA put dotcom man on the map", Sean Phelan, talks about starting his successful internet business, Multimap.

It was interesting to read that sales outsourcing was a part of his company's early success.

"...for a cash-strapped start-up, variable costs are okay and fixed costs are bad. So I outsourced the hosting of the servers to an internet service provider, I outsourced the advertising sales, I outsourced answering the phone to a call centre, and I outsourced the bookkeeping to my accountant."

Last year I blogged about this strategy for start-ups and early-stage companies, "Sales Outsourcing as a Bootstrapping Strategy".

By outsourcing, Phelan took his start-up to a point where he sold 25% to investors for a GBP 1.9m stake without hiring any people. "Up to that point I had no staff at all", says Phelan.

Multimap will have a turnover of GBP 13m this year.

Labels: entrepreneurs, sales outsourcing, start-ups

I read an interesting article for small businesses in the Sunday Times yesterday, "Think hard before selling a stake".

The article looked at the pros and cons of selling equity in small business. Lots of good points in the article, including a quote from Doug Richard, former Dragon and Chairman of Library House:

Any entrepreneurs who can get by without the cash for as long as possible are doing themselves a favour because whatever they can accomplish increases the value of the business and reduces the risk of the business - and therefore it means that whatever equity they do sell, they can sell less for more.

To me this is a very good point. For example, the other day I was speaking with a potential client who was considering a further round of funding to support sales expansion. We were discussing our proposals to help them get traction in a specific new market.

By bringing in a senior sales manager on a flexible contract, we can add value through testing the new market and establishing a beach-head. The company could then resource appropriately once the stage of the market was validated.

Plus any initial traction we achieve will make for a more attractive (and valuable) funding round.

Labels: entrepreneurs, funding, small businesses, start-ups, venture capital

This really is what blogging is all about...

I picked up a site, Trend Hunter, from Guy Kawasaki's AlwaysOn post "Trendhunter Rocks!".

Trend Hunter is a site which recruits people worldwide to spot trends. It has a global network of 8509 trend spotters and cool hunters collectively publishing 13 online magazines dedicated to trend spotting and cool hunting.

I thought, cool... this would be a great way to spot new business ideas.

So, I blogged about it on Ecademy and one member commented that it was similar to Springwise.

Now, Springwise really is cool.

Springwise tracks over 400 online and offline resources for the most promising business ventures, ideas and concepts ready for regional or international adaptation, expansion, partnering, investments or cooperation. Plus it enlists more than 8,000 spotters in over 70 countries worldwide.

Springwise publishes a fee monthly newsletter.

Check it out.

Labels: entrepreneurs, new business development, start-ups

I was reading an interview in F1 Racing with Mike Gascoyne the other day. Mike the CTO of Spyker F1, one of the smaller F1 teams.

I was struck by some of Mike's comments on how smaller F1 teams try to outmaneuver rivals with larger budgets and better cars.

"Even when we were at the back [with Tyrell] we went into every race thinking we were a going to score a point. We were convinced that we could come up with a strategy, make the call or do it better than our rivals."

According to Gascoyne, it's the thrilling bite of competition against the odds that drives him.

I get that. Absolutely.

Having worked with smaller companies up against larger, global competition, I know that it's all about finding smart ways to do more with less.

I've worked with people from larger companies who, when they make the transition to a start-up or emerging company, they just don't cut it without a huge marketing budget behind them and a string of warm accounts to farm.

Gascoyne calls it trench warfare - "I'll blow the whistle and we'll all pile over the top. Of course, it's going to be shitty at first, but you can guarantee I'll still be leading from the front."

Let's see how they fare when the F1 season starts next Sunday.

Labels: new business development, small businesses, start-ups

I had a meeting today with a client that is just about to come out of "stealth-mode" with their beta launch.

We were talking through their go-to-market plans and the work that I am doing. The CEO was giving me the run-down of his new team, who he had in each position and what role they were to play in the overall strategy.

This is the bit I love when working with start-ups.

It always reminds me of one of my favourite films, Reservoir Dogs.

Or come to think of it, any "heist" film where the team comes together to pull "the big job". Films like Heat, Ronin, etc... just love 'em.

The bit I like is when they're putting the team together, everyone's got their bit to play. They're specialists.

You know, there's a "grease-man", a "hacker", a "driver"...

I guess, I just like working in teams where everyone had their bit to play, we're all there for our particular slice of expertise; we all know the stakes are high and we have to deliver.

And we're working together for our own slice of the action ;-)

Labels: entrepreneurs, new business development, sales, start-ups

I recently took the Roger Hamilton's Wealth Dynamics profile test online. Roger runs XL Results Foundation, Asia's leading entrepreneur and social enterprise network.

The "Wealth Dynamics" profile test is designed to match your personality, natural style and talents with strategies to create wealth. It's a bit like a Myers-Briggs test with a focus on how to leverage your natural "profile" to create wealth.

OK, maybe it's just a bit of fun, but I thought I'd give it a try.

The test gave me an number of personal insights, and overall, the greatest learning I came away with was the concept of teaming up with complimentary "profiles" to leverage each others' talents.

I came out as a "Star" profile, with strong "Dynamo" and "Blaze" frequencies. Here's my profile.

According to the system, "leaders of the most successful new start-ups are always Creators and Stars with dynamo frequency. The leaders of companies that are acquiring market share and market presence in a consolidating industry are always Supporters and Deal Makers with blaze frequency."

Having worked with so many start-ups and companies with a focus on acquiring market share and new business, this made perfect sense to me.

As a "Star", apparently, my strengths are "quick to deliver; quick to connect; can take an idea and run with it; can think on their feet; can improvise quickly in tricky situations".

And, "Great Stars have entrenched themselves in their niche, so anyone with a new product or promotion is likely to be attracted to that Star to support them."

Also, to build wealth I should align myself with "creators & deal-makers" (read: CEO's & Entrepreneurs) to give me the catalyst of content & deals that I can promote.

In a nutshell, if you want to rapidly grow your start-up... just add a Dynamo!

Labels: entrepreneurs, new business development, sales, start-ups

You've probably seen "Dragon's Den" before. It's the TV programme where entrepreneurs pitch their ideas to secure investment finance from a panel of multi-millionaire business experts — the "Dragons".

It's great television and I'm an avid viewer of the BBC's UK version.

Now, when I say (jokingly) that I could be the next Dragon, it's not because I'm a multi-millionaire business expert (or have a few hundred grand to throw about). No, it's because on a regular basis I get asked by entrepreneurs who want to discuss working with my company on a "success basis", typically that means "commission-only".

In a sense, they are pitching me to risk my time (or the time of my team) to help them sell their product or service.

I read one of the TV Dragons say that only about 10% of the Entrepreneurs they see get funding (and of them, the Dragon's assume that about will 10% actually succeed).

And that's pretty much how I see it.

Only about 10% of the people that ask me to work on a "commission-only" basis have something which I feel either excited about or think has "got the legs" to work. The problem is, though, that if only 10% of those actually take off... where does that leave me?

Investing my time (and money) on high-risk, unproven ventures is not my business model.

I don't mind linking part of our fees to our results, such as a number of qualified appointments; if we don't deliver then we don't get that part of our fees - that's a healthy results-focused model.

But that's a long way from working "for free" on the basis that someone else will make a sale, deliver their (usually unproven) product or service, get paid and then still be solvent to pay us.

No, I think I'll stick to watching the Dragons on the TV.

Labels: entrepreneurs, funding, start-ups

Can you remember that Kevin Costner movie from 1989, "Field of Dreams"? It's about the Iowa corn farmer who, hearing voices, interprets them as a command to build a baseball diamond in his fields.

I'm not sure whether every dot-com startup watched that film, but the phrase "Build it and they will come" seems to have passed into the collective entrepreneurial unconscious.

So when Jackie Bassett told me about her new book "So You Built It and They Didn't Come. Now What?", I just had to read it.

If there was ever a book that should be compulsory for entrepreneurs to read, this is it (and Guy Kawasaki's "The Art of the Start").

Jackie shares her own experiences, as well as stories from CEO's and Investors on what to do when the wheels have fallen off. Does this sound familiar?

So you've burned thru several million dollars of Venture Capital funds,replaced the VP of Sales three times, added 17 more features that each round of salespeople you hired (and fired) insisted their prospects must have before they would buy-then didn't, now what?

You're certain there is a market for your product. You even have a handful of customers who've paid for it. But those "Wow's" aren't converting into sales.

How did this ever happen? Where did things go so wrong? More importantly, how can this be fixed and f-a-s-t!

Jackie shows you how to identify when you are in trouble, and how to stop and restart your business from a customer-centric perspective.

There is a lot in this book that I recognise from my own client experiences. One of the things about working with startups and new product launches is that you're going to see a lot of misfires.

Every now and then I have to write what I call a "Dear John" report at the end of a pilot campaign. Usually it goes something like "I'm sorry, but we don't think you've got a proposition that's really compelling for your market. Let's stop now before it costs you too much" In essence, we tell our client that they've got it wrong.

It's probably one of the hardest parts of the job, but it's something that's core to my values. If it's not working, I'll pull the plug rather than simply burn my time and my client's cash.

Of course, they can try another method of sales, or even another sales outsourcing company, but usually they go back to the drawing board and come back to us to help them test and refine their new proposition.

Our business is no different.

We tried promoting our services to startups as "market due diligence". Essentially, we'd pilot test a proposition with potential clients. However, we found that there really was little appetite for it. Entrepreneurs are pretty free-wheeling and their due diligence is usually to just launch and see what happens.

It's what we call the ultimate "Live R&D").

Labels: entrepreneurs, new business development, sales, start-ups

Risk is something any new venture faces.

As our services help mitigate some of the risk of launching new ventures, whether it be a startup or corporate-backed, it's something we understand and manage every day.

In The Venture Imperative, authors Heidi Mason & Tim Rohner neatly sum up the different attitudes to risk of startups and corporates.

"Because startups change course often and swiftly, they view uncertainty as a normal managed risk. Many critical elements of the business model for a new enterprise can be determined only through active competition in the marketplace, not via analysis based on historical data."

Contrast that with:

"When corporate strategists and other corporate leaders cast their eyes on a proposed new venture, they're often looking for a work of analytical perfection that quantifies every element of the business plan and eliminates all risks."

Our services can certainly help bridge the gap for corporate ventures and new market or product launches; I mentioned this in a previous post on the concept of "Live R&D"

Because we help shape value propositions at that crucial early-phase of the venture, our clients can manage their exposure to risk by testing the market without diverting internal resources.

As the authors of The Venture Imperative ask: "When do you stop analyzing and start executing?"

Labels: new business development, start-ups

A recent post on the Small Business Trends blog caught my attention with a great quote. It's from a US News article:

'If all you know about starting a business came from reading the financial pages during the 1990s, you might think the process works like this: Think up a killer idea, write a business plan, raise money from venture capitalists, launch the business. "Then you pitch the money on a bonfire and hope there's a company there before you run out," jokes Greg Gianforte, CEO of RightNow Technologies, a business software company he founded in 1997.'

The Small Business Trends blog points out that, for the majority of small businesses, bootstrapping (ie, funding your business from customer revenues) is the right, and often only, option. In fact, studies from the Global Entrepreneurship Monitor say that only 38 out of 10,000 businesses receive venture funding.

From our perspective, most of our startup and small business clients are "bootstrapping" their businesses and our services are a low-cost and low-risk option for them.

Labels: entrepreneurs, funding, new business development, start-ups

The Investor Fair is held in London every Spring and Autumn, the next one being held on Tuesday 9th May 2006.

This prestigious event has recently drawn nearly 200 active investors to meet with clients on the day. Investors are likely to be syndicate members, VCT's, small institutions and some wealthy High Net Worth individuals.

Last Autumn's Investor Fair was filmed by BBC TV for the Working Lunch business programme. One client at that fair received two offers of investment, and that was before the company was subsequently featured on BBC TV's Trouble at the Top. Fair clients have also appeared on BBC2's Dragon's Den.

The Investor Fair can be a stand-alone method of reaching potential investors or, even better, used as part of the full Business Angel service which gives you access to nearly 1500 angel syndicates, VCT's, small institutions and HNW individuals in the largest Angel network in Europe.

Spaces are limited to 30 clients, who can be from any sector and at any stage of development, on a first come-first-served basis.

If you're interested in attending, contact me and I will introduce you to our associates.

Labels: entrepreneurs, small businesses, start-ups

The term used by venture capitalists to refer to a company's market potential is its "running room".

This is a crucial aspect to how investors will value your business. You may have a fantastic proposition, but if the total market potential is just a few million, your growth will be limited even if you capture 90% of the market.

From a sales outsourcing perspective, we're also interested in your running room. We know that, to deliver rapid results, we need to hit your target market and capture that "low hanging fruit". This uncovers qualified prospects who are ready to buy.

As a rule of thumb, there's always a percentage of companies who have the issue your business addresses on their radar. The percentage varies, but let's say it's about 25%. The rest of your market could be categorised as not being ready now, already found an alternative elsewhere, or just not interested - yes, they're out there.

The art of getting traction with new business acquisition is to quickly qualify and work with companies in that magic 25%.

If you've only got a very small potential market, then your "low hanging fruit" will also be low in numbers.

However, if your proposition is either extremely compelling or of significant sales value, then it can still be a great return.

Labels: sales, start-ups, venture capital

The first time I heard the term "Live R&D" I thought, "this is something I understand".

I've know many companies who spend hundreds of thousands in designing and perfecting their technology and then realise that it's not what the market wants. Sure, you've got to have the vision and gut feel to get started but, as soon as possible, you need to test the market.

"Everyone really likes it" or "everyone thinks it is a great idea" are two of the most common phrases I hear...often followed by "but we haven't sold any yet".

Why? Well, once you ask someone to put some money down you begin to get real market feedback. It's where the "rubber meets the road", as they say ;-)

Now, this is where our lead generation and sales outsourcing services are the ultimate in "Live R&D" for startups or companies developing new products or services.

We take your product or service and test it in the real market. We develop and refine your value proposition, give you feedback on what the market thinks (and is prepared to pay) as well as providing valuable insights on the competition.

Plus we're developing a sales process for you; one which you can quickly scale up to really acellerate your growth, which is a very important factor if you have a headstart in the market.

Labels: sales, start-ups, strategy

I've been a member of the Go BIG Network for some time and find it an excellent tool to tap into the latest deal flow running through the startup business community.

Essentially, Go BIG is an on-line community for start-up companies. Members of Go BIG post a request for what they are looking for, such as investment capital, job opportunities, partners, etc., and the network routes that request to other members who have expressed interest in that type of opportunity. Members can also post their requests publicly so that everyone can see who needs what.

Well worth checking out.

Labels: funding, social networking sites, start-ups, venture capital

Last night I watched Dragon's Den on BBC. They had a follow-up on the businesses that the Dragons had decided to invest in and the results were quite interesting.

A large number of the investments fell through after then show (down to due diligence or just simply people falling out) and quite a few of the entrepreneurs were still trading having found funds elsewhere. The Dragon's would insist that they may be trading but were they profitable, and I'm sure they're right in the main part.

Having recently been following a poll on Ecademy, How did you raise the last round of finance for your business? it seems that the majority of startups and growth business (65%) found their funding from friends, family and other sources (which is predominantly self financing). According to the poll, only 7% financed through Angel Investors, and 1% through VC's.

That certainly ties in with my own personal experience and the results of the Dragon's Den.

Many of the clients we work with on sales outsourcing and venturing projects are self financing.

Typically, we work with clients who are looking to expand from an existing (usually low) revenue base and so they want a low cost, shared-risk way of increasing sales. We don't work with everyone; we also have a selection criteria. In many ways we are similar to angel investors.

Maybe I should have called the firm Dragon Associates? ;-)

Labels: entrepreneurs, funding, sales, start-ups, venture capital