#scale-ups

Read time: approximately 7mins-16secs-ish.

It’s New Year’s Eve. This post marks the month which saw the consumer launch of Chat GPT. Here’s an entrepreneur’s perspective.

I have been immersed in the innovation/entrepreneurial eco-system for more than two decades. Over that time we’ve seen global ups and downs in the world’s economy, some of which arguably the most severe in history. We’ve never seen so much change, transformation, and new technology.

Literally all our established orthodoxies are being challenged.

I think people are hardwired to resist change. For many, sadly that resistance worsens with age - which is a problem in an ageing society. I saw a recent video interview in which Elon Musk observed that humans don’t simply resist change, sadly “humans tend to ossify, and then die”. To which I’d respond with my observations about entrepreneurs:

Whether or not we like change, entrepreneurs have a demonstrable knack for translating change into opportunity.

Entrepreneurial success is sometimes admired, occasionally celebrated, and often envied.

Entrepreneurial talent is sometimes revered, but often mistrusted.

Entrepreneurial competence is often regarded as mythical, unacacdemic, instinctive, eccentric, and exclusive - all of which I frustratingly believe to be completely untrue.

It both saddens and maddens me that in an era of unprecedented opportunity for innovation and progress so little is understood about entrepreneurialism; how to cultivate it; how to teach it; and how to democratise the benefits of an entrepreneurial mindset so that everyone can leverage the opportunities available. Particularly the lack of entrepreneurialism, innovation, intuition, and financial literacy in the formal education and curriculum of our kids.

I think this is important:

To help counteract and pacify the genuine and legitimate concerns and anxieties I hear from people contemplating their future careers, incomes, and livelihoods. By contrast, entrepreneurs have a talent of managing uncertainty positively.

I am a passionate egalitarian. I am greatly concerned by the apparent disproportionate growth of socioeconomic inequality. I believe that an entrepreneurial mindset helps drive prosperity individually and collectively.

To maximise the potential positive impact of new technology and accelerate the mass adoption of technological advances to help people, businesses, and the planet to flourish.

My belief is that the more that entrepreneurialism is demystified and codified; the more that entrepreneurialism is understood; the more that entrepreneurialism is democratised and made inclusively accessible - the more these issues of anxiety, inequality, and ecology can be tackled.

Global issues such as the environment and the economy are debatable. Whether or not you agree with the scientific evidence regarding global warming - and whether or not you care about the consequences of this issue. Whether or not you have concerns about your future financial health and stability. From the perspective of an entrepreneur what I see is a world in which:

There are potentially more jobs than there are people.

There are jobs that the majority of people just don’t want to do. Justifiably so.

The cost of living is a significant burden for many people, (below a threshold of indulgence).

Average expectations fall significantly below average outcomes.

Inefficiency and poor productivity holds us back.

Human error accounts for significant loss of life and injury.

We are perilously close to passing ecological milestones that are irrevocable.

For years corporate corridors have been dominated with angst conversation about “Disruption”. My point is, if all we talk about is disruption, then all we will see is disruption.

What if instead all we thought about was: “Liberation” - then perhaps what we would be looking for is ways to enable ourselves to be more free to do what ever it is that we want to do.

At one point ( a while ago) there was a growing momentum in a conversation about “UBI” - Universal Basic Income. The notion that everyone could/should be paid c. $500 per month in order to live. Interestingly, my sense is to a large extent that conversation seems to have gone away (or certainly quietened). I understand the idea as a notion to provide stability; a sustainable alternative to displaced employment; a new mechanism for wealth distribution. But my whole premise is the opposite to this - my premise is not how best to distribute free cash and to remunerate idleness. My whole premise is, how best to pursue technological advancement in order to eliminate costs - for people to be free to do what they want to do.

Recent progress in nuclear fusion - the source of limitless [relatively] impact-less free energy, gives us a tantalising glimpse at a scientifically viable route to delivering such cost reduction, in terms of providing

Free energy to power our homes;

Free energy to heat our homes;

Free energy to power our cars;

Free energy to radically reduce the cost of food production.

Easy to dismiss as fantasist and fiction. Scientific breakthroughs this month in nuclear fusion mean that the industrial application of fusion power is an inevitability within the lifetime of my daughters. My view though is that this is not the most significant technological development to have arrived this month.

In preparing my book I have re-read the c. 175 posts I published over the last ten years. What’s clear, especially in the earlier posts, is the extent to which I was trying to capture the birth of the ‘digital economy’ - whatever that is, and whatever it means. Ten years later it could be debated whether the digital economy has now landed - or whether the ‘beginning’ is now over and we’re somewhere in the ‘midst’ of it. That is not important. What is important is, the public launch in December 2022 of ChatGPT - which delivers explosively the start of the ‘AI economy’.

It is a moment we should all note in our conscious memory: where and when we were when we first made aware of it - and fascinatingly, what we first nervously asked of it.

The difference between the ‘digital economy’ and the ‘AI economy’ is not semantic. Not only is the difference profound - but also, with each new economic-era the consequence, significance, and impact multiplies. In the case of AI I believe the impact will be exponentially more profound than any previous economic era.

When I first used ChatGPT it became immediately apparent to me that both conventional search (eg. Google) and established advertising models/revenue would be completely rewritten. I strongly suspect that is merely the tip of the iceberg. With CHATGPT, for the very first time, the general public gets a real-world practical AI tool that it can play with meaningfully that delivers tangible and interactive results.

The entrepreneurially minded among us will be beyond excited, motivated, and energised by the possibilities that AI now creates. Those that are more attached to an incumbent mindset will be deeply distrustful of this development and will choose instead to operate in either denial or combat (or both).

The hospitality sector. The agricultural sector. The care sector. The medical sector. All have profound shortages of labour. It seems overwhelmingly inevitable to me that the advances in technology, such as AI now need to be combined with the willing/available human capital in order to multiply the productivity and efficiency of those workers to enable them to meet the evident demand. AI can help make our existing workforce bionic. The distress in the health sector in the UK demonstrates that that need is beyond critically urgent. Whole regions of the UK today have announced ‘critical-emergency-cover only’.

I asked ChatGPT a question (as follows) - to which it replied with the six bullet points below, in less than four seconds:

Q. In using AI to deliver a conversational companion for elderly people with dementia, what safeguards need to be in place to protect vulnerable people? For example, in cold whether if an elderly person asked, should I turn-down my heating to save money - how can their safety and wellbeing be ensured and protected?

There are several safeguards that can be put in place to protect vulnerable people, such as elderly people with dementia, when using AI to deliver a conversational companion:

Clear and concise language: It is important to use clear and concise language when communicating with elderly people with dementia, as they may have difficulty understanding complex instructions or concepts.

Safety reminders: The conversational companion should be programmed to provide safety reminders, such as reminding the elderly person to stay hydrated, take their medications, and dress appropriately for the weather.

Emergency contact information: The conversational companion should be programmed to provide emergency contact information in the event that the elderly person is in need of assistance.

Limited decision-making capabilities: The conversational companion should not be programmed to make decisions on behalf of the elderly person, as this could potentially put their safety at risk. Instead, it should be programmed to provide information and recommendations for the elderly person to consider, but ultimately it is up to the person to make their own decisions.

Human supervision: It is important to have a human caregiver or family member available to provide supervision and assistance to the elderly person, as needed.

Regular review and updates: The conversational companion should be regularly reviewed and updated to ensure that it is functioning properly and providing accurate and appropriate information and recommendations.

My next question ought to be “please can you code this to work via Alexa?” - which I have no doubt it can do, but then like many of my entrepreneurial peers, I’m just trying to figure out what problem to fix first and where best to invest my limited time and capacity.

I am not eulogising that AI is the answer to all our problems and that the future is going to be amazing. I’m also not saying that entrepreneurs have all the answers and are exclusively placed to leverage this new technology.

What I am saying is, is that the launch of ChatGPT and all the other flavours of AI that follow it, is a watershed moment. A before-and-after moment. More significant than when my parents replaced our black and white television for a colour TV.

From the perspective of business - I can’t think of a single industry that won’t be affected by AI technology. Whole industries will be (and are in need of being) completely rewritten as a consequence of the new capabilities that AI enables.

Like all changes of era throughout history before us - some of us will grasp the possibility that new technology represents as a positive opportunity. Others will fare less well. When we look back through history, so far, without exception the macro economic effect of each transition of era has been overall increased prosperity.

2023 is going to be epic!

Read time: approx. 7 mins and 31 seconds, ish.

It is the tenth Birthday of the TallManBusiness blog. I find it somewhat incredible that this month ten years ago, October 2012, I made a decision – a commitment – to write down and share my original thoughts, insights, and observations about business, entrepreneurship, and innovation – and to publish those thoughts via a blog. This blog.

A lot has happened in those ten years. For calibration, my daughters have transformed from kids aged eight and ten, to gown-ups aged eighteen and twenty. Which is utterly bonkers.

The purpose of my writing was always clear: (I apologise if this sounds really pretentious, but) the intent of the blog is that I wanted to do for entrepreneurship what Delia Smith and Jamie Oliver have done for cooking. If you want to roast a chicken, you can simply Google their recommendations to find clear instructions on how best to cook the perfect dish. You can be confident that Delia and Jamie have tested their recipes a thousand times.

My ambition for the blog is simple: to make venturing more straightforward and hopefully more prosperous. And to share lessons learned. To identify the common bear-traps; help de-risk the abundant jeopardy; encourage more entrepreneurs to get started; and to help ventures succeed.

I want to bring to life the benefits of an entrepreneurial mindset for people and for businesses both small and large.

I have enjoyed a career that is unique in the extent to which I have worked for both large corporates and small start-ups, simultaneously. My work has gifted me the privilege of an exclusive perspective from which to observe the repeat behaviours common to successful entrepreneurs. And this insight is central to all my blog posts, which are unashamedly anecdotal and unscientific.

For ten years I have delivered insight from the frontline of commerce; the traumas and tribulations of entrepreneurs; the optimistic possibilities of innovators and their innovations.

I have been venturing for two decades and have invested directly and indirectly in more than 300 ventures cumulatively. The ventures which I directly help get started have collectively raised more than half a billion pounds in capital finance. I’ve taken great care to harvest the insights that I have observed over those two decades.

I’ve also given a lot of thought to the distillation of those insights, and the codification and translation of insight into practical interventions that anyone can undertake.

My passion is to democratize entrepreneurial success. To make entrepreneurship as accessible and inclusive as possible. I believe that no-one has a monopoly on good ideas and opportunity.

If humans can learn nuclear physics, my assertion is that entrepreneurship can absolutely be both taught and learned. I believe anyone and everyone can be an entrepreneur. Entrepreneurial success is not defined by ‘nurture or nature’ (although like musicianship, some people possess a natural disposition or talent).

My purpose is: To help people and businesses flourish.

My intent is: To liberate.

That is my life’s work.

In a word ‘flourish’ is singularly the consistent theme and the driving force of all my work throughout my career. That is one of the reasons why I am so passionate about my work as EiR at Alantra UK. Flourish is central to all the amazing ventures in my portfolio.

The purpose of the blog is not exclusively altruistic – it was also to give me:

Discipline: I never publicly declared how frequently that I would publish, but I made a commitment to myself. Privately, I set myself a goal - little did I know at the start how audacious and strenuous that target would become.

A repository: The blog has given me a thought-library in which to collect and collate all the entrepreneurial insight I have observed and amassed. And also to exorcise all those thoughts and observations that percolate in my head and put them instead into a vault to be accumulated safely.

Feedback: And by virtue of publishing, the blog enables people to give me feedback on the journey so that I can adapt and evolve my writing and my content.

In October 2012, with intense nervousness and trepidation, I pressed ‘post’ on my first article. I had no idea what would happen; whether anyone would read it; what they would think; whether or not they would like it.

The funny thing is – ten years later, I’m slightly less nervous to publish – but interestingly, those butterflies remain. You never know just what you might provoke or how people may react.

I made a commitment that I would publish a new post at least once a month. That is a commitment that I am especially proud to have delivered without compromise.

In 120 months since the first post was published, I have subsequently posted a total of 175 articles – an average of almost 1.5 posts per month.

Despite however intensely busy I may have been, I never missed a single deadline.

At the risk of sounding self-congratulatory, I am extremely proud of that accomplishment. It’s an achievement I regard as non-trivial. Not least because on average each post took me more than half a day to craft – which when multiplied by 175 adds-up to ‘a lot’.

But the man-hours are only one part of the story. In addition to the hours of labour is the burden-time in contemplation and consideration not just what to write, but what to say. And as a non-writer, how to say it.

I have worked hard to make the blog topical. The topic I choose to write about each month is invariably in response to what I see, hear, and observe happening at that time. Especially, to reflect what’s happening in the business and innovation eco-systems in which I am embedded.

In summary, what I have observed in business over the past ten years is that:

Fundamentally business is the same

However, how business is done has changed beyond recognition or prediction

In the UK we’ve witnessed faltering economy; faltering politics; austerity; referendum; Brexit; a pandemic; war; and climate change

WFH was mandated during the pandemic

And for many, Working From Home has become the norm (where ever that home happens to be)

Regarding venturing, I’d also say that over the past ten years more than ever before:

Businesses cannot afford not to be ‘digital’. There are no exceptions

The sector once referred to as ‘the tech sector’ now encompasses virtually every business that I meet. The tech sector has become universally inclusive

Since 2012 there has been a shift from ‘light-tech’ to ‘heavy-tech’ (AKA ‘deep-tech’) and significant shift to ventures that are inherently anchored in scientific innovation and/or ‘med-tech’

The exciting development is that tech is no longer the obstacle – there is an increasing realization that humanity can do what ever it wants dependent on sufficient appetite (with the exception of time-travel)

There is significantly greater understanding in venturing of what does and doesn’t work – a formula for entrepreneurial success is becoming more evident

Specifically in the UK, I’d say that there is a greater appetite than ever for customer service excellence – and yet despite this, in most examples that I can think of, corporates have gone in exactly the opposite direction in their annihilation of customer service departments / resources / capacity. Trying to engage a human within a corporate for service in the UK is futile

Wonderfully, ventures have become more purposeful

Despite the overwhelming importance of small businesses – and the number of globally significant corporates that serve them, I still can’t name a single corporate brand that is famous for its support and celebration of SME’s – it’s a massive missing, and one that I’m astonished that no-one has seized

The same absence of ownership is true across other wealthy sectors / demographies / genres – eg. I can’t think of a contemporary brand famous for its championing of the elderly, despite the shift in growth of an ageing society

A lot of ‘smart-tech’ (eg. smart-home technology) is either annoyingly unreliable or doesn’t work. I could shame-list a catalogue of brands/products that are infuriating but really what I want to highlight is that this field is still wide-open

The point is: more than ever, the incumbents have not got their markets sown-up – despite the trillions these corporates hold in reserve, none of them is too big to fall

There has never been more need of, and more opportunity for, INNOVATION – than now!

More than ever before my interest is in the innovation of ‘product’ not services

Over the past ten years I’ve learned a lot:

Despite the emergence of a ‘success formula’ for entrepreneurship, accurately predicting which ventures will succeed is still irritatingly elusive

At school I failed and retook English Language O-level at least five times (possibly six, we lost count). I’ve learned to never let earlier deficiencies determine my destiny

I’ve aged. And I’ve changed – for the better I hope

I’ve shifted my approach from one centred on ‘passion’, to one centred on ‘compassion’ – there is a massive difference (which is a topic for a post in its own right)

The posts that were most liked and read include:

The MPA

The Four D’s of Leadership Excellence

The Best Career Advice I Ever Had

And the posts that celebrated the lives of Arch Bishop Desmond Tutu and Her Majesty the Queen

I want to especially thank everyone that has positively responded to my posts and kindly commented, liked, and shared with their networks.

My biggest thanks go unreservedly to Mrs D without whose insight and inspiration this blog would not be complete. I regard Jules as co-author having contributed enormously to the richness of the content and disproportionally to its intelligence. Jules, thank you for your enormous patience, wisdom, expertise, and guidance. Jules, apologies that this is another of the ‘over-stuffed-cushions’.

Special commendation to Maddy (my youngest daughter) who took and edited many of the photos.

What next?

Never say never. I’m not going to stop blogging immediately, but I am going to stop my religious adherence to publishing every month, and move instead to publishing when I feel like it – when I feel it’s relevant or that I’ve found something that I think is important to share

I’m going to focus less on publishing blog posts and focus more on the task of translating all the content that I’ve accumulated into a coherent narrative for a book

I still have whole chapters of content rough-drafted in my head which I walk around with constantly - I’m keen to exorcise those thoughts and put these ‘missing’ chapters down on paper

I hope the blog has been helpful. I hope the blog has accelerated other peoples’ thinking. I hope to have added-value.

Enough said. For now anyway.

Thank you.

Loads of love,

Part 1: Thoughts for mentors: Read time: approx. 3 mins and 27 seconds, ish.

I often get requests from people asking how they can become more involved with start-ups. Also, requests for advice on how to become a Non-Exec’ Director (NED). These requests are driven by a genuine desire to ‘give-back’ and a genuine enthusiasm to help founders and their ventures to succeed.

And that’s a good thing because, without exception, I’ve yet to meet a venture whose success was not directly contributed to by external NEDs and advisors, no matter how talented the founders may be. And that’s important if founders want to accelerate their business.

The reality is that whilst starting a business can be tricky - scaling-up is much more difficult than starting-up.

As a founder and business leader, when you are in “the thick of the forest, it can be especially difficult to see the wood from the trees”.

Therefore, getting a helicopter view from an external advisor / Non-Executive Director can make all the difference between success and failure in business.

That’s why I encourage entrepreneurs and Executive business leaders to seek external input by recruiting seasoned Non-Executive Directors – and to set-up expert Advisory Boards.

Business problems are democratic – they seem to affect all business equally no matter what industry they operate in.

However, there are definite points in the scale-up journey when businesses commonly get STUCK. Usually the specific challenges and obstacles I see are correlated directly to the number of employees – for example, the distinct challenges that happen when companies hit c. 30 to 35 full time employees (FTE).

Founders need to be open minded about where best to source great advice. My guidance is, look for someone who is a few months ahead of you on their entrepreneurial/leadership journey/quest. This experience and foresight is usually way more valuable than industry specific knowledge. If you are about to hire your 30th employee, find a fellow founder who recruited their 30th FTE the previous year.

But there is a big difference between sharing wisdom based on actual lived experience versus telling people what to do.

Mentors add the most value when they deliver foresight based on the real-world hard-knocks and celebrations earned through years of actually doing business.Crucially, the most powerful advice is delivered best by asking questions (sometimes the dumber the better).

As an active investor, NED and a mentor, I take great care to avoid telling people what to do because, even if you believe that your advice is right, it is vitally important for mentors to take note that:

You cannot guarantee that the recipient heard correctly what you said.

Even if they did hear what you said, you cannot influence how they interpret it.

Even if they heard you correctly and interpreted what you said as you intended, you have no control over the quality of their execution.

Even if they execute your advice well, you have no command over how the competition will react.

And so on.

That’s at least four major factors about which the advisor has no control.

It does not matter how well intended advisor recommendations may be, advisors have very little influence over outcomes.

Perhaps more important, advisors don’t suffer the consequences of their advice to the same extent as Executives either.

Aspiring mentors should give more thought and consideration to the consequences of their interventions.

What if in-fact things do not go well?  What recourse does the entrepreneur have?  Could / should the entrepreneur be within their rights to sue the advisor to recoup their losses?

My experience is that advisors rarely consider the potential liability of their advice. And when they do, they find the prospect of mentoring far less compelling (however well intended their recommendations may be).

In my experience the best advisors:

impart wisdom in a way that helps founders and leaders to make informed decisions

they provide foresight (not hindsight)

they evidence their thoughts with relevant case-studies / past experience

good mentors ask questions rather than offering solutions / recommendations

they take care not to undermine the mentee’s confidence

they make sure that the mentee is clear that decisions are theirs to make (and that they made them)

Sometimes when people tell me about their enthusiasm to support ventures, actually what I hear is a desire to tell entrepreneurs/people what to do. For people that are keen to tell other people what to do, my recommendation is, find an alternative pastime and/or profession that satisfies that need.

Remember, whether you are formally Non-Exec Director or informally a coach/mentor – the clue is in the job title: “non-executing”. It is not your job to do your mentee’s job.

Part 2: Thoughts for founders: Read time: approx. 1 min and 38 seconds, ish.

Advice is a two-way street.  Not only should mentors take care in how they impart advice, but equally mentees should also consider when to listen. When seeking external advice, my recommendations to founders are:

Note that if your venture is pioneering a new invention, a new innovation or new technology, then perhaps there is no precedent for the challenges and obstacles that you face.

Precedent implies conformity with convention and incumbency. If your intent is to disrupt the status-quo, following the established ‘normal’ is unlikely to deliver that outcome.

Know also that entrepreneurial success is often achieved by uncompromising people that have an unconventional and non-conformist approach to a situation or opportunity.

Take care to leverage the advantages of a beginners’ mind.

Know that extraordinary results often require extraordinary interventions.  That following the average path is likely to only achieve average results.

Be prepared to make mistakes and to learn from them, fast.

Worry less about making the right choices and decisions. Worry more about how to recover faster from the decisions that you make.

Avoid relying on hope. Intervention is way more reliable than wishful thinking.  

Listen to external advisors that help improve the quality of your decision making when determining what your best shot is.

Resist the temptation to delegate difficult decisions – advisors should not decide for you.

Where possible use a ‘no regrets strategy’ – envision yourself in the future looking back on the decision you are making now and work out which option represents the least regret (not necessarily the least risk) – and ask your advisors / mentors / Non-Executive Directors for their perspective on that.

NB. Please note: Being ‘uncompromising’ and ‘unconventional’ should not be confused as permission to behave like an asshole.

When considering who you want to recruit as a mentor – my recommendation is: aim high. Don’t be frightened to reach-out to super-stars – what’s the worst that could happen – you never know, you might be pleasantly surprised by what they suggest.

My final thought is: think of business mentoring like food - like all forms of nourishment, metaphorically speaking:

take care to eat a balanced diet;

don’t over-eat;

check the ‘best-before’ date – make sure it’s not past it’s ‘sell-by-date’ – if in-doubt, rely on the sniff test (avoid anything that smells off);

eat at sensible times of the day;

always read the label (avoid artificial ingredients – and check the provenance):

consume all things in moderation;

mind your manners (be grateful, even if you don’t like the taste);

don’t talk whilst eating;

and consume as much variety and diversity as possible;

go to bed hungry.

Remember, some foods are more richly nutritious than others. Choose your mentors wisely – good input can make all the difference.

Part 3: Thoughts for both mentors and mentees: Read time: approx. 1 min and 21 seconds, ish.

One of my mantras is: Great leaders don’t tell people what to do. And so it may sound contradictory, but advisors should not duck answering straight questions. But they should take care to answer direct questions with relevant examples based on experience that demonstrate the context, the consequences, and the likely outcomes – which is very different to answering with a recommendation “What you need to do is . . .”.  As an advisor your job is to enrich decision making, not to decide on your mentee’s behalf.

Both mentors and mentees BEWARE:  Advisors have the luxury of the ‘helicopter view’. It is very easy for both mentor and mentee to mistakenly confuse the benefit of that elevated perspective for actual genius.  In the words of Liam Black, it is always worth remembering: “You are not the Messiah”.  I have seen first-hand the negative consequence of when that goes wrong. Supposed genius can create dependency, intoxication and addiction that is stronger than any drug and just as toxic and destructive.

If you are an entrepreneur and/or leader I encourage you to find good mentors, advisors, and Non-Executive Directors – they have the potential to accelerate your progress exponentially.

Read time: approx. 6 mins and 8 seconds, ish.

I am often asked my opinion on the difference between entrepreneurship and innovation. For me, it’s not semantic. Simply put, my belief is:

Innovation is about invention.

Entrepreneurship is about commercialisation.

There is a huge difference. Equally, there is a huge area of overlap and intersection.

I’ve also been asked whether I regard myself as either an ‘innovator’ or an ‘entrepreneur’. I have never thought of myself as either.

My first career – my early passion – was marketing. I’ve always seen myself as an agent for mass adoption.

My passion is the mass adoption of new technologies that deliver a positive impact to people, businesses, and the planet. What’s exciting is, I’m not alone.

During my career as a marketeer in the UK, I’m proud to have contributed to the mass-adoption of products and services a few times over, across a spectrum of brands, businesses, and ventures – I’ll write about those examples as case-studies when I translate these blog posts into a book (which I’ll start compiling later this year).

The term ‘mass-adoption’ is a relative term. What I mean by it is, to reach the maximum audience relevant to your product/service/sector/ambition. Some products are universally relevant – others are niche.

That last point, ambition, is perhaps the most important. If you are a fitness instructor, it is perfectly fine, acceptable, applaudable [even] to only want to recruit X number of customers. You don’t have to be as prolific and globally successful as Joe Wicks who serves hundreds of thousands of customers internationally, (Joe is one of the most talented entrepreneurs that I’ve ever had the privilege to meet).

My previous post captured my assertion that “Build it and they won’t come” – an appeal for innovators and entrepreneurs to avoid the illusion (delusion) that simply creating a product will manifest demand.

Inconveniently, building demand is invariably more difficult than building product. In venturing I’m keen for the application of effort to be more correlated to those challenges proportionately - for entrepreneurs to prioritise ‘demand-development’ over ‘product-development’. In my experience, success [and survival] depends on it – and that’s why I am so passionate about this topic.

Regarding mass-adoption - the problem is that rational logic does not work. We all know we should eat well, drink more water, and exercise more often. And yet, very few of us do.

The following examples are imperfect, but, if rational logic prevailed then the consumption of organic food should be much higher; we’d cumulatively eat less meat; and adoption of electric vehicles would be faster.

I am aware of two scientific studies that explore the failure of rational logic to affect positive changes in consumer behaviour. Propositions such as Saving Time; Saving Money; Saving the Planet – have very little (if any) impact, no matter how well they are communicated.  What the research concluded is that when uptake is dependent on behavioural change, the most powerful proposition that affects and accelerates adoption is evidencing to people that their peers are already doing it, [‘it’ being whatever the proposition happens to be].

I especially like the research study exploring how best to encourage domestic recycling, where communication leaflets that tested a variety of messages, (eg. saving the planet; saving money etc etc) failed to generate much of a response. But what did affect change was not only “this is what everyone else is doing” but specifically, placing the recycling containers on the pavement outside participants’ houses thereby broadcasting participation and conformity. There are other equivalent academic studies – one recently about switching off air-conditioning to save the planet; save money etc. which evidenced the same outcomes/findings.

No-one wants to be the one letting the side down. No-one wants to be humiliated – and not doing what others do represents a risk of leaving oneself open to criticism, possibly ridicule. Fear is a powerful motivator.

My assertion is that there is a positive force that is significantly more powerful than fear – and that is: the human compulsion to conform.

Humans are hardwired to mimic, to conform, to blend-in, to commune. This compulsion is hardwired in our NDA, in our genetics, our traditions, and our culture. It is involuntary, automatic, and subconscious. It is tribal, protectionist, and survivalist.

I believe that conformity is an animal instinct, and it is why humans have regional accents and local dialects – the purpose of which is not only to ‘belong’ it is also to disarm, to pacify, to unite, to literally broadcast: ‘I am one of you – I am like you – I am part of your community – I will preserve and contribute to our community’.

Mass adoption is often misunderstood and misdiagnosed. Comments such as “a million people can’t be wrong” is a legitimate rationale – it’s about trust. But my assertion is that whilst trust is important, trust is not contagious. My belief is that fundamentally, humans like to do what other humans do – and when leveraged entrepreneurially, conformity is highly infectious and especially viral.

Successful entrepreneurs have a talent for creating movements and creating momentum.

The repeat behaviour common to successful entrepreneurs is that they create the perception that ‘every-one-is-doing-it’ even before their product is fully available.

And that is why social media is so important. The practical application of social media is that the more remarkable you make your product, the more people will be compelled to remark upon it to their friends and family. Word-of-mouth was always the most powerful form of marketing. What social media provides is the opportunity to amplify and broadcast advocacy thereby multiplying its power exponentially. Social media is a tool that small businesses can leverage to their advantage, disproportionately.

Practical steps that innovators and entrepreneurs can take to affect mass-adoption – not an exhaustive list, but simply a handful of examples to help bring the opportunity to life:

MVP / Beta:  Get your product in peoples’ hands. Make your MVP digital – don’t just get ‘units’ into users’ hands, get those units producing data. Publish the insights and findings generated by that data.

Advocacy:  Get notable people to advocate your product and provide testimonies. ‘Notable’ can be either:

Celebrities

Industry experts

Unremarkable people that look and sound just like your everyday users

Network:  Engage existing customer interest groups: fanbases; forums; user-groups; charities; associations; trade-bodies – give them something to talk about – give them something that they are compelled to share with their members / peers.

Corporates:  Which corporates provide a fast-track to millions of people that you want to reach? What would compel those corporates to engage with you; to support you; to advocate your product/service? How can you contact directly the ‘Director of Innovation’ in those corporates specifically?

Build Communities:  The Most Powerful Action: if there is an absence of any consumer group connected to your cause / mission / purpose / ambition – what can you do to create and convene one and become a force for change in that space? Even if your product is B2B, what is the ultimate consumer group that has a vested interest in the success of your venture and is aligned with its purpose?

Vitally – how can you do all the above simultaneously?

To reiterate my previous recommendations:

Don’t pursue business development consecutively. Pursue interventions that drive mass adoption concurrently.

Plan for success. Don’t wait to discover how an initiative turns-out. Ask yourself, what will you do if it works well? Do that now.

Don’t focus on the money. Initial volumes are likely to be small and therefore the economics will be challenging. Investors are compelled by potential, not by the current metrics. Short-term revenue is invariably a red-herring. Instead of focusing on short-term revenue, focus instead on the identification of pathways to mass-adoption.

Read time: approx. 5 mins and 29 seconds, ish.

Ah – the infamous Devonshire ‘hand-of-no’. The hand gesture that makes clear ‘that’s not going to happen’ and that the time for talking is over.

Business is usually a negotiation.

A common mistake made during negotiation is a misguided belief that rational logic will prevail.

If only business was that easy – entrepreneurialism would be so much more simple, so much less brutal.

It takes extraordinary willpower to go out and sell, rather than invest effort in activity you believe will help win the negotiation. This is perhaps singularly the biggest issue that catches-out more founders than any other.

The repeat behaviour common to successful entrepreneurs is how quickly they concentrate on ‘sales’ as the highest order priority.

More important, successful entrepreneurs dismiss all the legitimate reasons why selling would be so much easier, more abundant, less risky, more convenient, sometime further along in the journey.

Successful entrepreneurs dismiss the “I need a logo” – “I need a website” – “I need a better website” as conditions on which selling depends.

As an active angel investor, the moment that I hear ‘sales’ being referred to as a future event, all my alarm bells start ringing.

If you want to accelerate the growth of your business and avoid expensive mistakes, the best source of foresight is asking entrepreneurs who are ahead of you in their quest – irrespective of how different your businesses might be.

When entrepreneurs are asked, ‘Do you have any regrets?’ and ‘If you were to do it all again, what would you do differently?’ the most common answers that I hear is a wish that they had started selling sooner – a regret that they could have pursued sales more aggressively earlier in the journey.

And that is exactly why when talking to new founders, the misconception which concerns me most is a belief that “build it and they will come” (ie. the notion that selling is dependent on having a finished product).

This idea represents three potential mistakes:

A belief that sales cannot commence until a tangible product has finished being built

That prospects need to see and feel tangible product in order to buy it

That simply by virtue of a product (and/or service) existing, that people will be compelled to buy it

I cannot say this strongly enough: The repeat behaviour common to successful entrepreneurs is that they do not rely on tangible product (or polished product) in order to sell.

What do they rely on instead?

The repeat behaviour common to successful entrepreneurs is that they: 

Convert every conversation into a sale.

End every conversation with – “and how many units can I send you?”.

Worry less about pricing and economics in the early days and accept that profit/margin will be tight initially. The economics can be optimised at scale.

Are especially clear, definitive, and articulate about what problem their product / service / company solves.

Build product that is remarkable – that people are compelled to remark about it to their friends, family, and network (even if it doesn’t totally deliver against its promise completely in the ‘beta’ versions).

Get product out the door – and that the product is data-centric and quickly yields and harvests ‘data’ – data that is converted into meaningful insights that are intriguing, engaging, and compelling. They generate new data and new narratives not seen or heard before.

Entrepreneurs are often obsessed. Sometimes their success depends on it. Which is why it is easy to forgive entrepreneurs for trying to ‘convert’ everyone with their passion.

But that passion is invariably misplaced when it translates into requests for funding in order to build product before sales have been won.

Sadly, increasingly, the evidence is the exact opposite. Increasingly my concern is:

“Build it and they WON’T come.”

I have participated in the investment of more than 300 ventures (and served as cofounder to a fair few). Without exception, I’ve yet to work with a venture that managed to achieve mass-adoption without considerable effort, intervention, and cost.

My appeal to founders is simple:

Just because you find a proposition compelling, that does not mean that everyone else will share your passion and/or your taste

However logical and rational you believe your solution to be, does not mean that that logic and rational thinking will be persuasive

If purchasing your product/service requires people to change their behaviour be aware that often people will do almost anything to avoid making that change

Saving money; saving time; saving the planet, are not necessarily enough to compel people to buy – however overwhelmingly logical and rational you believe that to be

Which may sound incredibly negative, pessimistic, and gloomy. In-fact the challenge of selling; the challenge of driving adoption of your product is singularly the most important obstacle that needs to be overcome in order to achieve business success. Not only is that challenge exciting, I believe it is surmountable.

Designing and building product is never simple or trivial. However, in my experience, building product is not as challenging as building demand. Which is why I advocate prioritising the building a sales pipeline ahead of building the product.

And that’s why MVP (Minimal Viable Product) is such a vitally important stage of the validating customer demand.

Build the cheapest, quickest version of your product in order to be able to establish and test routes to market.

I often hear entrepreneurs worry about failing to meet customer expectations. Concern about over-promising and under-delivering. About causing disappointment and the potential to burn bridges. I hear founders say: “we only have one shot at this”. There’s a common belief amongst first-time innovators that products have to be perfect before shipped. I think all of those concerns are entirely legitimate.

In response to these challenges, the solution is not to build the perfect product. Success is not dependent on perfection, success is managing expectations appropriately and winning your customers forgiveness and winning their advocacy.

My advice to founders is:

Don’t think of business development as a sequential process

Anticipate success

What that means in practical terms is, if you are running a trial, anticipate that it will end well and be ready for the next steps based on that assumption, rather than waiting for the result of the trial before deciding what to do next. Pursue business development concurrently, not sequentially.

Don’t rely on building product to unlock sales.

Products rarely make sales. Humans do.

Read time: approx. 3 mins and 43 seconds, ish.

For many entrepreneurs, the common goal is the ambition to one day sell the business and in so doing materially and financially evidence that they built something of worth. For founders, successfully exiting their venture is the understandable hallelujah moment when they cash-in all the blood sweat and tears invested – hopefully for a healthy return.

Through two decades work in capital finance, including both corporate and angel investing, I can testify that the valuation of businesses is a dark art.

Simplistically a company is only ever worth what someone else is prepared to pay for it.

Equally simplistically, companies are usually valued as a multiple of either their revenue or their profit (EBITDA) – depending on the sector, age, and financial maturity of the company.

When owner-managers decide that they want to sell their business, unsurprisingly they have a keen interest to choose when the best time is to do so. Timing is a common cause of anxiety.

What elevates that anxiety exponentially is that we are living through an era of unprecedented uncertainty. Two decades of economic roller-coastering, with waves of economic crisis of historic magnitude; followed by a global pandemic; and then the conflict in Ukraine. Stock markets are volatile, public confidence is flakey, share prices are low and rumors are speculating the inevitability of ‘a crash’.

Despite all the background noise, negativity, and pessimism, clearly the best time to sell a business is when more than one buyer wants to buy it.

Competing demand drives-up price. Even in a recession.

Competing supply has the opposite effect.

Which goes to demonstrate that the fundamentals of economics really are quite simple. The balance of supply and demand – overlayed with the buyer’s prerogative to ‘do nothing’.

However, in capital finance, good money is always in search of a good home.

And whether or not the economy is growing or in recession, in almost all circumstances, a buyer can nearly always be found if the seller is prepared to compromise enough. But that’s not a situation that any founder would choose for themselves or their business. Distressed sales rarely end happily.

Context is a powerful thing. No-one has the privilege of operating in a commercial/economic vacuum. Market confidence definitely has an impact on quantity of potential buyers, their appetite to negotiate, and the availability of funds.

If a founder does not need to sell, then the obvious advice is for them to wait for happier economic times. However, whilst liquidity tends to reflect market sentiment, it is worth noting that if sellers choose to wait for a buoyant economy, they risk:

the uncertainty of how long that will take;

how well their business will fare in the interim;

and how many comparable businesses they may be competing with when they eventually do go to market.

I’ve had the misfortune to experience three severe recessions: in the 90’s (the post-80’s boom); the early 2000’s (the post-dot-com boom); and the 2008/9 financial crash (the post Lehman crisis).

My experience of previous recessions is that those who invest in the hard times tend to fair better when the economy improves.

My view is, what matters most is not so much the state of the market, but the state of the business.

Even in a recession, there will be mid-tier and large corporates, and private equity funds, that will be hungry to acquire both revenue and/or innovation.

And so, if your business is able to demonstrably evidence either market leading innovation and/or clear year-on-year sustainable financial growth, there could well be material interest in the acquisition of your venture despite the state of the market.

And that’s important because we do not know when the economy will stabilize (or whether the current state is the new normal). We don’t yet know what the true cost of the Covid pandemic will be.

Those compelled to wait for happier times – risk waiting a long time.

My hunch is that UK demand has been forcibly constrained for an inordinately long period of time. The UK has experienced recession; ‘austerity’; Brexit; Covid. At each turn my expectation was that demand would be liberated – that spending would be unblocked. And yet, just before momentum has a chance to re-establish, there comes yet another obstacle. The UK economy keeps getting constipated.

I am lucky I get to meet some remarkable entrepreneurs who are driving amazing businesses. Putting a price on such companies is difficult at the best of times. Which is why it is especially helpful to get insights from someone who helps buy and sell more businesses than anyone I’ve ever met: friend and colleague, James Chapman Andrews at Alantra offered the following insight: “The super-resilience of revenue stability adds a premium to the valuation of a business”.

Specifically, if you can maintain revenue and profitability during the extraordinary time of pandemic disruption, your business will potentially be even more compelling to acquirers and investors post-Covid.

The end of the multiple crises that we have faced is inevitable, if frustratingly difficult to predict.

Read time: approx. 2 mins and 8 seconds, ish.

The conflict in Ukraine recently passed its three-month anniversary. I find it astonishing that Ukraine has proven to be so resilient in such extreme and brutal circumstances. My thoughts are with those directly affected by this terrible conflict.

In business, momentum is everything. I suspect momentum is equally important in war.

Context is a powerful thing. It is hard to imagine a context more affecting and impactful than war.

Extreme circumstances enable people to do remarkable things.

In Neuro Linguistic Programming (#NLP) there is a thought that the use of war references and battle metaphors in business are inappropriate. Old expressions like: “Man the trenches”; “Last man standing”; “Pull the pin”; “Land-grab”; “Gone nuclear” no longer belong in the office and are no-longer appropriate to the sensitivities of a compassionate workforce.

That may be so. But increasingly, my perspective is focused on driving transformational change, and the absolute urgency that those changes are required. Whether that is to arrest the global issue of an ageing society; or climate change. Whether it is the explosion [sorry] of diabetes; or obesity; or the systemic need to overhaul the connectivity infrastructure on which we now depend.

New technology represents an exciting opportunity for progress. But what I know is, innovation and transformative change are hard. Brutally so.

In my experience, the successful pursuit of innovation requires a warlike attitude in order to win.

Like war, innovation creates economy – but without all the collateral damage and loss of life. Innovation has the potential to create jobs and reduce costs.

Through the technological and scientific innovation that I see via my work, we are tantalisingly close to real breakthroughs in game-changing tech that have the potential to enrich our lives.

To bring that to life with some real-world practical examples from the frontline of innovation, three ventures that are driving a positive transformational impact in the world of occupational health:

www.howz.com

www.celsiushealth.com

www.gripable.co

These ventures are pioneering digital technology that doesn’t make occupational health experts redundant, quite the opposite, this tech helps clinicians to become bionic and has the potential to transform patient outcomes too.

I believe that is worth fighting for. That’s why I am so proud to have invested in all three of these remarkable companies.

I am passionate about the mass-adoption of new technology that helps people and business to flourish. What I know is, it is difficult.

The sad truth is transformational change rarely happens through passive intervention. The greater the need, and/or the more urgent the need, the more it needs to be fought for. The correlation is direct.

Perhaps that’s why people that have the courage to innovate want to know that their colleagues:

“Are in the arena with them”

“Are by your side”

“Have got your back”

“Will help you to deliver your Best Shot”

Fighting talk indeed.

Combat experience can leave indelible marks. That’s why care and compassion are so important, especially so in the workplace. Prior experience from previous tours of duty can be invaluable in reducing casualties and accelerating progress. But sadly, sometimes that value-add gets lost in translation, miscommunication, cultural-misalignment, and misperception. It is important to acknowledge that the authentic intent of veterans is for you to avoid stepping on landmines sometimes only visible to their hardened eyes.

If we are to conquer the globally significant challenges that humanity now faces, we need to collaborate; we need to unite; we need to entrepreneur like our lives depend on it.

Entrepreneurs are activists.

Read time: approx. 2 mins and 49 seconds, ish.

Russia’s aggressive invasion of Ukraine is rapidly becoming as momentous in human history as any previous event in Russia’s and Europe’s history. As significant as World War 2.

We live in fear of the very real danger that this unwanted conflict could escalate still further.

I’m convinced that the issue is not Russia. Or Russians. The problem is the lack of democracy in Russia.

Democracies are far from perfect. But my assertion is, in democracies what you get are differences of opinion. Differences that should be embraced, possibly even celebrated.

In dictatorships what you get are enemies. Dictators will do anything to maintain their regimes and sustain their wealth and power.

As a commentator on business and leadership, my thought is that this observation is as true in the running of companies as it is apparent to the running of countries.

I’ve had the misfortune to work with people who are perfectly comfortable (even enjoy) declaring their ‘hatred’ of colleagues. People who make enemies. My belief is that a mindset capable of making enemies has no place in the modern workplace.

The positive news is, contemporary leadership excellence is now totally committed to diversity and inclusion. It is not a nice-to-have option – inclusivity is fundamental to optimum strategic thinking and execution. What inclusivity means in practical application is the acceptance that people might go about things differently to the way you do, and that this has the potential to exponentially improve outcomes when this virtue is harvested appropriately.

Entrepreneurial enthusiasm is often mischaracterised as ‘hot-headedness’, uncompromising, and excessively passionate. Sometimes those stereotypes are legitimate. Business success demands huge effort, which is difficult to invest in something that you don’t care about. But in addition to conviction and persistence, the repeat behaviour common to successful entrepreneurs is their openness to try unusual ways to achieve desired outcomes. Ways that are not native to incumbents too entrenched to change – ways that are commonly resisted and even ridiculed.

Innovation is hard. It is especially difficult to pursue change democratically. I’m not advocating that businesses should be run as democracies that are overly dependent on majority consensus and over participation in deliberation and referendums. A topical risk within current corporates is the institutionalisation of ‘group-think’. 

But what this international conflict highlights more than ever before is the need of:

Transparency

Authenticity

Compassion

Listening

Which all seem in short supply to aggressors seemingly intent on persecuting a bloody campaign in the Ukraine.

I’ve always argued that success in business is relatively easy to materialise if you’re prepared to be an uncompromising b*stard. What’s challenging is delivering business success with kindness and compassion. This is where you’ll find your advantage and your competitive edge. Resorting to aggression, confrontation, humiliation are clear indicators of leadership malfunction.

In business, even the competition is not your ‘enemy’. Few companies can build and grow a sector on their own – multiple players bring with them multiple forces of investment to persuade buyers to buy. Your job is not to annihilate rivals – your job is to provide a service that is better than your customer’s alternative options. For businesses ambitious to scale-up, the real enemy is your customers’ prerogative to do nothing.

Out-witting your enemy requires extraordinary performance, resilience, and determination. As such, enemies can be a force of motivation and energy that drive performance. The good news is, we don’t need actual real enemies – it is perfectly possible to create the performance benefit with our imagination if we stop and think. It’s best not to make enemies.

Embracing collaboration, diversity, and inclusivity is good business.