Lessons Learnt at the Bord Bia Innovation Workshop I attended

 

Last Thursday I attended a great workshop moderated by PA Consulting and hosted by Bord Bia at their Vantage Programme day.

I learnt a lot from the PA Consulting talk, slides attached for the interest of all small businesses that want to get their “innovation function” functioning.

Bord Bia Vantage Innovation Programme Workshop Dublin 18 Jan 2012 (1)

Identifying the sweet spot for the services you offer is essential to growth in early stage businesses, here’s my guide…

Below is an extract from our former sales manual which I wrote for my business. Up until I wrote this document we had been trying to accept every incoming sales request. As a result was that we were un-differentiated, stretched and our internal processes were not optimal. After adopting the “Sweet Spot” approach we become much more focussed.

Identifying the sweet spot for our offerings

This is the process whereby we identify the type of customers we want to do business with in this business area. By doing this we can save a lot of time on sales quotes that are not going to turn into orders. It also means that we do not take on clients that are going to be more trouble than they are worth.

Guidelines for our ideal client:

• We want to target clients with a minimum spend of E2,000 per annum.
• We want clients that typically have some technical ability(i.e. will not be a massive drain on support)
• We want clients that need us to perform some managed services for them(which are higher profit)
• Client is in urgent need of the solution (i.e. we want to avoid spending a lot of time on clients that are only browsing or looking to screw their current provider at the renewal date with a cheaper quote).
• We want to make a minimum gross profit of 50% on all services provided to the client. In some cases we will accept lower than this where we are not involved in much of the work(e.g. backups by Serve Centric).

What industry sectors would our ideal client typically be in:

• Web developers
• Media/advertising/PR
• Software development
• Web services providers
• Clients that understand the quality proposition (i.e. that you get what you pay for) and are prepared to pay for a quality, reliable service.

What sectors would not represent our ideal client at this time

• Slow decision makers/long sales processes such as government departments.
• Low tech companies with no internal IT function.
• Single server colo clients with low bandwidth usage and no scope for selling additional services.

 Devising the list of core versus custom features in dealing with sales quotes

 It is commonly accepted that when clients are considering a purchase they indulge their fantasies and dream up everything they would ideally like in the new service. However the client’s customer requirements list will rarely take account of how practical it is or how much it will cost to provide to them.

Therefore when assessing incoming sales quote requests it is important that we have a clear idea in our mind of which of the list of requirements are on our core list of supported items (e.g. hard drives, server space, bandwidth, power) and which are custom (load balancing, RAID 5,JSP, custom software installs etc). Having a core list enables us to turn around sales quotes faster and helps us standardise our offering.

What we need to do is draw up a list of Core Features that all clients would typically benefit from. Any requests that deviate from the Core Features list are then considered Custom Features and quoted for accordingly.

When deciding how to proceed in the case where the client has requested Custom Features the following will decided on whether we provide it or not:

1. Is the client prepared to pay a commercial price for it?

2. How many clients are seeking the same feature? If a lot of customers are requesting the same feature we may need to consider moving it to from the Custom list onto the Core List and pricing it accordingly.

What Venture Capitalists look for when investing

At the Sligo Seed Capital event I was helping run the Info2Innovate workshops with Enterprise Europe Network and had the opportunity to listen to presentations by Michael Murphy (NCB), Shay Garvey (Delta) and Conor O’Connor (Enterprise Equity).

Their presentations were extremely helpful to anyone seeking to raise money from venture capitalists.

Shay Garvey Delta Seed Capital Fund October 11

Michael Murphy NCBVenturePresentationOctober2011

Conor O’Connor Enterprise Equity presentation-Sligo-5 Oct 2011

A strategic toolkit for designing and delivering a breakout innovation strategy

Professor Thomas C. Lawton talk at Queen’s Belfast entitled “Innovate for Advantage A strategic toolkit for designing and delivering a breakout strategy”

1 Innovate for advantage_InterTrade Ireland_June 2011

Decision making for SMEs/Start-ups with a Decision Matrix – getting the important ones right

Decision making under conditions of uncertainty is a daily task for an entrepreneur according to Michael Dell.

I was working with a group on my Masters with a start-up and we had each researched a potential route to market but had no easy way of quatifying which route should be the recommended one so I said let’s identify the key objective of this start-up and then list the factors that are relevant to that objective and assign each factor a mark out of 10 based on our best estimate from our research. This way we were able to arrive at a preferred route on a basis other than who shouted the loudest Here is the Decision Matrix I put together.

Route to Market Decision Matrix table – The row which refers to FIT is based on this model: http://eoinkcostello.wordpress.com/2011/10/01/startups-getting-the-right-fit/

I recommended this approach to one of my Mentees on the Enterprise Ireland Mentor Programme and he came up with a great decision matrix which he kindly let me reproduce here:

Startups – Getting the right FIT

Making decisions about your strategy as a start-up

According to Timmons and Spinelli (2009) the resources necessary to new venture creation include the entrepreneurial team, financial resources, outside people, legal and financial advisors, technology and patents. What their research has show is that on average the better fit there is between the components of Team, Resources and Opportunity the more likely it is that the venture will be successful.

Click here for an image of the Timmons model Timmons model of making the best choice of start-up formulation
Source http://www.amazon.com/New-Venture-Creation-Entrepreneurship-Century/dp/0073381551

Strategy for Small Businesses – Does it exist?

Great video and supporting materials for strategy for small businesses here:

http://www.smallbusinesscan.com/startup-centre/item/6-strategy.html

Startup Genome benchmarking tool turns entrepreneurship into a science

Great benchmarking tool that all startups should try out:

http://startupgenome.cc/pages/startup-genome-benchmark

Ranking of 8 EU start up accelerator programmes includes 3 Irish ones!

Nice to see 3 Irish programmes in there, here are the top 8 in order.

1. Seedcamp UK
2. Startupbootcamp Spain / Tetuan Valley
3. Startupbootcamp Denmark
4. Springboard UK
5. Openfund Greece
6. NDCR Launchpad Ireland
7. Propeller Venture Accelerator Fund Ireland
8. Startupbootcamp Ireland

Source: http://techcocktail.com/top-8-european-startup-accelerators-and-incubators-ranked-seedcamp-and-startup-bootcamp-top-the-rankings-2011-06

For more analysis on the components of successful accelerator programmes see http://www.nesta.org.uk/areas_of_work/economic_growth/economic_programmes/assets/features/startup_factories

Planning your strategy, ensuring it is informed by those who will determine its success!

Stakeholder analysis is a key way of ensuring that you consult those parties that will have a key role in determining the success or otherwise of your nascent strategy. There is a very useful article (albeit in a different context) on identifying your stakeholders and categorising them which I found useful:

http://www.fao.org/Participation/tools/stakeholderanalysis.html