Its been a pretty good weekend. The sun shone. I watched our resident vixen and her six cubs gambolling and scrapping on the front lawn. A game of golf with good friends and a decent score. A long run in perfect peace on Fenwick moor.
These are times to reflect and think about ambitions for the future. A lot of positive thoughts spun through my head. One topic which stuck is advice. I loved Vicky Brock’s Entrepreneur Agony Aunt podcast on the subject of Telling Good Advice from Bad. Leah Hutcheon is one of my favourite people and its a question which nags at me.
Almost every week I listen to an entrepreneur describing some bad advice they have received on the journey. And I have spent most of my career giving advice. So I feel I should be able to help. Its a difficult thing to get right and I have no doubt I have pointed plenty of people in the wrong direction over the years. (I was going to write there that its a tough job but in all honesty, its not.)
So how do you tell good advice from bad? There is no answer to the question. Thinking about the people and the context will help you decide.
The "bad" guys
Its kind of obvious that bad advice comes from bad people. If you are dealing with someone you don’t trust then ignore their advice. In fact, don’t deal with that person full stop.
Most times its not that easy. I see four situations where bad motives lead to bad advice.
The "good" guys
With the exception of the rare first category, these are not bad people. But advice with the wrong context or approach does not help your business. So how do you spot the people who are right to help you?
Here in Scotland at least the good news is that love is all around you. Scotland is a great place to live and work so we have more than our fair share of smart, experienced business people. And I know there are plenty happy to help anyone on the entrepreneurial journey.
But advice is a two way street. Finding a good advisor is half the solution. You also need to ask the right questions and listen to the answers the right way.
The right kind of advice
First you need to seek the right kind of advice. Kind of obvious - sorry. There are two basic types. Specific advice from an expert on a defined topic. And mentoring, problem sharing advice that helps you make better decisions.
At the risk of sounding like the script for a four box model, there are also two types of advisors out there. Some are old guys like me that have been around and giving advice for a long time. The other type are successful entrepreneurs. There is no doubt that people who have been there and done it, often more than once, have a unique and valuable perspective.
Its quite easy to define a specific professional who fills a gap in your knowledge and can suggest how to proceed. Lawyers, accountants and so on are in the phone book. Take a little care to look into specific experience and pick someone relevant.
Mentoring is sharing
Finding a mentor is much harder. Mentoring is a personal relationship. For me it is also a two way deal. I learn at least as much from mentoring someone as they can learn from me.
This is why I talk about being lucky at this stage of my career. Working with people like Leah Hutcheon, the Mallzee founders and Paul Reid is a great learning experience.
Don't forget the insiders
In addition to the two types, there are two others that too many people ignore. The best advisor just might be your customer. Or it could be someone on your team. Your customers and your team are closer to your business than any advisor.
The Chairman's View
Advice is only advice. Its an opinion on the best course of action not an instruction manual. You still need to make the decisions. There are three top tips to keep in mind:
I have never been to Davos. The closest I got was running into our senior partner in the queue for coffee at London City Airport at 5.45am one morning. He was on his way to the Swiss junket looking as miserable as everyone else at that hour.
Nonetheless I do have a Davos story. 6 or 7 years ago, I helped organise a discussion between one of the world’s largest mobile operators and the retail division of a global bank. My firm advised both companies and we wanted to explore ideas on how they might co-operate in mobile banking.
The upshot was a small dinner in a room in the bank’s London offices. I brought along a regional sales director from the mobile operator. The global head of retail from the bank attended along with 3 or 4 hangers on.
Everyone there was a committed leader, smart and engaged. We threw around a lot of ideas and it is fair to say the senior guy from the bank was blown away with the outcome. This nearly didn’t happen. Andy - the mobile guy - started talking about their coolest new ideas. The bank did not respond well to this kind of cutting edge stuff. But Andy was a good listener and dialled it back to more routine solutions. Some of these were already being used by the bank’s competitors and that really got the conversation flying.
As a firm we did a little work developing ideas for this potential partnership but nothing ever went anywhere. There were two reasons. First the bank had a rigid and structured procurement process backed up by a strong and influential procurement division. This meant that technology suppliers were not allowed to talk to bank executives. They could only respond to requests for proposal generated by a business need.
This sounds logical but the practical impact is not so good. The most senior person Andy was allowed to talk to after that dinner was four levels down the organisation chart from the regional head of procurement. A role that was another 5 levels below the senior individual who had attended the dinner. No amount of friendly chat could change this.
The enthusiasm for the whole concept finally died at Davos. Andy had reported back after the dinner. So his Group CEO was briefed on the opportunities generated. The bank guy on the other hand had kept it to the people in the room. He did not want anyone in the organisation getting excited until the time was right.
The two Group CEOs met at Davos (as these people do). The MNO guy mentioned this and his bank counterpart knew nothing. This was exactly the kind of uncontrolled situation the bank guy was trying to avoid. Disaster.
Stop trying to sell software the way your Dad did
If you are still here, you are no doubt wondering what this story from my previous corporate life has to do with the world of early stage B2B SaaS. Its simple. The individual concerned was not a bad person and the bank is not a bad business. Yet a great opportunity was killed before it had a chance to breathe.
The opportunity was mashed by two things that are common in the corporate world. Both have been created in response to an endless stream of enterprise sales people. Sent to corporations by big traditional software companies.
The Chairman's View
In B2B SaaS you are asking your customers to take on real business change - a major risk. Plus at early stage they are also taking a smaller risk on the credibility of your business. Driving that proposition straight into the jaws of the procurement/ don’t tell my boss monster is a fool’s errand.
B2B SaaS can and will change the world. Realising this potential means changing the biggest and best companies. Unless you offer something different they will never notice you are there.
Your product and its benefits already meet this test. Why try to push them through the same tired sales channel? With the same commission led suit and tie sales people? Its time to differentiate enterprise sales as well as enterprise SaaS:
The only job of a chairman is to make you a better CEO. My goal for 2018 is to do that job better. I’ll start with one suggestion. When you set your goals, don’t forget your own personal growth.
Simple questions can be deceptive. At a dinner the before Christmas, an entrepreneur I know asked me: “What does a good Chairman do?” I gave a clumsy, vague answer. I find my own brain frustrating about stuff like this sometimes. I have a great memory for facts and I am pretty good at seeing through problems. But I struggle to recall fundamentals when asked on occasions.
On my way home of course, the clear answer returned to me. So Rebecca (CEO of Pick Protection) the simple answer to your question is this: Your Chairman’s only job is to make you a better CEO.
The Economy of Nature
I spent most of my career working in a culture where personal development was embedded deep in the DNA. Every year you had to show that you had made improvements in your skills and capabilities. And you had to have a plan to keep on with personal growth for the next year. Without these things there was no career progression.
This was an example of single mechanism that determined the whole culture of the business. People over complicate culture. It is subtle and nuanced but there are always a small number of rules and practices that regulate the whole system. I saw a similar effect when I was in Estonia last year.
Your business is a little ecosystem of its own. So I look at it as having its own Serengeti Rules. A simple change can regulate the behaviour and health of the whole system. In nature this is a predator. In business, its about how you value your team and how you treat your customers.
The triangle demands three complementary elements
I lived a culture governed by personal development for 29 years. I found some simple frameworks to make it practical and real. This gives me a basis to assess core skills. Analytic skills, management skills and so on. It also covers so called soft skills.
“Soft” in this context just means hard to measure. None of these things are fluffy or spongy in any way. They are the essence of the toughest part of your job - leadership. And there are no KPIs. So much for numbers!
I think about three dimensions.
How do you build relationships and influence key people outside the organisation? This is a wide range. Negotiating skills, social and business communication, listening and pitching. It includes maybe the vaguest thing of all. The shape shifting concept of impact or gravitas.
Can you find and attract the right people? Motivate them to perform. Bind them together into a team which is more than the sum of the parts. And help them realise their potential inside your business and beyond.
This sounds tough and it is. If you get it right you will help talented people achieve amazing things. Intercom wrote about this in the opportunities of growth recently. I would go much further. Growing with your company is the only reason good people will join you. Plus, I have always found this to be the most fun part of leadership.
I always circle back to the start. How have you grown? What have you learnt? What will you achieve next? In the short term this is about leaders growing with the business. Its also a long term thing. Being an entrepreneur can feel all consuming. Yet it is only a stage. Don’t lose sight of your duty to yourself. Who knows where the next 30 years will take you.
The Chairman's Charter
My only job is to make you a better CEO. There are no numbers or metrics or KPIs that track how well its going. You need to bring innovation, passion and commitment to make this work. All the fundamentals of a great entrepreneur in other words.
All I have to offer is experience. I have a simple test to check if I am using it well. The CEOs I work with should be capable of achieving more than I ever could.
Watching people grow into great leaders is the most fun I can have. Feel free to challenge me when I am not doing my best to make this real.
"Leadership and learning are indispensable to each other."
John F Kennedy, Undelivered remarks for the Dallas Trade Mart, 22 November 1963
The UK Government is trying to tackle a problem that has no solution. No not Brexit, productivity. Hiding behind royal engagements and outrageous tweets over the past few weeks have been a couple of huge announcements. The Chancellor’s budget speech and our new Industrial Strategy. Both focused on the question of productivity.
UK productivity has been sluggish to terrible for as long as I can remember. The latest official data tells us UK productivity per hour is 15% less than the G7 average. And growing at a slower rate.
Government does not have the answers
The Chancellor calls these sort of numbers “economicky.” In my mind they are the essence of life. They are also the main reason I am so passionate about the tech sector.
Successive governments have shown that policy biases and ill judged, small scale subsidies are not the solution. Its not about shiny new ideas - Grand Challenges in the words of the industrial strategy. Government needs to focus on infrastructure, regulation and education. Leave productivity to entrepreneurs and consumers.
Technology is an integral part of the productivity solution. At the leading edge this means research in advanced areas like AI. Medium term these are essential but in the short term they will have little impact. By definition cutting edge ideas apply only to a small segment of businesses. That results in a limited impact on productivity.
The right agenda for B2B SaaS
The big prize will come from established businesses making better use of technologies that are already proven. Luckily, this is also what B2B SaaS needs to happen to drive the next wave of growth.
At a high level its simple. Either:
In both cases your customer’s productivity improves. If everyone does this then the productivity of the whole economy improves.
You may oversee that ittle in the UK budget or the industrial strategy will help achieve this goal. Correct. Don’t waste too much time looking for examples elsewhere either.
This will only happen if entrepreneurs and leaders make it happen.
Everyone I know in a SaaS company is working to make this happen. And every business is different facing its own challenges and opportunities. You need to find the right way for your company.
5 principles to help your SaaS and your customer
You will not go far wrong by following these 5 principles:
The Chairman's view
If this is too much, remember the first item on the list. Help your customers deliver business change. Without this, you will not have a sustainable or scaleable business. And your SaaS product will make no difference in the world.
Its like a meta variation of the old saying: execution, execution, execution. Government will not solve the productivity puzzle. We will. So let’s get on with it. Wherever you live, your country needs you!
This post is about psychology. Inspired by one specific facet of motivation and behaviour that is often overlooked. Why does winning drive some people to achieve extraordinary things and leave others cold?
Let me start with a health warning. I am not a professional psychologist. I have never studied psychology or had any training in the discipline. You could say that I am not even a rank amateur in the field.
I do know one thing about psychology. It underpins everything in economics and business.
If you want to understand better. Let me make two recommendations.
For a great business perspective on psychology then listen to a world class amateur in Charlie Munger (on human misjudgement).
Or get the professional view from Thinking Fast and Slow by the Nobel Prize winner Daniel Kahneman.
(Note that Professor Kahneman is a psychologist yet his Nobel is in Economics.)
All I have to offer is observations of real people in all kinds of business situations over the years. Unsystematic and anecdotal evidence if you like. Much of it gathered through business activities that revolved around winning and losing. Or at least were characterised in those terms.
I have enjoyed many great, even elaborate social occasions in celebration of wins. I have listened to ten times as many speeches or presentations bemoaning the fact that we don’t celebrate victory enough. And sat around countless tables analysing and agonising over every detail of a campaign.
In every case, the definition of victory was a business deal. Often a big sale to an important customer. But mergers, acquisitions, new hires, promotions, partnerships, procurement agreements are also seen in the same terms.
Don’t get me wrong, I enjoyed the parties (although I am getting a bit old for these things now).
Yet something always felt a little hollow. I didn’t feel the same rush that bubbled and popped in many of my friends and colleagues. It took me many years to recognise the reasons. For me, winning the deal or making the sale is the beginning not the end.
Selling versus doing
I was drawn into consulting because I like to help businesses become better. Since I found my way into SaaS and startups, I have kept to the same focus. Grow faster, be more efficient, develop new strategies, change culture, improve margins, enter new markets and many more. That’s how I have fun.
Making the sale or closing the funding round are means to an end. They give me the right to start doing what I love.
Sales or deals are a hard and painful process. Fuelled by adrenaline, myth and lots of late nights. The energy generates excitement. But the result is no more than another box ticked. There has been no value for the client. Nothing has been billed.
Closing the deal is the start of something for me. The process of creating value. The pressure to deliver. The sense of achievement. All begin after the win.
I don’t feel stress in a deal. Only when the overture ends and the show begins. Delivering what I have promised is the greatest pressure. Seeing the benefits realised offers the only real job satisfaction.
My world is very much services. Its an environment where the customer only pays after the job is done. The service provider is only as good as the last experience. Perhaps this means securing an engagement can never really be a win.
Yet I think the same principle holds true for product. If I pick your product off the shelf and pay for it, the sale is made. Is it good for your business if I hate it as soon as I open the box. No. Again the process of value and the customer relationship only begins after the sale.
Leopard or Impala - What makes the SaaS ecosystem?
I believe there are two basic types here. But the traditional type A/ type B comparison doesn’t work. So lets call them Leopards and Impalas instead. (I have also heard ducks and eagles but that was from an idiot so lets move on.)
I choose Leopards as the symbol not Lions because Lions are mangy, smelly, lazy scavengers in the wild.
Leopards are the hunters. Silent killers who stalk their prey and live for the hunt. The leopard is a beautiful, natural machine. Sounds pretty cool huh?
Then we have the antelope. I choose Impala to represent this crowd. It is the most common species in the Kruger Park and they are also sleek and stunning. Plus they are about the biggest antelope a leopard would take on as prey.
They gather in herds to defend against predators. When one moves, they all follow. The group takes precedence over the individual every time. The alternative is death.
By now its clear which type you want to be. And this type of image is common and widely accepted as a motivational tool. Hunters and farmers. Predators and Prey, Winners and losers. You can hear that motivational speaker revving up as I write.
But stop a moment and consider this. Impala graze the grasses, bush and trees. They keep the savannah clear and pristine. And they thrive and grow in huge numbers.
There are 2,000 leopards in the Kruger National Park……and 160,000 Impala.
So which species is more successful? Which model of evolution would you rather follow? Maybe that superficial impact is not so convincing.
I loved Yuval Noah Harari’s book Sapiens. One of the ideas that struck me most came early in the story of human evolution. Around 10,000 years ago our ancestors made the move from hunter/ gatherers to farmers. We developed reliable crops and gained control over a handful of animal species.
Its natural to talk about domesticating cattle and grains. But did man domesticate wheat or wheat domesticate man?
The Chairman's View
Its obvious that leopard and impala are both essential to the eco system. I think the same is true in business. Those who see a sale as victory are needed to drive through the obstacles and pain of the sales process. This is especially true for Enterprise SaaS.
Those who are only happy when their customer sees value are also essential. That’s how great products get built and excellent service is delivered.
A great business has a good mix of these two types. Its worth taking the time to recognise them and make sure you are developing that type of diversity in your team.
Both types are equally vital to creating value in your business. Too often I see rewards skewed towards the leopards. Sales are seen as some kind of rainmakers. A special breed who deserve super rewards.
This is a mistake which is embedded deep in business culture. The myth lasts long and spreads far. But sales do not generate value. They may close the deal. Success is a product of every element of the team.
Remember this when thinking about incentives and rewards. And think about it when you are building a business. Building a sustainable business requires the whole team.
Complaints about meetings are one of the hardy perennials of management. Alongside email, dealing with millennials and the stupidity of the C suite, you will hear this in along any corridor and around every water cooler.
Begin at the beginning
If you have a startup mindset, you may be tempted to think this is a real world problem and therefore a big opportunity. Spend any time on the subject and you will quickly learn that there is a solution out there already. Effective meetings are based on a well understood formula.
I could make this longer but you get the picture. And this is not new. Everyone in every business knows this.
Occasionally a new wrinkle appears. For example, Scrum or lean software development often relies on short, sharp meetings where everyone stands up.
This sounds new and smart. Yet the UK Privy Council has been meeting standing since time immemorial. (Note: This is literally true. Time immemorial is defined in English Law as being any time before 6 July 1189 and the Privy Council definitely predates this. Gotta love those lawyers!)
And I have never heard anyone hold this body out as an exemplar of efficient and decisive business meetings.
The hidden value of meetings
The truth is no-one can stick to these rigid rules. Meetings have a social value over and above their business purpose. Colleagues work in different departments or may be scattered across buildings and locations. In field work like sales, meetings may be the only time some team members return to base.
Even in small close knit teams live software developers, the daily or weekly meeting serves a purpose. Some things are just better shared with a group than in a one to one discussion. And Shakespeare’s Antony could never “cry havoc and let slip the dogs of war” over a coffee in the forum. It needs an audience, a meeting.
People like getting together and chewing the fat. No amount of logic and discipline over minutes and actions and agendas will ever change this. Human behaviour will eat any rationalist meeting approach for breakfast. Along with the biscuits and the bacon rolls if they are provided.
The other end of the telescope
I should apologise at this point. I will get to the other end of the telescope but my real point about meetings is that we should start in the middle. The “other end” would be working backwards from the actions to determine how meetings should be run. Tempting but no more likely to overcome human psychology than the traditional approach.
Instead my starting point is another common attitude. How often have you heard something like “I’m not sure if [insert name of meeting] is a waste of time but I always try to go along because its fun.”
Malcolm in the middle
That quote is the definition of a successful meeting. The attendees are motivated to attend. They enjoy being there. And they want to participate. Given these preconditions you can achieve anything.
So instead of starting with the purpose and agenda, go to the middle and build out.
How can you make this a meeting that people will want to join?
Bring together a group of people that like each other or feel they can learn from each other or have some other clear motivation to be in the same room together. Choose a time slot and venue that suits people’s diaries. If possible give them some additional motivation like free doughnuts or a couple of beers.
Once people want to be there you can think about what you want to achieve. This could be big decisions. But it might also be smaller things. For example, the core of the meeting might be to brief the team on a new strategy. The outcome you want is for each attendee to take away a couple of personal actions to make it work.
There is no need to have a hard line on actions and accountability. In this situation, that will feel like bullying not management.
And you want to people to enjoy the meeting. Otherwise, all that effort is a one off. They will come to your first meeting but not the next one.
Agendas are not required by Law
The final element is to think about what is needed in advance.
Most people like to know why the meeting is taking place. So a clear purpose is a minimum requirement. A simple statement like “Monthly Team Meeting” can be enough. No need to get evangelical.
For many meetings that is all the pre-work you need. Regular meeting have a rhythm of their own and an agenda is rarely necessary. An agenda and material to read in advance may be required. But there is no rule that says there must be an agenda.
A lot depends on timing. In a startup or a deal situation things can move fast. Advance notice can be tough to organise. I can remember, during a takeover bid, holding a Board meeting at midnight and scheduling the next one for 4 am.
Set agendas can be a straitjacket rather than a control. Especially in a startup. This week’s big issue can be superseded by the time you sit down to have the meeting. Any preparation should be set in the context of what is required for a good meeting. Not just a wish list of what you would like to talk about.
The Chairman's View
So there you have it. An alternative formula for good meetings. Plan how you can make the meeting good fun and add social value. Then set out what you can achieve - be realistic. And finally do the minimum needed in advance. No agenda without a reason.
One other thing. Most of this article is written in the context of the person drive ing the meeting. I have sort of assumed the reader is in a leadership position. CEO or founder for example.
And there is no doubt good meetings require good leadership.
Everyone has a role to play in this. Even if you are just a small cog in the business wheel. Come along to the meeting with the right attitude. Enjoy the discussion and work to make it fun for others. Make a note of your own actions and get on with it. Don’t wait for the minutes.
Leadership is about you, not about job titles.
This particular learning has been front of mind for me during the past week. And things right v the right thing turns out to be a good way of shining a light on some of the more frustrating moments.
Are we making it easy for startups to do business?
I like to focus on helping entrepreneurs and companies. There are plenty of other smart people and organisation trying to help in the same way. You would think that making life easy for founders would be important. And on the face of it, Scotland and the UK should be a good place to achieve that.
There are a handful of key measures Economists like to turn to when explaining the relative economic performance of different countries. A favourite is the Ease of Doing Business index compiled by the World Bank. The UK ranks 7th in this list and 16th for the specific category “Starting a Business.”
Yet it doesn’t seem to work out that way. So often a promising startup pitch becomes entangled in a web of process and bureaucracy
Or tangling SaaS in a web of complexity?
One recent experience sticks in my mind. The entrepreneur had a strong, simple idea in a high value life sciences niche. Life sciences is not my speciality but this lady was the best entrepreneur in the sector that I have seen in the last 4 years. It was all clear and compelling. Questions were answered with confidence and little bit of brio.
Then we got to IP.
And found what felt like dozens of unanswered and unanswerable queries. Many of which lay in then hands of an organisation that I know is committed to helping companies like this get started. Yet the founder was left unable to get to any clear answer. Never mind a simple one.
And there are plenty of other areas where the ecosystem designed to help has enmeshed startups in complexity they don’t need.
On the very same evening I heard about challenges related to complex shareholder arrangements for a company that has not product yet and has not started trading. Questions surrounding the best way of ensuring that a startup qualifies for EIS or SEIS, the two excellent tax incentives that exist in the UK. And another entrepreneur worn down by the time and effort required to go through the process for a pitching competition designed to give startups free money.
This happens all the time.
Sometimes its the founding team that initiates the problem. In other cases, the system designed to help is just too process heavy. But every time there is more people like me and other senior mentors could be doing to help.
Matters of shareholder law and contracts, tax incentives, distribution of public money and IP are all important to get right. Risk and complexity do exist in these arrangements. The way this reality is approached is wrong.
Complex solutions are offered and pursued. Or worse, the situation is allowed to go unresolved. Professionals and others weigh the options while the startup tries to move forward. In time, the weight of this uncertainty becomes crushing. A huge obstacle to investment. And a real drain on the time and energy the founding team needs to get things moving.
The Chairman's View
Too often (and I include myself in this) experienced professionals hear the problem and switch straight into doing things right mode.
We all need a big dose of doing the right thing mentality.
In the shareholder example above, there was a lawyer in the room. The entrepreneur explained what he wanted to achieve with his co-founder. Rather than taking him at his word, she challenged the underlying thinking. Take an alternative approach and get a simpler, faster, cleaner solution.
Great work Julie.
Advisors need to look for the simple way through. Resolve obstacles and move forward. Or to be clearer, get shit done. There is nothing worse than confusion and uncertainty. Not knowing your IP rights or shareholder structure kills any investment and the business with it.
So the job of an advisor is to make it easy for entrepreneurs to focus on innovation getting in front of customers. That is doing the right thing.
Competitive pitching drives a whole lot of bullshit.
Its become one of the centrepieces of every startup ecosystem. If you want to build a reputation, grab some PR, grow your network, win cash prizes and generally just fit in, you need to pitch to win.
Founders are groomed by a whole coterie of experts and supporters. How to hone your message? How to pitch your startup? Get yourself investment ready? Business is framed as a race and only the fastest and strongest are winners.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.