Category Archives: Management

The Art Of The Sale

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niro1This week I conducted a small experiment. I really want to play my part to reduce emissions, so I’m in the market for a plug-in hybrid electric vehicle (PHEV). I’ve also been doing a couple of papers at our local university for interest recently and have just completed a marketing course at Masters level. So I’m up to speed with marketing tactics and sneaky selling strategies. This is where the fun begins.

I headed into town to work my way around a few car sales yards – just to see how I would be treated as a potential customer. Here’s what I found.

1. KIA – The receptionist introduced me to a very young salesman who looked like he had better things to do. I asked if he could take me out for a short drive and introduce me to the vehicle I was interested in. No, that was not possible. But please sign this $5,000 waiver and feel free to take her out for a spin yourself. I asked a basic question about whether the vehicle had anti-skid. He said he needed to go check on this. Really? Aren’t you selling these vehicles? I was also informed there was a 6 month waiting list. Slightly bemused, I signed my life away. After a 2 minute familiarisation, he left me to it. 5/10

2. Subaru – Bubbly young lady waltzed up to me. Very positive attitude, but admits that Subaru do not offer what I seek and not likely to in the future (they do in the U.S.). Things got better though. She asked if I’d considered a Peugeot. I had not. Her colleague under the same roof looked after the franchise, so she kindly took me over and introduced me to him. 7/10

3. Peugeot – We had a good discussion about European vehicles and the sales chap mentioned that he would have a demonstrator vehicle arriving next month that would fit my needs. He gave me a business card and showed me where to find useful info on their website. At all times he showed an interest in the customer needs and was looking to find a solution for me. Not bad. 8/10

4. Hyundai – I currently drive a Hyundai. It has been a wonderful vehicle with minimal running costs. I also love that Hyundai is sponsoring the Pinnacle Programme that offers scholarship opportunities to high achieving students. The current television campaign is the best ad on tv in my humble opinion. I dearly want to love Hyundai – but they keep disappointing. At last year’s service, the car groomer conspired with a rude receptionist to turn the stereo volume to maximum, resulting in an ear blasting when I turned the key. Funny joke. So it was with some trepidation that I set foot on their car yard. I need not have worried. The salesman completely ignored me whilst having an animated discussion on his mobile phone. 1/10

My point is this. There was a time when sales people knew their products and they knew the art of converting leads into actual sales. As a customer, I want to feel valued and respected, no matter where I am in the pipeline. From walk-in to first sale to post-sale service. Sales people used to build lifelong relationships with customers who would often return for their next purchase. What went wrong? Attention deficit?

I’m not sure if this is a localised cultural problem, but service ethic no longer seems to be part of our business DNA here in New Zealand. I’ve lost count of the number of times I’ve walked into a shop or cafe this year where the young staff were either chatting amongst themselves or texting their friends on phones whilst completely ignoring customers. Since when has this ever been acceptable? It reflects badly on business owners who are failing to train teams in customer service and also failing to monitor performance. At a time when businesses are desperately trying to recover from sales lost during the pandemic – why are sellers failing at that most fundamental task called customer service?

Oh… and I still haven’t found my PHEV. Any suggestions?

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Stop The Grievance Virus

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covidqrThe number of pandemic “experts” seems to be growing by the day. Now with a former Prime Minister wading into the murk, it has opened the floodgates allowing a wave of discontent to infect the nation. But actively demonstrating a partnership approach with business could deliver better outcomes and bring some smart minds to bear on the gnarly problems that confront us.

In recent weeks a number of prominent New Zealanders have been expressing their impatience with the government’s approach to managing the pandemic crisis. Curiously the concern is not so much about the travails of extended lockdowns, but more to do with the impact of travel restrictions as a throttle on economic growth. Unsurprisingly, most of the complainants are absorbed with their own particular business predicaments. But rather than be labelled “whingers” (to their credit) some creative solutions have been proposed by them.

In 2020 our government urgently cobbled together an interim response to keep us safe. Controlling foreign arrivals, managing quarantine and rolling out the largest vaccination programme in our nation’s history have been huge, imperfect undertakings delivered under extraordinary and rapidly evolving circumstances. Without these initiatives, I am absolutely certain that several vulnerable members of my immediate family would not have made it through the last 18 months.

One only needs to look at the data from offshore to understand the dire situation we find ourselves in. But perhaps the most telling data point is that investing in snuffing out the virus does indeed result in a quicker and stronger economic rebound, at least in the medium term. Placing our trust in a benevolent State has paid off so far, but patience is waning as purveyors of a wide variety of grievances across the political spectrum become ever more vocal. So openly demonstrating a willingness to have business as part of the conversation would be reassuring to the public, whilst bringing a greater diversity of thinking to the top table. None of this should obviate the need to carefully balance social and economic considerations, of course.

Putting aside the fact that I find sports analogies rather tedious, some of the ideas for getting New Zealand business moving again have actually been good ones. We have a wealth of technical and management expertise in our business community and there are homemade solutions available for improving almost every aspect of the crisis response. I believe where the difficulty lies is that there is a public perception at least of a lack of engagement between government and business. That may not be entirely fair, but in politics perception matters.

Early in the crisis, the government appointed former Air New Zealand CEO Rob Fyfe as a liaison person between the government and business. That was a good move, but very little has been heard since. The Cabinet wisely considers advice from the pandemic technical advisory group who are respected clinicians and academics. But from time to time self appointed media darlings from scientific fields outside of epidemiology have an annoying habit of confusing the public by contradicting the actual expert viewpoints. So we have to be discerning about where we get information. Similarly we should not simply cave in to loud voices from the business sector who manage to get their views published.

Preserving life is paramount. But at present, it’s not clear what the exit strategy will be. There is a strong sense that the business community has not been fully enrolled as a partner in this process. I might add that this includes a wholesale failure to engage the talent sitting in our research institutions and technology incubators. What is clear however is that we will have no choice but to open up again in 2022, because the present approach is economically unsustainable in the long term. Elimination may already be nonviable and everyone (including business) need to deal with the reality of the new normal. The best piece of advice anyone can follow right now – get ready, get vaccinated!

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Finding The Happiness Particle

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happyRecently I had the great pleasure of being guest of honour at Startup Grind in Auckland. We had a very frank Q&A session about the many challenges facing startup entrepreneurs. Some of the discussion revolved around bootstrapping and growing globally. But we also devoted a lot of time to the emotional challenges faced by business founders, because I think this is a topic that we don’t hear enough about.

Entrepreneurship is a hugely demanding calling and few of us get through it entirely unscathed. Along with the daily dramas of driving sales, paying the bills and keeping your team on track, there is the pressing need to balance work and home life. This balance becomes especially difficult if you have young children at home. With the need to put in long hours when starting a business, having the support of your family is critical to entrepreneurial success. So you must engage loved ones in the process early and set some clear expectations.

Funding rounds, media recognition and rolling out the next big software release are exciting and wonderful things, but all of that is fleeting. Family and friends are ultimately what sustain us in the long term – not money, public accolades or brilliant software code. Participating and contributing positively in the community and building authentic familial, personal and professional relationships is infinitely more rewarding.

Creating a palatable work environment is also important. Holacratic workplaces is one controversial approach to addressing this. However, there remains ongoing (and valid) criticisms from within traditional schools of management about whether holacracy can ever succeed. But perhaps the real issue is how you actually define “success” in this context. Tech companies such as Twitter, Medium and Zappos are the most well known proponents of holacracy, within which customer and employee happiness also figures large in company reporting.

At iwantmyname we built a virtually enabled company around a flat structure and uniform remuneration across the company. We engrained an ethos of self-management across the organisation, bringing with it both freedoms and responsibilities. Weaving elements of holacracy into our work setting has been extremely challenging at times and there have certainly been missteps. Whilst very rewarding, it is still a work in progress.

The face of management has evolved very little in the last century within the corporate world, despite the fact that there has been a huge migration away from assembly lines to desk-bound work. But companies that are disrupting traditional business models and leading change have a special responsibility to illuminate the way forward. Finding a suitable balance between home life, personal freedom and the demands of your business is essential to finding the elusive happiness particle.

Paul Spence is a commentator, technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and a mentor with Startup Weekends. You can follow him on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Back In The Air

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FLT_nzle_smallBeing made redundant and then putting in the hard yards building a new online business put my lifelong love affair with aeroplanes on hold for a few years. But I’m very pleased to report that I’m finally back in the air again and loving it!

Aviation is something that gets into your blood, so it was hard to give it away. But sometimes life gets in the way and we have to refocus priorities for a period of time. It was sad to be grounded, because flying provided me with so much inspiration. Growing up with aviation has given me skills and knowledge that transferred over into to my business life such as practical approaches to leadership, planning and risk management. Being airborne also allows you freedoms and perspectives that many people never get to experience in their lifetimes.

So it was with a great sense of accomplishment that I recently flew some of the iwantmyname team to Lake Station aerodrome, near the township of Saint Arnaud on beautiful Lake Rotoiti in New Zealand’s South Island (see photo). A lot of good memories came flooding back – along with my self-confidence. I recalled many adventures from my younger days when I was a part-time commercial pilot, building flight hours on days off from my “real” job as an aviation meteorologist.

Consequently I’m enjoying greatly, the rather ominously named, Worst Place To Be A Pilot TV series. But for a quirk of fate, I very nearly headed down the same career track myself. It’s a steep learning curve for the young aviators introduced in the show, as they launch their flying careers in one of the most unforgiving environments on the planet. I’ve visited several of the featured locations in Indonesia and can totally relate to the situations illustrated.

That recent trip down south was the culmination of a lot of hard work and reminded me to confront challenges head on and never, ever give up on ambitions in life.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

How Long Is Your Runway?

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runwayAs a pilot I love it when I can draw aviation analogies and experiences into my entrepreneurial life. Perhaps the most obvious comparison involves the “runway” metaphor.

Most of us appreciate that the numbers we drafted in our start-up business plans are (let’s face it) rather meaningless. How can we possibly predict several years worth of revenue and cost data when we are still testing our initial business hypothesis? We simply cannot – but that doesn’t mean we shouldn’t have a plan. Cashflow distress is one of the leading causes of business failure. I’m not too proud to admit that I experienced a “near miss” myself in the past. Here are some tips to avoid a plane wreck.

The good news is that a cashflow crisis is entirely avoidable, if you have a robust planning and reporting process. Obviously, one of the goals of business is to generate a profit, but even profitable businesses are not immune from cashflow problems. If your bill payment cycle is out of sync with your revenue cycle, be wary. If you operate a web-based business, you have a particularly lumpy cashflow because your payment gateway provider may only pay you monthly initially. After a period of trading it is generally possible to negotiate weekly payments. Arrange this as soon as possible.

For other kinds of businesses, the chief risk is aged receivables. In other words slow payers. You aren’t a bank, so why should you loan precious operating capital to your customers?  Which is effectively what you are doing. There’s no law that says customers only pay on the 20th. For consulting or services work, I generally apply terms of 10 working days. Make sure you discuss the terms up front however, so everyone is on the same page. If they can’t be flexible – is that the kind of customer you want to be involved with?

Even if you don’t know exactly what your revenue is in advance, make an intelligent guess based on past experience. But be conservative. A cashflow forecast is quite possibly the one tool that will keep you out of the shit. Figure out your burn rate and balance this against cash on hand and income. That’s how you work out your runway. You should be able to forecast how much cash will remain at the end of each week, at least a few weeks ahead, preferably more. Initially this is tough, but it becomes easier as you collect more data.

Most businesses start out under-capitalised. Provided your business model is sound and revenue starts flowing early, this is not always a problem. But the reality is that under-capitalised businesses fail more often and grow more slowly due to less investment available for growth initiatives. If you are worried about excessive burn rate there are only two possible solutions. Sell more product or reduce outgoings accordingly. Unfortunately salaries are usually the first target, so be realistic with your early employees or co-founders and be clear about what the options are if cashflow drops.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

 

Talent Attraction Narrative Needed

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Creating an innovation economy has many challenges, not the least of which involves locating and securing skilled workers to help build and grow high technology ventures. There is little point in cultivating a tech start-up culture without the fundamental building blocks in place to fuel growth. Tech founders need to be proactive about building a team, as well as extolling the virtues of New Zealand as place to re-locate to.

Recently I received several requests for assistance from aspiring tech entrepreneurs eager to find a technical co-founder for their start-up project. Of course I was happy to help, but I needed to prompt for some basic web based information, so that I could share the opportunity. If you are a tech founder and you value an open approach to enrolling people into your project – please do yourself a favour and start telling your story online!

I probably reach around 4000+ individuals in the New Zealand tech scene directly through my social media channels, community groups and various blogs. My advice to start-up founders is to take a similar approach. Turn up to events, write blogs, tweet, organise and support stuff in your community, if you want to reach the kind of people who can help get your start-up going. I don’t just mean making a Facebook page or sending a Word document around to a few likely suspects. Get creative, if you want to surround yourself with creative people.

You might also need to look offshore. I’ve recently been involved in recruiting a new employee for iwantmyname and we ended up engaging a guy from San Francisco. When you look around at the most interesting emerging tech companies in New Zealand, at least half were established by skilled migrants. So there’s certainly no harm in attracting more people from abroad to deepen our talent pool; but remember we are competing with every other economy around Asia-Pacific. That’s why we need to get our brand values aligned in a regional sense, so we can be clear about what we have to offer.

We began some important work on this last year through the Inspire event with KEA and Grow Wellington. I’m looking forward to continuing that conversation in 2013.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Old Industries Are The Pits

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Railways, coal mining and industrial scale manufacturing were all economic activities that had their origins in the 19th Century. This week has not been a good one for anyone employed in those businesses in New Zealand, with widespread redundancies having been announced. The reasons for the collapse of these industries differ, but they share the historical hallmarks of “creative destruction” as expounded by Austrian economist Schumpeter.

Schumpeter was remarkably prescient for a man of his time. Drawing upon the political organisational theories of both Marx and Weber he concluded that innovation was the primary driver of economic change and that every industry was subject to a cycle of emergence, ascendance and decay. He controversially proposed that democracy could never truly empower the ordinary citizen because the electorate were largely ill-informed or ignorant. His predictions that social democratic governments would emerge in the West (rather than socialist revolution) have largely come true.

None of this will be of any consolation to our miners, factory workers and railway engineers. But it does underline precisely why we need to be moving up the value chain through exporting our knowledge rather than relying upon filthy, dangerous and extractive commodity based industries. After more than a decade talking about it, the penny has finally dropped and the government is now attempting to reorganise commercialisation of publicly funded research and has been increasing the investment in research, science and technology. Bullish talk by government ministers about opening up more public land for mineral exploitation also seems to have faded for the time being. That’s why I spend a lot of my time promoting and supporting knowledge based entrepreneurship and emerging technologies and industries.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

iWantMyName – The Next Steps

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A lot of people have been asking me recently how iWantMyName is going. The short answer is that it’s going great! We’ve been profitable this year and have had our heads down working hard laying both the technological and business organisational foundations that we need to grow. The challenge has been in making the transition from a small start-up business to a fully fledged, high growth technology story.

I certainly won’t say that it’s been easy. Everyone on the team has made sacrifices and we even had one or two nervous moments during the early days when we wondered if we would make budget and be able to pay salaries or rent. It comes with the territory. Being a start-up entrepreneur is like being on a mad roller coaster ride. It can be both thrilling and terrifying, especially if you are bootstrapping.

I meet a lot of budding web entrepreneurs and one of the first questions I ask them is, “are you ready for 2-3 years without a proper income?” It can easily take that long to carve out a niche for yourself and get meaningful revenues going. That’s without factoring in the vagaries of foreign exchange rates.

Notwithstanding the challenges ahead, we’ve got big plans for lots more features and fresh content on our New Zealand domain registrar site plus a major makeover of our search functionality across all four of our sites globally. There are also new and popular hosted services being posted almost weekly, so users can have smart one-click DNS set-up on their domains. We’re positioning iWantMyName as a next generation domain and DNS management service with an eye on future opportunities emerging with the new top level domains and internationalised domain names.

In addition, we’ve also started a new venture to advise young web entrepreneurs and share some of the experience we have gained on the journey so far. In fact we continue to be actively involved in supporting tech community events such as through Unlimited Potential, Startup Weekend, PXLJam and Perl Mongers to name but a few. We think it’s an exciting place to be as technology entrepreneurship continues to gain a greater profile as a career and lifestyle choice.

Keep in touch with us on Twitter @iWantMyNameNZ

Decoding Startup DNA

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A recent joint study by Silicon Valley VC firm Blackbox and academics from Stanford and Berkeley universities provides some interesting insights into what makes Internet start-ups successful. The project involved 650 web start-ups predominantly investor funded and based in Silicon Valley. However the findings also have relevance for tech firms outside of the Valley ecosystem.

“Entrepreneurship is strongest at the intersection of science and art”, say the research authors who set out to define the science of technology entrepreneurship more clearly through a better understanding of what drives entrepreneurial success. By codifying the features of high performing tech start-ups the researchers hope this success can be replicated elsewhere. The research findings naturally extend much of the methodology ingrained within the lean start-up movement; for example it was found that companies that pivoted once or twice did better than others in terms of both market growth and capital-raising.

The study identifies a typology of three major types of Internet start-ups based on the approaches to customer development and acquisition. It also describes a set of common milestones and stages that start-ups tend to have in common. Companies that skipped stages tended to do less well. But perhaps the most interesting finding was that start-ups with balanced teams of business and technical oriented founders achieved the most success overall and chose the right time to scale up after validating their markets.

The report can be downloaded for free.

Wild About Wellywood

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Just when we thought common sense had prevailed, the sneering face of Wellington Airport’s Australian born CEO appears in the media to inform us that the hideous and ill-conceived “Wellywood” sign will go ahead after all. Haven’t they got better things to spend their time on?

First it was the turd shaped international terminal, then they wanted to block off a public roadway, now the ridiculous “Wellywood” sign is back on the agenda. It’s clear that Wellington International Airport Limited (WIAL) have no interest in considering public opinion when it comes to their development plans. What is less clear is why 34% shareholder Wellington City Council is not strongly representing the public’s views at board level. Even Mayor Celia Wade Brown admits that the proposed sign is not a suitable reflection of the city.

WIAL management just don’t seem to get it. If you want to market a region as creative and fresh, why would you purloin an overused and derivative icon from an entirely different culture? Furthermore, why would you enflame the public with such a thoughtless and arrogant approach? The “Wellywood” sign concept is so tacky and poorly thought out it beggars belief from those of us who love and value Wellington’s beautiful seascape and are hugely proud of the achievements of all the digital creative industries across the city.

Majority WIAL owner Infratil is currently appealing to our national pride in a bid to encourage more customers to embrace their newly refreshed and wholly Kiwi owned fuel brand “Z”. Yet they seem oblivious to the conflict that is brewing with the airport’s proposal. “Wellywood” says nothing at all about Wellington, it’s not even funny and it certainly sends the wrong message about our ability to be creative. One can only hope that WIAL management will have a change of heart, for I fear a great many people will not take lightly to having their noses rubbed in it.