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Smart startup

May 13, 2019

Smart has a nice ring to it. It’s lovely to say something or someone is smart. Yet, it can mean so many different things.

But not all smarts are the same. A company building smart devices does not automatically mean that the people behind the things are necessarily smart or acting smartly in the long term.

Our devices are getting ever more connected. They are the ultimate spying equipment that Q of Bond movies could have only dreamed of.

Sloppy coding can breach your firewall and privacy for years without most of the users ever knowing it. The device is smart enough to leak your information but not clever enough to stop it independently.

A smart company needs to think closely what they actually want to achieve. Some of the things are easier to change yet others are more one-way streets with a lot of hardship involved to reverse the course.

The forming years of a startup define many of the things that are hard to change later. They may seem like minor issues or non-priorities when so many big pressing matters call for immediate action.

Yet, the silent ones can be either fatal or at least heavy hitting issues later on. My top favourites are business model, culture and people.

Companies’ business models say cloud and clear what they are really doing. It’s hard to deny something that is a necessity for your revenues. Google and Facebook are examples where you, the user, are the product. They are information hungry for a very good reason. It’s the money making machine.

In comparison, Apple is primarily profiting from selling devices and hence there is more credible claim of aligning with user privacy and letting users be in control of their information.

The tide is changing from centralised top-down hierarchy of data collection to user powered and controlled decentralised model. People are getting wearier of data breaches and the leaks can have dire consequences due to cheaper data mining, mass handling and surveillance.

Culture is something that happens anyways. You have a culture whether you consciously are aware of it or not. Often, the first people in a company define by their own actions and values the way things are done in the future. Culture eats strategy for breakfast. Once something is a habit it’s difficult to change it.

Nice statements have very little relevance if your performance goals and required results conflict them. Incentive structures are powerful tools that shape your culture, for better or worse.

This leads to the most crucial component: the people. Values and integrity define the outcomes. If you have a culture where long-term business relationship with clients is of upmost important it shows in the user experience and quality of the products. And all these start and end with your people.

If they are not comfortable with your business model or culture it will show. What does it tell about your company and your products if the very people who are building them are distancing themselves by stating that they are not actually using them to keep their credibility? I’m just working there. It’s just my job.

Building trust takes time but losing it can be done in seconds.

Showing love to the customer is good way to earn their respect and loyalty. A good quality product oozes trust and care. It is a delight to discover new features in products that you have already used for years beforehand. It tells someone has paid attention to details and thought about you, the end-user.

Being smart involves the why question in the beginning. Why are we doing what we are doing? This links to the other important question: Who’s really our customer (that pays our bills)? It may not be the one actually using our products.

Ambiguity on these two points tends to lead to confusion and conflicts later on. This is the business model issue: It’s hard to serve two masters.

Your business model and culture attract certain type of people. And they define the quality of your offerings and customer experience. This is where the short term meets the long-term, and your profits as well.

There are so many ways to be smart. What is yours?

The article was published on Grow with Tech magazine’s Spring ’19 issue (pdf).

The Obvious

June 4, 2018

Since you’re most certainly already doing most if not all of the following I advise you not to read further and save your precious hustling time.

For the humble, curious or just plain bored I lay out the basics of entrepreneurial startup building.

The big WHY. No, it’s not HOW as in describing at great length all the bells and whistles of what your product is doing or HOW it’s working. No one couldn’t be bother, so not interesting without a context. You need to understand first the relevance.

WHY is the ultimately most important prime mover of any convincing or sales. It’s the context, motivation and reason. Often if not always, it is something far and beyond the solution or the company in question. It provides the purpose.

Think about Apple vs. Microsoft or Nokia. It’s philosophy, lifestyle, and attitude versus superior product specs. A rational approach versus feelings, heart against the mind.

After winning with the WHY the rest is just assurance and closing the deal by convincing that you can deliver and the thing actually works and does as promised. This is details, and building trust.

Who brings you the MONEY? No, it’s not investors. They bring a little death every time you raise a round and dilute your shareholding. Making fuzz about raising a round is like having a wake or sequence of obituaries for the entrepreneur. You are literally dancing on your investment returns’ grave.

CASH. So bourgeois and plain vanilla yet it is the ultimate unicorn. Dividends are sexy, despite the fame for valuations in billions. Free cash flow gives you the freedom and leverage. More importantly it directs you to do the things that matter: customer experience, a commitment to deliver and close, and most importantly it validates what you’re doing. Someone is willing to pay for what you’re offering. A true success is paying customers.

PEOPLE. Who makes your success? A-players. A mediocre idea can win in the market place any day with a brilliant team. Switch the parts and the formula does not have the same outcome. Probably the most undervalued success factor is picking the right people. It requires patience, courage, and tough calls. Often, this lessons is learned only when your title is serial entrepreneur. Just think about it. Again. And again.

HUMBLE. Everybody is figuring out things while they go along. The difference is how they appear to the others. Empty barrels make the most noise. Asking for advice, being open to ideas and criticism, knowing oneself and taking responsibility are forms of true bravery. Weak signals, agility and a low cost structure enable fast moves and adjustments when needed. Mission driven approach to your venture ensures the steady course during a hardship, peer pressure or weak moments.
It’s all very simple and obvious, really. Just do it.

The article was published on Grow with Tech magazine’s Spring ’18 issue (pdf).

To the moon and back in Crypto, AR&VR, and for real in space

December 20, 2017

Being prepared does not make you less surprised nor stop the second-guessing. This is the feeling of cryptocurrency mania in 2017.

Fluctuating prices are nothing new for long time Bitcoin followers but to follow closely how a fringe technology catches larger audiences and traction is always an experience. In 2017, this happened in multiple fronts.

The ICO rush has similarities with dot com era behaviour. Slap a dot com on top of anything and you’re good to go for higher valuations. Now, token is the miracle term that makes everything magical.

Yet, technology is a neutral enabler and it seldom makes a business case itself. Crypto technologies are a revolution and disruption but like in the Internet era they need to be developed from the foundations upwards. We are still at the early 90’s of Internet in Crypto.

This time the disruptive forces are already knocking on doors of traditional centralised institutions and industries such as banking, finance and government services where a trusted central party has been a crucial component for service provisioning.

Decentralisation of trust and direct peer-to-peer services will start to democratise highly protected and often profitable sectors. Expect a backlash and protective measures that are trying to linger in the status quo.

Raising concerns of ICO oversight and regulation are just the beginning. 2017 was an example of fast movers taking advantage of seemingly non-regulated space. The window was open only a few months before a tide of copycats and sheer scammers started to overflow the market.

Who trusted online shopping in the 90’s? Not many, but the shock will wear out soon and we will start to see the new amazons, paypals and the like. When you focus on the capabilities and the overall potential it is hard not to get excited. Yet, building something robust, user-friendly and catchy for a wider audience takes patience and many trials on the way.

2017 was also a year of deflating hype. AI bots and voice interfaces were expected to become mainstream in consumer services and products. Alexa was the clear winner that has been becoming more ubiquitous. Still most of the intelligent service bots are still very specialised and narrow in focus.

A slight disappointment was also how Apple treated Augmented Reality in its 10th anniversary iPhone release. The big news was that Google and Apple have their respective AR kits available for larger mass adoption now. In the next years, we will start to see a rapid deployment of these technologies in everyday applications and use cases. Pokemon Go was a good pilot case that was ahead of the curve.

The writing is on the wall for 2018. From a regulatory perspective Revised Payment Service Directive (PSD2) will finally open up banking to third party services. Banks have been preparing for the change but now is the time for prime time.

New apps will start to compete for consumers’ attention with their agile and user friendly pricing models. Incumbents will try to stay relevant and avoid the role of having large overheads and regulatory burdens without much appeal from the users. A utility provider label is not a compliment.

Another EU imposed change is General Data Protection Regulation (GDPR) that will put a serious focus on data privacy. Most of all, this will have implications how user data needs to be approached and handled in a holistic perspective.

This alone is a major shift in perception but when it is combined with the crypto revolution things will shift to a higher gear. We start to see applications and solutions where all user-generated data is controlled by the end user herself. Software is separated from the content and user is in the total access control.

Decentralisation of Internet away from current godzilla silos such as Facebook and Google will spring new innovations and approaches to privacy. Consumer awareness towards their private data will escalate in steps but not necessarily in sync with new alternative solutions.

Large data breaches such as Equifax underline the fact that no single centralised party, private or public, can be trusted with your crucial data. Misuse or data breach are unavoidable eventually. You’re vulnerable if you don’t have control over your data that has consequences on your wellbeing.

Smart homes, IoT, listening devices such as your phone, alexas and security cameras are just the beginning. When your service provider has oversight of everything you consume in AR or VR environment we are stepping into a new level of data privacy.

Space is the new Internet stated Jezz Bezos. Commercialisation of the low orbit starts to catch the awareness of wider masses. The elite status of space is coming down fast with more frequent and affordable logistics that SpaceX, Blue Origin and others are commercialising.

Most of the new space activity has direct impact on our lives here on Earth. New applications, solutions and opportunities are opening up with cheaper start up costs. Spacepreneurs will enter the startup lexicon soon.

This article was written for the Winter ’18 issue of GrowWithTech.

Manager as a Service for growth companies

October 26, 2014

Startups are always in the look for new talent to join their mission to conquer the world. Interim managers are the latest secret weapon for some.

What to do when you are starting operations in a new country? Recruit a local country manager, get outside help or do it yourself by relocating?

Sometimes the answer is to do all those selectively and in a sequence. Entering a new market requires getting to know the local habits, business environment and customer segments. All this takes time, effort and money.

The manager as a service hack is to hire an experienced local interim manager to get your operations started. From day one you have access to local business networks, clients, funding sources and an expedited route to have your operations up and running.

Interim managers are seasoned business people who love to get things done. They focus on results. They attitude towards work is all startup – no-nonsense and every minute counts. Interim managers can be deployed for a specific role or time period.

Where to find them? The best way is to ask around. High valued and sought after people are often busy working. Some work together with accelerators or other programs. Investors, lawyers and other entrepreneurs are good sources to get tips. Usually interim managers have local associations or LinkedIn groups. The Finnish group was formed in August. There are also interim agencies that can find you suitable candidates.

How to pick the right candidate? First, it’s important you have defined a clear objective and deliverables for the assignment. What are the things you want to achieve? It’s good to consider hiring an interim as an investment. There needs to be a proper return on investment. And as a project it has a beginning and end. Sounds simple but in a startup environment one thing tends to lead into other and the focus and needs shift along the way.

After defining the scope it’s time to find suitable candidates that have the required expertise and references. You don’t want to pay for someone to do things for the first time. Getting results from the day one is the key here. That’s what you’re paying for. Make sure you interview some of the interim’s previous clients. Are they happy and would they select the same person again?

Interims don’t work in an isolated environment. They need your organisation’s support and resources. It’s paramount that they have the backing of the decision makers behind them. Also, shoestring budget does not mean that everything should be done without costs. A realistic budget for the project is a definite must. Magic tricks are just that – tricks. Interims are no rainmakers even though they can do wonders with their expertise and experience.

What’s the catch? Interims are your hired hands. They are fine for a defined project or objective. You don’t want to use them for a long term or permanent role. It’s just too expensive. Flexibility and experience cost but sometimes that’s an investment worth making. The opportunity cost can be worse either in lost time, opportunities or money. Lean startups are about trials and errors. It’s better to pivot quickly but it’s even better to avoid some pitfalls and false turns in the first place.

Photo: Flickr/erikaow