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Systematic Business Innovation for Startups
The document discusses the various inefficiencies that plague early-stage businesses, particularly tech startups, and argues that only focusing on product or service innovation is insufficient for sustainable growth. Instead, it emphasizes the need for systematic business innovation, which encompasses all aspects of business operations, from workflow processes to management structures. It provides a roadmap for entrepreneurs to identify their business's true value and innovate their entire operation to achieve long-term profitability and efficiency.
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Systematic Business Innovation for Startups
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- 4. Start-up Stay-up •You’re drowningin paperwork - especially financial •Quality of work is starting to slip •Cash flow is bumpy •Gaps appear in communications •Team morale is not so great •You feel overworked & stressed 10/12
- 5. Is Money theAnswer?
- 6. “The unfortunate truthis only one percent of (tech start-up) business proposals receive funding from angel investors or venture capitalists or private equity” – Startup Addict Blog
- 7. So think whatthe percentage is for entrepreneurial companies that are NOT start-ups: agencies, content producers, service companies etc. Businesses that don’t scale.
- 8. If money isn’tthe answer – what is?
- 9. In 35 yearsI’ve not seen a single early-stage company that couldn’t be more efficient as a business
- 10. Founders Focus Obsessively on TheNew Thing They Do
- 11. While the businessvehicle they’re building to make & market The New Thing They Do just isn’t up to the job
- 12. It’s flimsy, home-grown,unstable, and an inefficient way to get from A to B
- 13. Product/ Service Process/ Workflow Leadership/ Management Business Model People/ Skills Marketing Turnover/ Sales Net Profits Structure By ‘Business’ Idon’t mean finance. I mean all the things that – together - enable you to generate revenue & profits from your product or service. I assume that you can deliver your product or service . ‘Business’ is everything else you need to do to create a profitable enterprise.
- 14. Home-grown business ‘vehicle’ Business inefficiencies ‘Leak’ profits from producing &selling product Not enough profit to reinvest in growth Business stays stuck in Start-Up a home-grown business vehicle stops you motoring
- 15. Poor project management so jobsoverrun No ongoing job profitability analysis They’re ‘busy’ , have revenues, so think it’s OK No money to invest in s@#t- hot PM End of year accounts show 5% Net Profits agency that builds websites for retail clients
- 16. Flat structure: 2 founders+ very young team Founders get jobs in & look after clients No-one managing team so poor quality control Lowers job profits, reduces their biz dev effort, slows growth Founders have to step in to sort jobs out social media marketing/PR agency
- 17. All early-stage businesseshave – under the hood - these ‘invisible inefficiencies’. If you can identify these and reduce them, you can ‘find’ the profit to fuel growth organically. (what ‘funding’ often does is allow these inefficiencies to remain invisible)
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- 20. “Creative Destruction… incessantly revolutionizesthe economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
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- 22. They haven’t takenon board his distinction between Invention and Innovation INVENTION INNOVATION
- 23. They haven’t takenon board his distinction between Invention and Innovation INVENTION + INNOVATION = ENTREPRENEUR
- 24. “This should beas demanding and exciting as inventing the thing you do” Every aspect of it An entrepreneur also innovates the entire business that creates & delivers the new thing they do
- 25. When you Invent andInnovate it can produce extraordinary success
- 26. But that’s notwhat most early-stage entrepreneurs do
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- 28. A Business isa System
- 29. “A set ofinteracting or interdependent components forming an integrated whole”
- 30. “A set ofinteracting or interdependent components forming an integrated whole”
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- 34. How do you growa business in a Systematic way?
- 35. every detail, every element must bebuilding towards your ultimate Vision It’s like directing a film:
- 36. it’s a wayof seeing and understanding your business.
- 37. it’s about howyou use your own creativity to innovate your whole business
- 38. Let’s get closerto the real world of running a business. Let’s start by talking about burgers.
- 39. THE NEW THINGTHAT YOU DO BUSINESS ENGINE BUSINESS STRATEGY
- 40. BUSINESS ENGINE BUSINESS STRATEGY THENEW THING THAT YOU DO Deciding where you want to go as a business and planning how to get there The mechanics of the business; how it functions efficiently day-to-day
- 41. THE NEW THINGTHAT YOU DO BUSINESS ENGINE BUSINESS STRATEGY
- 42. OPERATIONAL COMPETENCE = the skills toexecute on The New Thing That You Do (The Invention) Business Strategy isn’t developed Business Engine is neglected
- 43. THE NEW THING THAT YOUDO (Product/Service) Process/ Workflow Structure Leadership/ Management Business Model People/ Skills Marketing Turnover/ Sales Net Profits
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- 46. Benchmark where you are –with total honesty. This is point A.
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- 48. Build an integrated Road Map Thisis how you’re going to get from A to B.
- 49. Identify the true valuein your business. Build your pricing around it.
- 50. Bake innovation skills into the team leadingthe business.
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- 53. Get management information flowing. Use it to makebetter decisions.
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- 55. Develop the entrepreneur/s business skills &perspective
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- 57. Let’s look atone in more detail. I’ve chosen this one because it’s at the heart of the whole process. Build an integrated Road Map
- 58. Q1 Q1Q4 Q4Q2Q3Q3Q2 Example: an early-stage online jewellery business that is growing fast & sees opportunities for it’s own e- commerce operation, partnering with the big online retailers and opening operations in China Build an integrated Road Map
- 59. Q1 Q1Q4 Q4Q2Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Marketing Turnover/ Sales Net Profits YEAR1 YEAR2 750K Team: 6 3rd party sites (too?) flat E-commerce range 94K Basic Website 2 Founders (designers) UK outworkers
- 60. Q1 Q1Q4 Q4Q2Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Marketing Turnover/ Sales 1.5m Net Profits 150K Full-time MD Free up MD 50% Shanghai Warehouse Bespoke Service Multiple rev streams Team = 15 people Open in China YEAR1 YEAR2 Team: 6 3rd party sites (too?) flat E-commerce range 94K 2 Founders (designers) UK outworkers 750K Basic Website 750K
- 61. Q1 Q1Q4 Q4Q2Q3Q3Q2 People/ Skills Product/ Service Process/ Workflow Structure Business Model Leadership/ Management Open in China Turnover/ Sales 1.5m Mgmt team Net Profits 150K Full-time MD 750K 1m 1.35m1.25m1.1m800K 900K Shanghai Warehouse Bespoke Service Multiple rev streams Team: 6 Hire studio assistant Hire designer Hire sales/ account mgr Hire Shanghai head Team = 15 people Promote Ben to MD Mgmt training Ben Ben: build mgmt team Ben: build mgmt team Marketing 3rd party sites (too?) flat E-commerce range 94K Basic Website 2 Founders (designers) UK outworkers Limit of flat structure
- 62. 1. Benchmark whereyou are: A 2. Draw your Vision: B 3. Build a Road Map 4. Identify real value & price accordingly 5. Equip leaders with innovation skills 6. Innovate your business model 7. Innovate & build your business engine 8. Get Management Information flowing 9. Operational/Strategic decision-making 10. Develop leaders’ business expertise 11. Develop/empower management team
- 63. Don’t derail yourbusiness by thinking anyone can run one… Invent and Innovate!
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