Burning Down The House

"I was in the house when the house burned down".

So sang Warren Zevon on his Album "Life'll kill Ya" in 2000.

Now I've never lived through a world war, but I've had my share of family losses and lived at more than 20 addresses. At work I've lived through two recessions, the dot com bubble burst, and 9/11 (when working in travel).  I've been in 5 companies that have been acquired and three that have had to lay off staff.  I've been through several VC funding rounds.  As an Ops Manager in travel and eCommerce I've had to fire staff, lay off staff and deal with; the death of my customers, vehicle crashes, flight delays, server outages, terrorism threats and avalanches.

So, when I heard Zevon's lyrics, it kind of made me feel - well - old.

Also - I realised that all that experience at the sharp end does make for better intuition and decision making.  Looking back at the younger me coming out of university in the early nineties - I hardly recognise him  - but it's still the same old me.

The thing is - when you're young, you have no way of knowing that something won't work, so you go for it anyway.  Business rewards risk that succeeds - and some of our best entrepreneurs and innovators are young, ballsy and blissfully ignorant of burning houses.  Passionate, energetic - and full of belief.

Increasingly I'm seeing that pairing up experienced hands with youthful vision and energy surely must be the best ingredients for start-up success.  I guess that's why Silicon Valley is a magnet for start ups; experienced VCs mentoring and funding youthful creativity.

If I ever go into business on my own, I'll be Butch Cassidy to a mother-f crazy Sundance Kid.

Embracing Order And Chaos

Ever heard the phrase "living on the edge".

What does it say to you?
- stress, out of control, barely surviving?
OR
- dynamic, exciting, feeling alive?

I often say to colleagues and friends that it's good to live on the edge of chaos.

Coming from someone that is naturally organised and likes to get things done well, this may seem like a contradiction.  Maybe it is.  Increasingly I find though that you can always have too much or indeed too little of almost anything.  For example; fun, pain, sleep, wakefulness, work, play, beer, food, heat, cold.  Add to that list order and chaos.

Order is great when it's obvious when what needs to happen.  Controlled processes are perfect for things like tax returns, train timetables, airline safety and manufacturing efficiency.

Chaos however is very useful when is not obvious about what needs to happen next.

Innovation and the entrepreneurial spirit that pushes our society and economy forward requires a certain randomness to succeed.  Through conflict of opinion, through chance encounters in the corridor, through exposure to different cultures, industries and methods, through trial and error it's through these unordered experiences that we build insight that helps us progress.

Then, ideas are worth nothing without execution, so you need to get ordered to see any results.

In my experience, it generally pays to have process, but only just enough process.

An unstructured mind needs to embrace order to see value come from their ideas.  A structured mind needs to embrace chaos to create the conditions for success.

Managers in an organisation can help construct a culture that leans towards order or chaos.  At any time in the history of a movement, the balance will need to lean towards one or the other.

Get Your Platform Shoes On

Finding a business model that scales is increasingly important in the modern world.

What does that mean, and how do we do it?

First of all, scaling. I'm using scaling in the broadest sense. In my definition, it's a case of where revenues per unit grow faster than cost per unit. An example would be; say I need 2 programmers and 3 web servers to make 1,000 online sales a day. If I do 10 times as many sales, I don't want to spend 10 times as much on programmers and servers. So instead of 20 programmers and 30 servers, maybe I can do it with 3 programmers and 4 web servers. The cost of doing business gets more efficient the more volume I add.

This is a particularly important concept for tech-media companies, because often in a start-up mode they are running at a loss. They are still investable businesses though because if the sales and marketing bring the volumes, not only do you get to a point where the company starts to break even, but the growth in profitability thereafter is extremely impressive.

Secondly, the modern world. Increasingly we are seeing business models that transcend borders. They can be run primarily from one central location with small local teams for international presence. Not just in tech (Google, Facebook, Amazon, eBay), but also in telephony (Vodafone, Orange, Nokia, HTC), consumer electronics (Sony, Samsung, Apple) and supermarkets (Wal-Mart/Asda, Carrefour, Tesco). A business model that scales has a huge advantage over one that doesn't when competing on world stage.

So, if scale is important to compete in the modern world, how should we think about business investments into this environment?

I always ask myself, "is this a platform business?"

If the answer is yes, I'm interested. If no, you'll need to work hard to get my interest.

A platform. Not 1970's funky shoes, but a prism through which to view to judge almost any business investment.

A platform is a place where supply and demand are aggregated. Lots of buyers connect to lots of sellers through a central marketplace or hub.

There are platforms all around you.

iTunes: Hundreds of millions of music consumers connected to almost every music publisher
Google: Millions of searchers connected to millions of advertisers
eBay: Millions of private sellers connected to millions of buyers
And there's more... Autotrader, Match.com, Amazon - and of course Livebookings (my day job) - where we connect millions of diners to thousands of restaurants.

These are all platforms. The more supply you add, the more interesting you are to buyers. The more buyers you can provide access to (consumers), the more interesting you are to sellers. You gain market power - because the owner of the marketplace can charge people for attending the marketplace and for transactions that happen in the marketplace.

In any business model like this, the potential is exciting. The keys to success are; seeding the platform with sufficient product to get consumers interested, have a diminishing cost of sale by adding more inventory over time and having inherent viral effects that customers create more customers. That's all about execution. Having a great idea is one thing - doing it is always harder.

To get past that "is this a good idea?" phase, I always ask myself, "does this solve a real need", "is this a platform" and "will it scale?".

Then - I get my platform shoes on - and go for a boogie.

Can I Ride In Your Airship Please?

Earlier this week I was priviledged to hear Richard Seymour give a talk.

Richard is one of the world's most respected product designers. He lives in the future. I mean, he's not Doctor Who or anything like that - but his perspective is very different to your average man in the street. You see, his job is to make the future happen.

Make the future happen? Yes. The future is not something that happens to us, it's something that we bring about ourselves. Richard is working on some fantastic projects that might be 2 years, 6 years or 10 years away from being a reality. But they're being worked on right now.

Someone - or some people - creates change and future comes about.

The world wide web didn't just happen by itself.
Nor did Facebook, Google or Amazon.
Or IVF treatment, open heart surgery or antibiotics.

People are creating the future every day. The future might not quite be what we expect when we get there, but our current reality is the result of decisions made in the past, by ourselves and by others.

We can see the future coming if we look hard enough.

In 2012, The Olympics
In 2018, Crossrail
This decade - Space tourism
Or how about - an airship to cruise between The Serengeti and The North Pole?

Check it out.



Fancy a ride?

The ROI of Doing Stuff

When is something worth doing?

We all make judgements every day about how much time and energy to devote to a task, a project, or a relationship. How do we do that?

You may think you make these decision on a rational basis. You calculate the effort required and somehow figure out if the returns are worth it. Maybe we do this, maybe we don't - I'm not convinced either way. There's probably a sociology or behavioural economist out there who has an answer. But that's not me.

It seems to me though that to calculate the personal return on effort is a dangerous game.

At some level it may make sense; for example, spending 2 hours preparing for a client meeting is maybe better than spending 5 minutes - if it helps you win the deal. Or - setting clear objectives for your team, if it means they focus on what you need them to focus on for the next 3 months.

Most of the time, the thing is - it's just not obvious what the short, medium or long time payback will be of any use of your time. This is especially true in a start up company. The purpose of a start up company of course is to uncover a viable business model. There will be much trial and error, but some things will stick and others won't. If you judge your efforts versus their short term results, you could think you're not using your time wisely.

When viewed through the lens of hindsight, often it's those persistant repeated efforts that occasionally yield gold. Individually each footstep might be in the right direction, it might not.

The journey to the mountaintop requires that you walk and keep walking. Sure, be smart, learn from your mistakes, but to judge each day's effort versus the results of that day is burden yourself with inconsequencial analysis. The big picture is what matters.

Some of the most important steps forward in our lives, or for the life or a company are small decisions. Small efforts or events. That doesn't have to mean the rest is meaningless. To find a nugget of gold you might have to pan a river for 3 years. Each day is not a wasted effort - if eventually you find a big nugget.