Category: My entrepreneurial adventures

Why We Should Welcome Uncertainty in Our Lives

“It’s funny that when people look back at their careers, the moments that stand out the most – the things they’re most proud of – are often the times that were the most uncertain” says Hugh MacLeod of Gapingvoid.

big chasm illusion
How do you feel in times of uncertainty? And if that was an illusion?

He continues about an example of great success (Netflix when it moved in video streaming instead of sending DVD through the post): “When they were stressed and afraid and not really all that sure anything was going to work out for the best…in fact, they were quite sure it wasn’t. But they kept pushing, until something gave way. That’s the thing about success. It doesn’t appear until it’s over and the results are in.”

It is obvious that it is when we push beyond our comfort zone that things feel uncertain for us. It is when we  persist in our idea even if it looks weird that we are able to cross the chasm and reach a new state that seems more stable.

Don’t be afraid of uncertainty. Welcome it even if that is not comfortable and even if it exposes you to the critics of those who remain on the safe side.

Just go for it.

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How to Make Commercial Departments More Creative

Following our post ‘How Commercial Is One of the Most Creative Activities‘, let us dwell a little bit into the organization of most commercial departments – and how these organizations seem to be designed to stifle creativity rather than fostering it.

Boring PresentationI am always amazed at how many commercial departments are run in a very bureaucratic manner, with a focus on compliance to procedures, requirements to report continuously and long-winded PowerPoint presentations even on the topic of marketing efforts or even on the status of negotiation with some prospects.

Of course, compliance is needed to make sure that certain limits are not exceeded; reporting and creating databases of commercial efforts is useful. But there needs to be space for creativity and I can’t find it in a number of commercial departments. Clever solutions need to be found to create the most compelling (and competitive) offer. This requires time to think and experiment; time to brainstorm and produce quality work (note – quality work is generally in the form of a text document, not of a set of slides). Where is that space for creativity?

Create a formal space for creativity in your commercial department and ensure for your organization a definite competitive advantage! And for my sake, reduce your addiction on PowerPoint slides: get to the work of creating real documents that will force you to put your ideas in order!

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How to Leverage Contracting as a Creative Activity

Commercial activities are to be creative. Does that mean contract development and negotiation is also a creative activity? My answer is clearly yes – with some safeguards. However most organizations focus on the safeguards and forget the creative part, with sometimes dire consequences.

Thick Contract
This Thick Contract is the result of a creative process!

Safeguards need to be implemented to protect the organization – the legalese that is often boring, sometimes useful and never to be forgotten for your piece of mind. I am talking about limits of liabilities, mutual indemnities and all these clauses that you must have in your contract to protect yourself in case things go really awry.

Still beyond this we should not forget that a Contract is there to reflect a commercial deal; and that a commercial deal is fundamentally the result of a creative process; therefore, for the contract to be successful, it needs to reflect the creative result of the negotiation (which hopefully will make the safeguard clauses superfluous).

Contract Managers in the industry are too focused on establishing compliance to a set of norms. They do not understand enough that a Contract needs to reflect the outcome of a highly creative process whereby we have developed a commercial approach tailored to the situation. The contracting process (including compliance) and format needs to be flexible enough to accommodate this creativity – without certain bounds.

Let’s transform our contracting processes to account better for the creative nature of this endeavor!

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How Commercial Activities Are Part of the Most Creative Activities

I have come to realize that commercial activities – from business development to the development and the negotiation of a commercial deal or even the implementation of a general commercial model – are among those activities in a company that require the most creativity.

Commercial creativityIt requires creativity because first, it is all about creating something. Not the product of the company, of course, but another tangible deliverable that is essential: the commercial proposal, a document that will describe how we create value to the client or to the market in a way that will fit its needs.

It is also creative because it requires to develop a solution to a particular issue, often while discussing with a client to understand its particular needs. And depending on the situation, our usual commercial approach might not be appropriate, and we need to demonstrate creativity in setting up a solution that will fit the constraints and the needs.

This observation about the fact that commercial activities are fundamentally creative activities have a lot of consequences on how they should be implemented – and on the profile of the people that should do them. Did you realize it?

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How to, and Why Put One’s Eggs in a Single Basket – a Small Company Guide

Mark Twain said, “Put all of your eggs in one basket and WATCH THAT BASKET.” Well, that’s obviously the contrary of the more prudent common wisdom say “don’t put all your eggs in a single basket“! Who is right? What are the situations where it might be worthwhile follow Mark Twain’s recommendation and what are other situations where we might better follow common wisdom?

egg-basketIn terms of risk management, having several egg baskets spreads the risk – there is less risk that the entire egg supply disappears, while at the same time there is a higher probability that some of it will be damaged. When you put all your eggs in a single basket, there is more focus.

Large companies will tend to follow common wisdom – they diversify their risk to enhance long term survival. This leads to average performance as some activities will be under-performing. Small companies don’t have this luxury – they put all their eggs in a single basket, and watching closely and fostering these eggs, with the help of some luck, they might be much better performing. This is what allows small companies to thrive and develop (together with the typical lack of reactivity that plagues larger companies).

Typical entrepreneurs need focus. They have to put all their eggs in a single basket and focus seriously on preserving it and having it grow. Still you can’t exercise such a focus on all areas of your life. Other areas (such as your savings for retirement) need more common risk management approaches.

You need to be choosy on those areas where you put all your eggs in a single basket, but that can be very worthwhile provided you exercise a right level of attention and focus. Choose the area where you will do that and stick to it!

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Why You Should Learn What Happens At the Periphery of Your Business

“Learn what goes on at the periphery of your business” says Andrew Grove, former CEO of Intel, in his book ‘Only the Paranoid Survive‘. He goes on to explain: “When I absorb news or information coming from people who are geographically distant or who are several levels below me in the organization, I will triangulate on business issues with their view , which comes from a completely different perspective. This will bring insights that I would not likely get from my ordinary contacts.”

shakeheadillusion
Can you figure out what it is if you don’t rely on straightforward observation? Watch differently -Shake your head!

In my observations it is not just about observing what happens in the industry or in the particular company. Peripheries are great places where experiments happen, and where people in your organization grow much faster than at the core because of the exposure.

Most organizations do underestimate the value that could be brought to them by their peripheries. It goes to the point where the experience of people sent there (typically, expatriates) is not valued at all by the core organization and gets ultimately lost to competition as these people leav in droves, unsatisfied by the lack of recognition.

With the Fourth Revolution, the importance of the periphery and of groups of people that are not directly within the organization will increase significantly, further from what Andrew Grove observed when he wrote his book in the 1990’s. Organizations that continue to focus excessively on their core will lose competitiveness. Watch for your periphery and leverage on it!

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How To Start a Business: Understand Who You Are

I find the following quote quite interesting: “My answer to the question “how do I start up a business?” is “with a thorough understanding and acceptance of who you are.”” – Sue Vizard in an article about coaching businesses.

walk-in-your-shoesOf course, the quote might be even more applicable to coaching businesses where the coach must be well grounded to help its clients, still, I believe this quote is very worthwhile to consider for all kinds of businesses, when it comes to entrepreneurial ventures. It requires so much dedication which needs to be backed by so much energy that it needs to be respond to a deep understanding of what makes the entrepreneur passionate.

Sue Vizard continues: “Take time to acknowledge what makes you tick, how you ended up where you are and who you want to be for the rest of your life. Yes, your business will provide an income, hopefully, but it’s also an opportunity for fun and fulfillment.”

Should not we reverse the proposition – if it’s an opportunity for fun and fulfilment, then we’ll find a way to make it provide an income?

Finally, Sue adds: “check how comfortably your business fits in to your dream. And if it does not, then adjust your business, not your dream.” You have been warned!

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Why Giving Up Does Not Mean You Are Weak – It Means Go Find Another Way!

There is a quote around the internet: “Giving up doesn’t always mean you are weak; Sometimes it means that you are strong enough to let go” – Unknown.

Giving-upThat’s of course not just an excuse for giving up. Sometimes it is really important and healthy to stop trying to force the natural evolution of the universe. And it has dawned on me over the years that what is destined to happen will happen somewhat easily; and that it is sometimes inadequate to try to tweak destiny.

Still this does not mean that we should not make a sizable effort to deliver what we think we can bring to the world. It just means that sometimes we need to figure out a different way. Or let time do its work. Losing a battle but not the war.

I would thus like to tweak slightly the quote: “Giving up doesn’t always mean you are weak; Sometimes it means that you are strong enough to let go and find another way.“

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Why You Should Be Scared Sometimes – It Shows You Are Thinking Big Enough

“If you’re not a little afraid, and the other vendor in the room is telling you you shouldn’t be, then either ‘one of us is in the wrong room’ or you’re not thinking big enough” – says Matt Ridings in this post, written in the context of a small company’s sales efforts. Growth will necessarily happen at the expense of fear.

dreams_scare_not big enoughMatt Ridings continues – “Fear is a good thing, it’s almost universally true that ‘the larger the opportunity the larger the challenge’”. That says it all. If you’re not a little bit afraid, then maybe you are not going after the right size of opportunities.

Not long ago I grasped a great opportunity to grow significantly my company. It came with some risk associated. The risk was quite high, just not so high as to bankrupt the company after some risk engineering. I decided to go for it. Time will tell whether the opportunity will materialize.

Funny, I was about to write ‘time will tell if it was the right decision’ but that is absolutely wrong. Whether the opportunity materializes will be the result of my effort (a little bit) and of luck and other external factors I can’t control (a lot). So, the decision was the right one. Whether the opportunity materializes is something else.

It’s tough to ‘think big’ and when I re-read my post on thinking big posted in June 2012 a few months after I started my company, I see how much a way remains for me to be comfortable with the fear it entails. It is getting better though – and growth ambitions for myself and my company combine into an exciting mix!

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Watch the video and slides of my May 2014 talk at Lycee Hoche (in French)

Did you miss it? The video and the slides of my speech at the Lycee Hoche in Versailles (France) are now available (in French).

Conference Jeremie AverousThe topic of this speech at my former high school was about my career – and I couldn’t help add something about the Fourth Revolution as well. It is a good introduction to the Fourth Revolution in French.

When is comes to presenting my career, it is an exercise that I don’t do too often and it was kind of funny to see how in hindsight a lot of what I have done and the choices I made, make an awful sense. In particular, my leaning towards project-based environments, and my international career. While these choices were at the time probably mostly driven by curiosity, luck and serendipity, they seem now to wave into a coherent framework. It is also probably because in the process I forgot quite a lot about other stuff that did not work out!

Watch the talk on Youtube here (if you can’t see the video, here is the link)

The segment on the Fourth Revolution starts here.

Happy viewing!

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Don’t Underestimate How Easy it is to Start a Business Today

The cost and effort to start a business has dramatically floundered in the past few years with the advent of the Fourth Revolution. I believe this fact is still not fully understood by the mainstream. It could comes up to the point where even Venture Capital, which was so important to the development of new technology start-ups in the 1990’s, might not be so relevant today in the field of innovation.

start-up business plan
A typical start-up business plan framework from ‘Business Plan Generation’

Some relevant stories and posts by Vivek Wadhwa include Beat the GMAT, a 32,000$ start-up that was valued millions in a few months, or this Quartz post ‘Anyone, anywhere can now build the next WhatsApp or Oculus‘.

With the advent of cloud services, it is very cheap to have a professional level infrastructure at your disposal almost immediately and for a few thousand dollars a year, as I am also experiencing with my own ventures. It is also very cheap to develop mobile applications, websites and other web-based software based on existing free, open source basis. The importance of strong financial backing is thus delayed in the development process of new start-ups to the point where they can demonstrate revenue and whether their business model could be viable.

This of course removes lots of excuses not to start following your insights and ideas and create value to the world!

For more insight into business models I strongly recommend the Business Model Generation book, a collaborative book that created a framework that is now used throughout the start-up business community.

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Why the Percentage of Overhead (SG&A) is Larger for a Small Company

Recently I was negotiating a consulting contract with a client and the client came up with the argument that our price should be lowered compared to a large consulting company they were employing at the same time, because as a very small company, our overheads (sales, general & administrative costs – SG&A) should be lower. I was convinced on the contrary that due to the lack of scale factor, they are in fact higher (as a % of revenue).

We did not conclude the argument before the end of the negotiation but that got me thinking. I did a bit of research and what I found is indeed that as a general rule, SG&A diminish as a percentage of revenue when the size of the company increases, due to economies of scale, such as for example in this study of software companies:

SGA ratio to revenue depending on the size of the company
SGA ratio to revenue depending on the size of the company

Would that also hold true of a very small company like my current company (2 employees)? My take is that it is certainly true even if is not necessarily clearly valued because I do spend a lot of my time on administrative and marketing stuff without being compensated for it (and without counting my hours). In addition, even in a time where it is easy and cheap to have the necessary infrastructure setup, the costs of using external contractors for such tasks as accounting, payroll etc is necessarily more expensive than having internal resources doing it internally – but the size does not justify a full time employee on these tasks yet.

It is thus clear that for very small companies, if it was fully valued, the percentage of SG&A effort is much higher than in even slightly larger companies, and much higher than very large companies even if they do use a small percentage of their revenue on activities such as research and studies.

In any case the debate was probably not relevant because what is important, is the going market rate for the services provided, amended by the value brought to the client organization, which needs always to be much higher than the cost of consultancy!

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