Systematic Business Innovation for Startups

Systematic Business

Innovation

Start-up Grow-upStay-up

10/12 30/35

Start-up Stay-up

10/12 30/35

Start-up Stay-up

•You’re drowning in 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

Is Money the Answer?

“The unfortunate truth is only one percent of (tech start-up) business proposals receive funding from

angel investors or venture capitalists or private equity” – Startup Addict Blog

So think what the percentage is for entrepreneurial companies that are NOT start-ups: agencies, content

producers, service companies etc.Businesses that don’t scale.

If money isn’t the answer – what is?

In 35 years I’ve not seen a

single early-stage company

that couldn’t be more efficient

as a business

Founders Focus Obsessively

on The New Thing They Do

While the business vehicle they’re building to make & market

The New Thing They Do just isn’t up to the job

It’s flimsy, home-grown, unstable, and an inefficient way to get from A to B

Product/Service

Process/ Workflow

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Structure

By ‘Business’ I don’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.

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

Poor project management so

jobs overrun

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

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

All early-stage businesses have – 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)

JosephSchumpeter

“Creative Destruction”

Creative Destruction

“Creative Destruction…

incessantly revolutionizes the

economic structure from

within, incessantly destroying

the old one, incessantly

creating a new one.”

INVENTION

INNOVATION

They haven’t taken on board his distinction between Invention and InnovationINVENTION INNOVATION

They haven’t taken on board his distinction between Invention and Innovation

INVENTION + INNOVATION= ENTREPRENEUR

“This should be as 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

When you

Invent and Innovate

it can produce

extraordinary success

But that’s not what most early-stage

entrepreneurs do

Systematic

Business

Innovation

A Business is a System

“A set of interacting or

interdependent components forming an

integrated whole”

“A set of interacting or

interdependent components forming an

integrated whole”

Product/Service

Process/ Workflow

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Structure

Product/Service

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

How do you grow a

business in a Systematic

way?

every detail, every element

must be building towards your

ultimate Vision

It’s like directing a film:

it’s a way of seeing and understanding your

business.

it’s about how you use your

own creativity to innovate

your whole business

Let’s get closer to the real world of running a business.

Let’s start by talking about burgers.

THE NEW THING THAT YOU DO

BUSINESS ENGINE

BUSINESS STRATEGY

BUSINESS ENGINE

BUSINESS STRATEGY

THE NEW 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

THE NEW THING THAT YOU DO

BUSINESS ENGINE

BUSINESS STRATEGY

OPERATIONAL COMPETENCE

= the skills to execute on

The New Thing That You Do (The Invention)

Business Strategy isn’t developed

Business Engine is neglected

THE NEW THING THAT

YOU DO (Product/Service)

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Product/Service

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Start-up Stay-up

10/12

Benchmark where you are – with total honesty.

This is point A.

Draw your Vision.

This is point B.

Build an integrated Road Map

This is how you’re going to get from A to B.

Identify the true value in your business.

Build your pricing around it.

Bake innovation skills into the team leading the business.

Innovate your business model.

Innovate & build your business engine.

Get management information flowing.

Use it to make better decisions.

Separate operational from strategic decision-making.

With separate management and board meetings.

Develop the entrepreneur/s business skills & perspective

Develop a senior management team.

Empower them.

Let’s look at one in more detail.

I’ve chosen this one because it’s at the heart of the whole process.

Build an integrated Road Map

Q1 Q1Q4 Q4Q2 Q3Q3Q2

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

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Marketing

Turnover/ Sales

Net Profits

YEAR

1

YEAR

2

750K

Team: 6

3rd party sites

(too?) flat

E-commerce range

94K

Basic Website

2 Founders (designers)

UK outworkers

Q1 Q1Q4 Q4Q2 Q3Q3Q2

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

YEAR

1

YEAR

2

Team: 6

3rd party sites

(too?) flat

E-commerce range

94K

2 Founders (designers)

UK outworkers

750K

Basic Website

750K

Q1 Q1Q4 Q4Q2 Q3Q3Q2

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

1. Benchmark where you are: A2. Draw your Vision: B3. Build a Road Map4. Identify real value & price accordingly5. Equip leaders with innovation skills6. Innovate your business model7. Innovate & build your business engine8. Get Management Information flowing9. Operational/Strategic decision-making10. Develop leaders’ business expertise11. Develop/empower management team

Don’t derail your business by thinking anyone can run one…

Invent and Innovate!

fromstartuptostayup.com