COMMUNITY LOG from HIGH GROWTH BUSINESS CLUB NETWORKING SESSION
DORICH HOUSE, 31 JANUARY 2007
Summary notes
These notes have been complied from the observations made by the group facilitators. They are not intended as a transcript of proceedings but, rather, to provide a brief record of the meeting and some shared point of understanding achieved during the session. We have also added some Hints & Tips and pointers to further resources that will help you explore some of the topics.
The overall feedback on the session was very positive with one participant describing it as “The best networking session I have been to” while another commented “The wide range of business encountered forced me to look at the business issues and not the product”. Participants found the fairly intensively facilitated process very productive and wanted more of it and often! We clearly have set a high standard and we will seek to surpass it in future events.
Round 1- Understanding each other’s business
This session asked participants to describe their business by way of a metaphor. This was a difficult activity for some people who like to think in black and white and found metaphor difficult to use but easy to understand. All agreed, though that it quickly broke the ice. Even though, some found it very difficult to step outside their comfort zone. Those who did it were able to use it as a break point and it did help explain about their business to people from other areas.
Some businesses are complex and using metaphors is useful to explain the idea in a way that is simple to grasp. They are also useful in peeking curiosity and getting people to ask more questions about the business.
The use of metaphors or analogies (i.e. what something is like from everyday experience) also provide an opportunity to tap into the power of pictures and stories and excite your listener without getting bogged down in the nitty-gritty. If a picture is worth a thousand words, think how much more information can be conveyed in a limited amount of time.
Hints & Tips :
Metaphor or analogies are particularly useful when preparing your “elevator pitch”, that concise, carefully planned, and well-practiced description about your company that a seven year old child should be able to understand, delivered in the time it would take to ride up an elevator. You may wish to have several on hand to suit different types of customers …… or convey different aspects of your business.
Round 2 – Exploring New Possibilities
‘What are the characteristics of a high growth business and the different routes to growth?’
Three themes emerged from the discussions in this round; the characteristics of an entrepreneur, the role of market research and vision.
Characteristics of an entrepreneur
There seemed to be a great deal of agreement that Entrepreneurs need drive ambition, vision, passion, focus, persistence and flexibility. Later stage entrepreneurs also emphasised the importance of being able to build a team and the importance of good planning. There are many roles that need to be fulfilled for success to happen (sales, developer, organiser, inventor to name a few). Many saw it was important for entrepreneurs to do what they are best at and build team round that. Therefore they need to be aware of all the different roles – even if they perform all themselves to start with.
Hints & Tips : “How to be an Entrepreneur” by Steve Parks and “The Beermat Entrepreneur” by Mike Southon both have good descriptions of the characteristics that help in entrepreneurs who succeed.
Market Research
This seemed to be an area of debate on whether market research is worth doing; particularly whether it could deliver real insights (there was some suggestion that people found it difficult to use market research in order to make a decision). Others were extremely enthusiastic about research and never let an opportunity go by to talk to potential customers or users of their product. A common difficulty was the ability to validate the market opportunity, although one group advocated listening to customers and asking them for suitable development directions. Insight is a two way process and while market research may help you gain an insight into customers, they often have insights to your business. Whichever way it is approached, you need to have a deep insight and identify a real pain in the market for your business to find a ready customer.
Vision
Many if not all successful entrepreneurs are seen to have a vision or dream that extends beyond simply making a profit – a commitment, substance and sustainability rather than focus on price. They also have the ability to sell that dream – a manner of connecting at a personal level with customers and suppliers. This may have been a dividing trait, some facilitators recognised that all participants had a vision but it was mainly in their heads and the ability to communicate a clear business vision to all was a point of seen as relevant by all.
Hints and Tips: Think back to the metaphor exercise and see if you can capture your vision in a way that can be easily communicated. Try it out on family and friends. What is the feedback?
Round 3 – Becoming a better entrepreneur
‘What risks would others see in high growth business and what can an entrepreneur do to prepare for this?’
An entrepreneur is a risk taker by definition – the issue is to manage that risk. Everything has risk – even the status quo or doing nothing, what most seek to do is balance risk and opportunity. However risk is mostly perceived rather than measured and how it is perceived will vary depending which side of the transaction you’re looking at. In setting up this question, we were thinking of how a business would present risks and their mitigation to an investor.
The actual discussion was more centred on the risks and opportunities for the entrepreneur. On the whole, they did not worry about risk; the driver is belief and conviction that what they are doing is going to be right.
There were specific risks identified, though:
Don’t over commit – don’t try to do too much
Small size = low credibility , takes long time to complete sales
Problems of accurate forecasting of costs and sales.
Risk of substitution or disintermediation by new technology
Manage forecast cash flow and prepare for new funding.
Ability to recruit and keep staff
Didn’t think/understand impact on customer
Over estimate market opportunity
Under estimate sales cycle
Much is held in the head
Do what we like to do and leave the difficult stuff.
Not enough long term planning. Too much short term activity.
Cyclicality of business
Relying to much on one or two big customers
Not having focus
Strategies and business plans that go out to date. They also need to consider contingency and variables
Not having sufficient market knowledge
Not being able to manage growth
Maintain delivery of quality when growth is high
Owner may become a bottleneck
By way of mitigation, the ideas were :
Use information to take the right risks
Grow with the business
Allow other to play roles which you can’t do.
Avoid risk through quality and cash flow
Having the ability to share a bad day with somebody who knows what it's like
Stakeholder management needs to be considered
Looking at value add from customers/staff/partners
Understanding the full business impact
Hints and Tips: The attitude to risk, whether a positive view of opportunities or perhaps the danger of neglecting an adequate appraisal of risks v. rewards, is one of the things that defines and differentiates us as humans. Anyone who would like to explore the topic further should read “Against the Gods” by Peter Bernstein. Practise putting yourself into others shoes. How might they be evaluating risk? Obviously, this will have particular relevance when seeking funding
Round 4 – The best way forward
‘What way can a business get the resources it needs with little money?’
There is often a tendency to believe that money is the only resource needed for growth and so it was at the start for many groups. However, after reflection it wasn’t as critical as had been initially stated. Many people really wanted experts but didn’t think they could afford them. Don’t obsess about finding money – it can take too long, too much of your time and may well be less important than scrounging the resources you actually need when you need them. Seek out resources that you can use free or at marginal cost. Look for resources directly by using your contacts, networking etc. If you think through what you need – very often it will find you. It is possible to build credibility without money e.g. through client contacts, even if the product is not ready. Credibility is a huge challenge but once you have it, it is a resource.
Be careful, though, to recognise when something is being offered “free” and when something is being offered as “paying later”. Some people were open to co-operation and some were completely against it. The issue seemed to be around integrity and how valuable it is. Perhaps the best way to find resource is to find someone who shares your passion!
While some businesses will need money for development or expansion, the need for resources does not necessarily equate to need for money. Contacts, ideas, ingenious solutions may be more useful especially for start-ups and early stage businesses. Some of the individual feedback from the meeting suggested that members would like to have had more time for individual networking and we will incorporate that into the design of the next meeting.
Hints and Tips : At networking meetings attended by large numbers of people, it can be difficult to leave a lasting impression. Consider being direct and introduce yourself with what you are looking for. People able to help are more likely to remember you or seek you out. You may also consider what you are willing to help others (within defined time limits of course).