Sunday, November 30, 2008

Weekend Reading

I am a reader!  I love to read but rarely find the time to be able to dedicate hours to get into a book.  Wasn’t convinced that audio-books were for me but I have spent a chunk of time on the weekend listening to the legend Seth Godin new book Tribes on my iPod.  If you have not “read” a book using audio I would encourage to give it a try.  When Seth is making a point that is particularly relevant for me I like to stop, pause, replay and give it some thought, even make notes on how that applies in my situation.

Tribes (link to paper book) is a great read for any business leader and there are several good points that I will use to write further blog posts about my thoughts on certain topics but some of the highlights are:

  • “Be Remarkable” – think about it!  be worthy of remark.  It is easy to become irrelevant and become  a ‘one of’ in your industry.  Don’t be afraid to rock the boat, in fact you have a responsibility to rock the boat.  More to follow in separate post but in the meantime think about it…are you worthy of remark?  Is your Company?
  • The Rules of the Game Change Everyday – If you are playing the game by the rules of yesterday it is clear you will not win the game of tomorrow.  YOU MUST CHANGE.  YOU MUST FORCE CHANGE IN YOUR ORGANIZATION. Past success is in no way an indicator of future performance.
  • Lead your Tribe – People want and need to be led.  Find the Tribe members in your company, find the Tribe members in your customer base and provide the voice, tools and ability for them to get together and drive the change you need.  EVERYONE in your organization can be/is a leader.  Permission is not required, only initiative and faith.

Whether it is Seth, or Tom Peters, or whoever reading and pushing yourself to think about things differently is critical to driving change and being successful.  What have you read this week?  How did it effect the way you think about your world whether it be politically, professionally, personally.  Continue to grow as a personal….there is no such thing as standing still, you are either moving forward or moving backwards.

Thursday, November 27, 2008

Conquering Fear

I Twittered today about potentially starting to use some video-blogging to add a new delivery media and to engage better with my audience. Interested in any thoughts people may have around pro’s and con’s and why they think it is good or bad. I enjoy blogs that have a mix of video and written posts and given that most communication and engagement is done orally I think people tend to engage better when they can see and hear the person delivering the content. The underlying assumption is that the content is good, without that the media is irrelevant. I will try to keep the content as or more interesting and historic posts.

Biggest problem…I’m worried I am going to suck at video-blogging so I am a little afraid of taking this leap. Not doing something because your afraid is weak. Leadership involves making decisions and taking action that is risky and may not work. We do learn from failure and accepting failure is healthy as long as you learn from it and do not make the same mistakes over again so here is the deal…..

I am going to prepare, plan, practice and take the leap. What I need from you is honesty. Tell me what you think, tell me if it sucks, tell me if it rocks. I want to continue to deliver content that is useful to my audience and I want to continue to improve and find better ways to get you better stuff. If video-blogging is neither better for you nor an improvement let me know. Watch for it….it’s coming.

What is your fear? Post your stories here, tell us how you conquered your fear and what the result was. Was it worth it? How has it changed your personal or professional life?

Take the leap…don’t be afraid of failure be afraid of complacency!

How Was Your Day Today?

This is a question most spouses and friends ask each other when they go home at night. How do you normally answer this question? “It was ok” or “same old stuff” are common responses. If this is your response day in and day out I want to encourage you to change that.

Doing the same thing day in and day out is not the right thing for you or for your company. Look at new ways to do things and challenge the “we’ve always done it that way” paradigm. Customers want and demand for us to get better everyday. I am big believer that people and Companies that remain status quo are getting passed and risk becoming irrelevant. Every day you either move forward or backwards because if you aren’t improving your competitors are.

Take a minute each day and look at what you are doing and why you are doing it and how you can do it better to add more value to your customer. Talk to peers over lunch about it. Push yourself, your peers and your boss everyday to get better and try to come home each night with a story, anecdote or example for your family (or your dog) that is not “the same old stuff”.

Push yourself to get better…start tomorrow, don’t wait.

Post stories and examples here, share and encourage each other. YOU can make a difference.

Wednesday, November 26, 2008

I’ll Take Anger over Apathy

I had the good fortune of having a call with a somewhat angry customer today.  Yes….good fortune.  As I start to reach out to customers in my new role I am hoping to get one of two reactions:

  1. I love your software and have received countless benefits and value through it’s implementation and use.
  2. Your product is killing me!

If customers are not loving your product and pushing you to make it better or screaming at you because it is not working properly that means they have given up and are apathetic about you and your product.  As long as your customers still have emotion, engage with them and get to Know Your Customer

While it is always good to get positive feedback from your customers and delivering value some of the best feedback comes from struggling customers.  These customers can provide you with key actionable inputs and feedback that can help drive further value for happy customers and turn around unhappy ones.

As you meet with more and more customers you start to pick up data points that form trends.  These trends then can then drive product strategy decisions.

Go to your customers and look for the unhappy ones as much or more than your happy ones and drill into there problem and struggles with your product.  Often a turned around customer will be a more engaged, passionate customer than one who was happy to start with

Let me know how it goes for you and make sure you take the angry phone calls before apathy sets in.

Tuesday, November 25, 2008

Know Thy Customer

Seems like a pretty common sense piece of advice...and it is, BUT DO YOU? In the upcoming months I need to spend time on the road going out and meeting with customers and prospects to ensure I have an accurate perspective on how 'they' see our product. It is very easy to get caught up in the act of navel gazing and convincing yourself everything is alright. It is also easy to carefully and conservatively maneuver through the difficult end of this year and 2009 convincing yourself that sales are down due to the poor economy and you would be right....in part. If your value proposition is compelling and provable aren't troubled economic times the best time to help your customers with their business problems? A few rules for getting to know your customers:
  1. Be generous with your customers - make the conversation about them not you. Find out what their biggest pain points are and see if there are ways you can assist them. If their biggest problem is NOT one you can solve, help them anyway. Connect them to a business partner with expertise, or a peer from another company who has successfully fought and won the same battle.
  2. Research and prepare - take the time to print out articles on their company and industry and read them ahead of the meeting. Understand the macroeconomics of their industry and vertical to build their trust and confidence that you are a knowledgeable and trusted advisor.
  3. Remember your Mother - I remember my mom telling me that I was given two ears and one mouth for a reason and they should be used in that proportion. Remember, you are there to learn! Learn what business problems are occurring at your customer and in his industry. Learn what they like and more importantly DO NOT like about your product. Learn how YOU can help THEM. In order to achieve the goals of the meeting remember to listen twice as much as you talk.
  4. Follow Up - Drop your customer a note when you return to the office that follows up on the meeting and thanks them for their time and interest in discussing their problems with you. Follow up with them on the commitments you made at your meeting whether that be a proposal, a contact's phone number you promised them, copies of materials they requested.

This process puts you in a position where once a month or quarter you can call your customer check in and see how they are doing. They may not need your services this trip but if you help them with their business problems whatever they are...your time will come. In the mean time you walk away with valuable information on how your product is used, perceived, the value it is driving and the problems customers are having with it. All in all a pretty worth while trip for both party's.

Let me know how this works for you or if you have a different approach

Monday, November 24, 2008

Changes and Challenges

It has been a long while since I posted to this blog. I have missed the therapeutic effect of thinking through issues, problems, successes and strategies and getting comments on those thoughts from people who follow me and who I follow.
There have been so many things that have gone on in the past few months that could be written on personally, professionally, politically, macro-economically, etc, etc. I will start to work through my thoughts on all of those things in the upcoming days and weeks. I have gone through many difficult and trying times in the past weeks at work and have been presented with the opportunity to lead a group of highly dedicated, focussed and smart people at Ivara Corp as President. We, like many businesses, are going to be entering some very uncertain times in the marketplace and have had to make some very difficult decisions to proactively prepare for this uncertainty. Some of those decisions, which occured over the past week, were the most difficult that I have made in my professional career and I feel deeply for the people that were affected by those changes and will continue to work with them as required to ensure they will land on their feet, which I have no doubt they will.
Looking forward we have a year filled with Change and Challenge but with change comes opportunity. Opportunity for us to refocus on the customer experience, to gather information about why our customers like us and don't like us, to change our product and our offering to meet the ever evolving needs of our customers in the market. It is important that we engage now more than ever with our customers and prospects to stay close and work with them to drive value in their business and grow the Ivara community. While change is a true constant it is not easy. People like the routine and comfort of consistency but the reality is that those who lead change in the marketplace, who allow their community to take them places they otherwise may have resisted, who are open to and embrace change engage their community and drive forward. A truly engaged and passionate group of employees, customers, prospects and stakeholders are unsettled with the status quo. They love what they do, what the company does and because they are engaged they want to make things continuously better than they were.
I love Apple! I love their products and I love their pace. Apple is a company that realizes if it does not constantly antiquate and cannibalize it's own products someone else will. Is the current iPod a great product? Most would argue yes (and sales numbers would support) but in very short order Apple will release a new iPod that will make the current perfectly good product obsolete. Apple does not accept the status quo, they know that the market will continue to change, customers will want new things and that engaging with their community will require them to provide those things (at the expense of their own existing product line) to ensure the community is and continues to be engaged and they remain the leaders of their space.
I will continue to blog here but will also do so at Ivara's blog. I will continue to Twitter personally and will begin to do so at Ivara. One of our great employees Jason Diller has started a Yammer initiative internally which is growing through his care and feeding and is facilitating much needed cross departmental communication. All these tools are just that...tools. Yammer and Twitter and blogs and Facebook are all excellent tools to facilitate community. This will be a year of change for me, this will be a year of change for Ivara and this will be a year where we start to form and engage with our community in new ways. I don't have all the answers and I don't have a silver bullet because their isn't one. I will look to engage through meeting face to face with employees, with customers...both happy ones and especially those less so...with trusted advisors and through social networks. Collectively this group of passionate people will generate the ideas required to drive Ivara forward to success through these turbulent times.
Success is a process, one that in my role I will support and foster among a great tribe of people at Ivara and within our community. Our success will be a group success and will come from ideas, thoughts, challenges and changes that I will endeavour to enable but will inevitably come through the community of dedicated employees, customers and prospects who will push us to the change we need.
I look forward to meeting with each of you along the way.

Monday, July 28, 2008

Meet My New Friends

I have recently had the good fortune of having some of my posts selected and my blog linked to some sites that I enjoy and respect.

I have joined the BackBone Magazine blog team. I have been an avid reader of the magazine for quite a while. Backbone magazine was launched in January 2001, at the height of the technology bubble. They continued to publish throughout the tech meltdown and beyond, working as an active participant in the changing business world. Their primary focus has been on how technology enhances business processes, markets, profitability and productivity. Backbone magazine’s aim is to provide business people with a tangible tool to enhance the way they do business in Canada’s New Economy. I plan to contribute as a resource toward this goal for BackBone customers.

As a follower of Guy Kawasaki and his great collection of sites at AllTop I am proud to have been added to the StartUp section of the site with a huge selection of other bloggers who are absolutely top of class. Check them all out here.

At Ivara we have had a great a relationship with Barrett Rose and Lee an Executive recruiting firm that we use for many of our Sales and Services positions. They offer several online resources to their clients and have been kind enough to add my site as a linked resource for their customers, something I don't take lightly.

If I can ever be of assistance to any of my friends and followers please feel free to reach out at any time and please check out the sites and resources of my new friends.

Saturday, July 26, 2008

Weekend Thoughts, Reads and the Last Lecture

Some of my Favorites and Musings from the week, hope you enjoy.....
1. On Friday we learned of the passing of Randy Pausch the famed computer science prof and all around great guy from Carnegie Mellon after a battle with Pancreatic Cancer at the young age of 48. His legendary "Last Lecture" is lengthy but always worth the time as the lessons are invaluable.....and very moving.
2. A quote from Michael Jordan (while the souce is questionable, the message is not)
I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occassions I have been entrusted to take the game winning shot....and I missed! I have failed over and over and over again in my life and that is precisely why I succeed.
Obviously, it is not important to just fail, it is important to fail and learn from those failures so that you do not make the same mistakes again. You may make new ones but not the same ones. In that vein there is a great Post Mortem on Monitor 110 that we should all read and use as a reminder to be honest with ourselves and analyze our failures so that we may learn from where we have been.
3. Almost every week you could pick numerous of Seth Godin's posts. I am a fan of Chris Anderson and The Long Tail. Seth has a post this week about the Profit in the Tail. If for some reason you have not read The Long Tail....grab it and read it (at least the article) this weekend.
4. Lastly, in support of my Delighting the Customer theme I provide a link to the Six Laws of Customer Experience. Have a read and I hope the theme of focusing on the customer experience is one that you will remember, maybe try some of my suggestions and by doing so you create not just good customer but good advocates, spokespeople and marketers for your growing business.

Friday, July 25, 2008

Keep them Engaged Through Leadership

OK, I think this is the last post in this "Delightful" mini-series so a quick recap is in order.
First I posted about the importance of Delighting your way to Success and how critical it is to improve upon the customer experience every time you deal with them. I gave some recommendations for implementation in your business to improve the customer experience and more closely align everyone at your company with your customer experiences. My Dairy Queen example was a simple illustration of the impact a positive experience has.
I followed up that post with a related one on a new role that we are seeing more of in the market and is that of a "Community Manager", which I am a proponent of and would suggest you consider for your organization. I used AideRSS and Akoha as examples.
Next I followed up with a piece on how critical it is to hire smart AND engaged employees right from the start rather than hiring just for smarts, and gave my thoughts on how to successful hire employees that will delight your customer. This is important for all organizations but especially for young startups. You do not have the luxury of being able to make mistakes against a really tight budget and very few staff. Take your time and get it right.
The last piece will be some simple thoughts on leadership that I think are important to keeping engaged employees in the game and on your team. Hiring the right people is absolutely critical to an engaged workforce but keeping them engaged and growing is all on you. There are so many leadership books out there by people who have forgotten more theory on leadership than I will ever know but here are my simple guidelines that I follow.
  1. Give direction - in the absence of being given direction by a leader employees will make up their own direction. This is hugely problematic because if you have 10 employees who are all engaged and acting in the best interests of the company but are pulling in different directions it will make the very difficult journey from point A to point B way harder than it already is. For small companies, you don't want to get meetinged (is that a word?) to death and a meeting schedule is a completely separate post so to start I would recommend the following. For 15 minutes at the start or end of every day huddle with your team. I posted some details earlier on the agenda.
  2. Open, focused and frequent communication - understanding the big picture and the strategic path the company is on is critical. Every chance you get reiterate the "elevator pitch" with your employees. Explain why you are doing what you are doing organizationally and strategically and how they fit in to that. What is their role in achieving this success and how can they impact total company success. Again, in a small organization it is much easier to see how you fit in and what your contribution means. Just make sure everyone knows the strategy and what success is so they are engaged as part of the solution.
  3. Lead by Example - BE FULLY ENGAGED! Engaged employees WANT to be inspired and look to you to be the rock through all the ups and downs you will face. Constantly reinforce your words in point #1 and #2 above with your actions. Your behaviour shows people what is acceptable and unacceptable behaviour for others...when you don't think anyone is watching...they are. Don't give them reason through your actions to become disengaged.
  4. Measure Success and Reward Proper Behaviour - make sure any and all measurements or metrics you put in place for the business are aligned with the strategy you are implementing and base all rewards around those. Rewards do not need to be purely financial especially for highly engaged people. These employees want the company to win and want to be part of it. Non-monetary rewards like GH3 nights out and pool and beer nights on the company to acknowledge great work are great motivators and team builders at the same time. I am a big believer in that which is measured is improved. Put the right measures and rewards in place and they will drive behaviour and engagement that is consistent with the strategy and keep everyone in synch rowing the same direction.

By Hiring Delightful Employee's and Keeping them Engaged you will Have Delighted Customers!

There are so many things in business that are uncontrollable that have a material impact on your businesses success or failure. Who you hire and how you motivate them as the leader and how they interact with your customers are all controllable. Nail the stuff you can nail and this is one area that everyone can control....get at it.

Tuesday, July 22, 2008

Hiring Engaged Employees

My last few posts have presented my thoughts on the critical need to delight your customers at all times and have discussed some of the how's around that from the perspective of the types of roles you will require and some recommendations around the types of action plans you can implement. There is one major requirement for the execution of the plan and the consistent delivery of a WOW customer experience and that is PEOPLE.
It is imperative that the people building your product, the people hiring, the people interacting with customers, the people in your company are passionate about what they do and are portraying the message and delivering the experience you want. In early days for a startup this isn't so hard because all of these people = 1 person = you!
In all companies hiring right is a key success factor but as a startup and/or small company it can be the difference between success and failure. I know I am oversimplifying and there is tons of literature out there for more complex processes and systems and formulas and measures but this is what it breaks down to:
  1. Hire Engaged People
  2. Keep Them Engaged

If you Hire correctly, keeping engaged people engaged is not nearly as difficult getting unengaged people to engage. You have 500 things to do each day as an entrepreneur/founder/CEO and keeping your employees up during good times and bad is an absolutely critical aspect of your job but don't make that harder on yourself than you have to with less than ideal hiring decisions.

For every role there are key components or competencies of the job that they need to be able to perform and perform at the head of the class but to me this is really just table stakes. Once you have some one who technically can do the job you need done here are some key things to look for:

  • Attitude - Attitude is everything. How are they emotionally in the interview, are they engaging, upbeat, smiling, eager, excited....regardless of the role you should walk away feeling energized not drained
  • Passion - Listen for knowledge and passion for what you do. They won't know everything about everything that your company does but if they are not jazzed about the space and what you are doing from a macro perspective it will make my next point even harder for them to pass and that is......
  • StartUp experience - this is not a must for me but it something I have to feel very comfortable that the person understands especially depending on how I feel about the prior point. There are long days, all nighters, low lows and high highs and you have to be comfortable that this person has a "very healthy appetite for work" lets say
  • Spidey Sense - Call this your gut. You get a feel for someone during the interview. How will they fit with your team, would you feel comfortable if they were in front of your customer? your investor?

My last recommendation here is to have at least two interviews with someone before you make any offer. The first in a more formal, typical interview setting and don't limit yourself to an hour (schedule them in the early evening say 5:30). If things do go well you will want more time to explore and the time will fly. If they pass the first interview the second interview should be in a more informal setting and should involve more members of your team. If you normally go for a pool night, darts, GH3, whatever...invite them.

None of these are rocket science but they are 4 simple points I have written on my white board at the office as I go through the hiring process. Write them down somewhere so you have them and just take a look at the points before and after you conduct your next interview. I actually have a ranking and weighting for each of the four but that is just the finance guy in me needing to bring EVERYTHING back to numbers so I won't bore you with that.

Interested in your comments on your best and worst hires and what happened....hope these help!

Some other great posts on this topic:

Tech Capital Partners - discusses the value of Employee Engagement

DangleTech

Dharmesh at OnStartups - talks about his hiring thoughts for startups

Monday, July 21, 2008

Follow Up to "Delight" Post

More and more you are starting to see super exciting roles for "Community Manager's" at exciting young tech companies. In most cases I view these roles as the Chief Delightment Officer at a company who engages with, support and befriends the community and makes the product, brand and company real to users. As my prior post mentioned the responsibility for delighting customers lies with everyone but making someone accountable for care and feeding of the community in the early days is a great move. A great example of how this can work is Melanie Baker at AideRSS. She is a great cheerleader, access point to development, PR person, etc that people who are engaging with AideRSS can interact with to reinforce the product experience. Great product + great human interface = successful brand building and customer engagement.
There is no shortage of debate on this topic with an article being written by ReadWriteWeb , commentary about online community at the WSJ and new positions opening up with much more regularity than ever before.
I am all for this role and believe that managing your online brand, marrying the human experience with the product experience and Delighting your customers is critical to a startup.
If you are interested in what I think is a fantastic role in any organization Austin Hill, who has a startup called Akoha, is currently looking for a "Community Gardener", check it out. Even if you aren't interested in the role check out the job description as it does a fantastic job of giving you insight into the type, style and culture that Austin is building at Akoha. Even job description are part of the customer experience!

Saturday, July 19, 2008

Weekend Reads

Some great stuff out there this week that I plan to either start reading or finish reading this weekend. Hope you find some of these interesting:
Seth Godin wrote a fantastic piece (all his stuff is great) on Scarcity which outlines ways Apple could dealth with the IPhone roll out better to further "Delight" (a theme for me this week) their customers.
I also really enjoy reading Fred Wilson, (NY based VC) who always offers a frank perspective on what's going on and is currently wrapping up a one month road trip across Europe (Based in Paris) meeting entreprenears and startups. He links to a piece on Failure which is particularly topical given FailCamp was last night in TO.
Every week Jevon over at StartupNorth has at least a couple great posts, this week was no exception. If you weren't able to make DemoCamp this week you missed a great time but one of the highlights was Jevon's "rant" on VC's and a call to action for entreprenears to save the VC's. He followed up with a blog post and lots of comments which you will find here.
Another site I found was doing a little work on Customer Experience is a site by Bruce Temkin who writes on all things customer loyalty related. Not going to highlight a specific article here but I would definitely recommend that you spend some time here researching how you improve the customer experience and build loyalty for your Company....enjoy and try to put some of this in practice.
Lastly but importantly there were several launches in the couple weeks and as my earlier blog challenges, try to go and check these out and provide feedback and commentary to the entrepreneurs. It is only through users trials and feedback that we can make product truly delightful for customers. Congrats to all mentioned below and readers please try these and provide your feedback:
  • AideRSS realeased several new products which I covered in an earlier post
  • Spreed:News presented at DemoCamp and has launched a version

  • PlanetEye released a travel service that I will be checking out as I approach my family Griswold vacation to Myrtle Beach that is upcoming
  • Praized also launched a local search platform designed specifically for social media sites

If I missed any please comment and add

Happy reading!!!!!

Friday, July 18, 2008

AideRSS

I have added a Top Posts widget to my blog courtesy of AideRSS. This allows you the reader to quickly have a look and see which posts have been the most active and are MORE worth reading, because clearly all of them are worth reading...right!
Lot's of valuable products launched recently at AideRSS including one for Googlereader that allows you set criteria around the news and posts that you get to your reader. Everyone is getting overwhelmed with data through the online media this product allows you to set filters allowing you to get only the information that is really important vto you so you don't waste your time reading material not relevant to your needs or interest. Please go check them out!

Delight Your Way to Success

I have been spending much time lately reading and thinking about customer engagement and experience and the importance of it in all businesses. Having a truly passionate customer base is not just for intimate startup companies, as Apple and the recent lines we all witnessed clearly illustrate. Having your customers so delighted with their experience that they will tell their friends and Twitter about their experience and proudly show/tell everyone they know is the most powerful (and inexpensive...sorry Finance guy in me coming out) marketing program any company can achieve. For a startup company positive word of mouth, press and chat is even more important as it can be the difference between success and failure. There are two sides of this experience that I'd like to cover, the product experience and the human experience that in my opinion are equally important.
PRODUCT EXPERIENCE
Building product that is focussed on solving a specific problem that a target audience has or providing them with a new experience they will value is obviously table stakes. Truly delighted customers are looking for much more:
  • Make product consistent and reliable
  • Save time or improve the quality of time for the customer
  • Ease of use will increase adoption and stickiness
  • A slick, well thought out user interface is a game changer
  • Flexibility in design (because your customer is going to try to use you product in ways you probably hadn't imagined...and you want them to)
  • The WOW factor...can't really describe it but you know it when you see it
  • There can be many others depending on the application, audience, etc

You are not beside your customer when they use your product for the first time, make sure you nail form, function and WOW.

HUMAN EXPERIENCE

EVERY interaction you have with a customer is an opportunity to delight a customer and build your brand. Really folks, this is not hard. Every person in the organization, whether there are 3 or 3,000 is in marketing and sales. I posted earlier on a simple experience at Dairy Queen (sadly no freeby's have arrived at my door) which demonstrates the difference every person in your company can make.

Everytime someone calls in for support on your product....delight them

Everytime someone calls to complain....delight them

Everytime someone asks you where you work....delight them

Attitude is everything, be excited and passionate about what you do. If you aren't how do you expect them to be so moved they will tell their friends and wear your shirt. Always ask them for feedback and suggestions, engage them in making things better. Hiring, retaining and maintaining engaged employees is a seperate post I'll cover later.

RECOMMENDATION

My call to action that I think goes a long way to help at a startup: When people download things (product, trials, etc) from your site make it mandatory to enter an email address AND a phone number (don't worry if they have come to your site and are interested enough to download a trial, they will). Now, don't just email your customers call them. Have everyone in your company call at least one person a day to interact and ask some set questions to collect data. This is your chance to delight them on the phone and make a personal connection that will solidify your relationship. At the end of every day, huddle as a group for 5-10 minutes NO more and run through what you found out.

Several major accomplishments occur with this process:

  1. Employees stay engaged with the solution and are always in sales mode every day which creates positive energy and momentum and allows they to get better and more comfortable with it.
  2. The customer experience is enhanced and over time you will build a loyal following of delighted customers.
  3. You will accumulate data, critical intelligence, on your company/product and share it every day which will allow you to spot trends, isolate problems, share wins and drive product and the company forward in lock step with your user community.

Try it and let me know how it works.

Thursday, July 17, 2008

#DemoCampToronto18 Thoughts

My first DemoCamp is in the books!
Really enjoyed being part of a community that is working on a number of very cool things and kudo's to all who demoed, keep up the good work. Thanks to David Crow et al (who it was really great to finally meet) for all his efforts in coordinating the startup community.
Venue:
The venue needs to support the reasons that participants attend and facilitate them getting out of the event everything that they wanted, in better language it needs to support not detract from the User Experience. I think it did some of both. On the plus side the very casual atmosphere of the bar setting facilitates great conversation and openness in getting to know new people and make introductions so I liked that aspect as opposed to something more formal. The negative was that for some/many it was VERY hard to hear the demo's. It was loud, cramped, everyone could not fit in the room and I think this really detracted from some of the great stuff people were trying to show and solicit feedback on to improve the product.
Overall I would vote for a new venue for 19 or a return to one of the old venues that people generally seemed to like.
Demo's
DISCLAIMER-As most of my readers will know I am not a programmer and not as technical as most (being a dumb finance guy) so I tend to focus more on understanding the problem that is being fixed, trying to relate to it and the applicablility and usability of the solution and potential business model.
Some great demo's on the night which I would encourage everyone to check out. Refresh Partners, Blueprint and Ali of Well.ca and Dr. Project all presented to get us started and showed some really neat stuff. Ali has Jabber chat for your site that he uses at Well that I thought was very usable.
Second group had Bitstrips, SpreedNews and Jevon MacDonald which were all pretty interesting. Bitstrips was fun demo that Jesse Brown pitched as revengeware where it allows you to completely build characters for a cartoon script with an infinite number of options, craft the setting and build the dialogue for your cartoon...Jesse also informed the crowd that there was a parental control setting built in and that it was required due to various office furniture that...ah never mind.... Spreed was interesting and I had read about them earlier in the day at Mark's blog as they had just launched yesterday. Unfortunately the demo struggled a bit with sound and tech and I am a first timer but it seemed like the demo broke the "infomercial rule" of DemoCamp. Putting those flagrant fouls aside the speed reading concept and the need to ramp up our collective ability to read, process and retain information that is coming at us at an exponentially increasing rate is a perplexing one to me. Admittedly I am not a fast reader and am even worse online (I am still a tree killer...although I do print double sided) so I think I will give this a try as it claims to more than double your ability to read AND retain information and early users seem to concur. Check it out and comment back with you thoughts!
The final act went to Jevon who presented something called a VC rant which I think was more aptly an ode to how we can all (startups and VCs and angels, etc) work to try to fix a funding problem that seems to be increasing at an alarming rate. Jevon has posted a copy of the presentation and a blog post at his site StartupNorth.ca. The blog post is a little less of a rant on VC's compared to the presentation and I think is a well balanced picture of what VC's AND entrepreneurs need to do to turn this around. there are several posts around on this topic right now and I posted some thoughts on this earlier as well.
So all in all on the night I had a really good time, I enjoyed a couple pints with some really smart, creative people who I had never met before, I met some folks for the first time that I had only Twittered with before (why does that sound wrong?) and I got closer to my startup community. All of that is good for me but I basically leached!
Here is what I can do today to give back and I expect my community to keep me accountable:
  1. I will be trying out products demoed and providing my feedback good and bad directly to the entrepreneur as this is critical for the continued evolution of these products and for the continuous improvement of the user experience and for the improved success of the community
  2. If there is any way that through a contact or a phone call or a Twitter question or a blog post that I can assist any community member please feel free to reach out and ask me for help. If I can't help directly I can help find someone who can.

You get out of events and communities what you put into them and while I have successfully made it through my first DemoCamp it definitely will not be my last!

Saturday, June 28, 2008

The Power of a Positive Attitude on the Customer Experience

Is Dairy Queen the best place in the world to work for a 17-19 yr old young lady...maybe/maybe not. Is it her lifelong ambition and the reason she gets up in the morning...probably not. Does a 17-19 year old typically prefer to work on a Friday night or perhaps do something slightly more social? As I waited for my son to finish one of his many extracurricular activities I decided to swing by DQ and grab a small blizzard...ok it was a medium but the amount of ice cream I consume is not really germane to the story. As I walked in the store there were two lines, one had a person ordering the other was empty. I walked towards the registered and a young lady greeted me with a big smile and in her most bubbly voice said
Welcome to Dairy Queen tonight, my name is Miranda isn't this a great night for ice cream!
I replied....
absolutely
Miranda then asked
What can I make for you tonight
I said
I will have a medium Peanut Butter Cup Blizzard please
Miranda replied with
Great choice, my absolute favorite
Whether it was really her favorite or not was inconsequential. I found myself smiling and feeling good about my selection. Miranda smiled, processed my debit payment, thanked me and turned to make my blizzard. As she went to the machine she smiled at her co-workers, provided some direction to a young man with an "In-Training" pin on and returned with my blizzard, smile still on her face and exclaimed
Here you go, medium Peanut Butter Cup blizzard. I hope you enjoy it, enjoy your night and please come back and see us
I stayed in store for a couple more customer interactions which went essentially the same way mine did and came to the conclusion "in my software mind" that Miranda was the best user interface that DQ could have. Whether it is service related, product related, P2P, B2B, whatever....a diligent focus on the customer experience is the single biggest thing you can do to ensure customer satisfaction, repeat business and viral spread. BTW...I think it was the best Blizzard I have ever had!

Wednesday, June 25, 2008

Arithmetic, Population and Energy

Below I have attached links to a video which I did not find but want to share. I was posted by a blogger "Vruz" and is available on YouTube. This is a series of videos on a lecture given by Prof. Emeritus Dr. Albert A. Bartlett and is one of the most thought provoking videos I have watched. The more I read and learn about the macroeconomic trends that are occuring the more there is to think about from a social, political, economic and personal perspective. I am still digesting this (some parts can be dry) and will post some further thoughts but wanted to get it out there.
Please let me know your thoughts after you have reviewed!

Tuesday, June 24, 2008

Product Planning

There have been a number of great posts lately on the importance of creating an excellent user experience with your product. While a detailed look at a product planning cycle would be a full article I thought touching on the main points may be helpful.
Peter over at Tech Capital Partners in KW has a good post on the topic where he articulates thoughts on "The experience IS the product" and the importance of establishing and maintaining a superior user interface.
Mark MacLeod over at StartUpCFO does a great job at nailing the importance of staying focussed on the product at ALL stages of a startup (early-late) and how it is a critical component of company growth.
As your company grows and the footprint of your product becomes larger and larger it is critical that you have a process in place (Product Planning Process) that allows you to:
  1. Capture all the required data to build a plan.
  2. Ensure that you are considering your architecture in lock step with the plans for the product. (A lesson Twitter has been learning)
  3. Validate with Market and document requirements.
  4. Plan timelines and resources required to complete

Capture all the required data to build a plan

There are many inputs into what the next shiny thing is for your product or what the next new product should be and it is important to collect data from various different sources so you have perspective and as close to full information as you can get. Any decision related to your product must come with input from customers and prospects. Get the good the bad the ugly. Don't wait for this info to pour in, go out and get it. User groups, web 2.0 tools, hosted onsite sessions, webex's, basically any way you can make it easy for the customer to provide their thoughts, suggestions and feedback.....just make sure you get it. In addition to customers talk to your sales people, your technical support group, your call centre, your development group. Get as much data as possible. Lastly make sure you are looking at what your competition is doing and what new entrants to the market that may be on the periphery of your product are doing.

All of this data collection is not event based. This is a continuous process that must be working every day in your organization. Make it part of everyone's job to collect this info and have a formal central repository where it is easy for people to dump their info as it is collected.

Ensure your underlying architecture will continue to support your plans

This seems to go without saying but it doesn't. Time and time again I see companies whose product evolves to a point they never imagined it would and it creates significant problems if the platform is not supportive of the type and pace of new product releases you want and need to do. Validating this regularly will allow you to not get too far down the path before having to make a possible switch. No one wants to have to switch something significant midstream but the reality is that with the best forethought and planning things can change in the marketplace so fast that you may eventually have no choice.

Validate with the Market and Document Requirements

Once you have defined a roadmap for the product validate it with the group you collect data from. When building the roadmap and communicating back to your group it is best if you can lay out for them your thoughts (based on what you know today) for the next 2-4 releases and where you see the product going, with the caveat that there may be a fair amount of change given the time horizon you are presenting is long.

Plan the Timeline and Resources

Now the execution. Build the plan to deliver what has been scoped, look at resource gaps and ensure you have a plan to secure the help required and that timelines are built for delivery to customer that are reasonable with a fair amount of buffer in them for....well...you know.

Summary

Everyone agrees that customer experience and the continued velocity of product development is critical for early startups and for more established companies with a start up culture. To successfully manage this it is important that you build a process to inform you and allow you to plan your way through to improving the experience. the above contains a brief example of the major requirements and this process will be very different depending on the size and scope of your company and product. the important message is HAVE a process that is part of your company's daily pulse and you will stay in tune with your customers, the market and success.

Wednesday, June 18, 2008

Ivara Hiring Again

Here is my "twitterable" (is that really a verb?) who is Ivara blurg....
"Ivara provides business intelligence software to manage physical asset performance in capital intensive industrial industries."
We at Ivara are looking for a few more good people. We are looking to add both a new Account Exec (Sales Rep) as well as a Reliability Consultant. A link to our careers section is here where you will find job descriptions for all open positions. If you know anyone who may be interested in joining an exciting but small growing software company please let me know. Geography is not important, anywhere in North America is fair game.

Lawyers, Accountants, Recruiters Oh My!

Although many people I have met, talked to and worked with feel the need for lawyers, accountants, headhunters, bankers, etc are a necessary evil NOTHING could be further from the truth!
As a startup or small business it is critical that as the CFO you establish a strong partnership with these key stakeholders in your business. Spend time with them and build a relationship. Let them in, let them know your vision and get them to buy in. The better they know you, your company, your risk profile the better they can support and be an asset to you.
Do not just view these folks as the "hired help". They have key relationships, lots of experience and can be fantastic resources to bounce ideas off of and even help open doors.
My other suggestion (which is true of all relationships you build) is be prepared to give twice as much as you receive. It is very likely that the social and professional network you operate in is a who's who of your Lawyer, Accountant, Recruiter, Banker, etc top prospects and ideal customers. When you find a partner you are happy with who delivers for your business introduce them to you best three peers and see if there is an opportunity for them to work together. You will strengthen your relationship on multiple levels while building your business.
Don't push the help away....invite them for dinner!

Friday, June 13, 2008

DemoCamp Toronto

Tickets are going fast for DemoCamp 18 which is being held in the Kensington Market at restaraunt/bar Supermarket on July 15th, 2008. Please register here. I have heard lots of great things about it and it will be my first time attending so I will report back with my thoughts as a virgin attendee. I hope to meet lots of my online friends there and put faces and names and spend time talking, sharing and learning with tech entrepreneurs and startups. Please drop me a line if you are attending so we can meet up.

Wednesday, June 04, 2008

Ivara Information Webinar - June 26th, 11AM ET

Why consider Ivara? Ivara provides business intelligence software to manage physical asset performance in capital intensive industrial companies. How does it work? Ivara is running a series of webinars that will demonstrate more specifically how we deliver the above value, please join in and feel free to contact me with any questions either before or after.

Gazelle's-Mastering the Rockefeller Habits

Our executive team at Ivara just completed going through a 2 day course that was put on by a Company called Gazelles. We had a great facilitator by the name of Les Rubenovitch who described us as an executive team with diverse positions on things and a healthy (I think he was being nice) appetite for debate. I think this was his polite way of telling us that we labour on points for way too long instead of getting to the heart of the issue, making a decision and actioning it. Spending a couple of days as a team in this way has several benefits:
1. I thought the course and materials presented in the Two Day session was very useful. Some of the topics that we discussed that we as an organization will attempt to implement over the next 90 days include:
-daily huddles (which are daily team meetings that never exceed 15 minutes and have a standard agenda that includes "What's Up", a "Daily Metric" and "Where are you Stuck"
-employee performance measurement (the details of this require a separate post but understand where your real talent is in the organization is and filtering out the "C" players is a must for high performing companies...Topgrading is a great read I would recommend.
-business dashboard (we came up with the metrics we feel are critical for our success and now will be implementing a dashboard system-not software based yet-to assist us with leading indicators alerting us when we are going off line)
2. The second benefit was actually getting some feedback from a strong facilitator of what they view as some of the strengths and weaknesses and general health of our exec. We all have areas where, as a team, we could work better but having a facilitator work with the group for two days really exposes the goods and bads of the group dynamics and presents opportunities for improvement. One of our takeaways from the session was to read The 5 Dysfunctions of a Team by Patrick Lencioni and we have blocked off an hour as an Exec to go through what we need to do after reading the book to become more effective.
3. Getting away with the Exec team for a couple days always leaves me feeling energized , refocused and part of something. All our days are busy and tied up with the tactical details of running a business. Stepping back and refocusing on what the overarching strategy is, what is changing, realigning priorities is really key in a small business. Getting lost in the details and to-do's is important but sticking your head up once a quarter to make sure that you are still driving in the right direction is really important. I hate to pick on them (again) but Twitter appears to be a prime example of this from the outside looking in. Clearly while they were busy running the business a funny thing happened to them. Their user community grew beyond their (at least preliminary) plans and used the product in ways and at a rate that they did not anticipate and before they knew it the architecture no longer was aligned with the needs of the users and now you have a major problem.
For a lot of reasons the two day session was great for us as a group but my call to action for you is to STOP.
-stop the day to day (I honestly do understand the difficulty this poses) at least once a quarter
-get out of the office
-get a really STRONG facilitator and try to keep the same one
-review and revise your strategy
-re prioritize your top 3 priorities for the next quarter
-assign timelines, responsibilities and accountability's
-START executing
-STOP in a quarter and repeat
If you want more details or want to discuss further please feel free to contact me directly.

Friday, May 30, 2008

Financial Post calls Canadian VC's Passive

The Financial Post has an article today on a keynote address from Roger McNamee, co-founder of U. S.-based Elevation Partners at the CVCA conference. What I took as his message from the article was that deals in the next little while may get fewer but bigger and he is calling out CVCA members as being "passive" investors and encouraging them to be more focused on making their current portfolio successful.
Curious, do you have a passive Board? What do you expect from your Board and are they driving you to success? Interested in your comments.

Ivara Elevates Partnership with IBM

Continuing on my theme of the importance of good partners to small software and tech companies Ivara announced today that it has achieved the IBM Advanced Business Partner Status. The elevated partnership level reinforces IBM’s endorsement of EXP Enterprise software as a solution that successfully integrates and delivers value to IBM Maximo Asset Management users. In addition, Ivara receives enhanced levels of marketing, sales and technical resources that fosters further collaboration between Ivara and IBM to improve service and deliver increased value to joint customers.

Thursday, May 29, 2008

Twitter Financing Update

As everyone knew Twitter was in the process of closing their next round of financing and there are now reports out that the raise is in the final stages of closing at $15M with Spark Capital out of Boston which places approx a $100M valuation on the Company.

I have read that Twitter's service has historically been bad but the last couple weeks have been a disaster and at present they are still not functioning on IM devices (which impacts a predominant percentage of the users).

As I commented last night in Mathew Ingram's post on the Twitter problems I am a relatively new user to Twitter (approx a month). I was almost entirely an IM user of Twitter in my short tenure. In the past week I have found that I have I have adjusted my habits to be able to use Twitter on my laptop (although not as frequently). I credit my subconscious willingness to do these unnatural acts to it being so new to me and wanting to continue to particpate in conversations and connect with my new Twitter friends. I also know I am not yet as emotional as some posters and users are about Twitter based on my newby status. Bottom line for me, I do not believe that I will sustain the modification of my behaviours to fit the available service but will soon modify the tool (change to FriendFeed) to fit the way I want to use it. It is new technology and it is free so I think it is fair to cut them some slack. But there is a lemming aspect to this and once some of the pioneers start moving the rest will move enmasse. Once people leave I think loyalty will build with FriendFeed and unless similiar problems occur there it will be difficult for Twitter to recover. I hope they get it fixed in the next couple days....I am rooting for them but I won't hold out much longer. For now I can be reached at https://twitter.com/cfomarshall.

Partnering and Channels - How To

This is a difficult but important aspect of growth for all small companies. Partnering is defined as "a person who takes part in an undertaking with another or others, especially in a business with shared risks and profits". The principle challenge as a small company is in attracting the attention of a larger company (as almost everyone is in fact larger than you) and then convincing them that the economics of a relationship with you are of a significant enough benefit to get them to engage. I like to think of this in a similiar vein to a sales cycle with a major customer and would encourage you to understand that just like there is a cost of sale associated with every new customer, there is similiarly a cost of sale for every new Partner that needs to be planned and budgeted as part of your growth initiative. As a small company your "investment" in the relationship will probably be very significant up front....plan for it and manage it.
The reward and end game of establishing a Partner (especially on the channel side) is access to sell your software/product/technology into a geography or customer base or vertical that you currently don't have access to through direct sales OR that would take significant time and money to develop. As a small company you really must be prepared to give before you get in starting up new Partners and Channels. I won't go into a lot of detail here but one approach that works has the following seven stages: 1. Target Strategic Channel Candidates - It is important to be focused. It is going to cost resources, both human and financial, so strategicly target both the number of partners you are able to support and the two or three that are most strategic based on your predetermined criteria. For most startups and small companies taking on more than one of these at a time is very difficult based on the number of people required to support and drive success. 2. Sign Them Up - sounds easy and is only three words so can't be that complicated right?! This is the Partner sales cycle I discussed earlier and depending on circumstance, size of their business, strategic fit, etc can take anywhere from 3 months to 2 years. Make sure that you clearly establish with them what success will mean to you and what it will mean to them and get alignment. It is critical as the partnership goes live that expectations around support from you (economic or otherwise), and execution/targets for them are agreed to and understood. 3. Train Them - it is critical that you get your partner up to speed with your software, how to implement, how to articulate and sell the value prop, etc. Depending on the amount of services required with your software/product this can be fairly short or fairly long. My warning here is DO NOT UNDERESTIMATE this step. The success of the partnership will hinge on their success so make sure they really "get it". 4. GIVE Them Work - this is mostly tied to channel partners who will be required to provide implementation services. An accelerator in getting them up to speed is to bring them in and get them delivering with your people on an implementation project. You can even split the revenue in some predetermined manner to invest in the partnership. 5. Support Them - sounds fairly straight forward and it is but it is critical to have regular check point with them, understand what is working for them and not working and they are "learning to walk". This may require sending sales reps (and/or services people) out with their people to work on the job. Weekly calls, web conferences, a partner hotline, whatever works for them. 6. Make Them Successful - it will take some hand holding and some time but the absolute most important thing you can do if get early wins. Validate for them why they did this and that they need to do more of this with you. Do everything possible to make them happy (within a reasonable risk apportionment). 7. Set Them Loose and Manage the Channel - Now your child has grown up and is ready to fly the coop. Let them go but manage the relationship in a similiar fashion to what you do with direct sales. Have a regularly scheduled weekly call with the Executive sponsor from your Partner. Do a pipeline review. Always ask where they are stuck and how you can help. Your channel partner is now a valued stakeholder in your business and you need to communicate with them and keep them vested and engaged. Manage to your predetermined targets and drive the channel. Again, it is a big investment for us little guys but the economic rewards in the long term can be significant. When entering any relationship (whether its a Twitter follower or a Partnership) I believe you should be prepared to give more than you receive, especially at the beginning. Good luck securing your home run channel!

Tuesday, May 27, 2008

Drive Process, Be a Data Gatherer

One of the things I have struggled with at small startups is process and the collection of data to create business intelligence and knowledge. There are certain areas where I think it is important to try to establish process so that a company can gather data, analyze data, build intelligence and then use that to improve internal processes, go to market strategies, product planning, etc. THIS IS IMPORTANT but all my fellow startup and small company members will appreciate that there are oh.......about 500 other competing priorities that seem equally or more important at any given point in any given day! I will use sales process as an example below to try to demostrate why YOU MUST make the time early on to build these processes.
The most important thing to remember about building and implementing process and knowledge is that in a growing company, implementing process will always be easier to do today than it is tomorrow. The bigger you are and the more entrenched you are the harder it is implement so START NOW!!!
Spending the time to build some rudimentary processes to collect data will save you time in the future and will provide you with more than just a gut feel when it comes time to review why something is or isn't working in the future.
Sales process is a good example. Building a sale process and utilizing a simple CRM like Salesforce.com, Maximizer, SugarCRM, (insert your favorite here) will allow you to start to build a better understanding of what works and what doesn't.
From a Sales Ops perspective (a few examples):
-What are the five key questions/pieces of data that you need to get from a prospect on a first call?
-What program or partner is generating the majority of your leads?
-Had the customer heard of us beforehand? If so from where?
-this list is endless and should be customized for your needs
From a CFO perspective:
-how long from first call to to demo and what % get there?
-how long from demo to meeting and what %?
-how long from demo/meeting to formal proposal and what %?
-how long from proposal to draft contract and what %?
-how long to close and how many?
This is neither complete nor perfect and is just an example to make my point that by starting to track data and building a database of this type of info you will have a data driven basis for assessing a pipeline and providing a historical fact based position on what the forecast may look like moving out. This can provide the straw man and starting point for your sales calls, forecasts and budget conversations with sales.
After time you start to link this data to certain verticals, certain geographies, certain partners and look for patterns. Now you are putting the pieces together that will really help the business.
Over time you can build a significant amount of internal knowledge (that is not just gut feel) that will help qualify prospects, pipelines, etc. When modelling revenue growth you can link the growth back directly to the volume of activities (demo's, meetings, first calls) that are required to drive that level of growth and ensure that you are modelling a cost base that will support the level of activity required to drive the required growth.
Summary Building process and collecting data for analysis allows us to create a learning organization. A learning organization is critical to us in our startup world because we have neither the resources nor the time to repeat our mistakes. We as CFO's need to support our organizations and drive improvement through learning from what works and what doesn't work. This can be applied in almost every functional areas our business. Start tomorrow, don't wait it will only get harder.

Thursday, May 22, 2008

Ivara Expands Partner Network

I will write a blog on Channels and Partners and their importance and critical role in growth soon. At Ivara we have just added another Implementation Partner named RMB that will continue to drive our growth efforts.

Canadian Entrepreneurs and Canadian VC's

This is a good topic that is getting much airplay lately with the crux of the debate centred (notice the Canadian spelling eh!) around where, how and why Canadian entrepreneurs who are looking to raise money are getting less of it from Canadian VC's. If you use the recent PWC Report on Emerging Software Companies as a data element it is suggesting that the amount of funds raised by VC's and available for investment has shrunk from $2.2B in 2005 to $1.6B in 2006 and further to $1.2B during 2007, a 45% decline in 3 years which is quite significant. When you overlay that against the actual performance of the VC funds (a 1% return over the past 3 years) it is not hard to understand why the number have dropped so significantly. This decline will have more of a longer term effect on the market than a short term effect as the money from 2005 through 2007 is not all spent with some VC's still having open, active funds. These open funds have facilitated the actual Canadian VC investment (money out to Entrepreneurs) to increase in 2007 to $2.0B out up from $1.7B in 2006. I think it is safe to say with money coming in to Canadian VC's going down coupled with performance in the single digits it is only a matter of time before the $1.0B drop in fund raising will hit the street. The Entrepreneurs have already started to either intuitively plan for this or coincidentally align themselves with other sources of capital. This gets us to the heart of the debate. There are two great blogs (both are among my favorite bloggers) out there with positions on this. Suzie Dingwall Williams made The Case for Canadian Venture Capital and believes that the reputation of the Canadian VC has been sullied and the relationship between Canadian VC's and Canadian Entrepreneurs needs to be repaired and collectively we need to partner to help each other and better understand each other. Gary Will has a great piece (somewhat of a rebuttal to Suzie) where Gary takes the position that Canadian Entrepreneurs should get money from where ever best suits them and not feel compelled to partner or align themselves with the Canadian VC community unless that meets their business needs. I think that both make good points and are actually not far each others opinions. I would, in a somewhat mediatory fashion, bring their points together and my position would be as follows. Entrepreneurs will and must (for the viability of their businesses) get funds from the place that makes the most sense for their business and where the economics make the most sense. The more interaction and sharing that occurs between Canadian VC's and Canadian Entrepreneurs the better positioned our homegrown VC's are to be able to meet the rapidly evolving needs of the growing and robust entrepreneurial community in Canada thereby making them one of the best places for Canadian Entrepreneurs to get funded. [btw...the legendary blogger Rick Segal as most of you have read has done a great job starting to bridge this gap through his recent roadshow across Canada to better understand entrepreneur needs and wants from a VC and what the opinion is today]. With the drop in new funds coming into the Canadian VC coffers Entrepreneurs, in the short term, will need to get access to funds through Angels and US VC's to bridge the gap between funds required and funds available. As Entrepreneurs the onus is then on us to perform. When you look at the low return of VC funds in Canada over the last ten years if we as Entrepreneurs cannot drive business performance and get beyond 1%-3% rates of return the drop in new funds we see on the VC side will rapidly leak into Angels and the US VC's and money will dry up. Are the low VC returns because they picked the wrong investments?? We all know the rule of 1 or 2 in 10 for the VC's but my call to action is to all of us Entrepreneurs. Better business performance will drive increased fundraising within VCs (Canadian or US), Angels and others and more access to capital to grow our businesses and to fund new entrepreneurs expanding the base of Canadian innovation.

Friday, May 16, 2008

Doing Business in Russia, what I've learned so far...

One great way to start (and perhaps stay long term) in a new geographic market is through your channel parteners. We have several really good ones that assisted us in our journey into Russia. here is what I've learned so far........
When you think about selling software and then you think about Russia as a market, we finance types probably tend to screw our faces up and take a step backwards as we dread the amount of work and headaches that we will be toiling through in the upcoming months and years to deal with this strategic imperative.
What about the VAT implications, the customs problems, the withholding taxes, the FX risk, the IP risk and so on and so on. The thing is it's really not that bad if you focus on the details and ensure you set things up properly. To detail the steps and conversations of this would be more like a feature articles than a blog so I will summarize and you contact me if you want to discuss further or find out more but here are some of the highlights.
IP Aspects
There are certain civil codes and rules that must be followed when executing a "valid" license contract in Russia. I am told that taking shortcuts or omitting some, any or all of these points can cause significant problems and not wanting to test that hypothesis I (and I suggest you) complied. I won't list them all but they include things like:
  • including a detailed scope of the rights being licensed
  • identifying the software in more detail than we usually do
  • the term of use (and perpetual doesn't work it has to be tied to something or it will be deemed to be 5 years so you have to get creative here)
  • the type of license (ie non-exclusive, non-transferable, etc)
  • the territory (if applicable)
  • any reporting requirements of the agreement

Under the law registration of your software with the Russian patent office is NOT mandatory however, fighting infringement cases without it is near impossible without it I'm made to understand.

The governing law of your license agreement can be anywhere in the world that you would normally use. The caveat is that where there is difference between the governing law of that country, province, state and that of Russian law, Russian law will prevail. This principally applies to some of the specific items listed above and I would still recommend you use a governing law outside of Russia.

VAT, Withholding Tax, Customs

In Canada we have a double taxation treaty with Russia which means that assuming you provide your custome with proof of your company's residency when you sign the contract there will be no withholding tax requirements (otherwise it is 20%) associated with the License, Maintenance and Support and Services revenues/billings.

License fees are exempt from VAT tax but training, installation and support services are not. All are subject to an 18% reverse charge VAT assuming your company is not a resident of Russia. It is really important that you agree and document with your customer that you are going to "gross-up" your invoices for these VAT eligible services. They will then be responsible for self collecting and remitting the VAT to the Russian agency and you then receive the same payment you otherwise would have net of taxes. This also prevents you from having to setup and be a VAT filer in Russia.

Support is a little tricky and you must be careful that new versions of your product that the Russian customer would receive while on Maintenance and Support do not contain any "new software product" or and plug in type releases that can be run seperately from the software originally purchased. Enhancements are fine but there is a grey area that you should review depending on your software, release cycles, etc. If you are deemed offside on this it will result in a number of tax risks that I won't detail here.

Customs is not really an issue unless you physically ship your software to your customers. If you are like us this is not really an issue as most software can be delivered electronically through FTP download or other means.

There are a myriad of other tax issues for your Russian customer on the other side of these comments that I haven't detailed but suffice is to say it can be very punitive to their books if they intentionally or accidentally misstep along the way.

Call to Action:

The Russian market is a huge opportunity for us and we are continuing to expand into that space carefully learning and asking for help each step of the way. I would encourage you to spend some time researching and understanding what is happening with your target vertical market in Russia and scoping out the opportunity, weighing the risks and evaluating the use of your limited resources in this market. There are plenty of well known established North American businesses operating resident in Russia who would probably be interested in partnering with you. Once you make Russia successful this may open up your relationship with them in other areas of the world as well which will help drive significant growth in your business.......good luck and let me know if I can help!

You don't know EVERYTHING about EVERYTHING

So let's be honest...we don't know everything about everything and we don't have to. What we do have a responsibility to do though, is be able to figure things out for our CEO. As our businesses grow and change and the competitive landscape changes dynamically on a day to day basis we need to have the ability to leverage the knowledge and experience of our peers and trusted advisors. Here is the model I follow when conqueringa new task:
  1. Identify the business issue - make sure you clearly understand and can articulate as intelligently as possible what is is that you are trying to accomplish so that people can assist you and you are not wasting their valuable time
  2. Research the issue and find someone who has done what you are trying to do - god bless google! Get on the net and research the issue as much as possible specifically looking for companies that have gone through what you are trying to do and have successfully come out the other end. Despite how you may feel at the time, most often you ARE trying to reinvent the wheel and you don't have to. Get a list of 3-5 people who have had success in your target area
  3. Reach out to your Network and solicit assistance getting in touch with the people on your target list - ok you're halfway there. You know who can help you all you need to do is find a way to get to them. Now hit your network through LinkedIn or Plaxo or phone or email or carrier pigeon or whatever you use (I will post later on Networking and some of my thoughts).
  4. Contact your subject matter expert - almost all people will be willing and happy to help but I should warn you that it is possible you will get shut down by one of your SME's. If you are just move on to the next one on your list. Make sure you have prepped your list of questions and info that you want to get and be organized so that you are in no way wasting your SME's time.
  5. Build a better mousetrap - Now take what you have learned and make it better! Just doing what has been done before will not accelerate your business. Now that you have a framework build it out, customize it and figure out how best to apply it in your business.
  6. Always, always circle back with your SME - call or visit in person (not email) to express your thanks and let them know what you did and what the results were. Tell them what you did the same and what you did different and why.
  7. You have now expanded your network, learned a new skill or process and impressed your boss.....yet again!

CALL TO ACTION

There is much more detail in all these points but hopefully you get the idea. What is on your plate today that you are struggling with??? Reach out, learn, expand your network and pay it forward!

Thursday, May 15, 2008

Ivara Commercial...stay tuned for your regularly scheduled program

Just to provide you with more background on what I do and where I work now I thought I would blog a little information on my company, Ivara. I am the VP Finance and Admin at Ivara Corp (parent company of Aladon LLC).
Ivara is an asset reliability software company located in Burlington, Ontario just outside of Toronto. Our target market is large fixed plant, continuous manufacting facilities principally in the metals and mining, pulp & paper, power generation and utilities and CPG verticals.
Our value proposition is that our software coupled with our implementation and maintenance methodology improve business performance by preventing industrial equipment failure while increasing production and lowering costs. Ivara was started in 1996 and is backed by two VC's (Almasa and Propulsion Ventures based in Montreal, Quebec).
As in any growing business our customer's success is directly correlated to our success. Success means different things for our customer depending on their strategic and competitive position in their market. In some cases we have worked with customers to reduce maintenance expenses as they try to make adjustments in their cost structure. In some cases we work with customers to drive more throughput with the same asset base through improved uptime and productivity of their assets. In all cases we strive to reduce the maintenance cost per unit of production whether they can sell as much as they can produce or they are slowing down production.
By analyzing why, where and how a customer's equipment fails, Ivara's software drives the right work at the right time.

Ivara has a proven solution and I am thrilled to be part of what we all see as a huge opportunity in an expanding and still underserviced space in the software landscape.

If anyone would like more info on what we do check out the website, contact me directly and I would be happy to set up a time to discuss more in a one on one setting or with a larger group at your organization.
I now return you to your regularly scheduled business and finance updates.....