Often the most interesting and promising entrepreneurs are not those who are one or two degrees of separation away, but genuine outsiders: from different sectors, countries and backgrounds. For this reason, while many excellent people still come to me via introductions, I always try to read messages via my blog, twitter and those (often awkward) “please add me to your network LinkedIn” requests.

Here’s the rub. Once you turn on the digital openness tap, you get swamped. There is no such thing as a trickle. You let one person in, you let everyone in – from those who’ve thought long and hard about contacting you, who’ve done their research, who’ve targeted their pitch, to those who just chance it, giving little thought to their approaches, thinking what have they got to lose. You know the type: “I’m thinking of starting something… I’d like to ask a few questions… can we have coffee?”

I barely have time to review all the messages I receive. I certainly don’t have time for all the coffee requests.

But if you’re really serious, I do want to hear what you have to say, and more often than not, I would love to meet you.

That’s why I’ve started using new platform OneLeap, which tests your seriousness by asking you to ‘put your money where your mouth is’ to send me a message. This is not pay to pitch. When I reply to your message (and you get a guaranteed reply in 10 days or 100% of your money back) the fee benefits my chosen charity, Kids Company. For me the value of the fee is a quick way to tell if you’re serious – it screens the timewasters pretty quickly. And the charity support is a great bonus.
The other day, I received my first OneLeap message – a targeted and interesting pitch. I ended up meeting the person who got in touch and watch this space!
One of the benefits of OneLeap is that I can cap the maximum messages per month I receive. So I know I’ll never be swamped, and you know, if you contact me through OneLeap, that you’ll be one of a few serious people, not one of a big pile (some serious, most not). I also know messages will be no longer than 400 words. And that is an art in itself, and it means I never have to endure again the “my business isn’t like everyone else’s and cannot be condensed to an elevator pitch or less than 1000 words”.

You’ll find other angels on the platform – as well as decision-makers in business – valuable access if you’re a small business trying to reach out to potential clients. As I discussed in my last blog, the economic climate offers a good opportunity here for entrepreneurs.
You can also sign up yourself, to help prioritise your messages (we’re all busy after all) and help a good cause while you’re at it. To use OneLeap as a more effective filter over existing services, I’ll also sometimes reply with a tweet like this:

@[name] Please tell me via @oneleap why you’d like my attention http://oneleap.to/permjot. Messages help @KidsCo_Tweets

I’ve also put automatic reply below on my email.

To show you’re serious, reach me through OneLeap at http://oneleap.to/permjot

I recently had a meeting with Andy Goldberg, someone I have been lucky enough to call a friend for several years. The guy is seriously a genius and as well as being a full time surgeon he is also the driving force between www.medicalfutures.com

This morning we were talking to someone who I hope will soon be joining the fold. One of the questions Andy asked was around the difference between a manager and an entrepreneur. It is a great question and there were three very different answers. What do you think is the difference?

Well, the first answer was a very typical young MBA answer. It was all about attitude towards risk, ambition and vision. It was a very good motivational answer but it was just wrong.

Then my answer was around a Manager being someone who executes a plan whereas a great entrepreneur can create the plan and the vision. Which may sound great but is actually just empty waffle which doesnt really help.

Andy’s answer was that an entrepreneur gets resources needed to get a job done whilst a manager gets great results from a given amount of resources. I loved the simplicity of this answer and also found it useful in terms of understanding what people enjoy doing. A lot of us like the idea of being called an entrepreneur, whereas we may be better suited to being a manager. The big breakthrough in my career came when I realized I wasn’t a particularly good CEO but I was very good at other bits – and if I focused on them – I could make more money and be much happier than trying to be a CEO (because that is where I thought all the glory was).

This definition also fits in neatly with what I think a CEO should do. Get the money and people needed to get something done whereas a great COO will be able to get the thing done – better and with probably less resources than most ‘entrepreneurs’ would.

Through this exercise, I also recognized that I love being a manager – and my enterprises are all about bringing managerial skills to play. That is getting things done for less resources and better than someone else.

So what are you?

And we get on to talk about Entrepreneurship. One of my many pet hates is the way we are encouraged to become a nation of ‘risk-takers’. Entrepreneurship is not about risk taking, it is in fact the complete opposite. And risk taking is not in itself a good trait. I would argue it was the risk taking culture that existed in the investment banks that got our economies into the terrible mess we are in. Borrowing money is always a risk, and we in the West were collectively encouraged to take this risk; so the idea that risk taking is an inherently good thing to do is simply wrong.

The best business start ups I have been involved in are all about mitigating exisiting risks rather than being an exercise in taking risks. It is interesting to note that many of the biggest companies that exist today (Apple, Microsoft, Oracle etc) all started off as Consultancy projects where the basic product was developed at someone else’s expense and then scaled up and rolled out.

Business is not about taking risks and I will never invest in someone who shows off about the fact that they are a risk taker. That is also why I have had a problem with the over use of the word entrepreneur.

This is why a track record is so important for investors. It is recognising that the ‘entrepreneur’ has learned that running a business is not about taking risks but about managing risks.

My background is in sales and my first business (which I am still running) focuses on sales training. What is interesting though is that the best business lessons I have learned have probably been as compliance officer of Flight and Partners, the fund management business that I co-founded over four years ago.

It is all about recognising the inherent risks involved in business and systematically reducing those risks. It is the same as any extreme sport or back to cage diving with Great Whites. People engaged in those sports don’t advertise the risk, but rather focus on how the inherent risks are mitigated. Risk means there is a strong chance of different outcomes.

Let me tell you, I am not going into the Ocean with Great White sharks with someone who advertises the fact that they love taking risks. I can tell you, investment decisions are made on the same basis.

I always enjoy the festive break as it is a great time to reflect and take stock of what you have done and what has yet to be achieved. It is also one of the few times of the year where you can take a break without worrying about the calls going unanswered.

The other interesting thing about personal ‘stock takes is that it is one of few activities that really reveal gender differences; men tend to overestimate what they have achieved and women tend to underestimate what they have achieved.

Everyone has been saying how they expect 2012 to be a difficult year. For once, I would say there is merit in the consensus view. The Euro drama has not played itself out and I just think the European leaders have not acknowledged the full scale of the situation or how powerless they are.

I am a very proud and staunch European but the Eurozone simply does not make economic senses. Along with a single currency you have to have single points of control. There are (and have always been) two Europes; a Northern Europe and a Southern Europe. What does make sense is to have two ‘Euros’ one for the North and one for the South.

There is no hope for Southern Italy (which I love) and Greece to compete with the super efficient Germany and Scandinavian economies. Normally, free floating currencies will compensate for these inherent differences, but they haven’t. Germany is benefiting from a massively undervalued currency (for them) really helping them to boost their exports (last month they overtook China as the largest net exporter!) and Greece and Ireland are seriously being hampered by a very expensive currency (for them) not allowing them to find the right level for their exports to be competitive.

The current economic management of Europe is a fantastic manifestation of Nietchzse’s maxim “principle is the enemy of the reason”. The leaders are so wedded to the idea of making the Euro work that they are prepared to let reason fly out of the window.

And for once, we in Europe all need to wake up to the idea that whilst the Germans are being asked to dole out more to support the Eurozone, they are by far the largest beneficiary’s of the Eurozone as well. There is something fair about them being asked to pay more towards the cost of keeping Europe solvent.

The hope for me is the USA. The economy seems to be moving again and I expect Unemployment to dip below 8% by November, ensuring Obama’s re-election. I do think Obama will win – and win convincingly. The main reasons being that the economy will improve, Romney will fail to ‘super-charge’ the Republican base (a strategy that Karl Rove deployed to terrifying effect in 2004) and I do not think in this year, Americans are willing to vote for a Private Equity guy (just see the anti-Romney video that his ‘colleagues’ in the Republican party have produced).

The UK will also benefit from the Olympics and I do not think we should underestimate the effect that will have on the UK economy. Along with the millions of visitors, it will bring lots of advertising dollars as brands will be desperate to communicate with that very attractive demographic.

And of course, inflation is showing signs of easing in the UK but I do expect things to be very tight here as companies continue to hoard cash and few investment projects get the go-ahead.

So…….

If you are an entrepreneur what does this all mean?

1) Now is a good or as a bad time as any other to start up
2) If you are seeking to work on Government financed projects – forget it
3) If you are looking to export – that would be a good strategy, go for markets are are in good health such as Northern Europe.
4) Export quality. It is going to become harder and harder to export on the basis of price alone.
5) Shop around in terms of the ideal location for you to be based as an entrepreneur. I did a lot of travel last year and I was amazed at the support available to attract and retain start ups. (I will be writing a blog about this soon) but be very flexible in your thinking.
6) There will be some great restructuring, management buy out opportunities. Get together the key skills needed to run an enterprise and you will be surprised at the opportunities available to you as companies continue to focus on their core activities.
7) Don’t give up.
If it’s really not working – learn when to give up.

And as always I wish you the best of luck for the New Year.

As any regular follower of my blog will know, I love Economics, and feel that an understanding of the subject can help business owners make better decisions. The Macro environment is very important in considering even what appear to be small business decisions.

However, a tweet (you can follow me on @permjotvalia) I read suggested that the very difficult pricing model of airlines could be solved by more competition. I disagreed with that and would hope to use this blog to demonstrate how in many cases, more competition can leave consumers worse off.

If anything, airlines are one of the best examples of learning from economic principles. They are great at explaining the issue of marginal revenue. (Even if ALL costs are not covered, it is always worth doing something providing marginal cost + $1 is earned). So even if a flight is making a loss, it is worth flying providing the costs of actually flying (petrol, food etc) are covered. That is because the fixed costs are going to be huge; that is wages (fixed), landing fees (fixed) and aircraft costs (fixed).

Travel is also one of the few markets that allows producers to practice perfect price discrimination. They are able to price each seat differently depending on how much the traveller needs that ticket. So if you buy a ticket for tomorrow that will be more expensive than in a months time. Just before Christmas will be more expensive than January. And my pet hate, if you do not stay over on a Saturday night, the return flight can be very expensive (as they can use this to discriminate between business travellers and leisure travellers).

But the airline industry is also very odd in that it is very heavy regulated. You would have to get rid of some these regulations to ensure that there could be more competition. One of the reasons Ryanair prefers pilots to hold Irish licences rather than UK ones is that they can fly an extra couple of hours a week because of that. How would we as consumers feel if the UK upped the limit from around 32 hours a week to say 60? It may lead to lower prices but is that what we would want.

And what about the fixed landing slots regime. In a truly competitive market each and every slot could be up for negotiation. If it got to the stage where all the fixed costs were made flexible, flights could literally decide 24 hours before they were due to take off if it was worth making the flight or not. Although its opaque pricing structure is very annoying, it is also the best guarantee we have that these flights will indeed take place.
So, more competition and flexibility is not always the answer.

Another great example is Premier League Football. Until recently, Sky had a monopoly on live matches. Because of EU intervention, other operators have had to have matches offered to them. This sounds great, but the consumer is a lot worse off as they now have to subscribe to multiple pay for view TV operators.

I meet with many people on a regular basis who say that they are not very good at networking. I found that strange as many of these people have great social skills – and then I realised that what they were really saying is that they find it hard to build relationships and manage relationships.

To me there is nothing more frustrating than having a good meeting with someone and feeling there is going to be something there – and then there is no follow up or actions promised.

You need to always remember that it is a small world (I have stopped getting freaked out by the incidents that remind me of that) and that every time you interact with someone there is likelihood that you will probably come across them again in a different context – or that your name may come up in a conversation with them and they will offer an opinion. Question is what opinion do you want them to offer?
And yet it is all so easy. We too easily manage people on a transactional basis rather than on a long term relationship building basis. I come across many people who I do feel are just wanting to ‘use me’. There is nothing wrong with meeting people with an objective in mind; but you should try and make the person feel good about helping you.

I have to be honest and say that I struggle to see why people struggle with this. Why not simply treat people as you would like to be treated yourself? And that creates a virtuous circle where favours kept getting passed on.

As an aside, I was talking with a journalist a couple of weeks ago and he was bemoaning the nickel and dime culture here in the UK compared to the US. He felt that Angels/ Advisors in the UK were too focused on their own rewards to really help entrepreneurs. I surprised him when I said that it works both ways. In Canada (and Cape Town) there is much more of a reciprocal relationship between advisers and companies. If I do a good job with a company there, I am often given an options package, asked to join the board and nine out of ten times at least paid something. In my experience, in the UK, despite helping lots of companies, no one has offered anything in return. Only one company has ever sent me something unprompted. I guess this is a cultural difference rather than a statement about the spirit of people.
And yet this still comes down to relationship management. It should never feel like a one sided relationship.

And if you are thinking of how to say thank you – its my Birthday on Thursday!

If you want to start a small business but aren’t sure where to begin simply because you’re afraid of failing, you’re certainly not alone. Many small business owners – or potential small business owners – miss out on the opportunity of a lifetime for starting a small business simply because they’re afraid of failure.

Luckily, Daniela Baker from CreditDonkey shares a few steps you can take to help you overcome this fear of failure and get your small business off the ground. Here are a few ways you can start to overcome your fear of failure today:

Discover the cost of inaction

If you’ve been dreaming of starting a small business, there have to be some strong motivating forces behind that dream. Do you want to be your own boss? Do you want to provide your family with more financial freedom and security? Do you simply want to do what you love and love what you do? Consider the reasons that you want to start your own small business, and then consider what it will cost you to not even try. While failure could be costly, inaction could be even more so!

Do plenty of research, and come up with a plan

Before you can even consider starting a small business, you need to come up with a plan. This involves hours’ worth of research into your market, your type of business, your financing options, and many more things. The more research you do, the better your business plan can be. With a better business plan, you’ll feel more prepared and will be less likely to fear failure.

Come up with a backup plan

It’s always a good idea to start off with a backup plan, as well. Decide how long you’ll work at your business before you have to change things or give it up entirely. Decide what you’ll do if things don’t work out or if you decide you need to try again later. Make sure that you’re also protecting your personal assets in the process. One of the scariest things about starting a small business is the fear of losing your home and personal possessions, but a good lawyer can actually help you set up your business so that your liability only extends to business items – not to your personal items.

Save, save, save

Another cause of fear for many entrepreneurs is what will happen to them financially while they’re starting a business. Hardly any businesses turn a profit for the first few months – or even the first few years. You need to come up with a financial plan an emergency savings so that you can create your business. This may mean starting your business on the side while you hold down your regular job, or it may mean learning to live on just your spouse’s income while you’re starting your business. In any case, it certainly means that you need to have a significant amount of money in your personal savings account before you get started. This way, if you have an emergency, you can finance it without panicking. Though saving up means delaying the start of your business, it’s definitely worthwhile if it gives you more peace of mind and gumption to go after your business goals once you get started.

Find someone to answer questions

Talk to another small business owner, a group of small business owners, or a small business organization in your community when you need help. You don’t know everything about starting a small business, even when you’re in the middle of it, so knowing where to go for help is vitally important. Make sure you have resources for help during your planning and start-up phases, and you’ll be much less likely to be stalled by your fear of failure.

Consider various financing options

Of course, one of the major fears of small business owners at the start of their businesses is financing. Do you find investors, or ask family members for loans? Do you personally finance your business, or go to a bank? Do you get a business credit card, or not?

It’s a good idea if you work with a variety of flexible financing options. For instance, you might use a business loan from a bank to get your basic materials and supplies, but you might also ask your parents or other family members in financially sound situations for personal loans. Business investors can also be helpful, so long as their investment doesn’t mean they get control over all your business decisions, which can be frustrating and harmful for new business owners.

A business credit card can also be a good option for day-to-day financing, especially once your business is bringing in enough money to cover the payments. Just make sure that you’re using this financing responsibly by keeping your balances at or below 50% of your credit limits and by using your credit cards for certain basic purchases that you’ll be able to pay off within a reasonable amount of time.

These steps can help you feel more prepared for starting a small business, so that you can overcome your fear of failure and just make it happen. Remember, there’s never a perfect time to start a small business, but by being prepared and thinking through all your options, you can create a great business at any time.

To readers of the blog outside of the UK, the story so far is as follows; a private investigator hired by a journalist working for the News of The World was found guilty and sent to jail for hacking into voice mail messages left on mobile phones. The paper claimed that these were rogue elements and had nothing to do with the paper.

The story is now much wider than that and it appears that many people were having their mobile phone messages illegally listened to. Stories were printed on the basis of these leaks. Many celebrities are now suing the newspaper and many have already accepted compensation.

The story has this week taken a very sick and twisted turn (but on the basis of allegations – not fact). The voice mail messages of a missing teenager appear to have been hacked and some messages were deleted to make room for more messages as the inbox was full. This gave the family false hope that she was alive when she had actually been murdered. The Police also appears to have colluded in this practice and the Chief Executive of News International in the UK told Parliament that the Newspaper did make payments to serving police officers for information.

Yes, you can understand the complete anger many people in the UK are feeling. The CEO of News International refuses to quit her post because she claims she was not directly responsible. But this is where there is a huge lesson for entrepreneurs. Many decisions we make on a daily basis do have a moral dimension and there is no escaping that.

Through those decisions and through the decisions we encourage our teams to make, we create a culture which we are ultimately responsible for. If there is a strong “win at any cost” culture do not be surprised when people start behaving in a particular way. It is no accident that it is organizations like Newspapers, Banks and Recruitment firms end up with cultures which seem to be morally bankrupt.

I strongly believe CEOs and founders are responsible for the moral conduct of the companies they lead. I was involved in selling some toy guns at one stage and one day we saw these ‘toys’; they were very realistic and very powerful. That day, despite it being a profitable venture, we closed the business down. It was just not consistent with what I wanted my business to be about.

So, I do think that in the case of the News International, the CEO needs to resign. They need to accept that they allowed this culture to foster under their leadership.

As Entrepreneurs and CEO’s we should feel entitled to enjoy the massive fruits of success we may get for the risks we take, but equally we should equally pay the price when things go wrong.

But for some strange reasons many of the entrepreneurs I know are very self-critical; this is a very good trait to a point. But it also becomes a big problem as I think many of you get addicted to mentorship or personal coaching.

Therapy has a very vital role to play in life if you have been through some trauma or something eventful that you need help to make your way through. However, I find the majority of therapeutic interventions utterly useless; and worse than that, sometimes very harmful.

It seems that because entrepreneurs are so focused on themselves; they engage in this almost narcissistic practice of seeking insights into what they are like. Worse than this is the class of industry that has developed around entrepreneurs. One of the problems with the growth of entrepreneurship is the development of life-coaches, business coaches and mentors who are blatantly not qualified for the role.

This is particularly noticeable in places like Halifax. There is an entire network of people who go around calling themselves entrepreneurs; when they blatantly are not. Be very careful of whom you accept advice from. Some of the worst business ‘insights’ I have heard are from ‘senior’ (they are never junior) business authorities.

Before you allow yourself to be judged by anyone- and I mean anyone, be critical and see what value they can offer. A quick test for you is that if at least 50% of their income comes from business support/ mentoring etc.; they are probably not right for you.
I have publicly stated on many occasions, that I would not ever invest in a business where the plan has been written by external consultants. I feel the same way about entrepreneurs who ‘need’ too many low rate mentors.

Just as they say you should judge people by the company they keep, you should judge the business acumen of people by the mentors they surround themselves with.

In summary; trust yourself. As entrepreneurs, of course you are slightly messed up. But celebrate that fact. Entrepreneurs; you are beautiful.

However, I managed to get a good exit last week (which I tweeted about @permjotvalia) and as such I was delighted to be back investing again.

I have invested the proceeds from that exit (promised as it still has not gone through 100% yet) into two companies and I wanted to share the information on those companies and why I had invested in those companies.

Before I say any more about those companies, I should issue a very appropriate wealth warning. You should not read the information below as an invitation to invest. Angel investing is risky and you are likely to lose your entire investment. Before you engage in any angel investing you should ensure that you understand the risks and have sought professional advice and that you are indeed an eligible investor (either a High Net Worth Individual, a sophisticated investor or a recognised counterparty)

The first business that I will be investing in is a company called Hoops Innovation website is www.shotloc.com This is a company based in Halifax, Nova Scotia and I think they are doing something which is awesome and fun. Being able to shoot hoops accurately is a key skill in Basketball. This skill requires you to hold the ball in the right manner and follow through in the right method. Shotloc is a great and scientifically proven training aid that will improve your shooting accuracy.
That’s just the product, but what has impressed me most about the company is their ability to have achieved so much in such a short time. They have achieved listings with major retailers and will be available at www.amazon.com in a very short time (days). The great thing about being on Amazon is that they sell a huge number of basketballs and every time they sell a ball, they can ask the buyer if they would like to buy one of our training aides as well. You can never tell – but I really think this is a winner.

The second business is called http://myows.com and I am excited about this as this is a business based in Cape Town (have you got the impression that I totally fell in love with this place yet?)

This is a business that uses the internet to empower creators of original works (hence Myows – My Original WorkS) to ensure they are copyright protected at a tiny fraction of the cost to the standard ways of protecting copyright. Soon to be announced enhancements will ensure that the internet is scoured to see if any.