Yesterday the government announced a retail banking sell off of RBS and Lloyds branches to re-establish competition in the consumer and small business banking markets.

John McFall, chair of the Treasury Select Committee welcomed a return to the era of ‘boring banks‘.

Is Lord Sugar taking the piss, when he moans about moaning small business owners?

Meanwhile Alan Sugar, The Apprentice star and government Enterprise Champion, was typically brutal in his assessment of firms blaming banks for their misfortunes.

At an event in Manchester last night, he called the bosses of small firms complaining about not being able to access bank lending, ‘moaners’ who ‘lived in Disneyland’ – much to the dismay of small business groups and many in the media.

Not a great piece of timing on Lord Sugar’s part, but he does have a point.

Many businesses I talk to say while there’s still very much a crunch when it comes to credit, they want to pay off borrowing. They don’t want to increase their debt.

To ask banks to be lending more and businesses to be borrowing more during the worst recession in a generation is entirely counter-intuitive and, you could argue, makes no business sense either for banks or most SMEs.

But robust businesses with strong balance sheets and assets can still obtain lending, if they want it. Yes, businesses fail in recessions, but throwing money at failing businesses isn’t going to make them better, sustainable businesses.

I spoke to Martyn Shiner, the FD of a South West manufacturer Severn Delta, a few weeks back and he agreed with me, saying:

When other small businesses bleat about not being able to finance their business, I think, but are you providing timely management accounts, can you tell me what your margins are, can you tell me what the risks are in your business – and most of them haven’t got a clue.

To be fair, Martyn went on to concede that since most of the UK’s 4 million plus businesses are at the micro end, like consumers, they probably borrowed because borrowing was easy and got used to the habit.

The banks were lax, had lending targets to meet and free money to give away. They then slammed on the breaks too hard and left many SMEs floundering to cope with the new world of austerity we’re once again living in.

But it’s easy to forget, the last time the mighty NatWest (owned by RBS) made an almost unheard of loss, before the current fiasco, was during the major recession of the early 1990s. Why?

Not because of derivatives, but because of huge bad debts incurred by lending in the domestic commercial and small business sector.

So what of small businesses feeling the pain?

Earlier this afternoon I talked to Peter Riches owner of a small Shropshire-based web development company, BeVivid who describes bank lending, or rather lack of it, as ‘diabolical’.

His company has for months sought lending for business development funding and a new product, but RBS, Barclays and Lloyds have all turned him down flat.

Banks have never been keen on web businesses, or on funding new concepts. But lending to innovative businesses and lending to growing business really ought to be considered.

But largely, I think there’s a strong case for saying the small business lending crisis is a myth.

Strong businesses will borrow, if they want to, despite unjustifiably high interest rates. Weak businesses will go to the wall. Some one-man or one-woman bands will just slip away unnoticed.

But what about the massive decline in bank lending figures as recorded by the Bank of England this year?

What about the lack of take up of the Enterprise Finance Guarantee scheme which to end October has seen just 6,100 businesses find funding of £620 million, some way behind target?

Well maybe the demand for borrowing is just not there right now. And maybe that’s a good thing.

The huge growth in SMEs in the UK over the last decade was, in my opinion, debt fuelled.

It’s no surprise many are finding it hard to break the debt habit the banks themselves pushed, like street corner crack dealers.

[Picture credit: Jason Cartwright licenced from Flickr]

After spending time with my mentor and deciding the concept I had was a good one, I felt relieved I’d at last shared my idea and received some very positive feedback. It can be very lonely when you’re the only person holding all the cards.

I had de-risked the opportunity for myself, my family and an independent mentor and now I had to set about creating a product and getting it to market to generate some revenue.

So the idea was to create a product in powder form which, when added to a refilled bottle of water, turned it into a healthy award winning alternative to soft drinks, squashes, vitamin drinks etc.

I wanted the world to become healthier by drinking more water everyday. A really simple idea. However I’m a salesman with a background of 12 years in IT and had no idea how to make a powdered soft drink in a sachet.

The first thing I did was apply to the government for a grant for researching an innovative idea (which is no longer available, I believe). There was an awful lot of paperwork involved but I wanted to make sure I was creating a product that appealed to the mass market.

I’d found that, through a national opinion poll, I could ask, for the princely sum of £1,500, 1,000 people four Yes/No questions.

So the government stumped up half the cash and I sowed in my half to book the questions on the next research round.

The questions were:

1. Would you use a powdered flavoured drink to help you drink more water?
2. Would a powdered drink with added vitamins be something you would buy to help you drink more water?
3. Would you buy a powdered drink with added vitamins and a light refreshing flavor for a family member to help them drink more water?
4. Do you refill ready to drink water bottles from the water cooler or the tap?

I can honestly say this was the best money I ever spent. The reams of research produced by the NOP report from these 4 little questions opened up avenues I thought impossible when I started out.

Quality research opens doors. Investors may believe you and invest in your emotions but they also require hard facts. The NOP poll gave me hard facts.

Armed with this data I was buoyed by the apparent need for my new undeveloped product. So instead of mucking about and spending ages learning how to be a technical food developer, I flew out to Geneva on EasyJet to an ingredients show to see if I could work out how to put together my new market ready product.

The first stand I went to I asked the question “I’m looking to develop a powdered vitamin and mineral drink that is sold in sachets and dissolves clear in water with low calories and no nasties in it, what do I need?” and the man at the desk gave me a lit of ingredients and where to get hold of them.

Really, truly that’s how the first formulation was developed. No three years at food technical college for me thank you very much. I just asked for some help and the guy gave it to me.

I honestly couldn’t believe my luck. He even wrote a proposed formulation on a piece of paper and wished me well. Sometimes it’s luck that helps us overcome difficult hurdles.

Back in the UK I contacted three companies, found through Business Link. I created a brief and asked each company to come up with a formulation that would satisfy my criteria at a reasonable price.

They did, I chose one and we worked on the formulation, taste and solubility for 3 months to get it just right before searching for a co-packer.

The essence of this blog is all about taking a chance backed up with real business sense and making sure those involved understand the research has been done and you can all move forward to the next step knowing that you’re on the right track.

I often look back at the research results from NOP and marvel at how far they got me.

When was the last time you stood back and reviewed your brand?

Take a look in the mirror and ask yourself, in all honesty does your company image accurately reflect the quality of service that you provide and is it appropriate for your target audience?

If not then it’s time for a change.

Your brand is far more than just a logo. It incorporates everything relating to the image that your company is looking to achieve. This includes your logo but also the quality of your marketing materials, where you operate from, the manner in which you deliver your product or service and the people who you employee.

All of these elements combine to give an impression to the outside world of your company and the quality of its service. So you must make sure all of these components of your brand give the same consistent message, otherwise you risk confusing your potential customers.

It is essential that your company brand is appropriate for your target audience. You must ensure your logo and marketing materials are of a quality and image that is appropriate for the audience you are looking to attract.

Consider Argos, the company focuses on competitive pricing and value for money combined with a convenience-based service. Buy a pair of earrings from Argos and you might not even see them before you buy, you certainly don’t expect a personal service or quality of product that you would expect from Tiffany & Co, for example.

So it’s appropriate for Argos to develop a brand that reflects this value market whilst Tiffany & Co must ensure its brand clearly portrays the same quality as its exclusive jewellery.

There is nothing wrong in developing a value based brand but it must be because you are delivering a value based product.

My advice is, if you are unsure of the perception your own brand portrays, then conduct some form of research. Find out from your existing customers and suppliers how they perceive your company and what your brand says to them and act on the feedback.

If upon reflection you find your brand is not suitable for your target audience, inconsistent or simply in need of a revamp, then don’t panic.

Many companies I meet dread the thought of a ‘rebrand’, it fills them with fear of escalating costs and an administrative nightmare. It doesn’t have to be either of these.

Managed properly a company rebrand can be a relatively stress-free, inexpensive exercise and actually a very satisfying project, you just need careful planning, a vision and a realistic budget.

The good news is that you can introduce a high quality brand without blowing your marketing budget!

In next month’s article I’ll take branding one step further and offer some advice on exactly how to develop a new brand, including some hints and tips on keeping the costs down and working with design agencies.

Microsoft’s Windows 7 officially launches on 22 October, but the undoubted appeal of the new operating system for the SMB (small to mid-sized business) market looks set to be tempered by potential upgrade issues.

According to Microsoft in the UK the vast majority of mid-market businesses are still running XP having skipped Vista due to real and perceived compatibility problems.

In a frank interview with Robert Epstein, head of small business marketing and sales at Microsoft in the UK, earlier this week, he told me:

As you start to look at 20 people companies and above where people are more interested in compatibility with their ERP and accounting packages, then there have been a large number who down-graded from Vista back to XP. So we think the actual install base is only 10% running Vista today.

So what’s the problem? Well the upgrade path from XP to Windows 7 isn’t straight-forward. Most would recommend a clean install of Windows 7 on an XP system, rather than an upgrade.

Indeed Microsoft’s own advice says ‘we don’t recommend’ upgrading from XP to Windows 7 and suggests the best option is to buy new hardware.

That’s one way to avoid compatability issues. No wonder Michael Dell is so keen on the new operating system!

As it happens I also think it’s a great operating system as I said in my Windows 7 review earlier this year.

But for businesses of 20-250 users the ‘clean install or buy new hardware choice’ may well cause pause for thought.

Of course Windows 7 includes the extremely useful XP mode which means businesses won’t have to buy new software to replace specialist applications that only work on older machines.

That’s good news in an economic climate where small businesses don’t want to be forking out for expensive software upgrades. But are they ready to upgrade their hardware instead?

Perhaps a refresh of hardware in SMBs is long overdue. Whether now is the time to make those purchasing decisions is another matter.

So it remains to be seen how swiftly XP-loving, mid-market businesses embrace Windows 7. Its penetration into this market may turn out to be slower than Microsoft would undoubtedly like.

If you’ve never written a press release before then there’s nothing to worry about, it’s fairly straightforward. The key ingredients to a successful press release are a good story, well-written copy and targeted, enthusiastic pitching.

Style Counsel

Aim to draft between 400-500 words. This is ample for a press release. Use short, to-the-point sentences, as journalists do not have much time on their hands and often receive hundreds of emails a day. Best practice here is to think how you’d sell your news in five seconds, because that’s about as much as you’ve got to catch the journalist’s attention.

The basic structure of your release should be as below:

Title: Bold, in one line explain what your news is and what difference it will make to your target audience

Standfirst: In italics under the headline, another line elaborating on the title

First Paragraph: Here, describe what you do, what your news is and why it’s relevant for your target audience in just two sentences. What’s the top line benefit for your customers?

Second Paragraph: Elaborate on the news. For example, if you’re launching a new product or service, what are the main features and/or benefits for your target audience? What’s in it for them?

Third Paragraph: Include a quote from someone senior here, preferably not a marketing title, though. Journalists don’t like citing marketing titles as a general rule.

Fourth Paragraph: Use this final paragraph to justify your business case with some recent industry statistics or news piece demonstrating why people should be interested in your news. Also use this paragraph to direct readers to other resources, such as online product demonstrations. Finish the release with the word ‘Ends’ below the final para

Boilerplate: Under the press release text you need to tell people who you are. How would you describe your company in one paragraph? What’s you website? Include media relations contact numbers and email addresses here.

Then, when you’re happy with the text, you’re all set to pitch to press!

Life’s a Pitch

Pitching to press is not easy, but editors – especially on regional papers – are usually more willing to hear from people who have set up their own business than PR people pitching on their behalf.

You can do some online research into the main target press in your field, or you can use an online service such as FeaturesExec or Gorkana to build your target lists, but be warned, these can be expensive.

There are newswire distribution services which will send your release to the target media that you want to hit. These need not be expensive, either. Most countries will have a service offering press release distribution but look at their credentials. In the UK, for example, established players include RealWire and ResponseSource.

At the end of the day, however, there is no substitute for the personal touch – calling the journalist to let him or her know what you’re announcing and then emailing them the press release with a short paragraph pitch to remind them of the call.

Once you’ve contacted your main targets you can use free newswires to help improve your search engine optimisation (SEO). Check out the likes of i-Newswire and PR Zoom. Also, research the news sites in your industry as some of them allow you to upload your press releases to their site, if they pass editorial control.

Social Media News Releases (SMNRs) are the most recent development in the continuing evolution of the press release. Whereas most press releases will be sent via email as pure text, SMNRs make the traditional release come alive, with links to more interactive content, such as videos, podcasts or articles and product demonstrations.

This can be done by simple building in links where appropriate, but there are sites that help you distribute your SMNRs, such as PitchEngine. These also enable you to plug the news over social news networks such as Digg and Reddit.

Top Tips

DO:

• Think of what your audience wants to hear, not what you want to say about your product
• Remember that if there’s a third party mentioned or quoted, they must give their permission for you to cite them and approve the text
• Research UK-generated press releases online to see how other companies word press releases
• Identify 10-15 key press contacts and pitch them by phone before emailing
• Use plain English. No one likes marketing puff
• Use keywords – see our SEO guides for more on this
• Send individually addressed emails to your key targets. “Hi Dave”, goes a lot further than “Good morning” to a blind copied address list
• Make sure you call the right journalist! If you supply garden furniture, don’t call the sports desk
• Call your main targets between 9am and noon. 12-2pm is a write-off due to lunch and by the afternoon journalists will most likely be writing to deadline. You can use the afternoon to put your press release on a number of free wires
• Build a news page on your website and aim to get one release out each month

DON’T

• Leave voicemails when calling journalists – they rarely check
• Use hyperbole. If you’re not the leader in your field, then don’t say you are
• Don’t capitalise your headlines, they’re hard to read and makes it LOOK LIKE YOU’RE SHOUTING!
• Send an email to a journalist and follow up with a call asking whether they received it or not, they most likely read it and if they want to get back they will
• Send the release out again a few days if you’re not happy with initial uptake. Journalists are not fools (believe it or not!) and it could damage your attempts to build relationships
• Include large attachments. Although bandwidth is wider now, click-through links are far more preferable. If the journalist wants anything else they’ll be in touch
• Don’t ask the journalist if coverage will appear – you should look for that yourself. If a journalist updated everyone they wrote about when and where their news would appear they’d have no time to write!
• Use exclamation marks in press releases

Writing press releases is something I podcasted on recently. You can listen to that along with other best practice marketing podcasts at my website.

Slash, burn, sweep away. Sharp blades, bonfires and new brooms.

When it comes to small businesses and red tape, politicians have a limited, but suitably strident vocabulary.

Nightclub bouncer Ken Clarke has the talk, but does he have the trousers?

Words that always play well to businesses large and small. Words that always play well politically.

Words that always play well to the vanity of politicians who believe their administration will have a light touch: less government, not more.

The problem is, for decades, Labour and the Tories alike have failed miserably to do anything about the legislative burden on UK SMEs.

They’re all talk and no trousers – words, words and more words.

So will Ken Clarke and the next Conservative government hold true to the pledge he made yesterday at the party’s 2009 annual conference that:

to get Britain back in business, the excessive regulation that businesses face has to be swept away.

Words like these echo down the years.

In 1994 Michael Heseltine famously announced the biggest purge of bureaucracy since World War II (?) and said he had lit a match under the :

… largest bonfire of controls that has taken place in modern times in this country.

In 2006 Tony Blair promised to cut red tape for business by 25% by May 2010, introduced the concept of ‘better regulation’ and Labour committed itself to:

… one of the most radical programmes of regulatory reform in the world.

The Cost of Red Tape

There is little doubt that the cost of red tape since Labour came to power in 1997 has increased dramatically.

Government figures suggest Whitehall bureaucracy costs businesses £15 billion a year.

The Federation of Small Businesses says SMEs spend 7 hours a week dealing with red tape. The British Chambers of Commerce (BCC) estimate new regulations introduced from 1998-2009 have cost business £76.8 billion.

Over 50% of the increase in costs accounted for by the BCC are linked to introduction of the National Minimum Wage, The Working Time Directive and the Data Protection Act.

Some would argue that introducing 4 weeks holiday for all, protecting personal data and setting a benchmark for low pay are all positive pieces of legislation.

But the uncertainty, cost and time it takes small businesses to deal with an ever-changing, growing legislative environment remains a massive headache.

In December 2008 the government claimed to have reduced the cost of red tape by £1.9 billion.

Bizarrely £400 million of this saving is supposed to have come via rather rudimentary ‘online tools’ to help businesses better understand their employment law responsibilities. A saving no business group I’ve spoken to finds credible.

Clarke’s Red Tape Proposals

So what will Ken Clarke actually do to address the red tape burden?

The headline grabbing ‘night club bouncer’ analogy – one in, one out in terms of new legislation – suits Ken down to the ground.

But one in, one out is not a ’sweeping away’ of red tape, although it promises a 5% net reduction in the legislative burden set out in a policy document released yesterday – interestingly retaining the New Labour mantra of ‘better regulation’.

The challenge will be to prove significant reductions, not just near status quo ‘improvements’.

For years small business groups and some politicians like Vince Cable of the Liberal Democrats have called for sunset clauses on legislation i.e. legislation disappears from the statute books after a set period of time.

Conservative proposals have avoided this step. They did, however, introduce a sunset clause for quangos, unless they can prove their usefulness.

Since much of the legislation affecting small firms is derived from Europe, the pro-Europe Ken Clarke may find the reality of wielding his new broom more difficult to execute in practice, than in theory.

Most important, however, is what’s been missing from government or shadow-government red tape policy for over a decade – the concept of deregulation.

Deregulation – A Dirty Word

The fact of the matter is that ‘deregulation’ has become a tainted word. Why? Because deregulation of financial markets played a significant part in the massive global financial mess we all find ourselves in.

But small businesses shouldn’t be punished for the crimes of big business.

We need deregulation, not the status quo and certainly not ‘better regulation’.

So you have an idea for a business, which is brilliant.

I am truly very excited for you, as this is the moment when your creativity knows no bounds. This is when your senses are most heightened and the constraints on what you can do have not yet reared their difficult and ugly heads.

Are you creative? Of course you are! Many people have simply forgotten how to capture their creative potential.

When you were a child, you would happily concentrate for hours on end, creating endless scenarios played out with the tools you had to hand: building blocks, dolls, cars, trains, dressing-up clothes and action heroes.

The creativity you had as a child was a powerful tool that you could call on to bring you happiness and that acted as comfort and support.

You still have this capacity for creative thought, but it may be buried deep down and the “toys” are different. You need to release your creativity and enjoy the benefits it brings you in business.

One trick is to exercise your brain and perhaps think a little more like a child. Do a simple crossword, paint a picture, sing a song, read some poetry, kick a ball about. Enjoy the freedom of letting go of your worries.

You may already have an idea for a business or just an inkling of one. Take this spark, get some quiet time and see if you can let your mind wander into unexpected places.

When you get good at this, the brain begins to reorganize your thoughts for you. Typically, the dream state is the mind’s way of allocating space and links to the thoughts and experiences you have been having throughout the day.

Dreams are often a strange collection of follow-on events because your brain is making subconscious connections.

Practice creativity and you can enable this process in your waking brain, making subconscious connections to solve complex problems without much effort. All it takes is a little practice.

Thomas Edison exercised his creativity by doing his thinking in a comfortable chair with a few ball bearings in his hand, draped over the armrest. If he fell asleep, the ball bearings would drop into a metal receptacle and the clattering would wake him up.

He believed that his most potent ideas came from the time between waking and sleeping, when his mind was able to set his thoughts free.

How many times have you fretted over a problem and then nodded off to sleep, only to find in the morning that the solution was there all along?

That’s your brain doing its work. Sometimes it’s better not to force a solution out but to coax it out with a little quiet time.

Your brain is a remarkable asset. If you want to solve a particular issue, then sleep on it.

Times have certainly been tough lately, and small business owners are likely to have grown tired of battling for customers in an overcrowded market place.

Faced with fierce competition, many have decided to look further afield for new business in an effort to reach a wider audience and increase sales.

Although taking products into new markets is an attractive proposition, it is not a move that should ever be taken lightly, and business owners should take time to properly assess the pros, cons and issues they may face when making such a move. To operate in foreign markets effectively, there are a number of important areas businesses must first address.

First of all, building in enough time to create a sound business plan in the early stages of the move will pay dividends in the long term; and thorough marketplace research is imperative. Businesses can’t afford to get carried away with the idea of expanding overseas and be blind to potential risks.

It is vital to have a solid understanding the business landscape in each country. This includes knowledge of size of the business universe, broad characteristics of the businesses, some view of the level of sophistication, business culture or adoption of direct marketing (DM) and importantly, the infrastructure to support direct marketing.

You should utilise all resources that can offer advice. For example talking to the local government, chambers of commerce and other business resources can help gather information on the size and characteristics of various markets.

Once you have carried out suitable planning and research and are ready to launch, the first hurdle you may face is that of the language barrier. Although many non-English speaking organisations are happy to do business in English, some aren’t and will not welcome you calling and speaking in a non native language – even if you are trying to buy.

Low brand awareness in the early stages may also slow down the sales process; however partnerships with established brands to add recognition and trust can help get things moving more quickly.

When dealing with finances in foreign countries, managing exchange rates can be bewildering and extremely complicated.

On paper, what initially appears to be a profit can be massively eroded by variations in exchange rates. You need to be part accountant, part economist and part fortune teller!

Small businesses can get advice from their banks on this, but the banking schemes for fixing (hedging) rates are very expensive. We’ve found Amex to offer the best value and the most support – but I strongly advise that people seek a range of views and schemes before deciding. Being prepared to simply risk the rate on any given day may be the best solution in many circumstances.

When it comes to data, you must be aware that not all countries will have good sources which are accurate and well maintained. It also may not conform to similar standards and address structures as the UK.

Even countries in Western Europe can have complicated, cumbersome and outdated data. Finding the data you need for a European or global campaign can be extremely time consuming, with some countries like Greece, Cyprus, Switzerland and Austria being particularly problematic.

Rather than rule out DM campaigns all together, businesses should work around these issues in order to get their messages to the appropriate prospects. Businesses should also set up systems to ensure data is captured from the responses, to be stored for later use.

For marketers, understanding how European privacy legislation is interpreted and practiced in each country can be tricky. Confusion can lead to big and expensive legal problems – which has led some companies to cease any lead generation activities while they formulate policy to avoid the increasing levels of complaints and legal escalation.

Building relationships with experienced and knowledgeable suppliers and partners can assist in ironing out initial hiccups, but be aware that this can be a lengthy process, and one which must not be rushed or overlooked.

For any small business considering crossing borders with their campaign, the best advice I can offer is to do your research, work with experts, have a plan but be prepared to adjust it, if needs be.

The benefits of not relying solely on one economy and allowing your products or services to reach a much wider audience can be substantial, but the task must be approached in the right way.

When Neal Hoskins left his job at Oxford University Press to set up a boutique publisher of english versions of children’s picture books from all over the world, booksellers and others in the industry raised a doubting eyebrow.

It’s just too hard to sell children’s books from non-english speaking authors to parents in the UK, they said.

Four years later and Neal’s business, WingedChariot Press, is one of those leading the publishing industry into the brave new world of digital, with the launch of an application (App) for the iPhone and iPod Touch.

He joins a growing band of ‘iPhone entrepreneurs’ who recognise the potential of the mobile platform to prompt innovation and disrupt the distribution models of traditional industries like publishing.

The picture book App, called ‘The Surprise’, has a simplicity and charm which parents and children alike will enjoy – very much in the spirit of Apple’s own design ethic.

It’s digital, but it’s also warm, benefiting from the gestures and beautiful screens of the iPhone and the Touch.

Distribution, distribution, distribution

With startup funding from the Arts Council, WingedChariot published its first books at the end of 2005, but rapidly found getting them into shops was the real challenge. As Neal admits:

Distribution is the hardest puzzle to solve and in some ways you should look at that first before throwing yourself into the deep end, but if you did you’d probably never take the plunge.

A link up with Walker Books in the UK has helped, but the distribution possibilities of the iPhone and other mobile devices was one of his main reasons for exploring digital.

It also has the potential to make WingedChariot, more of a publisher, rather than a translation, marketing and re-publishing business for foreign language picture books.

With digital overheads so much lower than printing and shipping dead trees to bookshops, Neal has ambitions to bring on new artists and authors who wouldn’t normally attract the attention of mainstream publishing companies.

Developing for the iPhone

A chance meeting with a developer at the Bologna Book Fair began the initially daunting phase of getting an App built.

In fact, although slow and sometimes difficult to begin with, Neal has learned a lot along the way about how to manage the publishing process in this new medium.

It was quite a tortuous process for us to learn how to work within that framework, how we work with editorial, images and so on. But I think it taught us a great deal. If this is really going to take off, we’ll want to develop ourselves in-house.

Of course, large publishers are already experimenting with Apps.

But by being in there early and by creating a new process and browser-based platform to streamline production and distribution on mobile, publishing minnow WingedChariot, like lots of disruptive startups in the web/tech space, has given itself the best chance to compete with larger rivals.

Marginal Margins and Speaking in Tongues

The irony is, despite slashing printing, distribution and other costs associated with getting a £15 children’s picture book into the hands of eager young readers in bookshops, margins for a 56p story in Apple’s App store are just as slim, if not slimmer.

And that’s the fundamental challenge. Will it pay?

Neal recognises pricing is untested and a bit of an experiment.

But plans to up the frequency of new titles, develop an App for WingedChariot itself to house collections of picture books and the promise of audio and images as a tool to teach reading, suggest there’s a lot of potential to sell in volume. The kind of volumes that even large publishing houses would envy.

WingedChariot’s roots are in publishing foreign language books in translation. And language may again be its biggest opportunity in the digital world.

Multi-lingual versions of its picturebook apps and the borderless appeal of the illustrations themselves, mean being big in Japan, Brazil, Russia and China is a real ambition, not a pipe dream.

As Neal says:

If we get this right, it gives us possibilities beyond our wildest dreams.

Like the books it publishes for kids, the WingedChariot story looks set to be a colourful adventure.

Let’s hope it has a happy ending.

When it comes to business-to-business marketing, particularly for those of us in the SME space, relationships really do count. Love or hate networking, you really should include it as a key marketing tool. But why?

The simple fact is people buy from people. So, the wider your network of connections, the greater your referral business will be.

It’s the ripple effect. If you provide a great service for a client then they’ll recommend you to their contacts and so on. However, building a network isn’t as easy as you might think.

It takes time and effort and you have to have 100% confidence you can deliver a great product/service, otherwise it could all backfire.

In the same way good service has a positive effect on building your referrals, one negative experience can seriously damage your reputation and erode all your hard work in building those important new connections.

The good news is networking delivers immediate results and provides a cost effective marketing tool. From my own experience, I find the sales cycle is often much shorter when leads are acquired through networking.

Attending just one event can generate a golden nugget of a new prospect that turns into a customer far more quickly than other methods.

The reason for this is you’ve met someone who already acknowledges a need. You don’t have to spend time trying to convince them they require your product or service as you usually do with ‘cold’ marketing such as direct mail.

Secondly, you’ve already made a ‘connection’ with that person, so your barriers have been removed.

Networking comes in many forms.  It isn’t just the pre-organised ‘networking event’ that so many fear or hate. Informal networking is just as powerful.

Meeting people in your building, making new contacts at meetings, socialising, friends and family, they’re all forms of networking. It’s also about giving to receive.

I go out of my way to proactively connect my clients, suppliers and trusted contacts to each other. I sing their praises to others and even have a page on my website specifically for this purpose.

There’s nothing in it for me, but my contacts appreciate that I’m promoting them and driving opportunities their way.  In return I hope they’ll do the same for me!

So give networking a go, the traditional face-to-face networking that is. Combine it with building your online network and you’ll have developed one very powerful, cost-effective marketing tool.

I don’t know about you, but every time a new top level domain (the bit after the dot in your web address also known as a TLD) is released, I feel like someone’s pointing a gun at my head.

Just when you thought you’d secured your brand, small business or startup presence online by buying up the .com and .co.uk versions of your domain name, all of sudden someone comes up with .biz, .tv, .mobi, .net or the latest, .tel.

It’s as if the companies behind TLD bloat are saying: buy this new domain now before some squatter or adsense splogger grabs it and trashes your brand, your trademark or your business online.

And that’s exactly what seems to drive demand and create a ‘new gold rush’ in the domain name market – fear.

Add to this the confusion which liberalisation of domain names in 2010 is bound to cause and protecting your business ‘name’ on the internet or mobile all begins to look very messy, not to say expensive.

Telnic and .tel – more of the same?

So when I received a call from someone representing Telnic, the company behind .tel domains, extolling their benefits to small businesses, I was more than a little sceptical.

Interestingly though .tel isn’t just another domain name – Telnic really has innovated.

A .tel domain, which will cost you around £12 a year, allows you to put your business or personal contact details encrypted on servers at the heart of the internet known as the DNS (domain name servers) and make them visible online and accessible quickly and easily on smart phones. So what are the benefits?

A .tel page which allows you to keep your contact details online in a simple .tel template held on domain name servers.

Telnic claims this helps non-tech savvy small businesses get a presence online, assists in SEO (search engine optimisation) through easily updateable keywords and thereby discoverability, creates a distributed global business directory and is very fast, particularly on mobile platforms.

Most of these benefits are highly debatable when it comes to what SMEs want.

Small business benefits of .tel?

Let’s consider web presence, SEO and discoverability. The simple html and javascript template (see above) which creates the .tel web presence is certainly a one-stop-shop for your business contact details and a few keywords, but it’s not much more.

Although friendly to search engine spiders because it’s so simple, the page is very unlikely to appear high in search results other than for your name or the name of your business. And surely you’d want your own website in that position?

Most small businesses online want to be discovered ahead of their competition locally or nationally for more general searches e.g. ‘glasgow plumber’ perhaps.

Making it easy for people who already know your business to find your contact details is fine, but it’s hardly discoverability or a source of new punters.

The keyword ‘benefits’ are also largely irrelevant because search engines look for fresh, relevant content and reputation in terms of in-bound links, something these pages are unlikely to attract.

As for speed, well such simple web pages load rapidly – in less than a second – but the benefit is hardly perceptible compared to well-designed ordinary websites.

If .tel, and it’s a big if, becomes the equivalent of a global business directory online, your business will be competing against thousands of others in the same category.

And because of the lack of information on the .tel pages, it’s going to offer no perceivable benefit in terms of differentiation. No more certainly than you’d get from being listed for free in a directory like Yell.com or FreeIndex.co.uk.

Bye, bye address book?

But in a couple of areas Telnic may be on to something, although they face a catch-22 as do their potential customers.

Browsing the web on mobile phones has seen massive growth as smartphones proliferate. Telnic’s .tel domains make your contact details easily accessible and also dialable on the move.

But then Facebook, Gmail contacts, and Plaxo do this too and Apple’s iPhone allows you to dial numbers on websites by clicking on them straight on the phone’s mobile browser.

What differentiates .tel is the possibility of synchronising contact details as they’re updated by your contact, not you. Always having up-to-date details for business contacts that you no longer have to update yourself is a big potential plus.

I’m a name, not a number

The catch-22 is that this service only becomes really useful, if .tel becomes ubiquitous and you and all your business contacts are using it.

But ubiquity is tough. To that extent .tel is competing against free services like Twitter and Facebook to become a definitive ‘namespace’ for people and businesses.

What’s a namespace? Well rather than everybody having a telephone number, it’s everybody having a universally accepted digital ‘name/home’. An easy to remember ‘handle’ that every man, woman and child recognises.  One click and you’re in touch, online or on the move.

Twitter with its @ symbol and Facebook profiles have come the closest to achieving this so far. Both companies have millions and millions of people on their platforms, with ambitions to grow to 1 billion users.

Your hairdresser knows about Twitter and Facebook. Your hairdresser probably uses Twitter and Facebook. The day your hairdresser asks you, ‘what’s your .tel’ will be the day Telnic is dreaming of.

As the company’s head of communications, Justin Hayward, said to me last week:

We’re certainly aiming for our Hoover moment.

The moment when .tel becomes a generic term, a verb or a universally accepted ‘namespace’.

It may be a long wait.

When I first embarked on my public relations career more than a decade ago, my boss said to me: “PR is just common sense, that’s all, common sense”. He’s right, but as a small business looking to form your own PR strategy saying it’s “just common sense” is a fairly vague description.

Knowing just “what” PR is – and what it’s not – is a good platform to start from. PR is not advertising, you do not procure online space, column inches or airtime with PR, but your aim is to secure those via various campaigns and tactics.

PR is the establishment and maintenance of your reputation – trying to ensure that people are talking about you, that those comments are positive and, where they’re not, working to change that perception.

Wish List

A poorly thought-out PR strategy is unlikely to succeed. Small business managers have precious little time on their hands to dedicate to marketing as it is, so getting it right first time is crucial in the long-run.

There are some very simple questions small businesses should be asking before they start managing their own PR:

- What are the objectives of our PR strategy in the short, medium and long term, and how are we measuring effectiveness?
- Who are our customers and what media do they access that we can use to reach them
- What makes our company different from our competitors and how do we communicate and articulate that in a way that’s palatable to press, potential customers and search engines
- What do we want customers, bloggers and editors to say and think about us?

From here, forming a PR strategy is then limited only by your imagination. There are endless things you can do as a small business or start-up to promote your products and services, from press releases to opinion articles, blogs to social networking, customer case studies and creative stunts.

You can engage everyone from your local paper, regional organ and even national newspapers and broadcasters, if you have a genuine story to tell.

Logistics

Once you’ve worked out who you want to talk to, what tactics you want to deploy to reach them and over which platforms then you need a few more things to get started.

- Build press lists of target publications and writers: You can do this yourself or you can use services such as Gorkana or Features Exec, which can be quite pricey. Think vertically as well, here, there are hundreds of trade publications out there. Building press lists is time-consuming, so it could be a job for that keen graduate intern!
- Build your press release template: Look online for great examples of press releases. For more, listen to this podcast I recorded on this subject recently.
- Identify relevant bloggers and engage with them: Leave non-salesy comments on their blogs, create backlinks. Get blogging yourself!
- Build a news and resource page on your website: This is critical as journalists need to know who to contact if they’re interested in you, plus the more Web-friendly text and links you host on your site will increase your search engine ranking.
- Use free online news distribution sites, such as PitchEngine, Digg or Reddit to place your news, as well as distributing it to your main targets.
- Seek advice on how to handle media calls. Journalists can sniff out inexperienced or uncomfortable spokespeople. Study how politicians and business leaders answer questions on television, these guys receive the very best media training.

The entrepreneur PT Barnum once said that “Without publicity a terrible thing happens, nothing”.

If you’re not engaging in PR already, then it’s time to get your skates on. It’s not a thing you necessarily need to outsource and the only real investment is your time. But it all comes down to getting the basics right, and that’s where common sense comes in.

If you can master that common sense approach, then not only should you be able to look forward to increased business, but my old boss would be very proud of you.

So, there I was, married. One small child and another on the way within a couple of months.

The call I knew was coming, rang through on the company mobile. I had lost my job and there was no chance of redundancy pay as the company had folded and can we have our phone back please.

As a seasoned sales professional I knew I could walk into another IT sales role fairly easily. However, according to my wife, this was the chance to put into practice the idea I’d been mulling over for a couple of months.

And anyway I’d been selling corporate IT for a decade and never really enjoyed it from the outset.  Perhaps a chance for a career change.

I decided the idea had enough innovation and novelty X-factor to be worth a punt, so decided to give it a go.

Now here is lesson number ONE when starting your own business: it has to be you who decides the idea is a good one, it has to be you who has carried out the research and proved to yourself that the idea will work.

You have to be the first person to de-risk the idea and accept that this is the path you are going to follow with focus and determination. Without self-belief how can you possibly convey the emotion in the business to a third party?

It’s all well and good getting excited and hot under the collar watching The Apprentice and Dragons’ Den and thinking that’s easy, if they can do it then I can definitely do it.

The reality is that everyone can have a go at starting their own venture, but a very determined few will actually make it through to a sustainable ongoing business.

So make the decision based on reasoned understanding of the opportunity. Once you have made the decision, stick to it.

Right, that’s hurdle one out of the way.

You’ve decided to go ahead and start a business on your own.  Well done.  Just a few minor things to do before you can pass go and actually start.

Next you have to sit the wife, partner, girlfriend, boyfriend, husband (or all five) down and explain to them the opportunity, why you’re going to make it a success and how they can help.

If you don’t get the support of your closest allies then you cannot go on. Sorry, it’s just the rule.

It should be easy because by this stage you will have created a simple elevator pitch to clearly and concisely convey the idea to people in about 15 seconds. So 2 minutes 27 seconds later after they close their mouths in amazement at your humanity-altering idea, you should have your first nod of assent.

The slight issue with getting family and friends on your side is that they really want you to do well. “Oh look, we have an entrepreneur in the family, we are so proud, of course you can do it, it’s a great idea!”

Family and friends will always urge you to go for it because they believe in you and want you to do well. The relative closeness may cloud their judgment.

The turning point in my decision to start my venture was to get hold of a mentor. A seasoned professional with real business experience in a similar and non-competing industry who would point out all the flaws as well as boost morale rather than stroke ego.

I found my mentor through a friend of the family. When I spent three hours with him talking through the idea, the pitfalls and the opportunities, I knew I was onto a winner.

You have to decide to go for it, get your family and friends on side but most importantly get yourself a mentor to coach through the good and the bad times to come. Without someone telling you where you could go wrong, you may not know until it’s too late.

Four years ago, our beloved leader, Alex Bellinger, interviewed one Greg Gianforte. By then he’d started five businesses – one went to $10m annual revenue, another to $80-85m at the time of interview. The other three experienced enough success to be sold on.

He believes that borrowing money to start a business is not a good idea, far better to ‘bootstrap’ it using the money generated to help it grow. In fact, he advocates trying to sell your wares before you actually have a product. A few hundred phone calls will tell you whether you’re on the right lines and, if not, where you can adjust your vision to match the market. Make sure, though, that you can deliver on your promises within eight weeks.

Trust Alex to have found Gianforte four years before me. He’s the first story in a recent book called ‘Entrepreneur Journeys: Bootstrapping: Weapon of Mass Reconstruction’, by Sramana Mitra (142 pages). You can get it as a paperback from Amazon US for $16.95 or online for $9.99 at Smashwords.

Mitra mixes her own observations with interviews with a bunch of (mostly) hi-tech entrepreneurs who built their businesses with little or no starting capital. Certainly not venture capital, although a few put their hands in their own pockets, tapped friends and family or went to angels. The general tone of the book is ‘the less funding, the better’.

The book reads like a series of business autobiographies, allowing you to understand the interviewees’ thought processes.

I downloaded the ‘.rtf’ version and read it into Word, from whence I could highlight text which meant something to me and add comments. The conversion from .rtf to Word wasn’t wonderful – some sections appeared all capitalised – but it more or less did the job. You can download in a variety of formats to suit your computer software.

I highlighted 454 bits of text and added 81 comments. Essentially, that’s over five hundred separate mental stimulations as a result of a longish day’s-worth of reading. The comments largely referred to how I intend to do things differently in future, plus insights into my own past successes and failures.

The book has an American orientation, but this is not a reason to reject the lessons it contains. In fact, it’s more a reason to be inspired by the ‘can do’ approach over there. (I was a regular visitor to Silicon Valley for 28 years, by the way, and experienced the culture first-hand.)

Gianforte re-tells his story about how he hired a 48 foot billboard to promote his company right outside the company he really needed to do business with. Within six weeks he’d shipped it a $100,000 order. The client had massive credibility in his market place and, by referencing the sale to new prospects, he was on his way.

Om Malik is a well-known technology writer. In 1999, he thought he’d capitalise on his massive knowledge by becoming an investment manager. Within three months, he realised his mistake. He says, “I think a lot of people do things for money, and it’s the stupidest thing we can do for ourselves.” He went on to create a web-based publishing company, the GigaOM Network, which reaches over three million readers worldwide. He’s probably earning a fortune, but from his first love, writing and publishing quality content.

Rafat Ali, of Paid Content discovered, more or less by accident, the power of a regular, informative, newsletter. Although set up as a web-publishing business focusing on news relating to the economic evolution of digital content, he also published an early morning newsletter of the previous day’s blog posts. At the time of the interview, this newsletter had 50,000 subscribers which gives his company a powerful daily presence in the subscriber’s inbox.

These are just three tiny snippets from the book of a dozen stories, plus Mitra’s essays. Each reader will be stimulated by different things. You might be interested in staffing issues, patents, earnout problems, identifying customer needs, raising capital or something else. It’s all touched on and the stories come from the heart.

Of course, if you have no empathy for American stories or an affinity with the hi-tech sector, then you’re less likely to enjoy the book.

When Apple launched the iPhone and its App Store in iTunes, it upped the ante in terms of what mobile phone applications could do. In July this year the number of iPhone apps downloaded hit 1.5 billion.

Competitors followed suit rapidly and the App Store wars broke out.

Blackberry launched its App World, Nokia its Ovi Store and Microsoft is about to unleash Windows Mobile Marketplace.

So I decided to take a look at the top 5 mobile apps for business on each platform and ask has the mobile world really embraced the needs of SMBs?

iPhone apps for SMEs

Here are the top 5 highest rated iPhone apps for business in Apple’s iTunes store.

1. QuickVoice Recorder – in essence an app to record and tag voice memos. Strangely number 1 in the charts, despite Apple having built a very similar app into the latest iteration of its iPhone software.
2. Griffin iTalk – another voice recording app. Useful for recording meetings and memos. A dictaphone replacement.
3. Mocha VNC – a virtual desktop app that lets you access your work PC or Mac. Seems to be difficult to set up.
4. Remote Desktop Lite - another remote desktop app from Mocha. Only connects to Windows XP. Somewhat limited and surprising to find it in the top 5 most popular.
5. Documents (Mobile Office Suite) – word processor and spreadsheets you can create and edit on the move. Integrates with Google Docs. Used to have the advantage of editing which Google’s own iPhone app didn’t have, but that’s changed recently.

The above list and indeed most of the others in the top 50 all focus on memo recording, remote access, documents and to-do-lists.

All well and good and oh so utilitarian. But then maybe that’s exactly what small businesses really need from their iPhone.

Nevertheless, there seems to be a dearth of creative apps for this audience, bearing in mind all the possibilities the iPhone itself offers from a technological standpoint.

To be honest most of the apps look pretty similar to what I remember downloading on both Nokia and Windows Mobile platforms some 5 years ago.

Why nothing creative from all those cool and talented app designers out there?

But, maybe I’m missing some diamonds in the rough. What are your recommendations for business-related iPhone apps?

Social media cannot be ignored as you’ll have noticed, if you’ve been reading the SmallBizPod blog over the last year or two.

Not only does social media offer small businesses an incredible opportunity to reach a global audience, but it also presents employers with potential headaches.

Firstly, the good news: social media can really help you grow your business, interact with potential and existing customers, and draw traffic to your website.

If you look at a start-up such as Swedish music streaming service Spotify as a case in point, it owes much of its phenomenal rise to viral word-of-mouth marketing on social networks, such as Twitter, Facebook and Bebo. I heard of Spotify first via Twitter, not via advertising.

However, there’s no point getting involved with networks such as Twitter unless you’ve a clear plan of what you want to achieve, how you’re going to manage it and what are you going to use it for. Likewise with blogging.

I’d always recommend starting up a blog, for search engine optimisation (SEO) purposes as much as using it as a platform to position your company as a thought leader. But then again, a blog is pointless unless it engages the audience and encourages a response.

It’s also going to have no impact unless you plug it via social media – sites like Twitter and news ranking sites such as Digg and Reddit.

Social media is holistic and, most importantly, it’s a conversation. Marketing is no longer a one-to-many tool, it’s a dialogue. Have a listen to my podcast on social media for small businesses and start-ups for more on managing social media from the outset.

Secondly, the bad news: Social media is also a double-edged sword. As well as presenting companies with incredible marketing opportunities, it also presents a whole set of potential issues with confidentiality and staff trust.

Have a look at this recent case where a girl managed to get herself very publicly sacked for comments she made about her boss on Facebook.

Staff who perhaps are not familiar with things like libel, defamation, NDAs and, judging by the above story, are prone to lapses in common sense could seriously compromise your company’s reputation and intellectual property.

You can’t stop social media – the chances are your staff are on some kind of social network – the best thing you can do is form a policy which they should all be clear on. This post will help you form one.

Social media is here, it’s been here for a few years already and it’s only going to get more powerful, presenting both an opportunity and a threat to small businesses.

The smart firms will see how social media can benefit their business and also form policies to manage the inevitability that their staff are engaging on social networks. With so many things in business, it all boils down to common sense and planning.

UK web startups are like rock bands. Not because they all rock, although some do, but because many want to make it big in the US.

But the British invasion doesn’t look like it’s going to happen anytime soon. Last.FM and Bebo are more like Oasis and Blur, than The Beatles and The Stones. Noticed in the US, but hardly game-changing.

So what of our own backyard, Europe?

Well, I recently interviewed Yann Motte the London-based French, CEO of WebJam who prior to setting up the social network platform with Spanish and English co-founders, spent many years leading business development at Yahoo! Europe.

Yann Motte, ceo of WebJam, bringing social networks to business

A good person to ask about the challenges of building a web startup in today’s post-crunch world, but also a chance to pick the brains of someone who knows all about the cultural challenges of extending web applications and services across Europe.

Building Yahoo! in Europe

Yann joined Yahoo! in 1998 when it was only a few years old.  With just 300 people worldwide, he was one of the first business development managers in Europe.

On leaving in 2006, he was VP of Product Management for Europe.  By then Yahoo! France alone employed 500 people.

It’s perhaps these early pioneering days that confirmed his taste for starting a business on the web, leading to the creation of WebJam almost a decade later.

As he says:

One of the reasons I joined Yahoo! was because of the amazing entrepreneurial feel, especially in Europe.

As the business grew it inevitably became more corporate and Yann observed, with occasional frustration, the oscillation between US headquarters letting European subsidiaries off the leash only to have second thoughts and rein them back in again.

It’s not the culture, it’s the branding and pricing

Yahoo!’s and Yann’s experience of managing European growth, reflects ongoing concerns about how European web startups can effectively scale across the continent.

Nils Hammar one of the founders of recently sold Kindo, described developing a multi-language site as like “dragging a big heavy anchor behind you”.

And questions about why it’s so damn hard to build trans-national web businesses in Europe was also raised by Sarah Lacy on a panel at the recent Techcrunch Europas.

Yann believes for web applications that are platform based, beyond the obvious language challenge, startup CEOs should spend less time changing the product for different countries and more time concentrating on differences in the perception of the brand and the strength of its competition locally.

This and getting the pricing right for different services in different territories.

And these two elements are the very essence of the European challenge.

Language isn’t a huge problem. Cultural differences aren’t the key. The real challenge for any web company is launching a brand over and over and over again with the right price proposition in each European country. That costs.

Costs that US startups aren’t going to incur in the same way, if they want to reach punters in California, Texas, Nebraska or New Jersey.

Building WebJam

After Yahoo! Yann set his mind on working in a startup environment again.

What he didn’t know was whether he wanted to work for an existing startup, or take on what he describes as the “blessing and the curse” of creating a business himself from scratch.

He chose the latter having brought together a team of co-founders who combine creativity, technology, marketing and business development skills.

A solid foundation for WebJam which acts as a software as a service social publishing platform for businesses and organisations. A Ning for business, if you like.

Tick tock

What WebJam doesn’t have, however, is Ning’s huge VC funded pile of cash ($75 million) in the bank to help navigate the recession and grow through it. It is, however, funded by Versailles-based VC firm I-Source.

Is the timing for such a startup, which counts Random House and Yamaha Music as customers, problematic?

Yann says this is something he’s learned the importance of:

It’s all about now finding the right momentum for the vision we have. What’s always difficult for a startup is the sense of timing.

WebJam is already generating revenue, but he recognises that one of the key issues they need to address before the end of the year is whether and to what extent they will need additional funding rounds.

That depends on how aggressive a strategy WebJam will take. Slower organic growth might be the right move in the current economic climate.

On the other hand Yann sees an opportunity for startups in Europe to grow rapidly across the continent, while many US web businesses are refocusing on their own core domestic markets.

In the short term, however, WebJam’s focus is squarely on building revenues in the UK.

Although marketing budgets may be under pressure at the moment, Yann believes his startup will float on a rising tide of business interest in social media as its ROI becomes better understood.

Buzz and engagement with customers are the most commonly cited benefits of social media. But behavioural data and good old traffic are also important.

Yann clearly sees social media breaking the search hegemony of Google and helping to diversify spend away from SEO and SEM.

Certainly savvy online marketers are going to be looking for alternative ways to spend their online budget to build brand and community as well as immediate return.

With a robust team, VC funding and revenues already flowing, WebJam looks well placed to take advantage of this shift if and when it happens.

So today Microsoft clinches a 10 year deal which means its recently launched search engine Bing will be used by Yahoo.

In return for sacrificing its second place in the search market behind Google, Yahoo will be able to keep 88% of revenues (for five years) coming from search ads generated by its now Microsoft-powered search engine.

Microsoft's Bing will power Yahoo search. Competition for Google and curtains for Yahoo?

The search business that was one of the cornerstones of Yahoo from its early years is for all intents and purposes no more.

Some, like one of the shrewdest entrepreneurs currently in the search space Mahalo.com CEO, Jason Calacanis, would argue Yahoo has capitulated and is now dead meat.

In an email to members of his mailing list, copied to his blog, he says:

Aggression and innovation wins. Period … To say it clearly: Microsoft does not enter a market unless it’s important, huge and on the way to becoming even bigger. Microsoft is the buy sign, not the sell sign.

He argues the once innovative Yahoo lost its innovative edge, lost its talent and has now lost the plot.

It’s also repeating history, having once allowed an almost unknown (at the time) company called Google to power its search engine.

The logic of Calacanis is hard to contest. Innovation remains one of the most potent of competitive tools for any business large or small, but particularly small.

And small is what his own search/directory hybrid, Mahalo.com is, with a touch of innovation and a lot of iteration, ironically, of Yahoo’s original directory of the web.

When I interviewed Calacanis on SmallBizPod soon after its launch it seemed he might have his eye on a Google sale exit.

Now one search behemoth has fallen perhaps his praise for acquisitive Microsoft suggests the courting of a new suitor. Stranger things have happened.

For the rest of us, bizarrely, two main players in the search space may prove better than three.

Microsoft will undoubtedly drive even more competitive pricing into the search advertising market, if only to needle arch rivals Google.

Much has been written about pollution of the land, sea and air. The problems seem massive and, therefore, seem to require massive solutions. Massive wind farms, massive tidal barrages, massive solar collectors – and that’s just energy capture and re-use. Then there’s massive reforestation, massive carbon sequestration and massive implementation of smart metering.

Okay, enough of the ‘massives’. The point with all these activities is that they are beyond our control. We hope that politicians, businesses and other organisations will find ways of getting together and implementing necessary change. It’s the ‘top down’ bit of sustainability.

At a smaller level, you see major companies churning out their CSR (Corporate Social Responsibility) reports which, in part, show how good they’re being to the planet (not to mention their bottom lines). And these companies, naturally enough, lean on their suppliers to smarten up their own acts. (And that could be you, sooner or later.) But why wait?

Many SMBs are implementing their own measures – monitoring and reducing power usage, improving thermal insulation, cutting travel and so on. The motivation is probably money-saving but who cares? They are potentially making life better for their children and grandchildren.

Coming down a level further, many individuals are trying to ‘do their bit’. But it’s not necessarily easy, at any of these scales, to get it right.

However if, at each level, right down to the individual, we can articulate what we’re trying to achieve, then there’s a good chance that we’ll bring about massive change at the micro level as well as watching it happen at the macro level.

Billions of individuals have the potential to bring as much benefit to our environment as all the global players put together. (Okay, I made that up, but it can’t be far wrong.)

Simon Perry is a great example of an individual who is trying to get his own sustainability act together. Like me, he’s a researcher and an analyst working mostly from home, largely for an analyst firm – Quocirca in his case, Freeform Dynamics in mine. Unlike me, he has disclosed his ecological intentions, so that people better understand where he’s coming from, not least when he turns down visits to exotic (and some not so exotic) places. He calls his private business Thinking String, by the way.

If we were all to start thinking the way Simon does, we could start to bring about a vital ‘bottom up’ reduction in our collective ecological footprint. You may not agree with all his choices, but that’s not the point. His ideas might spark off some of your own.

He admits that his approach is, “by no means perfect, however its the best compromise available to me as a worker and as an individual (and as a family member) for the moment.” This environmental stuff is work in progress for all of us. At least, with him, it is actually in progress.

Taking travel as an example, his order of preference is:

1. Bicycle / walking
2. Public transport (rail)
3. Personal motorcycle or personal car (< 2 litre engine size)
4. Long distance rail
5. Flights (avoid if possible)

He then clarifies his travel motivations by these criteria:

1. I will almost certainly travel to deliver a paid-for engagement of services …
2. I will generally always travel to … educate a good sized crowd of people on a subject related to sustainability …
3. I will generally travel to a … meeting [if it] is entirely focused on a product with genuine potential to reduce emissions.
4. I will merely consider travel to a vendor / conference that has tenuous potential to reduce emissions …
5. I am always happy to participate in a meeting via one form or another of teleconferencing …

By making these, and other, statements about his ecological preferences and motivations, everyone (including himself, his family and friends) are clear where Simon is coming from and can act/react accordingly.

While my own motivations and actions are very similar, it never occurred to me to articulate them the way Simon has. So hats off to him. And may I humbly suggest that we all learn from his example?

You can read Simon's whole statement here.

Bullshit detection is a must have skill for entrepreneurs and journalists alike.

Telling a great story, whether you’re talking something up, or talking something down is also a stock in trade of both callings, if I can call them that.

The Clash - in the garage with their bullshit detector

But to use a few lazy, bullshit stereotypes myself for a moment, entrepreneurs are traditionally seen as optimistic and inclined to exaggerate, while journalists are seen as cynical and inclined to denigrate. Often when the two meet you get interesting results.

Witness the hoo-ha around a story about online angel network Angels Den which appeared on TechCrunch earlier this week.

Sound and Fury

The piece written by freelancer Milo Yiannopoulos, who until recently wrote for the Daily Telegraph, appeared to contain at least one factual error and provoked a storm of comments and counter-comments about the value or otherwise of Angels Den and its move into the ‘digital’ arena following the appointment of Irish opportunist Paul Walsh.

You might think this is all a huge storm in a teacup which incidentally will suit TechCrunch which gets more page views and Angels Den which gets a lot more profile than the Paul Walsh appointment would have received otherwise.

But I think it’s also quite instructive for startups and those writing about them.

Big numbers, big scrutiny

I wrote about Angels Den soon after it launched and was a little cautious in recommending it to readers.

It turns out, however, that two years on co-founder Bill Morrow and his team claim to have completed 157 deals worth £25 million in funding.

They’ve been keen to point out their disruptive startup has rapidly become the most successful angel network in the UK – at least in terms of getting money into the hands of startups and entrepreneurs which is what it’s all about. Genuinely good news.

But inevitably, and I believe rightly, when a startup puts out a story like this the bullshit detectors go up.

That’s not a judgement on the integrity of an entrepreneur, but merely recognition that some people talk up stories more than others.

When you’ve seen and heard as many over-hyped press releases and pitches as most journalists and bloggers have, you begin to realise why their first response is often a sceptical ‘really?’.

Think of it this way: the bigger the number you quote or the claim you make the more scrutiny it’s likely to receive. Don’t quote numbers you wouldn’t be happy to share in due diligence with an investor.

Where Angels Tread

Bill Morrow - co-founder of Angels Den securing significant angel funding for his punters.

In the TechCrunch piece Bill Morrow is quoted as saying Angels Den had “just over 10,000 entrepreneurs looking for money”. Blimey, I thought, that’s a lot of people forking out £99 to submit their business plan and a possible further £400.

On that basis Angels Den would have turned over well in excess of £1.3 million in two years without the recent introduction of a 5% commission on done deals.

So I gave Bill a buzz and asked him about the figure. He corrected my misconception and made it clear only a proportion of those 10,000 had actually submitted business plans, although for commercial reasons he couldn’t disclose the percentage – which to be fair is understandable.

Interestingly from a business perspective, Angels Den, while successful, seems to be doing a lot better for its punters than it is for its own bank balance, which may be why it’s introduced the 5% commission on deals and is looking to target the busy web/tech startup space.

Blog Bullshit

But you need your bullshit detectors finely tuned when you’re reading bloggers or journalists too.

Take my own harmless observation above about Milo Yiannopoulos having ‘until recently’ written for the Daily Telegraph.

This small phrase could provoke the reader to wonder why Milo no longer works for the Daily Telegraph. That combined with mentioning the equally minor factual error in his TechCrunch piece may imply something negative.

In a similar way Milo’s own phrase ‘Something’s going on at Angels Den’ combined with leading on someone quitting rather than a new appointment could be perceived as straight factual reporting or a negative insinuation.

Direct challenge is always better than insinuation in my book.

As for me, well I’ve recently dubbed myself a journalist entrepreneur so, to be honest, I’m well beyond bullshit.

For those that aren’t immersed in news about web startups and the world of social media, you might have missed the biggest story of recent weeks, the hacking of Twitter business documents by a Frenchman dubbed Hacker Croll.

By breaking into a personal email account of a Twitter employee, he was able to infiltrate most of the company’s highly confidential documents, email and other details held on their own servers and in Google’s ‘cloud-based’ applications.

He then passed over 300 of these documents to the world’s most widely read blog about web startups, TechCrunch.

For the geeks among you the fascinating details of the hack were revealed by TechCrunch yesterday.

Twitter security FAIL. But how robust are the passwords of your staff?

Lots has been made of the fact that Twitter’s security house of cards came tumbling down because like many a good web startup the company used cloud services.

Their documents, email etc were all held online on other people’s servers, like Google, rather than on their own hardware in a broom cupboard.

But the reality is it’s people that are the problem, not where your data is.

The key component of Hacker Croll’s successful break in was being able to guess the personal Gmail password of a Twitter employee.

Because, like the huge majority of people, this individual often used the same password for many accounts and also had the answers to additional security questions like ‘what’s the name of your pet’ inadvertantly spread around the web on social networks, the French hacker soon had his hands on Twitter’s crown jewels.

Secure passwords are at the heart of the problem. Most people simply don’t use them, because they can’t remember a four digit pin number let alone unique passwords for every application, computer or web service they’re signed up to.

This is a major problem. And it’s not just online security that suffers in this way.

I used to work at a FTSE 100 bank where everybody in the department had their computer password written down in the team personal assistant’s rolodex.

So how do you improve password security online and off for your business? Here are some tips:

1. establish a password policy for your business to which all staff are required to adhere;
2. encourage staff to use unique passwords for each computer or service they use;
3. make sure all passwords have eight or more characters;
4. do not allow passwords to contain real, comprehensible words otherwise guessing is about as hard as playing hangman;
5. suggest ways to make passwords, long, secure, but memorable: for example pick a favourite line from a song, poem or nursery rhyme and use the first letters of each word to form a password i.e. “You have brains in your head. You have feet in your shoes.” could be Yhbiyh!YHFIy5;
6. remember to mix upper and lowercase characters in the password together with special characters and numbers.  In the example above, the exclamation mark is used in place of a full stop (which you couldn’t use in a password anyway) and the last ‘S’ is turned into the number 5;
7. make sure answers to password hints are false i.e. if asked ‘what is the name of your pet’ make sure the answer is the name of a friend’s dog, not your cat;
8. if you really have to write down passwords, don’t store them on a computer, but write them on a piece of paper and put them in the company safe.

Just the above measures will dramatically improve your online and physical computing security, but it’s not an extensive list.

Let us know, if you have any password security tips we’ve missed.

As we reach the bottom (hopefully) of a credit and bank induced recession, most small businesses want some straight talking.

Straight talking about late payments. Straight talking about cash-flow. Straight talking about the cost of legislation. And straight talking about lending.

When it comes to the government’s £1.3 billion Enterprise Finance Guarantee (EFG) scheme designed to prop up bank credit to SMEs, getting straight answers can sometimes prove tricky, no matter who you talk to.

Time for straight talking about lending to UK small businesses

Media Spin

Take the Daily Telegraph this morning. Its business section slams the EFG for not meeting government targets for lending to SMEs and failing to meet levels achieved a year ago by the Small Firms Loan Guarantee (SFLG) scheme.

The problem is the newspaper seems to bend the facts to suit its story.  Firstly, why does it only use figures for EFG lending to end March 2009 when figures to end June or even into July are readily available?

The answer may lie in the fact the complicated EFG scheme didn’t come into force until 15th January. This gives the previous year’s figures an additional 15 days’ worth of lending to assist in making the Telegraph’s case.

How much lending was made under the SFLG during the first 15 days of the year is not made clear, but it would be surprising if volumes were significant bearing in mind the scheme was about to be superseded.

So, let’s divide the figure for SFLG lending in Q1 2008 (£205 million) by the 90 days of a full first quarter to get a daily lending figure of £2.28 million.

Let’s do the same for EFG lending in Q1 2009 (£177.8) taking 15 days away from the 90 days of a full first quarter to get a daily lending figure of £2.37 million.

Hmmm … an increase in lending to SMEs which could blow the story out of the water.

Government Spin

The government’s been spinning the EFG too.  Hardly surprising with the master of media management, Lord Mandelson, at the helm in the Department for Business.

For several months the Department was putting out press releases dramatically talking up the numbers in relation to the EFG by being economical with the full facts.  Here’s an example from the end of April:

More than 2,500 eligible loans worth almost £290m have now been granted, or are being processed or assessed to assist businesses’ lending needs via the Government’s EFG scheme.

This is as good as meaningless.  Applications ‘being processed or assessed’ may not end up receiving the offer of a loan at all.

What we need to know is how much has been actually granted as a loan. After some questioning, the Department did start to release more specific figures.

And the figures to the beginning of July show total lending after nearly six months of the 15 month scheme reaching £364 million. On course for £1 billion by the end of March 2010, but some £300 million short of the total allocated.

The Federation of Small Businesses and British Chambers of Commerce say they want to keep up the pressure to make sure lending keeps flowing.  That’s a good thing.

But you might well ask, if small businesses gain in confidence as recession eases, then perhaps demand for EFG lending will slow. Banks not being able to lend the full £1.3 billion by the Q1 deadline next year, may actually prove to be a positive sign for the economy.

Bank Spin

Until then the banks are in a race to prove they are lending more than anyone else to small businesses.

They have their battered images to rebuild and being nice to SMEs right now is vital, although their battered balance sheets may also be a powerful disincentive to lend willy-nilly to meet government targets.

The part-nationalised RBS and Lloyds TSB have quotas to fulfil in terms of the volume of loans they need to place under the EFG.  Their hands are forced.

So how much are the big four lenders (who account for 90% of the SME banking market) really lending under the EFG? SmallBizPod has managed to extract the following figures from the major banks for the period up until the beginning of July:

Barclays = £150 million
HSBC = £40 million
Lloyds TSB = £91 million
RBS/NatWest = £190 million

This totals £471 million.  The eagle-eyed among you will notice the official figures I mentioned earlier total £364 million for the same period.

So where’s the extra 30% or so come from? Well, it’s down to the banks wanting to make the highest possible figures public by quoting (in some cases) the latest sums ‘granted and in the pipeline’.

Back to straight talking

When all said and done, what matters is whether viable small businesses have access to lending when they need it and under what terms.

For example, where no other security is available, personal security is still often required by banks under the EFG, contrary to some suggestions when the scheme was launched.

With the trend in house prices down, this may be a more important restricting factor for many than the volume of lending available itself.

Straight from the TechCrunch Europas awards ceremony come the results of the winners in each category. SmallBizPod hopes to be able to grab a few short podcast interviews with winners during the night, so keep an eye out for those.

The Europas Shortlist: Best Web Application Or Service (EMEA)

Spotify

The Europas Shortlist: Best Design

SongKick

The Europas Shortlist: Best Bootstrapped Startup (less than 3 years old)

Soup.io

The Europas Shortlist: Best Social Innovation (which benefits society, EMEA)

Mendeley

The Europas Shortlist: Best Enterprise / B2B Startup (EMEA)

Huddle

The Europas Shortlist: Best Cleantech / Environmental Startup (EMEA)

Alertme

The Europas Shortlist: Best European / Real World Gadget (EMEA)

Poken

The Europas Shortlist: Best Entertainment Application or Service (EMEA)

SoundCloud

The Europas Shortlist: Best Mobile Startup (EMEA)

Nimbuzz

The Europas Shortlist: Best Mobile Application (EMEA)

SpinVox

The Europas Shortlist: Best Startup Founder(s)

Daniel Ek & Martin Lorentzon

The Europas Shortlist: Best Investor (VC or Angel fund, EMEA)

TAG The Accelerator Group

The Europas Shortlist: Best Investor Personality (EMEA)

Yossi Vardi

The Europas Shortlist: Best New Startup, Summer 2008-2009

Spotify

The Europas Grand Prix

Spotify

How did this happen? That feeling of being, well, not quite as young as I once thought I was? Don’t get me wrong, I’m not old – at least this is what I tell myself. I’m just about clinging onto my 20s – granted the thread is precariously thin – but it’s still there. Just.

It’s more that as I reach 30, I suddenly realise my only assets are four bicycles (which I love dearly) and I am very definitely not the co-founder of a fresh new start-up.

The cause for this day of dawning? A meeting with Anna Lewis and Oli Brooke of CompletelyNovel – an online publication platform that allows writers to promote books, and publishers to see how the market receives them – virtual market research.

The young entrepreneurs behind CompletelyNovel.com l-r Jon Gilbraith, Vincent Peresl, Oliver Brooks, Anna Lewis

Both mid-twenties and graduates of Cambridge University – Anna in Law and Oli in Engineering – the pair co-founded the company after Oli saw an opportunity to disrupt the publishing industry.

Writers can use the site to catapult them into the armchairs of publishers, without the cost of printing endless manuscripts (many of which no doubt go unread).

CompletelyNovel.com has therefore inadvertently found itself with enviable sustainable credentials, while at the same time opening up a large door into a notoriously impenetrable industry.

Suddenly the sky for would be writers seems the limit.

When asked about previous entrepreneurial ventures, it is soon clear that for Oli, enterprise is in the blood. His first lesson in price placement came after the completion of a piece of software to design helical staircases.

With his father, a joiner, they bid for a contract with Dukes Mews, only to find they had won as their bid had been so low. Nonetheless they still made a profit. For Anna, CompletelyNovel seemed like a suitable challenge after a few years with the Foreign Office.

Let’s not forget, however, that CompletelyNovel is a team of four, and it is Jon Gilbraith who tirelessly builds and maintains the site with Vincent Peresl.

The concept seems to be working and their grasp of bootstrapping is refreshing. They clearly understand what to spend, when.

Don’t get me wrong, they aren’t out buying fast cars, nor are they rewarding themselves with six figure salaries, but I get the feeling that when Oli mentions ‘keeping things lean’, he means they at least pay their rent and eat without the need for personal overdrafts.

As I sit on the sofa in their North London home office, it’s apparent that these four mean business. They eat, sleep and breathe the business and it seems to be paying off.

While publishers are trying to grasp the move to digitising content, the trio have provided a platform where not only can writers sell their creations, they can connect with the rest of the industry and will eventually provide print on demand.

They have competition – Shelfari for instance is an online community with a book focus, and Lulu a marketplace for books – but there are no other sites linking the whole of the industry in one social place.

My only concern with their present concept is their lack of access to products like Amazon’s Kindle and the Sony E-Reader which could dramatically change the way people consume literature.

For the time being at least, users of CompletelyNovel can only access books online, but once they establish a way to ensure writers do not relinquish control of their works the company may even be able to start selling books to people on the move direct to their portable device of choice.

The company already makes a trickle of profit – which quite frankly is a great success for most internet companies these days, let alone such a new one.

And with an eventual premium model in place, a community and its comments broadcast to all and not just those that are following a particular author (think Twitter), I would happily stake my four bikes on the fact the wheels won’t fall off this particular venture any time soon.

If you’re a first time entrepreneur looking for VC funding right now, then forget it.

Julie Meyer rallying entrepreneurs

That, to put it bluntly, was the message coming from a panel of esteemed venture capitalists and investors at last week’s Entrepreneur Country event hosted by online Dragon and Ariadne founder, Julie Meyer.

VCs are more worried about exits than they are about deal flow and business angels are on their knees as most have seen their personal wealth shrink dramatically over the last 12 months.

To be fair, as Dharmash Mistry at Balderton Capital rightly pointed out disruptive ideas and entrepreneurs will always find capital and the two largest VC funds in Europe have recently raised $1.5 billion.

Nevertheless this isn’t any consolation for startup virgins.

As Nic Brisbourne of DFJ Esprit put it:

I have a strong personal conviction that there are good opportunities going unfunded. The VC industry has yet to show a consistent ability to generate good returns in Europe.

But despite all this, the mood at the event was overwhelmingly positive. And I began to start thinking less money = good news.

It is after all only going to accentuate one of the sharpest and most important of entrepreneurial skills – resourcefulness.

In many ways I can see the crisis of capital creating a new generation of dynamic, nimble, revenue focused entrepreneurs and small business owners. The very people Julie Meyer is appealing to in her recent ‘individual capitalism’ rallying calls.

The second theme I took away from Entrepreneur Country was speed.

Speed as rapid, agile action and speed as often irrational gut instinct. The instant slicing and dicing of Malcolm Gladwell’s Blink.

Whenever you talk to investors or listen to a panel of VCs, it becomes very obvious that most investments hinge on gut. That split second, sub-conscious feel for the people behind an idea or a business.

It’s an area, of course, where investors and entrepreneurs are perfectly aligned. Both act on instinct often, both get it wrong often. So fail fast is the mantra and rightly so – or at least much of the time.

Which brings me on to the other speed.

One of the more esoteric, but nonetheless interesting speakers at the event was former editor of Business 2.0 and The Harvard Business Review, Tom Stewart.

Tom talked about five key forward-looking themes for businesses of all sizes. Among them was speed – the fact that businesses no longer have time to rest, let alone to rest on their laurels. As he said:

Speed is necessary, but speed kills.

Who does it kill? Well potentially the slower, bigger companies. And that’s where startups and smaller businesses can step up to seize new opportunities.

But particularly in the world of the web, there’s also an ever increasing need for ’speed to scale’ – at least if the VCs are to achieve a worthwhile exit.

And in that case not being able to keep up can kill off startups, just as much as monolithic corporate monsters.

As Tom Stewart pointed out somehow we’ve got to balance speed with the important task of letting things emerge – listening to the traffic, if you like.

Otherwise we’re never going to be able to make a decision about an event or an opportunity we simply couldn’t have foreseen – leading in uncertainty when decisions are beyond calculation.

What’s this got to do with startups, small businesses and VCs for that matter?

Well, uncertainty is where the opportunities are and the world seems to be blessed with an abundance of uncertainty right now.

Exciting, challenging times, but let’s make sure we also pause to reflect on what we’re trying to achieve while we’re racing towards new horizons.

Jeremy Ettinghausen, head of digital publishing at Penguin, and Tom Thirlwall, managing director of small creative agency, MWorks, appeared recently in a session called ‘Alchemy, Chemistry and Collaboration’ at an event run by b.TWEEN. They thought they’d like to create a document about collaboration by collaborating with the audience. This was to be done using a rather nifty online collaborative editing application called Etherpad. The audience had other ideas but, as the discussion proceeded, it became clear why collaboration can’t be forced.

Referring to a 2007 collaborative book-writing experiment as a way of opening the discussion, Ettinghausen explained that Penguin got over 1500 people to collectively write a novel using a wiki. All of the contributions were anonymous so it meant that some well known writers could participate without risking damage to their reputation by association. This was just as well, because the end result was not at all good. He said it has been called, “not the most read, but the most written” novel in history.

However, Penguin learned a lot about collaboration which it has applied subsequently. In the case of the book, though, the question that hadn’t been asked was, “what was in it for the contributors?” And the answer was, “not a lot”. They got to exercise their writing skills and, presumably, saw what others made of them. So they learnt something. But the anonymity meant that no-one could see that they’d participated or, maybe, written a particularly scintillating chapter. The bottom line for these things is that everyone has to be a winner in some respect – learning, revenue, PR value, establishing new business relationships and so on.

Many organisations no longer have all the talents they need in-house, so collaboration with third parties, especially small businesses, is increasingly the case. Project team members can come from several organisations, large and small. And these projects, ideally, have a life of their own which is an obligation to meet certain agreed objectives but remain largely independent of their own organisations.

What turns out to be far more important than the contractual agreement is the chemistry between the participants. Figuring out whether a collaboration is likely to work owes more to flirtation and courtship than to project planning. The participants have to respect, like and trust each other. If not, the cracks will show as the project nears completion.

One audience member drew a distinction between the participants and the organisations they worked for, especially when it came to meeting up. He wondered if ‘neutral territory’ was important. (In the university world, for example, politics gets in the way. Hosting meetings gives a power advantage to the university, even if the project team couldn’t care less.) The speakers suggested that the money spent on such neutral venues, hotels and the like, would be better spent on content and product. They suggested that organisations need to empower people to be part of the project and not be a spokesman for their organisation.

Discussions about the causes of collaboration breakdowns followed and, fundamentally, the issues came down to clear initial objectives, an understanding of the benefits to the individuals, periodic reminders, continuous dialogue and meet up when possible. Not so different to an internal project really.

In wrapping the session, the speakers summarised the key elements for successful cross-organisation collaboration and took a few extras from the audience:

From the speakers:
- A need for the project (collaboration for its own sake will fail)
- A good chemistry between the participants
- Shared needs
- Mutual respect
- Leave egos at the door (acknowledge own strengths and weaknesses)
- Ongoing communication
- The right tools (Twitter, Huddle, BaseCamp, phone conferences, video conferences, phone calls, meeting up. Ettinghausen found phone conferences particularly bad.)

From the audience
- Clear objectives
- Ownership (who knocks heads together if things go wrong)
- Lots of decent human beings

A video of the session is on blip.tv

The recession has seen businesses putting expansion plans and financial investments on ice, however the one thing a small business should always keep warm is its relationships with customers and prospects.

The economic climate has encouraged businesses to become far more value orientated and companies are keen to make sure their marketing activities and budgets are drawing maximum returns.

However, by putting too much focus on marketing to gain immediate returns, businesses risk falling behind their competitors when the economy picks up.

By concentrating on long term as well as short term relationships with prospects, businesses are ensuring they are in the front line when customers are looking to invest once more.

When a new prospect is first identified and engaged, they are probably still in the research stage of the purchasing decision and not yet ready to talk fully with a member of the sales team.

It is crucial to nurture these leads, develop relationships and collect data during these early stages of research. The stronger your relationship is with a prospect, the better positioned you will be to apply this knowledge and offer them services and products they might actually want at an appropriate time.

SMEs have the potential to enhance their customer relationships, and therefore their data, with every communication sent out. So make sure each one counts.

Collecting and maintaining good data should be considered a strategic move allowing you to deal with current customers better and enable you to address the potential needs of prospects. Any touch point can be used to collect information including mail-outs, click-throughs and white paper downloads.

To avoid putting strain on new relationships and alienating potential customers, SMEs should aim only to ask questions to which the answers will be beneficial.

To work out which questions are most important to ask, a business will first need to establish what its desired outcome will be and work backwards to see the fewest questions that can be asked to gain this information.

By using prospects responses, data from any contact points and applied customer analysis, companies can predict what a prospect (or an existing customer) could buy in the future rather than purely concentrating on what they might buy tomorrow.

A relationship developed over a period of months, or even years, rather than just a few weeks will be in a strong starting position when prospects are again ready to purchase.

No one goes into business thinking “I want to be a middle manager – then I’ll have succeeded”, and the truth is that pretty much everyone within an organisation has thought at least once that they could probably do a better job of running their company than the Chief Exec.

But as George Bernard Shaw famously mused, “There are two tragedies in life. One is to lose your heart’s desire. The other is to gain it.” And at no time is this more true than when that final promotion happens and you find yourself sitting in the CEO’s office.

For usually confident, high-flying business people, it can be a significant shock to the system to realise that being the CEO hasn’t made them quite as happy as they thought it would during all those years of hard slog and shameless corporate ladder-climbing. So what has changed?

Often the job is fairly familiar even if the responsibility has grown. And their ability is still the same. The difference in most cases however is that ‘staff’ – even if you’re towards the top of the management tree – usually stick together, whereas the CEO? Well, mostly they’re on their own.

Almost every CEO describes their role as lonely in some ways, with the main reason being that they feel they cannot share all their fears with their colleagues or their board members.

They feel they are expected to know all the answers, show no fear and stay positive at all times, otherwise their authority will crumble and their business will do likewise. But as another great writer, John Donne, said: “No man is an island”, and this goes for the CEO as much as the rest of the organisation.

There are numerous reasons why the CEO might feel they have been backed into a rather lonely corner, but often it is because they haven’t hired colleagues of the right quality or don’t have the right board members in place.

Just as Obama and even J-Lo are surrounded by their own coterie of trusted advisers, supporters and ‘do-ers’, so a CEO needs to make sure that they have the back-up of their colleagues. Crucially, this does not mean you want an entourage of ‘yes-men’.

By involving your colleagues in the decision-making process, decisions are of better quality and are implemented with greater commitment and passion, and as the CEO you can be confident that you are being balanced as well as supported by your team.

Sharing your problems and concerns is not a weakness, and in the long run it will actually earn you trust and respect. Build up a culture of openness and lead by example by engaging with the business and consulting the team on matters of importance.

Concerned that sales have taken a nose-dive? Talk to people and find out what can be done about it. Sitting alone in your fancy office stewing about a client complaint? Share it with the team and ask for their help in resolving it.

It may be a cliché but a problem shared really is a problem halved, and the sooner you can make this part of the way you work, the sooner you’ll really start enjoying being the CEO.

It’s always intriguing to see how startups and particularly web startups refine their sites and their business models.

And these shifts in priorities are thrown in to stark relief for web businesses like Bview and Cmypitch.com which launched mid-2008 by the full horror of the financial crisis which hit our TV screens and VC funding last October.

It now looks like the Web 2.0 sensibilities of user generated content and community are giving way to ‘where’s the revenue’ as people realise only sites the size of Facebook and Twitter can afford to make no money.

Runways are considerably shorter than they used to be.

When Bview launched in the Spring/Summer of 2008 it seemed set on being a UK Yelp! with networking, local small business reviews and the added hard edge of Experian credit data leveraged by its parent price-comparison company Xbridge.

Bview's design is not a thing of beauty, but is the local business site sitting pretty after a revenue rethink?

Then today I receive a press release which describes Bview as the UK’s largest voucher search engine.  Whoa …  not what I was expecting.

So I quizzed co-founder, Colin Bruce, about the shift in emphasis. He said:

We looked at what businesses really wanted and thought about what new features we could add.  There’s a lot going on in the affiliate space, so it made sense to do something in that area and in essence we’re developing a voucher aggregation site.

The reviews or content element of the site are seen as a commodity to help drive traffic towards the revenue generating vouchers.

Although vouchers from large retailers predominate at the moment, Bview is still very much positioned as a site focusing on the ‘local’.

The announcement today, for example, promotes the fact that Bview’s vouchers will be displayed on Google maps allowing small businesses to offer discounts to a very focused online audience.

An interesting model which as Bview builds out its APIs is likely to create partnership opportunities with other search engines and price comparison sites.

Cmypitch has also had a radical overhaul.

Cmypitch looks a lot clearer than it did at launch, but will it have the traffic to make affiliate revenue count?

At its launch Cmypitch.com seemed to be a UK version of Vator.tv, a place to pitch on video for funding and clients – plenty of user generated content combined with networking, forums and editorial. That said, the homepage design was extremely confusing.

As Ian Wallis at Cmypitch admits:

We always had lead generation services on the site, but the homepage was far too confusing and the navigation didn’t make much sense.  So we decided to switch to a much more product focused site.

Cmypitch hasn’t just reworked its site, it’s reworked its business model by focusing, like Bview, on a share of affiliate revenue from offering small businesses special deals and price comparison.

The original subscription-based model, asking small businesses to pay up front for potential leads, wasn’t proving popular as the recession started to bite.

Building traffic to the site to build revenue is a priority, but Cmypitch is also exploring white labelling and syndicating its deals and quick quotes services to other sites to extend distribution.

Both sites offer a web startup story for our times.

Revenue is very much the new ‘pre-revenue’.

Yes, Yasmina! From the moment I saw her in action in weeks one and two, she was my hot tip to win this year’s Apprentice.

And so it proved in tonight’s final when shrewd business instinct, rather than polish, clinched the Reading entrepreneur and restaurant owner a job with Sir Alan Sugar.

And I’m so happy. Not just because I guessed right, but because Yasmina’s win is a win for startups and small business owners around the country.

Yasmina Siadatan - winner of The Apprentice 2009, giving up grim-faced determination for a touch of glamour

In choosing one of the very few candidates to have built her own business up from scratch, Sir Alan again showed that he and his business values the entrepreneurial over the corporate.

Ultimately Yasmina was clearly going to appeal to the soon to be ennobled business tycoon when you read what she’s quoted as saying from the outset on the BBC website:

Business is about a simple formula. Make more than you spend. That’s what I do, I keep business simple and it works. I’m good at it.

Very business savvy, very focused, but also despite her grim-faced determination, outside the boardroom she clearly knew how to have a good time and was liked and respected.

Kate Walsh put in another polished and very impressive performance and like Debra Barr the week before was unlucky not to taste victory in a challenge that pitted the two young women against each other to design and launch a new brand of chocolates.

Kate went upmarket with a box of chocolates for him, for her and to share. Brilliantly executed and presented and only just saved from being called ‘Intimate’ thanks to Debra who joined Kate’s team along with Ben, Kim and Rocky.

Nick gave his verdict on Kate’s first name for her chocolates: ‘frankly it sounds like something to do with feminine freshness’. Mouthy Debra, put it more succinctly – ‘oh my god, it looks like a box of tampons’.

And in so doing she saved Kate from a huge error as the team rapidly came up with the rather good ‘Choc D’Amour’ in just a few minutes before the deadline to confirm packaging design.

Yasmina also escaped certain death in the boardroom, by bravely giving up on a frankly idiotic idea to create a new range of chocolates exclusively marketed to men.

The moment that convinced her ‘man chocolates’ were a bad idea was when Philip, who’d joined her team along with Howard, Lorraine and James, suggested, like ‘pants man’, people would come around to the idea.

It was good to see Philip back. Most of the comedy in this final episode was his. Taking charge of choreography for a dance troupe for Yasmina’s launch event was a sight to behold, only narrowly bettered by his original pants man gyrations.

Yasmina’s Cocoa Electric chocolates, all electric shock, shocking pink and electrifying taste sensation, was all very retro with danger written all over it in a very 80s Duran Duran video kind of way. A fact confirmed when we caught a glimpse of Philip with a shocking pink thunderflash painted across his face.

Kate’s overall presentation and TV ad, in particular, outshone Yasmina’s. But Yasmina got price right again, bringing her chocolates in at £6 per box, compared to Kate’s £13.

Sadly, the chocolates tasted as shocking as the pink in which they were packaged. But in an echo of the catering task when Yasmina bought poor quality food and successfully achieved a huge margin, it was that simple business principle that won the day.

Ironic that the woman whose restaurant is by all accounts really rather good, should have won by literally sacrificing taste for short term profit.

Some will argue the short term, quick buck mentality is a short-coming of The Apprentice and its series of reality TV business challenges.

In fact the real business lesson from this year’s series, is Yasmina’s dedicated focus on her customer – namely Sir Alan Sugar.

She clearly knew her business flare would appeal and did everything necessary to deliver it in a way that would catch Sir Alan’s eye.

A good winner who I bet will return to her own successful entrepreneurial venture a year after spending time learning all she can from Sir Alan’s organisation. A smart cookie.

Quote of the week, from Sir Alan himself: “They weren’t shocking flavours, they were shocking chocolates”.

Business lesson of the week: know your customer.

I’ve been away on holiday and missed a few episodes of The Apprentice as some of you may have spotted.

But in my absence something strange has happened, if last night’s final five preview and interview show was anything to go by.

Firstly, I think I too may be afflicted by the Mystic Meg intuition of one of last night’s final firings, Lorraine Tighe.

Back in week one I predicted who would be in the final three: Yasmina, Rocky and Debra.

Well, just like Lorraine, my intuition was almost right, but not quite, although I don’t understand how I missed the Stepford Wife-like perfection that is Kate Walsh.

The other thing that struck me was just how popular The Apprentice must have become. The BBC devoted two whole hours to the show in prime time last night and the final is scheduled for peak viewing on Sunday.

Business as entertainment has clearly taken off. Celebrity entrepreneurs are the new celebrity chefs.

The last thing to strike me watching last night, is that the comedy – so easy to play up as the show’s own producers and I have done over the last few weeks – is making way for a programme that does after all have something serious to say about business.

A bit of TV manipulation’s been going on I’m sure, but Debra’s progression is a case in point. She’s appeared obnoxious, loud mouthed and über-ruthless as many of her former colleagues confirmed last night, but her journey through The Apprentice has clearly taught her something – about business and life.

The preview show focusing in on the characters and backgrounds of the final five, proved as, if not more interesting, than the penultimate episode itself.

You got a real sense of the very often working class backgrounds, adversity and inspiring family members that had shaped and motivated the finalists: James’s bricklayer Dad, Lorraine’s battle with a fused spine as a child, Yasmina’s Iranian immigrant family, Kate’s desire to impress her hard-working mum and Debra’s inspirational business father.

Suddenly caricature gave way to a better understanding of the real people battling it out to be Sir Alan’s new Apprentice. Suddenly the show seemed to be a little less about business pantomime.

It also has to be said the finalists, Kate and Yasmina, have to be two of the most impressive business people to have appeared on the show. Sir Alan must be delighted.

Quotes of the week, both from James’s comic CV: “I put a leash on people who spunk money up the wall” and “I bring ignorance to the table”.

Business lesson of the week: never underestimate The Apprentice, it might just have something serious to say about business after all.

You may have heard of Salesforce.com, an online service that has been penetrating companies left, right and centre because a) it’s useful, b) it can be paid for by individuals and departments without ringing alarm bells in IT and finance and, c) because it can be slipped inside the company as a standalone application. With some justification it calls itself “the world’s most popular sales tool”. Its 55,000 customers are split about equally across small, medium and large enterprises.

Last week, it published some independent research findings among 1,000 UK SMBs which ostensibly pushed the importance of seeking new business. It defines SMBs as organisations of between 50 and 250 employees and the ‘new business’ seeking behaviour was most intense (at 60 percent) among companies of fewer than 50 staff – companies that shouldn’t have been included. However, while the remaining figures are not as dramatic, they’re still quite interesting. See how they match your reality (and comment if you feel so moved):

Important issues by number of employees (Q109)

The 51-150 (surely that should read 50-150) and 151-250 organisations broadly differ in their attitudes to getting new customers/selling to existing ones and in cost cutting versus revenue growth. All four things are important, of course, but each organisation has its own preferred strategies for getting through the present recession. About 28 percent of these same respondents said that they’d consider themselves successful if their businesses don’t shrink during 2009.

Turning to their cost burdens, you may be interested to see where they lie:

Areas of greatest cost overhead

Again, organisation size makes a difference, but not much. IT appears as something of a headache. And this, of course, is music to Salesforce.com’s ears.

As well as the original CRM service and a ‘service cloud‘, which I won’t bore you with here, Salesforce has a third string to its bow called Force.com which is an application platform.

This means that it provides somewhere to run your applications in the ‘cloud’ (no, don’t get me going), taking away from you all that horrible stuff like backup, restore, disaster recovery, reliability, hardware and delivering applications to connected users 24×7. Applications are easier to write (five times easier according to the blurb) and easier to implement. And you have no capital costs. An associated service, called AppExchange, provides many prewritten applications which could save you at least some development effort.

That’s the good news. The bad news is that it doesn’t excuse you from analysing your business processes, deciding what functions you need, writing and testing them (or finding them) and all the other activities that go into implementing business software. You will probably need to consider how such systems are going to work with those that are still running on your own equipment until, and if, you manage to outsource the whole lot.

UK Force.com user, Nimbus, got a 28 year old person with no IT skills (but, presumably, plenty of business analysis and Force.com skills) to do most of the work involved in migrating its home-grown applications, including spreadsheet macros and the like, out to Force.com.

Many companies might be interested in the idea of getting shot of their computing equipment and associated expenses. But, they are also probably concerned about their ability to do it, the cost of doing it and the danger that they won’t be able to get access to their systems if their broadband connection goes down or the Force.com platform goes off air. The last is probably the least of their worries. Salesforce is highly motivated to fix all problems of this nature very quickly. If it happens too often, it goes out of business. The company provide a ‘briefcase’ facility that allows people to continue working when they know they’ll be offline – travelling etc.

With respect to the other two issues: ability and cost, the first depends on your staff and their skills. But, it has to be said, sources of third party help for small businesses wanting to take the Force route are not exactly thick on the ground at the moment. Salesforce is aware of this.

And, since it represents a great opportunity for systems integrators and the like, I think it’s safe to say that this will change. The second, cost, means that you’d be moving capital expenditure to operational. So you could save big in the short term.

You will, however, incur implementation expenses, which wouldn’t be that different to moving to a different internal system. Then you will have your ongoing monthly costs for the service. These you have to hammer out with Salesforce.com and conduct your own ROI analysis. Its blurb reckons you’d halve your costs.

So, although IT is a large expenditure for SMBs, like all ‘cloud’ type solutions, Force.com is unlikely to prove a magic bullet. So much depends on your exact circumstances and your IT setup. But, equally, when reviewing your future computing options, it would make sense to keep it on your radar, not least because Salesforce itself is an established and reputable provider.

Keeping in contact with old friends couldn’t be easier these days. Hotmail, WAYN, MySpace, Facebook, Twitter – the list is endless. That’s all well and good for your personal life, but what about in a business situation?

Some big name companies have thrown themselves into the social media space e.g. Dell claiming to have made over $1million from their twitter feed. That’s all well and good for the big boys who have spare money to experiment but does social media have any real value for SME’s looking to network?

Many business people are already tuned into the benefits of using LinkedIn to network. But is that where social networking should start and finish for small businesses?

Last year Visa Business launched a new network page designed for Facebook, the social network page. They used it to encourage small business owners to exchange ideas, manage their resources and expand their customer bases. This was in addition to the $2 million Visa already spent on advertising on the website.

But was it really an effective strategy? Undoubtedly many small businesses have signed up for Facebook pages but most of these are for fun; offering ways for Facebook’s 200 million active users to play games, share photos, rate music and track friend’s activities.

Whilst I understand the desire to harness Facebook’s rapidly growing audience for business, in my mind it still hasn’t proven that its social playground is an effective tool.

Businesses using social media may also be in danger of blurring the lines between personal and public life. We’ve all seen the stories of employees moaning about their job apparently in the domain of their private network of friends, only to find it gets back to bosses and they’re promptly fired.

Another unresolved issue with these new sites is privacy. Do businesses really want to be doing all their deals and negotiating out in the open? Surely when competitors see new business lined up they will try to lure them away?

As for expanding business opportunities and customer bases, I’m not sure how many people will want to do business with someone they found on a social networking site, predominantly used by teenagers for seeing what their mates have been up to.

Clearly this technology is still evolving but for the time being I’m not convinced it’s a key tool for SME.

When invited to a Microsoft ‘Voice of the Customer’ briefing, I must confess that I didn’t know what to expect. Software that expects the customer to close their computer by going to the ‘Start’ button obviously doesn’t really understand customer needs.

A search on the internet revealed that ‘Voice of the Customer’ is actually quite an accepted term in software circles. It’s about understanding customer needs through market research in the early stages of a project, then prioritising them in order to influence product development. You can find out more at wikipedia’s entry on the subject.

The briefing went way beyond the voice of the customer though. Perhaps it should have been called ’second-guessing the needs of the customer’ or something. Microsoft wants to get things right, customer-wise, in the first place and then make it easy for customers to get resolutions to problems encountered – sometimes before they’ve even encountered them.

You’re probably thinking what I was thinking; “Microsoft has been in business over 30 years, shouldn’t it have been taking this approach all along?” And I don’t have an answer to that, except that I suspect that programmers (who, in general, have little grasp of the average user’s needs) were left to run wild with their clever but irrelevant and often inconsistent (across applications) coding.

Microsoft seemed to have little idea of, or sympathy for, the hours that users would waste trying to find answers to their problems. As the web increased in popularity, Google probably became the first port of call, with real users in forums or Q&A sites becoming the best source of answers.

Although, having said that, I have a note here that says Microsoft itself participated in 13 million email or chat conversations, took 24 million phone calls and served up two billion on-line self-help requests. I presume that was in a year. It represents a ton of work and a huge cost for the company, over whatever time scale. This is, presumably, part of the trigger for a customer-focused revolution.

So, the new order is determined to design products better in the first place, be made better in the second and be better supported in the third. One of the company’s products that has already gone through this particular mill is Windows Server 2008. In a comparative time period, the incident volume was half that of its predecessor, Windows Server 2003.

Rather than have to plough through arcane knowledgebase articles, online users will be able to hit a ‘Fix it’ button. Later on, an online service will be able to undo something that’s harmed your system. Running applications will be monitored for health and get fixed in the background.

Microsoft has 424 full time employees, plus contractors and vendors involved in this quality process. Even so, it has to prioritise its work, it knows, for example, that Windows Mobile is a pain but it’s still not reached the head of the queue.

However the Windows 7 operating system that our beloved leader (Alex Bellinger) blogged about last week, received the full treatment, and it shows. Half a million individual items of feedback were processed. Five diagnostics and 108 design changes were incorporated as a result. It’s no wonder it’s becoming one of the best-received Microsoft offerings.

The company could have saved users (and itself) a lot of pain had it introduced such processes from the start. But then, without the internet, this would have been virtually (no pun intended) impossible.

Let’s hope that this really does represent a fresh start.

Many CEOs and MDs will tell you that their people are their biggest asset, yet spend less time on the selection process than they do on deciding what font to use in their latest presentation.

Even larger organisations with HR departments and formalised recruitment procedures can be woefully bad at really making sure the people they hire are the right ones for the job. Sure, they may force candidates to endure three interviews and a battery of psychometric tests, but none of this is worth a dime if they’re not actually testing them on the things that matter – their attitude, their ability and their potential.

There are lots of reasons why hiring well can be scuppered from the start. Particularly in smaller businesses it can be hard to make the time to really put a candidate through their paces, and convenience wins out over rigour.

In addition hiring can often be a knee-jerk reaction – ‘we’ve won some business, we’re over-stretched, we need to hire!’ – and the recruitment process is started from a base of panic, without anyone taking time to really define the role that needs filling, let alone the qualities required to fill it.

But hire in haste, repent at leisure – getting the wrong person in can cost your business a fortune in terms of time, money, morale and reputation.

So how do you know when it’s time to call it a day with a specific employee? In general, if you’re even thinking of firing someone because of an attitude problem, then you probably should have done it yesterday.

However, if the attitude is right but the performance is under par it may be worth looking at other factors prior to making the decision. Changes in the office or with client requirements, pressures at home, illness or simply stress can all impact ability to perform, and can often be overcome with the right support.

Whatever the issue, if you have any concerns about an employee it is essential that you address them immediately. Either they’re a keeper, in which case you will want to help them get back on track as soon as possible, or they are not suited to your organisation and the sooner you can remove them the better.

Some CEOs delay firing because of the fear of costly legal action. In such cases, you need to compare the cost of delaying versus the cost to the business. Perhaps leaving the individual in place could have worse financial implications than firing, or would demotivate the rest of the team.

However, this does not give you licence to fire people in an unpleasant or insensitive way as this will only create an enemy in the market for you and your company – not to mention all the legal implications.

So what is the secret to hiring success? My personal rules of thumb are very simple. Surround yourself with people that are better than you. And make sure that they are the kind of people you would enjoy going to dinner with.

You need people that will keep you on your toes but also people that make you want to go to work in the morning. A strong, motivated team is worth more than anything to your business in today’s climate, so hire, nurture and retain the quality, even if that means losing some of the quantity.

As many of you know, Vista hell became too much for me and I spent most of 2008 using Ubuntu.

And what a very pleasant surprise the open source operating system and all the good (free) things that come with it has been.

But there were a few gotchas: poor multimedia support, no viable Linux accounting package and a power management system that left my laptop hotter than the sun.

These niggles, the fact that I’m a bit of a tech tart, David Tebbutt’s initial reactions, and my never ending quest to find out whether stuff’s good for other small businesses, prompted me to install Windows 7 beta on my main work laptop in February this year.

The following review is based on my experience of the beta and release candidate 1 (RC1) of Microsoft’s new operating system.

Windows 7 wallpaper - Gates & Ballmer ride into a Yellow Submarine landscape, but is Microsoft's new OS blue monster or blue meanie?

Wow, it works now

Remember the Wow starts now? Microsoft’s come a long way since then.

What the Vista launch proved is that a computer OS no longer merits marketing hype. The evolution of operating systems, Apple and Linux included, is now iterative, not revolutionary.

What matters is do they work well? The bottom line is Vista didn’t and Windows 7 does.

Like many others, I’ve found Windows 7 beta and RC1 to be equivalent to or perhaps even a little faster than XP.

A stable, fast, secure operating system that you can forget about is exactly what small businesses want. Windows 7 could be just that …

It’s all in the detail

There’s really not a lot to say about Windows 7. The very fact that people are talking about the new ‘wallpaper’ in the OS is a rather amusing sign of this.

But actually this is great news. It feels lighter and more refined to use and seems to herald a new less is more philosophy coming from Redmond.

Perhaps cloud computing is forcing software vendors away from the bloatware mentality of Moore’s Law where all the extra headroom created by leaps in processing power had to be filled.

What you’re left with focuses on well executed detail and usability. About bloody time.

Windows 7 small business benefits

As a small business owner these are the things I enjoyed about the software:

- at last the desktop search built into the start button works well bringing a touch of Apple’s Spotlight to the PC – this is a real time saver when you want to find a document quickly;

- the ability to mouse over the taskbar and get a peak at files and windows you’ve got open works very well and saves time (click on the image below to see a screencast review to go with this blog post) as do the jump lists which give you quick access to files you’ve been working on;

- Vista was a pig for connecting to wifi networks on the move and Apple MacBooks are also often a pain if you’re trying to get some work done in an airport or down your local cafe. Windows 7 puts that right and is much more intuitive in terms of finding and connecting to wifi networks;

- compatibility is good thanks to ‘XP mode’ which means all your old software should work fine. Much to my surprise my ancient accounting package is alive and well under the new OS, saving me from an expensive forced upgrade;

- with all the data protection legislation around these days small businesses will increasingly value the ability to encrypt sensitive data on computers easily. Bitlocker on Windows 7 does this for an entire hard drive, while encryption on a file or folder basis also works well.

That’s about it, other than general stability and speed.

Similar features are found in other operating systems and arguably Microsoft should have had all this sorted years ago. But it’s here now and it works. Having said that …

Ghosts and the black screen of death

Just like Ubuntu there are some gotchas, albeit I’ve been testing beta and RC1 versions, so some quirks may get ironed out.

I frequently get programmes including Firefox and Microsoft Office documents suddenly freezing and turning a ghostly shade of transparent. Like ghosts they’re then often difficult to lay to rest. This was particularly bad in the beta, but it’s still happened a few times over the last week in RC1.

On much more rare occasions I get what I can only describe as the ‘black screen of death’. Windows 7 doesn’t stop running (which is good), but if a programme crashes I’ve had the background turn a mournful and appropriate black …

Norton Internet Security 2009 has proved extremely problematic to install correctly – but I expect Symantec will rectify this before the RC1 turns final. Windows-targetted viruses and malware remain a pain which Linux and Apple users don’t have to struggle with.

Finally Internet Explorer 8, bundled with the new OS, still feels slow. Firefox is the way to go.

Conclusion

If you’re a sole trader with an XP or Vista computer and you’re sticking with Microsoft, yes upgrade to Windows 7 (assuming Microsoft is sensible with pricing).

If you’re a larger SME, the benefits of Windows 7 are not so compelling that you should shift existing hardware/software upgrade cycles just for the sake of getting your hands on what’s new.

But when you do, you’ll notice a positive difference.

It was with a heavy heart that I set off to the London Climate Change Marketplace, part of the Prince’s May Day Summit 2009. I wasn’t looking forward to meeting lots of people selling things and pretending this was good for the environment. And I was dreading bumping into Prince Charles, a man whose carbon footprint must be very ‘interesting’.

I needn’t have worried. Prince Charles was at one of the other May Day events, but his speech was screened at our event too. And the exhibitors I spoke to were pretty genuine people who were more than happy to share their knowledge and insights. And yes, if you wanted, to flog you something.

What was refreshing to me was getting out of the IT box and looking at the subject in the round. Sure, IT can help a lot with addressing sustainability-related actions, but it’s not the only game in town.

I received my invite through a colleague’s husband, Habib Abdullah, the MD of MITIE Pest Control. MITIE is an outsourcing and asset management company. It had the largest stand by far and, over a drink made of apples from Kent and some cheese from Somerset, a representative talked to me about reducing food miles, ethical procurement, waste recycling and reuse and local sourcing.

You might be interested in flicking through MITIE’s online booklet entitled ‘the little book of big ideas‘ for inspirations of your own.

Couldn’t resist stopping by the 3M stand to tease it about swine-flu face-masks. Poor guy nearly hit me. He’d only got four hours sleep because of global press interest. He pointed out that even the most advanced masks have to be thrown away after a single use. And, anyway, you need to be trained to fit them properly in the first place or they’re useless. However, on the subject of energy saving, he did manage to show me how 3M window film can substantially reduce heat gain through windows, thus reducing the air conditioning work load.

Siemens was interesting because it is an industrial company that has moved to IT, rather than an IT company that’s moving into industry. Its services are probably not up your street but the perspective is worth bearing in mind when listening to potential suppliers.

The University of Cambridge and the World Business Council for Sustainable Development has produced (among other things) a neat e-learning tutorial on the business case for sustainable development. It looks like a great way to inculcate an understanding among employees in a fairly enjoyable way. You can download a PowerPoint guided tour if you’re interested.

Then we come to the Prince and the May Day network. During his speech, Prince Charles reported that about 1000 companies have pledged to do something about climate change in their own operations. About half of them are sending their footprint figures to the network and some of these are also sharing their stories with others. The May Day name was chosen because it is an international distress call (derived from m’aider, it seems). And it was chosen because we have very little time (98 months, in the Prince’s view) to ‘take the necessary action’.

To find out what that means, I strongly recommend you look at the May Day Journey. I’m ashamed to say that I knew nothing of this until last week. It is a great mind-focusing exercise. And it’s not all about ‘doing good’, it’s about doing the right things for your business.

Is it time for a proposition overhaul?

If, like me, you’re feeling a bit fatigued by the doom and gloom stories of the credit crunch, recession, deflation etc. etc. yawn yawn …

Maybe it’s time to remind yourself why it’s great to be a small business.

Whilst big, lumbering corporates frantically look at ways to cut their costs, re-engineer their business to strip out years of institutionalised inefficiency and wrestle to steer their titanic operations in a better direction, it seems to me small businesses have it GOOD.

Why? Because we’re more nimble, we can adapt to market conditions more quickly and by comparison, we’ve got super light power steering to take ourselves where the money is.

So if your business is taking a bit of a hit as a result of the crunch, maybe it’s time to do some smart marketing and have a look at your proposition. If it’s not getting results in current conditions … what can you change about your product … its pricing … its positioning … to make it more attractive to your key audiences?

At the end of the day, you have power to make changes … just as long as you’re in touch with your customers and you understand what it is that’s changed in their world that’s having a knock on effect on your business.

They say there’s always money to be made in a recession. I say hurray for the small businesses that have the sense and capability to grab opportunity whilst its there.

The sniping was unrelenting. Bomb blasts of abuse rained down. Shell shock prevailed.

Sir Alan’s own brand of put-downs were so abrasive on this week’s episode of The Apprentice he must have had the BBC’s lawyers scurrying for their tin helmets and copies of slander case law.

Noorul who finally got fired received a particularly shocking parting shot in the back from Sir Alan, who quipped:

Whoever employs him, better get a receipt.

Meanwhile James was likened to a village idiot who’d gone missing.

But it wasn’t just Sir Alan who was hurling abuse. Debra outrageously and unwisely kicked off in the boardroom with Nick (yes .. Nick!), Philip continued his running battle with Lorraine, James berated Ben for almost calling him into the boardroom and Ben refused to take any more shit from a bunch of tough nut antiquarian booksellers.

From the off we were left in no doubt by the programme’s editors and writers that this episode was going to be all out war.

Ben, who’d received a scholarship to army officer training college Sandhurst, but for some inexplicable reason had never taken it up said:

Under those situations where I am under extreme pressure i.e. heavy gunfire, explosions going off around me, people getting injured, that’s when I bring a team together.

All well and good, but valuing and selling a rug, a skeleton and a few jellied eels among other things, proved a mission too far. As project manager for the first time, 22 year old Ben was more Dad’s Army Corporal Jones, than Iraq war Colonel Tim Collins.

The key to this week’s task was identifying correctly the value of a selection of items. They included an expensive rug at over £200, a first edition James Bond book, a medic’s skeleton, some valuable antique shoes, a bunch of old tat and two vats of jellied eels.

Sir Alan had pointed out there was a twist in this task all about selling: the twist being it wasn’t about selling everything, but selling the most valuable items. Judgement day in the boardroom involved subtracting the price items were sold for from their real value to work out a profit or loss.

Both Ignite and Empire sold very poorly and had no real concept of the value of anything. The spectacle of both teams hoiking a £200 rug around the streets of London finding it impossible to sell for a pittance was a great example of turning a silk purse into a sow’s ear.

Ben’s tactic, as the day drew to a close, was to offload everything by ‘finding some absolute nutcase and flogging it”.

Meanwhile Ignite team leader Philip continued to ignore Lorraine who rapidly identified the rug and antique shoes as worth a pretty penny.

He did, however, come up with the ingenious idea of selling a medic’s skeleton to punters in a pub opposite a London hospital. Amazingly, he actually found someone (not a medic) who’d wanted a skeleton all his life and stumped up £150 for it.

Back in the boardroom Ben’s team suffered defeat with a hefty loss of £169, while Philip’s team were also poor with a loss of £39.

When the losses were totted up and it became clear that both teams had completely missed the point of the task, the silence was deafening. The deathly hush wasn’t only the quiet before the storm, it was also recognition of abject failure.

Classic moment for me this week was the look on Sir Alan’s face when Margaret accused Lorraine of being the ‘Cassandra’ of the team (someone everybody refused to believe). His expression was a combination of horror, confusion and strain, like a man trying to give birth to the complete edition of the encyclopaedia Britannica.

By this time Ben was all at sea – so indecisive that he couldn’t work out who to bring back into the boardroom, opting for Noorul (safe bet) and then James before heading back to Debra who’d already received a dressing down by Sir Alan for abusing ‘him’, by which he meant Nick.

Sir Alan speculated that Ben was a broken man, before fixing on Noorul who he’d clearly wanted to sack weeks ago.

The battle was over, but the war goes on.

Quote of the week from Sir Alan describing Ben: “Your mind is like concrete. Thoroughly mixed, but set in its ways.”

Business lesson of the week: no point pricing everything, if you know the value of nothing.

As an ardent fan of high street chemists – Boots for their loyalty points and Superdrug for their cut-price tactics – I was looking forward to talking to Mitesh Soma, brains behind the online pharmacy Chemist Direct.

Not only does it seem husband and wife team Mitesh and Krishna Soma have successfully squared up to stiff online competition, but they’ve also achieved pain-free VC funding from investors including Skype’s founders.  No mean feat.

Formerly a management consultant for Deloitte, Mitesh graduated with a degree in business and computing before persuading his wife to sell her pharmacy in Westminster to take the business online.

Mitesh says:

I used to occasionally pop in to see her (Krishna) and I noticed some of the prices that she was buying goods in for. Comparing them to what the retail prices of those products were there seemed to be huge margins. Items were being bought for pennies and sold for £7 or £8.

Mitesh had stumbled on a golden ticket. By going online he had a far greater market at his feet. With ‘smaller margins and greater volume’ he was suddenly in a position to undersell the high street giants and beat them at their own game.

An online consumer-led business model meant the couple could now provide: ‘everything you can buy at your local pharmacy for a lot less’.

Mitesha Soma persuaded his wife Krishna to sell her London pharmacy and move online

Boots of course is a national chain, employing thousands of people across the country, and it would be wrong to assume in the light of increased online spending that they were not taking their own online push seriously.

Online pricing in the sector is becoming increasingly competitive.

Yet Mitesh believes it is Chemist Direct’s ‘small and agile team’ which puts the business ahead of the game, allowing them to react at speed to competition, changing consumer needs and market advances.

With the original business sold and an office in the garden shed, the Somas employed a team of web designers and in November 2007 the site was launched.

Less than twelve months on and the business had grown from a handful of people into the Hitwise number 1 online pharmacy complete with warehouse, a 50 strong team of employees, a product list in excess of 1,000 items and turnover of £4 million.

Fast forward to the end of last year and it was apparent the business was moving on from its pioneer phase.

While looking to expand services, their team and their warehouse Mitesh was not actively seeking funding, and yet a meeting with the former Skype co-founders Niklas Zennstrom and Janus Friis, now of Atomico, led to Chemist Direct achieving £3 million in VC funding.

You only need to look at LoveFilm to realise that such a consumer led business model can feed off a downturn. People will always need toothpaste and soap, and they’ll always want to enjoy films.

Chemist Direct hoping to do for pharmacists what Glasses Direct did for opticians

You might imagine adding whole new product ranges would prove challenging, but Mitesh and his team have frequently shown startup agility in practice.

In January 2009 a pet team was developed and pet drugs added to the online catalogue.

As Mitesh explains:

I was talking to a pet owner who said she was thinking she’d have to put her cat down because she couldn’t afford the drugs … I thought well we can get hold of these kinds of items as we are a pharmacy. The move has been hugely successful since we launched at the start of the year. People couldn’t get these items for less before and now they can.

All this sounds like the perfect startup story. But it’s only when you dig a little deeper you really sense why Mitesh left the corporate world – his entrepreneurial instincts burn too bright for office politics.

It may be early days for the business, but Mitesh is driven by the desire to create a household name. Yet he recognises that if there comes a time when he’s no longer happy, he will move on. Indeed like all entrepreneurs he already has a number of ideas brewing, although none he would divulge.

It’s very difficult to find fault with Chemist Direct. To get VC funding in today’s economy is impressive. Persuading a partner – which Mitesh calls ‘the power of the entrepreneur’- to sell her family business to set up an online startup in a garden shed is astonishing.

And yet Mitesh’s powers of persuasion and vision have held sway.

This and the recession-fuelled desire for people to cut bills by finding bargains online, mean I reckon it’s a safe bet to predict Chemist Direct is set to enjoy a very prosperous year.