Prof. Aard Groen: Making a high tech start-up successful

The founder of Insego website talked to Aard Groen, director of  VentureLab International about creating successful start-ups.

Best Dutch Brands:  VentureLab International is your brainchild.  What was your a-ha moment which inspired you to begin VLI?

groenAard Groen:  My aha moment came to me after the Innovation Platform Twente asked me why many startups from UT weren’t growing further.  Although we already had another business development program called Kansrijk Eigen Baas, which helped companies start up, I realized we also needed to help prevent entrepreneurs from stunting their company’s growth during the early stages of their high tech high-growth company’s development. They should become more competent and aware, and this is possible if they work consistently on this goal through coaching, networking, having access to finance and remaining focused.

Insego:  What are some barriers when making a high tech start-up successful? 

Aard:  One barrier lies within the idea behind the company.  If the persons who developed the technology set up the company based on the idea that the technology will sell itself, the company will almost never become big. Something which causes this behavior is that they’re not market oriented enough. They don’t know what their clients want, but they are also not seeking what the client needs.  If that link is missing, then it is almost impossible to create a large company.

Even if you do have that link, there can still be issues.  For example, financing a start-up is usually perceived as the big obstacle. Unnecessary, because there are plenty of financial resources available for high-tech start-ups. The problem lies usually in how entrepreneurs ask for the money. If you appear to be a technology-driven person and not a client-driven person, and if you have a poor network and an unclear presentation, it could be difficult to receive finance or find investors.

Insego:  How does VentureLab International help entrepreneurs receive financing for their companies?

Aard:  We first make our entrepreneurs “investor ready”, helping them have a prepared and presentable plan, the ability to do the first initial negotiations about the terms of reference for how they will get investments and what kinds of the share they will share with the investor, and what will be their exit strategy. The real financing comes from someone else.

We’re connected to several formal and informal investor networks and we are able to introduce our participants to the right investor.

Insego:  Are there international participants in the program?

Aard:  We have many international participants; the program is given in English so there are no barriers for international people to join us.  We are also recognized by the NBIA (National Business Incubation Association) in the United States as a Soft Landings International Incubator designation and we help to set up a business in northwestern Europe, specifically in the Netherlands.

 

Jaap van Tilburg: Online Businesses Ideas

jaapvantilburgBea Stanford, the founder of Insego blog, talked with the Jaap van Tilburg, the Programme manager of VentureLab International about his own start-ups.

Don’t put all eggs in one basket is a well-known strategy that many entrepreneurs keep in mind. This is also a Jaap van Tilburg’s motto, who, apart from having a successful career as a board member of VentureLab Twente, he has a number of websites and online businesses.
As I always advocate creating a passive and residual supplemental income stream on the side, I took the chance to learn about Jaap’s approach.

First, why would anybody want to have a small business on the side if you have a good job?

There are many reasons:

  • Job security is a huge issue. Globalization, outsourcing, downsizing and economic woes in general are worrying people. Many desire something to fall back on; a safety blanket underneath them to catch them if and when they fall.
  • You might want to learn something new and challenge yourself
  • You have brilliant ideas that your work doesn’t allow you to realize, because you want to have the financial benefits for yourself or because you want to do things your own way.

Jaap has been an entrepreneur for more than 30 years. When he accepted a job at the university he liked to continue some entrepreneurial activities. Anyway, having a small business on the side is getting more and more popular. There are many factors that decide how successful that will be, depending on business model and expectations. Jaap van Tilburg says some of his 6 websites are more successful than others.

For example http://www.spocnet.net , dedicated to spreading information about doing business in Curacao, is a great support for the offline business. This website is a driving vehicle to offline meetings that van Tilburg organizes regularly. To attract traffic, van Tilburg uses a social media strategy including YouTube movies. The business monetization model is based on public sponsoring and the earning model via the website is in preparation.

One of his sites,www.innomeet.com,  is the other story. He was very optimistic about this website. It should  match innovators with potential buyers and help them create long-term partnerships. Visitors were reached via the traditional PPC (pay per click) method as well as by SEO (Search Engine Optimization). Unfortunately the idea wasn’t as popular as Jaap predicted and the website is now waiting for new inspiration.

Jaap also has 4 other businesses that deliver him a steady stream of work, help him build relationships and also enhance his credibility as an expert in the field. Furthermore he says that having businesses online is a need to be recognized, brings in new clients out of his existing network and helps him to stay on top of the game.

Jaap is an avid YouTube user and has his own popular hits. This can be another way of creating passive income. I like Jaap’s contagious attitude of being open on trying new things, whatever it is, social media or a new business. I agree when he says that, if you want to succeed, you have to change your mindset first and foremost. There are so many possibilities around all of us.

New Trends Crowdfunding and Crowd-sourcing

There’s definitely a great deal of excitement about the best way the startups can benefit your crowdfunding and rightly so if you take a look at how much the crowdfunding industry has increased in 2012. Yet another phenomenon, crowdsourcing, has also increased significantly over the last years, and with that at heart, MBA Resources website has presented five good reasons why companies and organizations really should take a good look at crowdsourcing.  The most important reasons why businesses should check out Crowdsourcing are:

  • to save money,
  • to save time,
  •  to innovate, to increase customer satisfaction and
  •  to scale up.

Another way of crowdsourcing is turning to consumer feedback for generating new content or products. For example, you might ask website visitors for their opinion about online courses versus traditional classes. If you summarize the outcome of your survey you will be able to create interesting, original content and maybe a new product.

The premise is that faster is better and that the first mover wins. They believed that if they just made a decision and went with it, they could correct their mistakes later. I don’t care how much you go on about Internet time before you spend millions implementing a database solution for your e-business portal you might want to take an extra day to weigh your options. The adage “measure twice, cut once” has worked for a few thousand years. The New Economy won’t displace all the old rules.

Wait a minute

Today, business plans are based on the hurry. The difference between success and failure is no longer profits or traditional businesses. Rather, it is looking before you leap. The popular media will continue to glamorize and perpetuate today’s lightning-fast traits: lack of details, small attention spans, and more spin than “stuff.” The risk is good, but a failure as a result of a blind sprint is unforgivable.

Thanks for taking the lead and saying wait a minute. I used to think I was crazy. I probably still am, but my perspective isn’t as warped as I once thought.

Fast and feckless

I just wanted to thank you for your insight regarding the problems that come from the action without thought (“Speeding Up, Dumbing Down,” September 26, 2010, p5). My organization, a multinational services company, is suffering terribly in the throes of this effect, throughout many different business units and levels of decision-making.

Considering the complexity, irrationality, and ambiguity of our business, I think that this problem may be even more intractable in my company than in most other large corporations. Case in point: My unit (in which I am a services portfolio manager) is currently working on a 10-day planning cycle for developing our 2017 business strategy. There is almost no possible way to generate a coherent, effective strategy based on the sound analysis in that kind of a timeframe.

To better illustrate the idea, they came up with this infographic along with some cases-in-point:

crowdfunding-infographic

Managers need good practical models, based on good theory

Visiting the Academy of Management conference this year in San Antonio was again an inspiring event. 6000 management scholars meet and discuss the newest management research developments. Many sessions of the entrepreneurship division and the technology and innovation management division focused on high tech entrepreneurship & business development.

One very inspiring event was the award session for Clayton Christensen, he was awarded the innovation award of the technology & innovation division for his career. Professor Christensen accepted this award with an inspiring and moving speech about his lessons learned in his research and consultancy on disruptive innovation. He had several messages for universities on how to teach management students, and for managers. One common thread in his thought is that managers need good practical models, based on good theory, as one cannot base decisions on data from the past alone. Especially in innovation the future is expected to be different then the past, therefore the predictive power of analysis of data from the past is limited. Models of innovation development however, are informative to guide entrepreneurial managers in their quest for realizing an innovation process.

As an example, consider how difficult it was for IBM to understand the possibilities of the PC when they developed it in the late seventies/early eighties. Looking into the past was not useful, as there where very few practices to analyze. Imagination of entrepreneurs like Steve Jobs, Bill Gates determined the development of new innovative applications of existing IT such a windows based computers or Apple I-pad, but additional to this imagination obviously the business potential of opportunities conceived by the entrepreneurs need to be assessed.

In the Venture Lab Twente we use value creation modeling to estimate the possibilities of creating business in future with certain products. Jim Anderson, professor of marketing, Kellogs business school, Chicago trains our entrepreneurs to make better assessments of their financial value. His work also fits to the norms of Clayton Christensen being well based in strong theories and developed into practical modeling of value creation in market networks.

How is your entrepreneurial DNA?

You can find a good amount of misconceptions hanging around, boosted by icons like Steve Jobs and Mark Zuckerberg, that you should be in your 20’s, and include a rigorous way of thinking and a huge ego. But, as outlined by a comprehensive study carried out by a startup incubator, these people are merely outliers.

Smart companies used to go to great trouble to build their reputations – literally. They’d build plush and cozy branch offices that practically radiated that invaluable commodity, trust. Then came other tools – deploying armies of smooth-talking salespeople to play golf with the clientele (and to smooth over any problems), or broadcasting hours of reassuring television commercials. If none of those tactics reached the customer, the customer could literally reach for the product itself. Trust was easily built and tested at every step.

But now your company exists in the form of glowing pixels on the screen. Your schmoozing sales folk and beautiful storefronts are seen as an impersonal user interface. Your physical products are morphed into online content.
And so you can forget about decades-old reputations and the power of a brand name. The power of the Web comes from narrowcasting – not broadcasting – a mass of specialized services, the vast majority of which do business with relative anonymity. You’re no Amazon, and likely won’t ever be.

So why should users believe the information on your site? Why should they give you money? If they do, and they receive a purchase but something goes wrong, will you be able to resolve the issue, or will all complaints go into a black hole?

Answering those questions on the Web means fighting an uphill battle because for every striving, well-intentioned e-business there must be 25 more that continually treat consumers badly, spam ruthlessly, violate privacy cavalierly, or don’t deliver on time. The truth is, the current climate on the Web – on the whole – is one of casual disregard for customers who are traded like sheep. Most companies buy one another not to create better products or services but to advertise more users and create more “stickiness.”

So you don’t have six million customers. So they don’t trust you with their credit cards. Don’t despair. Cheskin Research and Studio Archetype/Sapient recently completed a user study of Web trust. Their key finding: Trust is a long-term proposition that builds slowly as people use a site, get good results, and repeatedly do not feel let down or cheated. True trust comes from a company being on good behavior with an experienced customer, transaction after transaction.

Trust is both hard to build and easy to lose: A single violation of trust can destroy years of slowly accumulated credibility, and buying yourself a Super Bowl commercial won’t bring it back.

According to another recent study, by Jupiter Communications, when customers encounter technical difficulties at a previously preferred site, about half of the users will abandon the site for that session. Many of these users do return later, but often with split loyalty after having tasted an alternative site with the same or similar services.

The Web is truly a user-driven environment where instant response times and perfect inventory management matter – and building trust begins with giving never-ending attention to what you do with all those pixels.

Here then are a few unappreciated but invaluable trust-inducing pointers for Website design:

1. Maintain design quality – Professional design communicates trust; clear navigation conveys respect for customers and an implied promise of good service. In contrast, typos or difficult navigation signals disregard for the users.

2. Full disclosure – Embrace constant and upfront disclosure of all aspects of the customer relationship. Reveal shipping charges immediately rather than waiting until after the user has placed an order. You may cheat a few people into ordering by hiding the shipping costs, but many more will abandon the site at an early stage of the process for that reason alone. And those users who do get cheated will be suckers only once.

Anytime you have a need for capturing a user’s email address, it is necessary to provide full disclosure of what the address will be used for. It is also necessary to give users the ability to control how many emails they will be getting. For example, it should be possible for a user to place an order and be assured that the only email he or she will receive would be clarifications or confirmations of the order.

3. Consistently good content – If a site has product photos, it should have good shots of all the products. Haphazard, random content signals a brittle service.

4. Reach out – Connect your site to the rest of the Web with links in and out. Not being afraid to link to other sites is a sign of confidence, and promotional information via third-party sites are much more credible than anything you can say yourself. Isolated sites feel like they have something to hide.

Some matters of online trust are deceptively simple: to users, fast servers are trustworthy servers. Negligible download times mean you know what you’re doing, while slow servers fuel a user’s suspicion – however ungrounded – that your site could break down at any time.

Trust is essential for building long-term customer relationships, and deep trust comes from behaving honestly through many subsequent encounters with the customer. But you are never going to get the chance to satisfy the customer even once unless your site oozes credibility and trustworthiness from the very first click.

The outcome? As you are able to see in this infographic, the greatest entrepreneurs are usually those who have prior work experience in their discipline, developing important real-world know-how and expertise for a decade or longer.

Other characteristics appear slightly more evident: you must be open-minded, flexible and ready to react in a split second. You have to be friendly, you do not require IQ in the way it is generally assessed, but what you must have is the capability to identify patterns.

Did you know that VentureLab International is also present on Symbid,  a Dutch crowdfunding company? Check our Symbid group here. 

 

entrepreneurial-dna-do-you-have-it_511c09402a524

Entrepreneurs hate business planning

Most entrepreneurship programs are organized around the development of a business plan. This is understandable because the first thing entrepreneurs are asked for when they apply for a bank credit or venture capital is a business plan. Although many entrepreneurs have made a business plan one could question their attitude towards this ‘obligation’. Albert Shapiro concluded that “companies that plan do better than companies that don’t but they never follow their plan” and Mc Kinsey stated that “it is not so that winning businesses don’t make plans but they refuse to let planning become an end itself”.

Why business planning?

The added value of business planning is not to predict the future but to think about possible futures for today’s decision making. Of all the business plans made by the entrepreneurs that I supported, I found none realized exactly according to this plan. “In fact, business planning and market research do not fit to the natural behavior of successful entrepreneurs”, is one of the conclusions of Saras Sarasvathy, a key trainer in VentureLab International. In her research among around 30 expert entrepreneurs in the world, she found that these entrepreneurs follow another approach. They hate systematic market research and planning and prefer to discover in practice how they can be successful.

If not what then?

They make use of opportunities which arise and adapt their approach continues to the market responses. Sarasvathy called this the “Effectuation” approach as opposed to the usual “Causation” approach in which business planning plays an important role. Her findings are more and more recognized at entrepreneurship support centers, educational and research institutions. One of these is the Dutch Institute for Knowledge Intensive Entrepreneurship (Nikos) which applied this approach in the
VentureLab program.

So: Get inspired by Saras Sarasvathy! In an

interview at VentureLab she explains about her approach. For me and many other Venturelab participants it was a ‘party of recognition’.

 

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Crowdfunding Now and In The Future

Crowdfunding by definition is “the process of financing an activity or endeavor by way of generating lots of modest sums of capital from a huge number of persons, generally by using the Internet”.

We seem to be in a constant recession wave so nowadays start-ups are under huge pressure to remain profitable, and business owners are not going through the best of times. Crowdfunding creates a good possibility for success for this kind of entrepreneurs and businesses, by displaying their initiatives and assignments to the whole global community. The infographic shown below designed by Eventstir, events crowdfunding service, gives an excellent review of the global crowdfunding arena. It includes broad subject areas, such as the total amount of funds generated and platform explanation by region, along with specific parts of the world, together with the greatest platforms and ventures.

The Internet isn’t “about” anything anymore, and it never will be again. In the past, we were told that it was about empowerment, personalization, rapid information exchange, getting goods and services on demand, and a host of other descriptions designed by marketing departments to cause companies to panic. Everyone thought that if they weren’t part of that year’s steamroller, they would become part of that year’s road.

That is behind us. The Internet is still about all those things, of course, and about dozens of other contradictory things as well. In the end, the only thing the Internet is about is moving digital data at low cost. Consequently, once we realize that the number of uses that people have found for being able to move digital data at low cost has become so staggeringly various that there’s no way to draw it together in a single phrase or movement. We can finally say “game over.”

As the madness of the great bull market, it is no longer possible to imagine that Amazon and Aabra-kadaabra.com are in the same kind of business because they both sell books over the Internet or that e-steel.com and pashmina.com are similar businesses because of they both end in .com. Now we’re left with the world where an online bookstore is a bookstore, and a car company that buys steel over the Internet is a car company. The Internet is going away like the phone went away, permeating everything and, in the process, becoming invisible.


crowdsourcing-helps-business

How to become a recognized expert in your field

It’s possible to boost your personal brand by establishing a reputation as an expert in your niche. Experts are sought after, they get noticed, they can command higher fees for their services, and they get interviewed by journalists. In brief, becoming a recognized expert can help you achieve your business goals using less effort.
Until recently, becoming a recognized expert took decades and only the MBA degree or the academic degree granted the status of the expert but today even if you got your diploma through online classes you can be easily perceived as the expert.  Showcase your knowledge in online and offline, choose the right strategy, and start your journey towards becoming a recognized expert using online marketing and social media.

monitoring-web

 

Just say you want to be known as the expert on cutting machines then you should: 

• Write articles about your niche and publish them on your website and blog. Your website is the virtual headquarters of your business. Every promotion leads to your website, so make sure your articles are visible and easy to find.

• Now you should think about promoting your articles. There are many ways in which you can do this. First, let’s take a look at LinkedIn. Add your blog URL to your profile, click on “Additional Information” in your profile, and add a link to your blog.

• Use the “update” feature – to share your blog posts within your network. Include the title of your post and a link. People linked to you will see such updates on their profile pages after they log in and they’ll receive your updates from LinkedIn on a weekly or monthly basis.

• Join groups. There are thousands of groups on virtually any topic imaginable. Once you join your chosen groups, you can participate in discussions and share your expertise. Treat this area like a typical forum, be helpful and don’t spam.

• Use Twitter to spread the word about your articles. Ask your webmaster to add a Tweetme button to your website. With this, you’ll be able to regularly tweet your articles.

• Retweet articles by other experts and they will do the same in return. Reciprocation is one of the most important rules of persuasion.

• Follow other experts on Twitter. Create your own twitter list or follow one of the existing lists.

• Provide an e-course or offer a newsletter. Send regular emails to your subscribers supplying them with useful content.

Follow these steps and you will notice a difference. I’ve done it many times for my clients and for my own purposes, so I’m certain that it works. If you’re consistent and patient, you will see results.

Listen to this story

Every dream starts somewhere, and around a decade ago, it began in a third-floor banquet room at the Doubletree Hotel in San Jose, Calif., where Steve Lane was speaking to a crowd of more than 100 people who have gathered to take part in an event described on the schedule in the hotel lobby as an “E-commerce Seminar.”

Lane, a mechanical engineer, looked a bit like a TV weatherman, with slicked-back hair and a dark tan, and he knows how to explain the dream in ways that are easy to understand. “We’re talking about setting up an income that will allow you to go to Hawaii, kick back, run your feet through the sand, and make more money by the time you come back than you had when you left!”

“The Internet is the wave of the future,” Lane said. “Look at Amazon.com. It was back then a 4-year-old company, founded by Jeff Bezos, who started out with hardly any money to his name. Today, Amazon still has not made a nickel in profit, but Bezos is worth more than $8 billion.

“Now, my net worth as an employee at an engineering firm didn’t go from nearly nothing to $4 billion in the last four years,” he added with a down-home touch. “But tonight, we’re going to talk about a way that you and I, without significant investment, can take part in the phenomenal growth of the Internet.”

Lane went on to describe how a group of “venture capitalists” were preparing to roll out a new “virtual mall” on Sept. 1 that year – one that will make it possible for anyone “to net around $3,100 per month, every month” he says simply by getting a few friends and relatives to buy household products over the Internet. The venture capitalists behind the project, he explained, are members of the Van Andel and DeVos families – the founders of Amway – but this will be part of an entirely new company they’re creating, called Quixtar.

Amway on the Web: The idea isn’t as far-fetched as it might seem. At a time when many e-commerce sites are just now discovering concepts such as viral marketing, incentive programs, affiliate schemes, and community-building to acquire and retain customers, Amway has been using these same tactics as the foundation of its direct-selling business since the company was founded in 1959.

“Amway was way ahead of its time,” says Seema Williams, an e-commerce analyst with Forrester Research. “It’s almost as if they spent all these years operating in the wrong medium.” Maybe, but Amway’s offline effort remains one of the wonders of the retail world: Today the privately-held company embraces a global network of 3 million “independent business owners,” or IBOs, active in more than 80 countries, who distribute and sell more than $5 billion worth of Amway products each year.

 

Success comes after failure[infographic]

People are afraid of failure and this is the key reason why they will not succeed. It is a fact that most of the people who now are rich and successful experienced several failures before. To a certain degree they all have failed in the past. If you examine this infographic  you can see what kind of set-backs these famous people experienced before becoming so successful.
So you better not give up your efforts when you feel that success seems unlikely. Just keep working hard and have faith. There will be no success if you haven’t failed before. This is just a fact of life that you will need to deal with.

failure-and-success1

Courtesy of: Covcell Math Prep

Angel Investors vs. Venture Capitalists

For start-up companies that are without an established performance record or enough assets to obtain a bank loan, finding financial backing is critical for both business growth and success.  Therefore, many start-up companies endeavor to secure finances from outside investors, for example, angel investors or venture capitalists.  The difference between these two types of outside financing is a question that we often receive; therefore we have outlined the differences below.

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