BQF Innovation

Jonathan Abrams created the first online social network and enlisted Silicon Valley’s best and brightest to run it. Yet Friendster flamed out spectacularly. What went wrong?

This article from Inc.com analyses the answer in detail.  It contains some salutary advice for entrepreneurs with great innovative ideas.  Abrams believes he failed because because he embraced a system that is designed to create far more failures than successes. Friendster, he believes, was not simply a singular failure, but a systematic one. And he’s determined that things be different with his new Web venture, Socializr. “In the old days, entrepreneurs would bootstrap and figure things out over the first few years,” he says. “The VCs come in too early these days.”

Abrams is not the only one who feels this way. “The basic venture capital system is structured so that there are built-in conflicts of interest between the VC and the entrepreneur,” says Joel Spolsky, founder of Fog Creek, a New York City software company, and writer of the popular blog Joel on Software. It’s a point that even some investors are willing to concede. “Most VC firms have adopted a model where they make 20 investments and have two hits,” says Peter Rip, a partner with San Francisco-based Crosslink Capital, which has backed such companies as Good Technology and TiVo (NASDAQ:TIVO). The traditional VC model works fine for investors, since the returns from one Google (NASDAQ:GOOG) far outweigh the losses from nine Friendsters. It’s fine for the VCs themselves, who reap healthy management fees regardless of the outcome. And it’s fine for the network of professional managers who bounce from start-up to start-up, earning well wherever they go.

But it isn’t much good for an entrepreneur who has a promising idea–and who would prefer odds that are better than 20 to 2. Spolsky believes that working with a VC imposes a level of risk that someone prepared to invest his life–not to mention his life savings–in a single enterprise simply should not tolerate. “An entrepreneur would rather have a 100 percent chance of owning an $80 million company than a 10 percent chance of having a $800 million one,” he says.

Full article on Inc.com

The Oxford University 21st Century Challenge is an international entrepreneurship competition for bold and innovative business ideas that can help to solve some of the key challenges of the 21st Century.

The goal of the competition is to promote the creation of sustainable new business ventures that combine financial returns with social and environmental benefits. These can include new products and services, operational processes and business models.  The competition encourages ground breaking innovation and problem solving – challenging entrepreneurs from across the world to make a real difference through developing new markets and making a sustainable profit.

To achieve this, the competition is divided into three challenge tracks: Tomorrow’s Planet, Tomorrow’s People and Tomorrow’s Wealth. To enter, participants business ideas must address a key 21st Century challenge in one of these tracks. Entrants will be required to write a 5-page outline summarizing their business idea.  The prize fund for the 2007 competition is £65,000.

More details here.

Put your thinking cap on, sharpen your pencil and enter!

Paul Sloane

As an author I am always on the lookout for interesting new business books.  I have just finished The Thinker’s Toolkit by former CIA analyst, Morgan Jones.  I can recommend it.  He shows how systematic analytical techniques are much better than seat-of the-pants decision making.  He explains 14 methods including some that I already use in my workshops.  One of the most interesting thing I learned was that in comparing rival hypotheses you should choose not the one with most supporting evidence but the one with the weakest contradictory evidence. 

Paul Sloane

Brainstorms, Thought Showers or Ideation Sessions – call them what you will – can be fun, fulfilling and fruitful or damp, dismal and demotivating.   It all depends on how they are run.  Let’s brush up on your brainstorming skills with a short quiz.  Here are some things to think about before your next brainstorm meeting.  Try these questions then check your answers below: 

1)      How many people should there be in a brainstorm?

2)      What sort of people should you invite?

3)      How long should it last?

4)      What are the two phases of a brainstorm?

5)      Who should facilitate the meeting?

6)      How will you capture the ideas?

7)      Should the department manager be present?

1)      How many people should there be in a brainstorm?  Ideally between 6 and 10.  Fewer than six and you may not have enough diversity of input.  More than 10 and you may well have problems managing the flow of ideas – people get frustrated in larger groups because they cannot be heard and the quieter ones will give up.  So if you have 16 people say – divide into two groups of 8 and see who comes up with the best ideas. 

2)      What sort of people should you invite?  The key thing you need is diversity.  If you put together the same group who have always looked at this issue then they will probably come up with the same old ideas.  Sprinkle in a few outsiders.  It is good to have young and old, male and female, fresh into the organisation and experienced.  Why not consider inviting a client, a supplier or someone from a completely different part of the business?  Look to include a maverick who will challenge your thinking.   

3)      How long should it last?  It depends how complex the issue is, how many methods you plan to use and whether you need to do some problem analysis work first.  For a regular brainstorm meeting where the problem is reasonably well defined then an hour is plenty.  In any event it is better to have a short, high energy meeting than a long rambling one. People are generally brighter and fresher in the morning.  So why not start at 8.30 with coffee and muffins before they can get distracted with emails, phone calls and today’s crises. 

4)      What are the two phases of a brainstorm? The first phase is idea generation and the second phase is idea evaluation and selection.  In the first phase you use divergent thinking and you want lots of ideas.  Judgment is suspended and all ideas are welcomed and recorded.  In the second phase you use convergent thinking and critical analysis to whittle down the ideas to a handful that will be carried forward.  (If you need to do some problem analysis work then that becomes the first of three phases). 

5)      Who should facilitate the meeting?  The best answer is to have a skilled external facilitator.  This is someone experienced, neutral, enthusiastic and with good hand writing!   They manage the flow of ideas by encouraging everyone to contribute.  They intervene if some people become too dominant or take the meeting in wrong directions.  They can use a variety of methods to keep ideas flowing.  If you cannot get an external facilitator choose someone enthusiastic and neutral on the issues.  If their writing is not so good then delegate someone else as chartwriter. 

6)      How will you capture the ideas? The traditional method is to write all ideas on flip charts and to number them.  An increasingly popular alternative is to use post-it notes.  You then have the choice of one person writing or everyone writing.  Both methods work provided everyone is aware of all the ideas – so call them out as you stick them up.  Post-it notes can be messy during the idea generation phase but they are very handy at the idea evaluation stage when they can be easily moved around and categorised.  A third option is to use software.  One person enters the ideas on a laptop and they are projected onto a big screen for everyone to see.  There are software packages specifically for this. 

7)      Should the department manager be present? This is a difficult one.  It depends on the issue and the manager.  A forceful, dominant manager can inhibit people from voicing unorthodox ideas.  On the other hand when it comes to evaluating which ideas go forward it is important that whoever can assign resources is part of the process so that you can move quickly to actions.  If the manager is present they must make it clear by their words and actions that any idea is welcome no matter how unconventional or challenging to current policy. 

Paul Sloane