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Colin Johnson’s blog


Archive for the ‘Business’ Category

Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.

Wednesday, April 26th, 2017

Here’s something interesting. It is common for people in entrepreneurship and startup culture to fetishise failure—”you can’t be a proper entrepreneur until you’ve risked enough to have had a couple of failed businesses”. There’s some justification for this—new business ventures need to try new things, and it is difficult to predict in advance whether they will work. Nonetheless, it is not an unproblematic stance—I have written elsewhere about how this failure culture makes problematic assumptions about the financial and life-circumstances ability to fail without disastrous consequences.

But, the interesting point is this. No-one ever talks like this about jobs, despite the reality that a lot of people are going to try out a number of careers before finding the ideal one, or simply switch from career to career as the work landscape changes around them during their lifetime. In years of talking to students about their careers, I’ve never come across students adopting this “failure culture” about employeeship. Why is it almost compulsory for a wannabe entrepreneur to say that, try as they might, they’ll probably fail with their first couple of business ventures; yet, it is deep defeatism to say “I’m going into this career, but I’ll probably fail but it’ll be a learning experience which’ll make me better in my next career.”?

Basic Income (1)

Saturday, November 28th, 2015

It only struck me a few months ago that there is a decent minority of the political/business establishment who seem to believe that a large proportion of the population can live at a basic level without the need for any income, i.e. from some nebulous kind of family wealth. That’s not “to live well”, but the idea that the basics of housing, food, transport and basic personal care are just somehow “taken care of” in some vague way. You see this on Dragon’s Den, where entrepreneurs are urged to quit their job and show “real commitment” to their business idea. I’d always been rather bemused by statements such as this, but in light of the idea that the basics are “covered”, it makes sense—they are asking people to give up, as they see it, luxuries, not just the basics of living.

Seeming more Specialised than you Actually Are

Monday, June 29th, 2015

Sometimes it is important to present yourself as more specialised than you actually are. This can be true for individuals and for businesses. Take, for example, the following apparently successful businesses:

Woaah there! What’s happening here? Surely any decent web design company can provide a website for a doctor’s surgery? The specific company might provide a tiny little bit more knowledge, but surely the knowledge required to write a decent website is around 99 percent of the knowledge required to write a doctor’s surgery website. Surely, handling payments from parents for school activities is just the same as, well, umm, handling payments, and there are plenty of companies that do that perfectly well.

This, of course, misses the point. The potential customers don’t know that. To them, they are likely to trust the over-specialised presentation rather than the generic one. Indeed, the generic one might sound a little bit shady, evasive or amateurish: “What kind of web sites do you make?”, “Well, all kinds really.”, “Yes, but what are you really good at.”, “Well, it doesn’t really matter, websites are all basically the same once you get into the code.”. Contrast that with “we make websites for doctors.” Simples, innit.

So that’s my business startup advice. Find an area that uses your skills, find some specialised application of those skills, then market the hell out of your skills in that specific area. You will know that your skills are transferrable—but, your potential customers won’t, and they will trust you more as a result.

I’ve noticed the same with trying to build academic collaborations. Saying “we do optimisation and data science and visualisation and all that stuff” doesn’t really cut it. I’ve had much more success starting with a specific observation—we can provide a way of grouping your data into similar clusters, for example—than trying to describe the full range of what contemporary data science techniques can do.

Similarly with courses. Universities have done well out of providing “MBA in Marketing for XX” or whatever, when the vast majority of the course might be generic marketing skills. Again, the point here is more one of trust than one of content.

Mission (1)

Monday, November 4th, 2013

When organisations become confused about their mission, they drop their full title and insist on people referring to them by just their initials. This way, the public is confused about their mission, too, and so all is well and good because everyone is on the same page.

Levels of Indirection (1)

Friday, April 19th, 2013

So, let me get this right. The company that sent this letter used a private mail provider, which have been encouraged because it is assumed that they would be able to undercut the publicly run mail service due to “private sector efficiencies”. Then, having taken its admin costs and profit from that service, they were able to subcontract this out to the publicly-run Royal Mail, who were able to do the work at break-even or better for whatever money was left. Who’s efficient now?

This has somewhat of the same flavour as James Meek’s piece for the London Review of Books, in which he points out that one of the completely unexpected consequences of electricity privatisation was that the privatised industries would, to a large extent, be bought up by nationalised companies elsewhere in Europe: “Why was it that we had to lose our nationalised industries in order to hand them over to nationalised industries from other countries?”

“Teach someone to fish…”

Friday, February 1st, 2013

Why is it almost an axiom of debate on public service provision that the gain in efficiency through outsourcing will outweigh the inevitable additional cost of the service provider’s profit, whilst it is also assumed that, however hard they try, public organisations will not be able to learn these efficiency gains?

Isn’t there a long-term advantage for public organisations to learn these more efficient means of practice, as that would, after the initial cost of doing so, pay off indefinitely, whilst paying an outside organisation to realise these gains is an ongoing cost.

There is a flavour of “give someone a fish, and they’ll have a meal; teach them to fish, and they’ll have meals for the rest of their life” about this.

Knick-knacks and Gee-gaws

Saturday, January 5th, 2013

Will the rise in internet-based distribution of media content mean that increasing numbers of presents end up being random knick-knacks rather than books, CDs, DVDs? It would be a pity; but there isn’t a particularly elegant way to present a gift of an e-book or MP3 album. Perhaps there is a business opportunity here?

What Happens when Nothing Happens?

Wednesday, December 26th, 2012

More times than I’d like to think, when I talk to someone in a call centre, or fill out an online form, nothing happens. For example, a few weeks ago I had a perfectly clear and polite conversation with a call centre person from O2 about increasing my phone data allowance. They explained very clearly what the options were, and what the costs were, I chose one, they confirmed when it would start, and then…nothing happened!

This isn’t snark. I’m just interested to know what happens within the business logic of the organisation that leads from this seemingly clear conversation to no actual action. Do these requests get lost immediately after the request has been made, e.g. the person makes some notes and then gets another call and loses the notes, or the context of the notes, when they get a chance to return to them? Surely large organisations can’t be relying on such a half-arsed system?

Do requests get added to some kind of queue or ticket based system to be actioned elsewhere in the organisation, and then somehow time out after a while, or get put in a permanent holding position whilst more urgent queries are dealt with? Or, are the requests that I am making too unreasonable or complex, so that the company policy is to make sympathetic noises to the customer and then just ignore them once they have got them off the phone? I can imagine that this might occasionally be the case, but surely not for a request like the one above, which must be one of the simplest piece of business logic for organisation to execute.

Or, are there people in the organisation who are just being lazy and ticking off a lot of their work without actually doing it, like my schoolfriend who, for months on end, got all of the advantages of having a paper round without any of the actual work by systematically collecting a bag of papers every morning, then setting fire to them in a ditch in the local park?

This strikes me as something that would be almost impossible to research, and indeed very difficult even for companies to discover the cause of internally. Yet, this must be a massive issue; I would reckon that around 20% of interactions of this kind have resulted in the agreed action not happening. What can organisations do about this?

Managing the Innovation Cycle

Thursday, May 31st, 2012

When we can afford to innovate, we don’t. We are happy. We are making lots of money, our staff are happy and busy, we have too much damn stuff to do to worry about the Next Big Thing. Besides, the current Big Thing will be around for ever, surely?

When we most need to innovate, we can’t. We are in straightened times, struggling to do what we need to do with the current staffing levels, trying desperately to hang on to our current activities and make them viable. We just don’t have the time or resources to risk on something that might not work out.

I’ve seen this happen in universities. Departments that are doing well see little (strategic) need to consider delivering new degree programmes: the current programmes are recruiting well, staff are enjoying teaching them, the students are enthusastic and there doesn’t seem to be any shift in the supply of new applicants year on year. We could easily put together something new, risky and exciting; but, who cares? When student numbers dry up, we flail around for new courses to deliver, and end up putting on untried and cobbled-together courses without the staff effort to do it properly.

I would imagine that this same cycle holds in many kinds of organisations.

What can we do, as a management strategy, to handle this cycle better?

Evidence vs. Assertion

Tuesday, April 17th, 2012

One piece of advice that is commonly given to candidates in job interviews and similar situations is to evidence what they say. If asked “Why should I believe that you are capable of doing X?” the suggested response is to find an example of where they did X in the past, or something that is similar to X is some way, and build an argument around that. This seems very sensible to me, it prevents waffle and generic assertive statements.

Watching The Apprentice recently, though, makes me wonder about this. Often this kind of evidence-based response is dismissed by Lord Sugar using phrases along the lines of “don’t tell us your bloody life story”. It seems like he is expecting a generic, assertive statement and that providing evidence from what the candidate has done before is looking backwards rather than looking forwards.

What should a candidate do if they encounter such an attitude in a real interview? I can’t decide whether it is best just to redound to the generic statements that seem to be being demanded here, or whether to try to turn it around by being very explicit about how the evidence relates to the question being asked.

Info-stream or Interface

Tuesday, March 13th, 2012

Online organisations usually have the choice between two ways of making their information available. One is what we will call info-stream, where the information is made available in the form of a stream of machine-readable information that people can view and process in different forms. Twitter is a good example of this: whilst it does provide a fallback option of viewing it through the Twitter website, many users use a different way of interfacing with it such as an app on a computer or phone, or an alternative web interface. By contrast, some other organisation choose to provide the information through a specific graphical interface. An example here is Facebook, who clearly expect all users to interface with the content through the Facebook web-site (or Facebook-provided mobile app). People wanting a different view of the content can get alternative interfaces (e.g. Social Fixer or Facebook Purity, but these appear to work by a screenscraping-style approach that is not designed for in the way Facebook designs its information provision.

What is the business argument (in the broadest sense) for making one or the other of these choices? Clearly one argument for the interface approach is concerned with advertising. One problem with providing an info-stream is that this makes it very easy to filter out advertising. Organisations that have adopted an info-stream approach tend to have a very tight integration between their advertising and their content. For example, advertising in Twitter is in the form of promoted Tweets or Trends, which are Tweets or Trends in their own right; by contrast, the content delivered by Facebook has advertising, but not as part of the main News Feed content.

A more complex example is provided by the choices made by travel, insurance, banking and energy companies. In the early days of the web, much was made of the idea that online commerce would be a purer form of commerce because aggregators would be able to draw a direct comparison between different providers. Clearly, this vision has been realised—up to a point. A number of firms, for example insurance firms Direct Line and Aviva and some of the discount airlines have largely avoided being on comparison sites. What is the business case for this? Possibly, to avoid the commission fees charged by the sites; possibly, to create a more direct channel of direct negotiation with the customer, akin to the old print-advertising strategy of not listing prices but saying “call us for our best price”. Again, this is an info-stream versus interface decision: the “not on comparison sites” are pursuing an interface strategy, where they want to control the interface between the information and customer in their own way; by contrast, the firms that are supplying information to comparison sites are providing information in an info-stream fashion.

"not on comparison websites"

This is clearly not something that was anticipated in the early discussions about e-commerce. It was assumed that organisations would be falling over themselves to provide information for aggregation and comparison. Clearly, though, it is possible for firms to adopt a strategy of opting out of such comparisons. This does not bode well for the development of the semantic web, which (rather naively) assumes that any organisation online will want to readily provide information in a computer-readable fashion. Instead, the choice for a firm is more complex: to provide an info-stream and work on an objective (as far as the measures used) comparison as a strategy, or to provide an interface and rely on more traditional advertising and marketing strategies that leverage the lack of ability to compare directly.

Are there other organisational/business arguments about the info-stream/interface choice?

Obsolescence

Thursday, March 8th, 2012

Over the last few years lots of money has been spent building automated ticket barriers at stations. However, I wonder if this is all going to be rather wasted, as train companies are gradually moving towards e-ticketing, and the barriers are designed to take a very specific form factor of printed ticket. At the moment, e-tickets have to be checked by a human operator, which kind of defeats the point. I wonder if this is why the new barriers at King’s Cross have some kind of barcode scanner thingy on them?

Out of the Valley of Death

Monday, February 13th, 2012

The “Valley of Death” is the rather overwrought term used in technology transfer for the difficulty of getting technology developed in a university research environment into commercial use. This is a big concern for governments—for example, the UK government Science and Technology Committee recently held a consultation on this very issue.

Thinking about how the university world operates compared to other areas, I wonder if one problem is the ready availability of people at the university end to do medium scale pieces of work. The university research workforce breaks down into largely two categories of people: the lecturing/professorial staff, who have lots of expertise but also lots of calls on their time, and the PhD students and postdocs, who have specific expertise and whose time is largely taken up by the project that they are working on. It is easy enough for a commercial organisation to get a little piece of consultancy, e.g. running a few ideas past a professor for a day or two; similarly, a firm that is happy to make a larger commitment, e.g. to sponsor a postdoc, PhD student or KTP associate for two or three years fits into the system readily.

The difficulty is the middle ground. What about a project that requires specific expertise in a particular area, but which also requires a substantial commitment of time, say three to six months. In many other industries—say, product design—a designer would be available from the pool of designers employed permanently by a consultancy to work on projects. One initially attractive proposition, therefore, would be for a university to retain a number of such “consultants” to work on projects as needed. However, this fails; the expertise required in a research-driven project is rather specific, and it would be impossible for such a consultant to have the breadth of knowledge required to work immediately on projects.

I wonder if a very low-ceremony secondment scheme for postdocs and PhD students would work here. I am sure it is possible for, e.g., a research council project to be extended by three months to allow a postdoc to work for three months as such a consultant; but, I would be put off investigating this, as I would be concerned that the amount of admin overhead in extending the project etc. would be large. What we need is a simple way to do this; a one-page web form where a PI can request a small number of months extension to a project so that a postdoc or student currently employed in a cognate area could take some time off their project and be paid by the firm to do a medium-term project of a few months. This would provide both the flexibility and the expertise, and would mean that universities could respond more rapidly to such requests. If sufficiently well remunerated by firms, I can see this being appealing to the secondees, with the opportunity to work on something relevant and probably earn a little more money for a while than they normally would do.

“You switch if you want to…”

Sunday, February 12th, 2012

The government and the press occasionally get in conniptions about why people aren’t switching energy providers (or similar service providers) more readily. The government has gone to all the trouble of creating a rich marketplace of competitive providers, with the intention that people will exploit this liquid market by readily moving from provider to provider and therefore putting pressure on the providers to provide efficient, cheap services.

But the people have spoken with their feet—the bastards—by standing still and refusing to change fluidly. Why? Part of the problem is that the stalls set out by all of the providers are obscure and uncomparable. The last time I talked to an energy supplier we had a conversation along the lines of “your last three months gas and electricity usage amounted to about 35 pounds a month; therefore we’ll set your direct debit at 73 pounds a month”. When I asked for an explanation of what “therefore” meant in that sentence, there was, of course, no explanation. It was take-it-or-leave-it; and, the same would no doubt be true for all other providers. Comparison sites help somewhat here.

Another part of the problem is that people have bought into the efficient market hypothesis and therefore don’t see the point in switching. This is meta-capitalism: the effect of awareness of market mechanisms on the market itself (a slapdash version of the “Lucas critique”). People commonly say “it might be cheaper now, but I’m sure it will all even out in the next few weeks”, which is reinforced by headlines like “final energy provider falls into line and puts up prices”. This is where service markets vary from the markets concerned with the purchase of individual items; in a one off transaction, a customer can immediately benefit from the cheapness of a widget there-and-then; with a service, conditions might change rapidly.

There seems to be a further effect here. All providers feel the need to present themselves to the customer in largely the same way: a complex, incomprehensible presentation together with an assertion that they are therefore obviously the best and that if you tie-in now for the next 24 months you will get an even better deal. It seems that there is some conservation law of complexity emerging here whereby the complexity of presentation to the customer remains the same across providers, regardless of the number of providers in the system.

It is odd why there isn’t a provider that tries to distinguish itself by radical simplicity—the “Gordon Ramsay” strategy of “throw away the complex twelve-page menu and write half-a-dozen dishes on the blackboard”. I don’t think that there is anything conspiratorial going on here, it is just that such an approach is too big a risk to try, and the costs for new entrants with a radically new strategy is too high. It is interesting that in another industry—gym subscriptions—which previously had a similar complexity of presentation to the energy firms, has recently been shaken up by the emergence of upfront, fixed price, no tie-in providers. But, it is easier to build a few gyms (or just one) and experiment with a new model.

I wonder if there is an opportunity for a supplier to run a “diffusion line” under a different name, with a radically different level of complexity of presentation? This would bring a new “provider” into the market backed by the requisite infrastructure but without the risk of the original provider exposing its whole customer base to the experimental strategy.

Advertising Opportunities (2)

Wednesday, February 8th, 2012

Almost all hotels seem to supply generic no-name toiletries, sometimes branded with some ad hoc private label, sometimes branded with the name of the hotel. This seems to miss a tremendous marketing opportunity for manufacturers of shampoo, shower gel etc. I’m surprised that such manufacturers aren’t falling over themselves to give free samples of their products to hotels, as this is one of the rare occasions where people use products that aren’t “the usual”. I wonder why this doesn’t happen.

House Size

Tuesday, December 27th, 2011

On the kind of property programs that were popular a few years ago and that my mother was addicted to watching, a clichéd suggestion was that “you could just knock this wall down”. However, when compared with housing in many other countries with similar economies and lifestyles, the typical English house has lots of small rooms.

Why does this contradiction continue to hold? We might assume that if there is sufficient demand for larger rooms, then eventually the market would respond and start providing houses with a smaller number of, larger, rooms. However, I suspect that the answer is in how houses are marketed. By contrast with, AFAICT, every other country in Europe, no headline indication is given of the overall floor area of the house. Therefore, number of rooms is used as a proxy for overall size of house, which motivates builders to build houses with a large number of small rooms.

December Rituals (1)

Friday, December 23rd, 2011

Taking last year’s plastic-wrapped phone book off the shelf, unwrapping it, putting it in the recycling, replacing it with this year’s phone book, still in its wrapper.

No Sale!

Thursday, December 8th, 2011

Bizarre message from East Coast trains website:

You have now made the maximum allowed number of purchases today (4)

I wonder what the origins of this are? Trying to clamp down on secondary markets? Avoiding fraud in some way?

Rates of Exchange

Friday, November 18th, 2011

Current talk about the Euro makes me wonder about what will happen to the notion of a country belonging to a currency system in the next century or two. At present, we see a change in the currency system as being a huge shift—something that might happen at some point as part of a long-term political realignment, as with the introduction of the Euro, but which we wouldn’t imagine happening again in our lifetimes.

I wonder if, in the longer run, we will see a much more flexible approach to this. If currency becomes much less dependent on physical notes and coins, it becomes much easier for a government to swap out into a different currency system. Perhaps this might be something that is done regularly as part of economic planning: a number of worldwide currency systems could exist, with various criteria for entry, and countries enter and leave these systems according to their economic status and planning, and have the option of returning to a local currency for a while if none of these international systems work for them at that point.

Is this plausible? I don’t know enough economics to know whether this is at all a meaningful proposition.

Entrepreneurship and the Fetishisation of Failure

Tuesday, November 15th, 2011

The amount of successful experience required before a practitioner can regard themselves as basically accomplished varies vastly from field to field. A professor needs to have published a few dozen papers, an actor taken on a few dozen roles, before they are regarded as established. Sure, there is the occasional exception—the brilliant theorem proven in a PhD thesis, the definitive performance given by a 20-year old—but, for most people, there is room enough for a few apprentice-works followed by a track record of decent achievement.

Other areas require fewer individual projects before the practitioner is regarded as basically successful. A novelist who has published a couple of books is regarded as part of the mainstream, a parent who has brought up a couple of children isn’t regarded as an amateur. This is largely due to the scale of these achievements—doing them a couple of times takes a lot of time, and the number of people who have a track-record of 50 novels or 20 children is rare and regarded as somewhat freakish.

One area where this reaches its apogee is in entrepreneurship. I recently went to a—very good—talk on entrepreneurship by someone whose track record was two failed businesses and a current business that was struggling to get off the ground. Are there any other areas where such a track record would be considered enough for people to come and hear you speak?

There is almost a fetishisation of failure in the entrepreneurship culture. Talks on the subject often include something along the lines of “anyone who hasn’t had a couple of failed businesses isn’t a proper entrepreneur”. There is substance to this—statistics are regularly trotted out that some large percent of businesses fail within some small number of months—so, the point isn’t an irrelevant one. Yet, I worry about the consequences.

In areas where failure is small in impact, being upbeat about early failure is unproblematic. When I was learning to juggle, I was told that “a drop is a sign of progress”, with the implication that I should be pushing harder to do more complex moves and not always stay conservatively within my current capabilities. Similarly, I try to reassure PhD students that a rejected paper is fine. I am sure that the same is true in many other areas: there are many stories of novelists or scriptwriters figuratively, or perhaps literally, wallpapering their houses with rejection slips.

However, in these areas the consequences of failure are minor. A novelist can submit their book to another publisher, an actor can attend another audition. Note that this doesn’t always correlate to the scale of the work created: a novel, once written, can readily be touted round a dozen publishers. But in entrepreneurship the cost of failure can be large.

This is where there might be a class bias in entrepreneurship education. Perhaps the talk of failure isn’t offputting to the potential entrepreneur from a financially secure background—the worse that can happen is a slightly embarassing cap-in-hand return to family for support. Whilst, for the financially insecure, the risk of “having a go” at a business is potentially threatening to that person’s financial and personal stability for many years afterwards.

What could entrepreneurship education do about this? This is a difficult question. We would not want to downplay the potential risk of failure, as it is real and there is little in the way of definitive guidance as to how to prevent it. Perhaps more advice could be given as to how to isolate the business risks from personal risks; after all, a business failure need not lead to lead to personal financial ruin if the business is set up in the correct way. What other ideas might there be to encourage a wider range of people into starting innovative and exciting businesses?