Since founding Innocent Drinks 12 years ago Richard Reed and his co-founders have enjoyed phenomenal success. As he explained to students of Hult International Business School at an executive speaker night this week, launching and running a start-up is one challenge after another but also a source of great satisfaction. Here are the lessons he has learnt.
1. Know thy purpose
Your business has to have a mission, providing people with a clear idea of who you are. You have to be really clear on why you exist - for Google this is to organise all the world's information and for Innocent Drinks it is to get healthy food to people. That is what we care about and what we want.
2. It's the people, stupid
Let's be clear, any business is just the sum of the human parts. You need to bring in the best people, engage them, motivate them, and develop them. The most important thing you do as a business leader is recruitment and you need to know what you are looking for.
We look for people who are entrepreneurial and we reward the right people. Everybody gets a share in the business and a share in profits, as well as the option to buy more shares. Every Monday morning the whole team gets together and everybody gets one minute to say what they are doing and we do some exercise together. This may look silly but it creates a great energy. We also have an employee of the month scheme and a scholarship of £1,000 for people to fund their passions - we like having a culture where people do interesting things. People have to pitch for the grant, they bring enthusiasm and energy into the business.
At the other end of the scale it also means you will need to fire the people who don't work out. You can't run a team when someone is not pulling their weight.
3. Ethics help
At heart we are an altruistic company, we want to leave things a bit better than we find them. There are five things that matter to us: we provide natural and healthy food, it is ethically procured, we use sustainable packaging, we are resource efficient, and we share the profits. A minimum of ten per cent of our profits go to charity and as a result 95% of people say they are proud to work at Innocent.
4. Details count
Once you have your business, paying attention to the details can get you so much further. On every bottle we put an "enjoy by" date instead of the more usual "use by" date. We tried to stand out with vans covered in grass or painted like cows. When you are building a brand, getting noticed is the most important thing. The world is now full of advocates, on social media channels like Facebook and Twitter, so as long as you make your brand sincere and interesting you don't need to spend a penny on advertising and marketing. We have worked really hard on the details and tried to get them right.
5. Listening is free and creates value
The fundamental truth about a business is that it only exists because somebody buys the product. We have tried to create a culture that understands that, so we always want to find out how we can get it better and we are always listening to what people want to tell us.
We encourage customers to contact us and visit us at Fruit Towers - I love the open door policy and every day one or two people turn up and we take them round the office. This reminds us of the fact that we are only here because somebody is good enough to buy our product.
The people who call and visit are the people who pay our wages. We invite them in to give feedback and take part in product development. You can rate and review every single product on our website and we have the Innocent Twitter feed going in every meeting room. It is important to remember that if given the opportunity the consumer will tell you exactly what they want.
Friday 30 March 2012
Thursday 22 March 2012
Just read Lean Start up by Eric D and then saw this... so had to mention it.
Am loving Eric Dries's book on starting businesses called Lean Startup.
No really new ideas but put in a way I finally understand.
For too long I have been all sigma 6 in my life, all about perfection, all about making and planning when I could (and perhaps should) have been about being in beta, always out testing, testing - learning - building etc.
As it turns out that when the future is unknowable (Is quitting your job and starting something new a good idea? Will the prototype we are developing at work find a market?), how we traditionally reason is extremely limited in predicting what will happen.
So you need a different approach.
The guys who wrote this blog think they have one. And it is very very similar to three ideas I love. Apparently, there is a proven method for navigating in an uncertain world, an approach that will complement the kind of reasoning we have all been taught. It will help you deal with high levels of uncertainty no matter what kind of situation you face. We know it works because entrepreneurs — the people who have to deal with uncertainty every day — use it successfully all the time.
It is also the approach that is used by Babson College — the world's number-one school for entrepreneurship.
Babson calls the approach "entrepreneurial thought and action," but we use a simple shorthand and call it "Act, Learn, Build, Repeat."
Based on the research of Saras D. Sarasvathy, of the University of Virginia's Darden School of Business, and similar work by others at Babson College, this approach is a time-tested process for dealing with the unknown.
Put simply, in the face of an unknown future, entrepreneurs act. They deal with uncertainty not by trying to analyze it, or planning for every contingency, or predicting what the outcomes will be. Instead, they act, learn from what they find, and act again. More specifically the process looks like this.
1. Start with desire.
You find/think of something you want. You don't need a lot of passion, you only need sufficient desire to get started. ("I really want to start a restaurant, but I haven't a clue if I will ever be able to open one.")
2. Take a smart step as quickly as you can toward your goal.
What's a smart step? It's one where you act quickly with the means at hand. What you know, who you know, and anything else that's available. ("I know a great chef, and if I beg all my family and friends to back me, I might have enough money to open a place.") You make sure that step is never going to cost more than it would be acceptable to you to lose should things not work out. And you bring others along to acquire more resources, spread the risk and confirm the quality of your idea.
3. Reflect and build on what you have learned from taking that step.
You need to do that because every time you act, reality changes. Sometimes the step you take gets you nearer to what you want ("I should be able to afford something just outside of downtown"); sometimes what you want changes ("It looks likes there are an awful lot of Italian restaurants nearby. We are going to have to rethink our menu.") If you pay attention, you always learn something. So after you act, ask: Did those actions get you closer to your goal? ("Yes. It looks like I will be able to open a restaurant.") Do you need additional resources to draw even closer? ("Yes. I'll need to find another chef. The one I know can only do Italian.") Do you still want to obtain your objective? ("Yes.")
4. Repeat.
Act. Learn. Build. Repeat. This is how successful serial entrepreneurs conquer uncertainty. What works for them will work for all of us.
No really new ideas but put in a way I finally understand.
For too long I have been all sigma 6 in my life, all about perfection, all about making and planning when I could (and perhaps should) have been about being in beta, always out testing, testing - learning - building etc.
As it turns out that when the future is unknowable (Is quitting your job and starting something new a good idea? Will the prototype we are developing at work find a market?), how we traditionally reason is extremely limited in predicting what will happen.
So you need a different approach.
The guys who wrote this blog think they have one. And it is very very similar to three ideas I love. Apparently, there is a proven method for navigating in an uncertain world, an approach that will complement the kind of reasoning we have all been taught. It will help you deal with high levels of uncertainty no matter what kind of situation you face. We know it works because entrepreneurs — the people who have to deal with uncertainty every day — use it successfully all the time.
It is also the approach that is used by Babson College — the world's number-one school for entrepreneurship.
Babson calls the approach "entrepreneurial thought and action," but we use a simple shorthand and call it "Act, Learn, Build, Repeat."
Based on the research of Saras D. Sarasvathy, of the University of Virginia's Darden School of Business, and similar work by others at Babson College, this approach is a time-tested process for dealing with the unknown.
Put simply, in the face of an unknown future, entrepreneurs act. They deal with uncertainty not by trying to analyze it, or planning for every contingency, or predicting what the outcomes will be. Instead, they act, learn from what they find, and act again. More specifically the process looks like this.
1. Start with desire.
You find/think of something you want. You don't need a lot of passion, you only need sufficient desire to get started. ("I really want to start a restaurant, but I haven't a clue if I will ever be able to open one.")
2. Take a smart step as quickly as you can toward your goal.
What's a smart step? It's one where you act quickly with the means at hand. What you know, who you know, and anything else that's available. ("I know a great chef, and if I beg all my family and friends to back me, I might have enough money to open a place.") You make sure that step is never going to cost more than it would be acceptable to you to lose should things not work out. And you bring others along to acquire more resources, spread the risk and confirm the quality of your idea.
3. Reflect and build on what you have learned from taking that step.
You need to do that because every time you act, reality changes. Sometimes the step you take gets you nearer to what you want ("I should be able to afford something just outside of downtown"); sometimes what you want changes ("It looks likes there are an awful lot of Italian restaurants nearby. We are going to have to rethink our menu.") If you pay attention, you always learn something. So after you act, ask: Did those actions get you closer to your goal? ("Yes. It looks like I will be able to open a restaurant.") Do you need additional resources to draw even closer? ("Yes. I'll need to find another chef. The one I know can only do Italian.") Do you still want to obtain your objective? ("Yes.")
4. Repeat.
Act. Learn. Build. Repeat. This is how successful serial entrepreneurs conquer uncertainty. What works for them will work for all of us.
Wednesday 21 March 2012
I am overwhelmed - but guess what.... it's my fault.
This is a blog I should listen to. But guess what I probably won't and the irony is that reason is precisely what this blog is about. It's all about doing tooo many things at once.
It explains somewhat why between 25% and 50% of people report feeling overwhelmed or burned out at work?
It's not just the number of hours we're working, but also the fact that we spend too many continuous hours juggling too many things at the same time. Especially as start up businesses owners - especially when you try to own three (very silly)
What we've lost, above all, are stopping points, finish lines and boundaries.
Technology has blurred them beyond recognition. Wherever we go, our work follows us, on our digital devices, ever insistent and intrusive. It's like an itch we can't resist scratching, even though scratching invariably makes it worse.
Tell the truth: Do you answer email during conference calls (and sometimes even during calls with one other person)? Do you bring your laptop to meetings and then pretend you're taking notes while you surf the net? Do you eat lunch at your desk? Do you make calls while you're driving, and even send the occasional text, even though you know you shouldn't?
The biggest cost — assuming you don't crash — is to your productivity. In part, that's a simple consequence of splitting your attention, so that you're partially engaged in multiple activities but rarely fully engaged in any one. In part, it's because when you switch away from a primary task to do something else, you're increasing the time it takes to finish that task by an average of 25 per cent.
But most insidiously, it's because if you're always doing something, you're relentlessly burning down your available reservoir of energy over the course of every day, so you have less available with every passing hour.
I know this from my own experience. I get two to three times as much writing accomplished when I focus without interruption for a designated period of time and then take a real break, away from my desk. The best way for an organization to fuel higher productivity and more innovative thinking is to strongly encourage finite periods of absorbed focus, as well as shorter periods of real renewal.
If you're a manager, here are three policies worth promoting:
1. Maintain meeting discipline. Schedule meetings for 45 minutes, rather than an hour or longer, so participants can stay focused, take time afterward to reflect on what's been discussed, and recover before the next obligation. Start all meetings at a precise time, end at a precise time, and insist that all digital devices be turned off throughout the meeting.
2. Stop demanding or expecting instant responsiveness at every moment of the day. It forces your people into reactive mode, fractures their attention, and makes it difficult for them to sustain attention on their priorities. Let them turn off their email at certain times. If it's urgent, you can call them — but that won't happen very often.
3. Encourage renewal. Create at least one time during the day when you encourage your people to stop working and take a break. Offer a midafternoon class in yoga, or meditation, organize a group walk or workout, or consider creating a renewal room where people can relax, or take a nap.
It's also up to individuals to set their own boundaries. Consider these three behaviors for yourself:
1. Do the most important thing first in the morning, preferably without interruption, for 60 to 90 minutes, with a clear start and stop time. If possible, work in a private space during this period, or with sound-reducing earphones. Finally, resist every impulse to distraction, knowing that you have a designated stopping point. The more absorbed you can get, the more productive you'll be. When you're done, take at least a few minutes to renew.
2. Establish regular, scheduled times to think more long term, creatively, or strategically. If you don't, you'll constantly succumb to the tyranny of the urgent. Also, find a different environment in which to do this activity — preferably one that's relaxed and conducive to open-ended thinking.
3. Take real and regular vacations. Real means that when you're off, you're truly disconnecting from work. Regular means several times a year if possible, even if some are only two or three days added to a weekend. The research strongly suggests that you'll be far healthier if you take all of your vacation time, and more productive overall.
A single principle lies at the heart of all these suggestions. When you're engaged at work, fully engage, for defined periods of time. When you're renewing, truly renew. Make waves. Stop living your life in the gray zone.
It explains somewhat why between 25% and 50% of people report feeling overwhelmed or burned out at work?
It's not just the number of hours we're working, but also the fact that we spend too many continuous hours juggling too many things at the same time. Especially as start up businesses owners - especially when you try to own three (very silly)
What we've lost, above all, are stopping points, finish lines and boundaries.
Technology has blurred them beyond recognition. Wherever we go, our work follows us, on our digital devices, ever insistent and intrusive. It's like an itch we can't resist scratching, even though scratching invariably makes it worse.
Tell the truth: Do you answer email during conference calls (and sometimes even during calls with one other person)? Do you bring your laptop to meetings and then pretend you're taking notes while you surf the net? Do you eat lunch at your desk? Do you make calls while you're driving, and even send the occasional text, even though you know you shouldn't?
The biggest cost — assuming you don't crash — is to your productivity. In part, that's a simple consequence of splitting your attention, so that you're partially engaged in multiple activities but rarely fully engaged in any one. In part, it's because when you switch away from a primary task to do something else, you're increasing the time it takes to finish that task by an average of 25 per cent.
But most insidiously, it's because if you're always doing something, you're relentlessly burning down your available reservoir of energy over the course of every day, so you have less available with every passing hour.
I know this from my own experience. I get two to three times as much writing accomplished when I focus without interruption for a designated period of time and then take a real break, away from my desk. The best way for an organization to fuel higher productivity and more innovative thinking is to strongly encourage finite periods of absorbed focus, as well as shorter periods of real renewal.
If you're a manager, here are three policies worth promoting:
1. Maintain meeting discipline. Schedule meetings for 45 minutes, rather than an hour or longer, so participants can stay focused, take time afterward to reflect on what's been discussed, and recover before the next obligation. Start all meetings at a precise time, end at a precise time, and insist that all digital devices be turned off throughout the meeting.
2. Stop demanding or expecting instant responsiveness at every moment of the day. It forces your people into reactive mode, fractures their attention, and makes it difficult for them to sustain attention on their priorities. Let them turn off their email at certain times. If it's urgent, you can call them — but that won't happen very often.
3. Encourage renewal. Create at least one time during the day when you encourage your people to stop working and take a break. Offer a midafternoon class in yoga, or meditation, organize a group walk or workout, or consider creating a renewal room where people can relax, or take a nap.
It's also up to individuals to set their own boundaries. Consider these three behaviors for yourself:
1. Do the most important thing first in the morning, preferably without interruption, for 60 to 90 minutes, with a clear start and stop time. If possible, work in a private space during this period, or with sound-reducing earphones. Finally, resist every impulse to distraction, knowing that you have a designated stopping point. The more absorbed you can get, the more productive you'll be. When you're done, take at least a few minutes to renew.
2. Establish regular, scheduled times to think more long term, creatively, or strategically. If you don't, you'll constantly succumb to the tyranny of the urgent. Also, find a different environment in which to do this activity — preferably one that's relaxed and conducive to open-ended thinking.
3. Take real and regular vacations. Real means that when you're off, you're truly disconnecting from work. Regular means several times a year if possible, even if some are only two or three days added to a weekend. The research strongly suggests that you'll be far healthier if you take all of your vacation time, and more productive overall.
A single principle lies at the heart of all these suggestions. When you're engaged at work, fully engage, for defined periods of time. When you're renewing, truly renew. Make waves. Stop living your life in the gray zone.
Friday 16 March 2012
10 top tips from GEC2012 :)
The Global Entrepreneurship Congress took place yesterday, with 3,000 entrepreneurs from 120 countries packed into Liverpool's Arena and Convention Centre. And I was there - it was all rather exciting :)
Amid the bustle and networking frenzy there were speeches from Sir Richard Branson, Martha Lane Fox and Sir Terry Leahy, here are the best quotes from the day.
"Do something you enjoy because success is waking up happy each Monday morning"
Lord Michael Heseltine, founder of Haymarket Media.
"If you have an idea, act on it! A dream is just a dream"
Sir Terry Leahy, former CEO of Tesco.
"Never ever chase money. You should chase success, because with success money follows."
Wilfred Emmanuel-Jones, founder The Black Farmer.
"You need to find people better than you, to work for you"
Sir Richard Branson, founder of the Virgin Group.
"If we were starting lastminute.com today we would start where the people are and work hard through their networks. You have got to start where the people are."
Martha Lane Fox, founder of Lastminute.com and Lucky Voice.
"If you're a small business, you simply have to be better than the big ones. That what it was like for Virgin up against British Airways."
Sir Richard Branson, founder of the Virgin Group.
"Never stop unleashing the will to win. In the US the age group that starts the largest number of new firms are 55-64.
Benno Schmidt, President and CEO of the Ewing Marion Kauffman Foundation.
"The best form of marketing your business is free marketing. Get out there and promote your brand as best you can."
Sir Richard Branson, founder of the Virgin Group.
"Say no to the fear of failure - then you will know what success looks like." Will King, founder of The King Of Shaves.
The best antidote to fear is passion. If you have enough passion you'll overcome the fear of running a business.
Wilfred Emmanuel-Jones, founder of The Black Farmer.
Amid the bustle and networking frenzy there were speeches from Sir Richard Branson, Martha Lane Fox and Sir Terry Leahy, here are the best quotes from the day.
"Do something you enjoy because success is waking up happy each Monday morning"
Lord Michael Heseltine, founder of Haymarket Media.
"If you have an idea, act on it! A dream is just a dream"
Sir Terry Leahy, former CEO of Tesco.
"Never ever chase money. You should chase success, because with success money follows."
Wilfred Emmanuel-Jones, founder The Black Farmer.
"You need to find people better than you, to work for you"
Sir Richard Branson, founder of the Virgin Group.
"If we were starting lastminute.com today we would start where the people are and work hard through their networks. You have got to start where the people are."
Martha Lane Fox, founder of Lastminute.com and Lucky Voice.
"If you're a small business, you simply have to be better than the big ones. That what it was like for Virgin up against British Airways."
Sir Richard Branson, founder of the Virgin Group.
"Never stop unleashing the will to win. In the US the age group that starts the largest number of new firms are 55-64.
Benno Schmidt, President and CEO of the Ewing Marion Kauffman Foundation.
"The best form of marketing your business is free marketing. Get out there and promote your brand as best you can."
Sir Richard Branson, founder of the Virgin Group.
"Say no to the fear of failure - then you will know what success looks like." Will King, founder of The King Of Shaves.
The best antidote to fear is passion. If you have enough passion you'll overcome the fear of running a business.
Wilfred Emmanuel-Jones, founder of The Black Farmer.
Thursday 15 March 2012
What #GEC2012 reminded me about - 8 Qualities of a Successful Entrepreneur
Just landed back from GEC2012 - which was amazing.
And this blog pretty much sums up a couple of thoughts from that.
So when you think about the people in the world who are highly successful, making money beyond their wildest dreams, and hear their success stories, do you wonder what it was that brought them success? Were they just lucky, or superbly talented, or did they just have a product that was seriously needed in the marketplace?
What exactly are the qualities these people possess that brought them success? Does everyone have those qualities, or is it just reserved for the few millionaires and billionaires who seem to turn everything they touch to gold?
Behaviors that have proven to be successful, time after time. After all, an entrepreneur is just a businessperson with a belief in him/herself, who takes risks, has a mission, and organizational skills beyond the norm.
Have a mission:
Successful business owners had a mission, they knew what they wanted to do, and had a very detailed business plan in which to accomplish this mission.
Work on strengths:
In starting a business know your strengths and weaknesses, and rather than try to work on those weaknesses, build your strengths and hire your weaknesses according to Langemeler. Hire the people who can compliment those weaknesses making the business venture stronger, because your strengths are emphasized and your not so strong points are covered.
Courage:
Know that this venture is not going to be a cakewalk – in other words, it is going to be great some days, and really tough other days, but the conviction in yourself and your business will carry you through. Be fearless and strong and don’t let the little details that are mounting and troublesome get you down.
Set Goals:
Detail (on paper) the vision you see for the business, and measure your progress. If you don’t see progress it is typical to want to give up, especially on the most difficult days, but when you see progress, it inspires you to keep going.
Be Resourceful:
Use others successful business to model your own, not exactly of course, but keeping on top of who is doing what, and what brings success will allow you to spend more time building customer bases, than trying to figure out everything on your own.
Learn how to seek advice and guidance when you feel overwhelmed. Ask others for help who are successful, and more times than not, you’ll be surprised at how willing they are to guide you.
Persistence:
Never give up on your dream or vision. Many times things go pretty rough, and some people will think it’s time to throw in the towel, but if you have a great business, and know that it deserves success – stick with it through thick and thin and think positive. Never think that failure is an option.
Form the managerial mindset:
Find your driving force and realize that even though you want to break away from that 9 to 5, and do things your way, you cannot do it alone – you’re going to need a team, and some help. You cannot have that strong do it yourself attitude if you want to succeed. Be the manager of your business!
Most failures of the self-employed entrepreneur is that they try to do everything themselves – and burn out. And remember the strengths and weaknesses section? These are vital to the business mindset.
Design a business that can run with or without you, and remember that getting help is not failure, but the next step to entrepreneurial success.
Build your personal skills:
Successful business owners are relaxed and secure relating to others and building relationships in the business world as well as with employees. The more extroverted they are the more approachable and likable they are and in turn leads to people wanting to do business with them.
These attributes lend a better working environment, as well as success with employees and their needs to communicate and interact. It creates a strong team and allows others to flex their positive muscles, and be more apt to interact with customers in a more friendly way.
Of course not all executives possess all of the characteristic that bring success, but the ones who don’t make up for their shortcomings in hard work. They lean on the people on their teams who do possess what it is they lack, and are competent, supportive and great leaders.
They are respected, admired and looked upon as an expert in their field of business, through plenty shoe leather, or credentials, and never doubt their abilities.
Although there are tons of books written about being a successful entrepreneur, the basics are listed here to get you started, but attending a seminar or buying a great book would be highly beneficial – and having a good product and a good dose of self-respect doesn’t hurt either!
And this blog pretty much sums up a couple of thoughts from that.
So when you think about the people in the world who are highly successful, making money beyond their wildest dreams, and hear their success stories, do you wonder what it was that brought them success? Were they just lucky, or superbly talented, or did they just have a product that was seriously needed in the marketplace?
What exactly are the qualities these people possess that brought them success? Does everyone have those qualities, or is it just reserved for the few millionaires and billionaires who seem to turn everything they touch to gold?
Behaviors that have proven to be successful, time after time. After all, an entrepreneur is just a businessperson with a belief in him/herself, who takes risks, has a mission, and organizational skills beyond the norm.
Have a mission:
Successful business owners had a mission, they knew what they wanted to do, and had a very detailed business plan in which to accomplish this mission.
Work on strengths:
In starting a business know your strengths and weaknesses, and rather than try to work on those weaknesses, build your strengths and hire your weaknesses according to Langemeler. Hire the people who can compliment those weaknesses making the business venture stronger, because your strengths are emphasized and your not so strong points are covered.
Courage:
Know that this venture is not going to be a cakewalk – in other words, it is going to be great some days, and really tough other days, but the conviction in yourself and your business will carry you through. Be fearless and strong and don’t let the little details that are mounting and troublesome get you down.
Set Goals:
Detail (on paper) the vision you see for the business, and measure your progress. If you don’t see progress it is typical to want to give up, especially on the most difficult days, but when you see progress, it inspires you to keep going.
Be Resourceful:
Use others successful business to model your own, not exactly of course, but keeping on top of who is doing what, and what brings success will allow you to spend more time building customer bases, than trying to figure out everything on your own.
Learn how to seek advice and guidance when you feel overwhelmed. Ask others for help who are successful, and more times than not, you’ll be surprised at how willing they are to guide you.
Persistence:
Never give up on your dream or vision. Many times things go pretty rough, and some people will think it’s time to throw in the towel, but if you have a great business, and know that it deserves success – stick with it through thick and thin and think positive. Never think that failure is an option.
Form the managerial mindset:
Find your driving force and realize that even though you want to break away from that 9 to 5, and do things your way, you cannot do it alone – you’re going to need a team, and some help. You cannot have that strong do it yourself attitude if you want to succeed. Be the manager of your business!
Most failures of the self-employed entrepreneur is that they try to do everything themselves – and burn out. And remember the strengths and weaknesses section? These are vital to the business mindset.
Design a business that can run with or without you, and remember that getting help is not failure, but the next step to entrepreneurial success.
Build your personal skills:
Successful business owners are relaxed and secure relating to others and building relationships in the business world as well as with employees. The more extroverted they are the more approachable and likable they are and in turn leads to people wanting to do business with them.
These attributes lend a better working environment, as well as success with employees and their needs to communicate and interact. It creates a strong team and allows others to flex their positive muscles, and be more apt to interact with customers in a more friendly way.
Of course not all executives possess all of the characteristic that bring success, but the ones who don’t make up for their shortcomings in hard work. They lean on the people on their teams who do possess what it is they lack, and are competent, supportive and great leaders.
They are respected, admired and looked upon as an expert in their field of business, through plenty shoe leather, or credentials, and never doubt their abilities.
Although there are tons of books written about being a successful entrepreneur, the basics are listed here to get you started, but attending a seminar or buying a great book would be highly beneficial – and having a good product and a good dose of self-respect doesn’t hurt either!
Tuesday 6 March 2012
The Credit Card Is The New App Platform - wisedom from Linkedin's Reid Hoffman...
Have been reading Reid's Start up of You book, and ever since bumping into him at SVCUK1 and being totally humbled by my own stupidity I pretty much love what he does.
SO this is a guest post written by him, Mr Reid Hoffman, Ali Rosenthal and James Slavet from Greylock Partners. And its all about how the world is changing and bringing forth new opportunities to make money (ironically on money / with money - or not money then credit cards.) As they put it:
Credit and debit cards are ubiquitous, but they’re mostly pretty dumb. That’s about to change.
Over 170 million people in the U.S. have credit cards, and the average card holder has 3.5 of them. And those totals are not even counting debit cards, which are roughly 40% of the total market and growing. That’s a crap load of plastic! In spite of the promise of mobile payments, plastic cards are not going away any time soon. (Which is something we have been saying for a while... here at EAT mobile)
However, we’re at the early stages of a massive wave of innovation in the payment industry. It’s like when Apple launched the iOS platform for mobile developers. The platform in this case is the payment network. Software developers will add new capabilities to cards by programming the payment network to link online applications to specific payment events. Consumers will be able to effectively “drag and drop” apps to their smart cards in the same way that they add apps to their smart phones today.
We’re big believers at Greylock in the future of “online to offline” commerce, and we’re seeing a ton of innovation in this space. One of our portfolio companies, CardSpring, announced a major partnership with First Data earlier this week. We’ve invested in several other “online to offline” commerce companies including Coupons.com, Groupon, Shopkick, Swipely, TrialPay and Wrapp. And there are many other companies innovating in the space, including startups like Square, and established companies like Google, American Express and Visa.
All very very exciting :)
For all of the attention focused on online commerce, the market opportunity for “online to offline” commerce is way bigger. Online commerce is now a $200 billion industry, but it’s still small compared to offline transactions. Up to 70% of consumer spending is influenced by Web and mobile research, but over 90% of actual transactions are still conducted in the physical world.
Which is what we are very interested at with augmented reality apps and real live views from streetmap etc :)
Several major industries are motivated to see this new app developer ecosystem take flight. Retail marketers know they can advertise more efficiently if they can actually track and close the redemption loop from online browsing to offline buying. Major consumer internet and financial services companies are also highly motivated, as they see a path to greater advertising and promotion-based revenue if they can demonstrate more marketing value through closing the loop.
Online budgets that are directed at social ad campaigns will further expand as consumers share experiences connected to their offline card transactions, including reviews and gifting. So what will be the impact of this emerging app platform on the card carrying public?
Expanded memory: If you’re like most people, it’s hard to keep track of all of your paper and plastic. With cloud-connected cards, you can clear out your desk drawer or wallet. Instead of holding on to that Red Lobster gift card, REI loyalty card and printed Groupon deal, you can add these to your card, and receive benefits automatically when you make a purchase. You can also store a digital receipt or warranty on your card rather than keeping these in a filing cabinet in the basement. You’ll be kind of like Bradley Cooper in “Limitless”, without the creepy smile or the terrible side effects.
New spending habits: The ads and offers that you receive today via the Web and mobile are mostly blind to how you’re actually spending your money in the physical world. As these databases are more intelligently connected, the offers you receive will become significantly more relevant and compelling, based on where you spend your actual time and money. Note to payment network innovators: it’s critical that these programs are introduced in a way that protects consumer privacy and retains consumer trust.
Our spending habits tend to be just that, habits. So if you drink coffee at Starbucks three times a week but never try any of their food, you’ll receive an offer to try one of their fruit plates. Or if you buy gas at a Shell Station on your way to work once a week, you’ll be offered a better deal at the Texaco that is right across the street. The discount you receive from a merchant may also vary based on how hard they think your existing habits are to break. Merchants will be able to dynamically manage supply and demand in their local market by testing real-time what types of discounts and offers they need to offer so as to acquire foot traffic. So Supercuts might offer “40% off” if your historical buying patterns are concentrated 5 miles away, and “10% off” if your transactions are centered 5 blocks away.
This is Hyper hyper local - which is what I have been ranting about on www.dansodergren.com and losomopho.
Validated check-ins and reviews: One potential downside of most consumer review sites is that published opinions are dominated by a small, vocal minority. There’s value in getting a broader sampling of people to share their views. A growing percentage of reviews on sites like Yelp and check-ins on sites like Foursquare will over time be tied to actual transaction activity. When you and your friends buy, you’ll be asked via email or text message if you’d like to check-in or
provide a review. As a result, more customers will provide feedback and recommendations, and the information they provide will be better validated, in connection with actual transaction activity. A review or check-in will carry additional weight when it’s been validated.
Quantified self: The “quantified self” is an emerging trend in the digital health space. Early adopters and fitness buffs are wearing devices like Fitbits and Nike FuelBands to track their heart rates, calories burned, quality of sleep and more, so that they can measure and improve their health and performance. The cloud-connected credit card will also deliver a stream of valuable intelligence based on your transaction behavior. Your health data stream alone could include how much of your diet is fast food, how often you actually visited your health club, and how many times you stopped for coffee (aka “your caffeinated self”). Your appified card can also deliver you informed insights on your spending activities across other life categories so that you can optimize decisions and be your best self.
Status Redefined: Today you receive mostly siloed benefits, based on your transaction history with a single company. So for example, you may get upgraded to first class on United Airlines or you may get access to the Red Carpet Club if you’ve amassed status through flying a hundred thousand miles with United. But in the evolving world of rewards, United might try to win you over with compelling offers if you are a high value traveler who currently travels mostly with other airlines, or they might offer you rewards if you’re someone who has especially high
influence through your online social activity. You’ll earn points on your appified card based upon your reviewing, liking, pinning and sharing, and you’ll gain status with retailers and brands for reviewing and promoting what you believe in.
So its like the tranverse of Peerindex - the brandindex of you :)
It’s an exciting time in the payments industry. There are several hundred million people in the U.S. walking around with plastic in their wallets. Developers are now poised to build and launch a wide range of promising new applications to super-charge these cards. Game on!
More importantly America has the VC imagination and muscle to make it happen. Game on indeed :)
SO this is a guest post written by him, Mr Reid Hoffman, Ali Rosenthal and James Slavet from Greylock Partners. And its all about how the world is changing and bringing forth new opportunities to make money (ironically on money / with money - or not money then credit cards.) As they put it:
Credit and debit cards are ubiquitous, but they’re mostly pretty dumb. That’s about to change.
Over 170 million people in the U.S. have credit cards, and the average card holder has 3.5 of them. And those totals are not even counting debit cards, which are roughly 40% of the total market and growing. That’s a crap load of plastic! In spite of the promise of mobile payments, plastic cards are not going away any time soon. (Which is something we have been saying for a while... here at EAT mobile)
However, we’re at the early stages of a massive wave of innovation in the payment industry. It’s like when Apple launched the iOS platform for mobile developers. The platform in this case is the payment network. Software developers will add new capabilities to cards by programming the payment network to link online applications to specific payment events. Consumers will be able to effectively “drag and drop” apps to their smart cards in the same way that they add apps to their smart phones today.
We’re big believers at Greylock in the future of “online to offline” commerce, and we’re seeing a ton of innovation in this space. One of our portfolio companies, CardSpring, announced a major partnership with First Data earlier this week. We’ve invested in several other “online to offline” commerce companies including Coupons.com, Groupon, Shopkick, Swipely, TrialPay and Wrapp. And there are many other companies innovating in the space, including startups like Square, and established companies like Google, American Express and Visa.
All very very exciting :)
For all of the attention focused on online commerce, the market opportunity for “online to offline” commerce is way bigger. Online commerce is now a $200 billion industry, but it’s still small compared to offline transactions. Up to 70% of consumer spending is influenced by Web and mobile research, but over 90% of actual transactions are still conducted in the physical world.
Which is what we are very interested at with augmented reality apps and real live views from streetmap etc :)
Several major industries are motivated to see this new app developer ecosystem take flight. Retail marketers know they can advertise more efficiently if they can actually track and close the redemption loop from online browsing to offline buying. Major consumer internet and financial services companies are also highly motivated, as they see a path to greater advertising and promotion-based revenue if they can demonstrate more marketing value through closing the loop.
Online budgets that are directed at social ad campaigns will further expand as consumers share experiences connected to their offline card transactions, including reviews and gifting. So what will be the impact of this emerging app platform on the card carrying public?
Expanded memory: If you’re like most people, it’s hard to keep track of all of your paper and plastic. With cloud-connected cards, you can clear out your desk drawer or wallet. Instead of holding on to that Red Lobster gift card, REI loyalty card and printed Groupon deal, you can add these to your card, and receive benefits automatically when you make a purchase. You can also store a digital receipt or warranty on your card rather than keeping these in a filing cabinet in the basement. You’ll be kind of like Bradley Cooper in “Limitless”, without the creepy smile or the terrible side effects.
New spending habits: The ads and offers that you receive today via the Web and mobile are mostly blind to how you’re actually spending your money in the physical world. As these databases are more intelligently connected, the offers you receive will become significantly more relevant and compelling, based on where you spend your actual time and money. Note to payment network innovators: it’s critical that these programs are introduced in a way that protects consumer privacy and retains consumer trust.
Our spending habits tend to be just that, habits. So if you drink coffee at Starbucks three times a week but never try any of their food, you’ll receive an offer to try one of their fruit plates. Or if you buy gas at a Shell Station on your way to work once a week, you’ll be offered a better deal at the Texaco that is right across the street. The discount you receive from a merchant may also vary based on how hard they think your existing habits are to break. Merchants will be able to dynamically manage supply and demand in their local market by testing real-time what types of discounts and offers they need to offer so as to acquire foot traffic. So Supercuts might offer “40% off” if your historical buying patterns are concentrated 5 miles away, and “10% off” if your transactions are centered 5 blocks away.
This is Hyper hyper local - which is what I have been ranting about on www.dansodergren.com and losomopho.
Validated check-ins and reviews: One potential downside of most consumer review sites is that published opinions are dominated by a small, vocal minority. There’s value in getting a broader sampling of people to share their views. A growing percentage of reviews on sites like Yelp and check-ins on sites like Foursquare will over time be tied to actual transaction activity. When you and your friends buy, you’ll be asked via email or text message if you’d like to check-in or
provide a review. As a result, more customers will provide feedback and recommendations, and the information they provide will be better validated, in connection with actual transaction activity. A review or check-in will carry additional weight when it’s been validated.
Quantified self: The “quantified self” is an emerging trend in the digital health space. Early adopters and fitness buffs are wearing devices like Fitbits and Nike FuelBands to track their heart rates, calories burned, quality of sleep and more, so that they can measure and improve their health and performance. The cloud-connected credit card will also deliver a stream of valuable intelligence based on your transaction behavior. Your health data stream alone could include how much of your diet is fast food, how often you actually visited your health club, and how many times you stopped for coffee (aka “your caffeinated self”). Your appified card can also deliver you informed insights on your spending activities across other life categories so that you can optimize decisions and be your best self.
Status Redefined: Today you receive mostly siloed benefits, based on your transaction history with a single company. So for example, you may get upgraded to first class on United Airlines or you may get access to the Red Carpet Club if you’ve amassed status through flying a hundred thousand miles with United. But in the evolving world of rewards, United might try to win you over with compelling offers if you are a high value traveler who currently travels mostly with other airlines, or they might offer you rewards if you’re someone who has especially high
influence through your online social activity. You’ll earn points on your appified card based upon your reviewing, liking, pinning and sharing, and you’ll gain status with retailers and brands for reviewing and promoting what you believe in.
So its like the tranverse of Peerindex - the brandindex of you :)
It’s an exciting time in the payments industry. There are several hundred million people in the U.S. walking around with plastic in their wallets. Developers are now poised to build and launch a wide range of promising new applications to super-charge these cards. Game on!
More importantly America has the VC imagination and muscle to make it happen. Game on indeed :)
Friday 2 March 2012
Am loving reading the Start up of You - so here are some great quotes from it
The book explains how you have to treat your career as you would a start-up company. Even if you don’t want to start a company, the lessons you will learn throughout the book will help you advance in your career. You need to invest in yourself, build strong relationships and take risks if you want to make it in the newly emerging modern world.
His point about Detriot and the once booming America Car Manufacturing scene and how if you don't change and don't listen to your customers you will ultimately fail is a great warning red light for those working in high end tech especially in my field of mobile phone augmented reality.
Anyway this aside - here are ten quotes that stood out to me while reading this amazing book:
1. “All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA.”
2. “Entrepreneurship is a life idea, not a strictly business one; a global idea, not a strictly American one.”
3. “Before dreaming about the future or marking plans, you need to articulate what you already have going for you – as entrepreneurs do.”
4. “When you’re doing work you care about, you are able to work harder and better.”
5. “You remake yourself as you grow and as the world changes. Your identity doesn’t get found. It emerges.”
6. “Whatever the situation, actions, not plans, generate lessons that help you test your hypotheses against reality.”
7. “No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team.”
8. “The fastest way to change yourself is to hang out with people who are already the way you want to be.”
9. “If you want to build a strong network that will help you move ahead in your career, it’s vital to first take stock of the connections you already have.”
10. “What will get you somewhere is being able to access the information you need, when you need it.”
His point about Detriot and the once booming America Car Manufacturing scene and how if you don't change and don't listen to your customers you will ultimately fail is a great warning red light for those working in high end tech especially in my field of mobile phone augmented reality.
Anyway this aside - here are ten quotes that stood out to me while reading this amazing book:
1. “All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA.”
2. “Entrepreneurship is a life idea, not a strictly business one; a global idea, not a strictly American one.”
3. “Before dreaming about the future or marking plans, you need to articulate what you already have going for you – as entrepreneurs do.”
4. “When you’re doing work you care about, you are able to work harder and better.”
5. “You remake yourself as you grow and as the world changes. Your identity doesn’t get found. It emerges.”
6. “Whatever the situation, actions, not plans, generate lessons that help you test your hypotheses against reality.”
7. “No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team.”
8. “The fastest way to change yourself is to hang out with people who are already the way you want to be.”
9. “If you want to build a strong network that will help you move ahead in your career, it’s vital to first take stock of the connections you already have.”
10. “What will get you somewhere is being able to access the information you need, when you need it.”
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