African Entrepreneurs suffer from venture capital shortage

February 14, 2014

African EntrepreneursLocal Entrepreneurs in Africa are disadvantaged by a lack of venture capital

In an article for Computer World, [November 2013] journalist Rebecca Wanjiku suggests several factors that may be contributing to a shortage of funds for new technology start-ups. There is no parallel with the vibrant venture capital hubs such as Silicon Valley in America or the University spin-off science pars flourishing in Cambridge [American or English versions].

The perceived challenges of businesses operating in Africa as well as the higher costs of due diligence and inexperience of the investors and entrepreneurs in the region have all worked to dampen the growth of venture capital funding for tech start-ups and mid-level businesses on the continent, according to industry insiders.
Local start-ups have held discussions and wondered whether their lack of success in raising big money had racial overtones. Companies run by whites seem to be luckier in securing funds. The problem, however, seems to be more about the perception of inexperience and a lack of contacts than race.
“I don’t think it’s about being white or black, it’s about your network; highly networked Kenyans have an easier time too,” added Erik Hersman, founder of the iHub Nairobi, a co-working space for techies.
“Innovative early stage ventures with the potential to yield high social and environmental impact and requiring less than $500,000 in financing remain the most difficult segment of the SME pipeline to reach,” said Ben White, founder of VC4Africa. VC4Africa is an online portal that brings together 13,000 entrepreneurs, VCs and angel investors interested in Africa. It was kicked off at the annual congress of the African Venture Capital Association in Dakar, Senegal, in 2007. Last year, VC4Africa start-ups secured $80,000 in funding while companies seeking expansion secured an average of $237,000 in funding.
VC4Africa works with entrepreneurs in 40 African countries but the number of start-ups and growing companies seeking funding outstrips the available capital. The lack of in-country funding mechanisms and lack of tech-specific financial facilities from the public sector most likely means that the problems will persist.

Leadership challenges

Leadership challenges abound. The contrast with the developments emerging in China, is stark. A similar sense of the availability of entrepreneurial venture backing is reported in India.


Will you say yes to yesware?

July 31, 2013

Yesware offers a way of managing your emails. As emails increasingly are becoming unmanageable, the product is tapping into a widespread business and social need

The Yesware organization has hit on a great business idea. The videolink here is the corporate webpage

Its software has attracted positive reviews:

Yesware does a few things;

Tracks emails – you can see when someone has read your email, and more (please read their FAQ for info on any limitations)
Custom email templates
CRM Sync – connect email right to your CRM
Analytics – see your email analytics right in Gmail

It’s designed and marketed for Sales. But, “Hello” link builders… meet your new best friend.

I look forward to following its progress. Meanwhile, here is the output of an imagined nightmare scenario for the entrepreneurial organization:

To Yesware

We are a global company with headquarters in the Vatican. Our CEO has encouraged us to use social media to promote our brand and to retain a customer focused approach. Can you help us.

To Yesware

We are a global megagiant. We would like to do no evil but we are increasingly plagued by email messages that sneak though our very expensive spam filters, purporting to come from potential customers. What should we do?

Dear Yesware

Loved the review I read about about you on the web. You should beware of phonies out there wasting your time with spurious emails. I bet you get thousands every day. You should try our proven nukespam system which reaches millions of potential customers every day and filters out time-wasting replies

Dear Yesware

Jime bottle is the pretty much buy our clean no in the Internet. Lowest prices for oval tube boring. Wrapping oral tube supplis.

Dear Yesware

We successfully promote crowdsourcing events. We need a system to avoid infiltration from security forces, hackers and leakers, imprisoned fraudsters, juveniles using parents’ smartphones. Can you help us?

Dear contact [Message from Yesware]

Thank you for your contribution to the overwhelming volume of traffic we received due to recent publicity on the world-famous Leaders We Deserve site. Unfortunately we have become the victim of a service denial attack. Normal service will be resumed as soon as possible.


Facebook IPO helps define the American dream

May 19, 2012

The initial public offering for Facebook shares reveals much about the American dream

The valuation

When the dust settled after the first day of trading [18th May 2012], Facebook’s valuation, of just over $100 billion placed it roughly on a par with Amazon.

The dream of wealth creation

The wealth accruing to Mark Zuckerman and the other young co-founders has been widely noted. In America, much has also been made about what is seem as tax-dodging by Eduardo Saverin, who has taken up residency in Singapore and renounced his American citizenship, although his actions are seen differently in Singapore

Expectations

On the date of the public offering [18th May 2012], The Verge attempted to answer the question of why the stock appeared to be trading at a figure based so much on expectations.

Why would so many smart, rich people put such a premium on the stock? IPOs are an insider’s game. Buying the stock today at $38 means paying a premium to the founders, early investors, bankers, and even the bankers’ best clients, all of who have passed the stock down the food chain and taken their bite along the way.

Can Google and Facebook be compared easily?

The success of Google and its continued growth after its own share launch is now being used to justify the excitement. Google’s revenues are roughly three times those of Facebook ($9 billion to $3.5). But the prospects for the two companies seem difficult to assess (although the graph offered in The Verge article is worth studying).

The Initial Public Offering [IPO] was considered less than a success. The Los Angeles Times put it this way

“There was all this pressure and hype and attention with all eyes on Facebook — and the starlet tripped on the red carpet,” said Max Wolff, an analyst at GreenCrest Capital Management in New York. What went wrong? Analysts point to a variety of factors that might have given investors pause. Its valuation at about 100 times earnings likely struck some as too high. Its growth in new users is slowing. And Facebook has not yet found a way to cash in on mobile devices, where social media is gravitating.

This week’s decision by General Motors Co. to stop advertising on Facebook because it wasn’t getting results heightened concerns about how Facebook can profit from its 900 million users.

But perhaps the biggest blunders came in recent days as the company and its largest shareholders moved to maximize their profits at the expense of new investors.

Friendship and economics: The dilemma for Facebook

Other commentators have gone beyond the financials, suggesting a flaw in the proposed growth model of Facebook. The massive popular reach of the corporation comes with a belief that ultimately it was a social phenomenon primarily about achieving social goals. In particular it has redefined personal identity and the concept of friendship. There was always something apart from economics in that set of beliefs.

The dilemma for Facebook becomes more visible now that the corporation is legally obligated to conform to economic principles and governance. Considerations of ethics, stock price and social vision increasingly will interplay. Even its efforts to promote the American Dream may be scrutinized more coolly and globally.


Will The Materialise Group spearhead the 3D printing revolution?

August 31, 2011

Materialise, A Belgian-based hi-technology firm, has become one of the pioneers of the 3D printing revolution. What are the chances of it becoming another Apple?

Wilfried Vancraen

The Materialise Group was set up in 1990 by a young engineer Wilfried Vancraen as a joint venture with the University of Leuven, Belgium. The firm still retained its headquarters in the University town. The venture aimed to develop the emerging engineering science of stereolithography.

Stereolithography

The termed was coined by an American inventor Charles W. Hull a few years earlier, defined as “a method and apparatus for making solid objects by successively “printing” thin layers of [chemically-fixed or ‘cured’] material…” It has become associated with related terms such as additive technology and 3D printing. Conceptually it may be thought of as a stereoscopic scanning of a 3 dimensional object and presenting information to “print” out a thin layer of chemicals which are fixed by UV and become the base for subsequent layers.

Materialise’s first years

Within a few years, the firm’s ideas and prototypes were winning design and innovation awards. Initial applications were for ‘demonstrator’ processes attracting attention for their potential for medical applications. By the turn of the century it had established centres around the world including the United States. More recently the organisation has been able to raise awareness of the potential for its knowhow far beyond its dental markets. The potential for art and design has been particularly recognised.

Mission and Vision

The company website states:

The company’s founders have always had one main objective: striving to develop products that add real value to a designer’s, patient’s or toolmaker’s work and life. [Our] mission is to innovate product development resulting in a better and healthier world through its software and hardware infrastructure and in-depth knowledge of additive manufacturing.

Our product developmentfocuses on making the world ‘better’ through making ‘better’ products [which save lives and make life more comfortable. This vision relies on dedicated software infrastructure and state-of-the art equipment, combined with specialized knowledge executed through the Materialise core competences. The mission statement is telling ‘what’ we are trying to achieve, our value statement is indicating ‘how’ we are going for this mission.

We strive to add value for customers, until they become fans, with a team of specialists, in an open environment that favors personal growth on a healthy financial basis.

The Company Structure

As of January 2011, the company consisted of eight Business Units in the fields of: Rapid Prototyping & Low Volume Manufacturing; Additive Manufacturing Software; fixturing, Measuring & Scanning; Biomedical R&D; Cranio-MaxilloFacial Surgery; Orthopaedics; MGX Design Lighting Accessories; and i.materialise [3D Printing Made by You]

Wilfried Vancraen

The corporate founder and CEO Wilfried Vancraen has a high profile for his technological innovations. In this respect there are echoes of Apple’s Steve Jobs.

23 May 2011 Wilfried Vancraen [CEO of Materialise] wins RTAM/SME Industry Award

Wilfried Vancraen was selected to receive this prestigious award by the RTAM/SME Industry Achievement Award Subcommittee in recognition of his exceptional contributions and accomplishments in the Rapid Technologies & Additive Manufacturing industry.

A pioneer in his industry, Wilfried (“Fried”) Vancraen has been developing breakthroughs in the medical and industrial applications of Additive Manufacturing (AM) at Materialise for more than 20 years. Fried also pioneered several major applications in the AM sector including stereolithographic medical models, colored stereolithographic medical models, perforated support structures, RapidFit Fixtures, and automated hearing aid design.

Fried has recently undertaken the launch of the i.materialise website which allows consumers to express themselves by turning their ideas into 3D reality. The website empowers consumers to create designs that enrich their lives and enables them to share their sense of beauty with the people around them by adding unique touches to their environment.

The next Apple?

Materialise has not yet gained global recognition, but there are some similarities to the Apple brand in its ceaseless innovativeness, and technologically brilliant founder.

Updating Notes:

[1] Dentistry has been a fertile profession for innovation. An earlier post described an alternative process from Nobel Biocare, a technical competitor.

[2] The Victoria & Albert Museum is to hold a design exhibition Industrial Revolution 2 exploring the artistic potential of 3d Printing.

[3] Further revolutionary applications are reported [April 2012] which could result in a home pharmacy from which you would ‘print a drug’.

[4] See Sky News 3D Printing Revolution Could Re-Shape World [May 25th 2012] citing 3D Additive research firm Econolyst and EPSRC research centre at Loughborough University

[5] In April 2013 the first hand gun was produced and successfully fired as a trial of 3D printing applications.
More about ‘home office factories’

LWD subscriber Dr Dina Williams contributed this BBC youtube


The People’s supermarket: A communitarian innovation?

February 9, 2011

Tudor Rickards

The People’s Supermarket, as televised on Channel 4, appears to be a social innovation offering a communitarian local alternative to the international retail giants. But there is more to this project than meets the eye

The People’s supermarket exists as a physical entity in London, with two entrepreneurial founders and a group of local members. It also exists as a Channel 4 television series. It can be said to exist as a visionary dream with social and communitarian values.

Over a million people watched the TV launch of the People’s Supermarket. This is sort of publicity most entrepreneurs can only dream about for a new venture. As I watched [February 2011] I had trouble getting my head around what I was seeing. Is this whole thing a creature of the media? A little more research and I discover even more publicity for the project in a recent [23rd January 2011] Guardian/Observer article.

The People’s Supermarket is giving it a go. Set up by Arthur Potts Dawson, who was behind London’s environmentally sound, award-winning Acornhouse restaurant, the mission statement is “for the people, by the people” which in practice means a not-for-profit co-op. Pay a £25 membership fee and sign up for a four-hour shift once a month and you become a part owner, have a say in how it’s run and receive a 10% discount on your shopping. The store itself, in London’s Lamb’s Conduit street, opened on 1 June [2010]

So what’s going on?

The initial fund-raising event involved sixty people lobbing up top-dollar prices for a special dinner cooked by a celebrity chef. That bit I understand. It’s a classic fund-raiser much loved by politicians. The creative edge was food ‘obtained’ from discarded stuff acquired by volunteers and discarded by the major supermarkets (but that’s another old media story, isn’t it?). The diners got their few minutes of TV exposure. Health worries were reassuringly addressed (they had begun to worry me, anyway).

By the end of the episode, the critical elements of the business model had become clearer. The success of the enterprise depends, pretty much as the Guardian indicated, on whether the community membership and volunteers will go on supporting the idea, and whether the products will generate footfall and satisfactory financials.

A bit of a mash up?

While the TV mockumentary would like to preserve the story line, information in today’s multi-media environment means that we can experience a bit of a mash-up. The Retail Gazette reported:

Kate Bull, the former Marks & Spencer commercial executive and co-founder of The People’s Supermarket alongside chef Arthur Potts Dawson, told Retail Gazette: “Average spend per person has grown from £3 to £5 in recent months. “On a Saturday – our busiest day – this has grown to just under £10.” The evidence suggests that the store is drawing a small percentage of locals away from the top grocers at weekends.


What happens next?

I just have a feeling there will be a few crisis points in the mini-series. Viewers will share the roller-coaster as Arthur, Kate and chums experience the pains and pleasures, the highs and lows of becoming involved in creating social reality. It is likely that the future of the venture will remain unresolved.

Maybe inferences will be drawn regarding David Cameron’s vision of The Big society. Or perhaps comparisons will be made with communitarian dreams such as that of the famous Mondragon community venture in the Basque region of Spain, or Ricardo Semler’s Brazilian vision.

Stop Press

By March 2011 the project had become a political football. The publicity had included a visit from Prime Minister David Cameron. But Labour-controlled Camden borough council had moved to claim unpaid rates of £33,000.


The Grigor McClelland Conference

This post was prepared as part of the celebrations planned for The Grigor McClelland Conference to be held at Manchester Business School, Friday April 8th 2011.


How to Renew your Business: A Dentist’s Tale

June 15, 2010

Tudor Rickards
Professor Emeritus
University of Manchester

Conventional wisdom suggests that every business has to renew itself to become and remain competitive. An example from a Dental Surgery shows how management of technology, knowledge and people all have their parts to play

When I arrived at his surgery to interview him, Ian Smith was on a mobile, discussing a technical problem. His space-age dental chair had produced some space-age symptoms. A dental version of Hal from Space Odyssey seemed to be misbehaving. In another part of the practice, a more recent piece of new technology looking not unlike a mini-lathe was creating a replacement tooth, working to data and dimensions specified by a more compliant computer.

Transforming practice

Dentistry is not the most obvious profession in which to search for examples of innovative leadership. Ian Smith took me back through changes which had taken place in his business which had transformed practice over the years.

“In the 1970s” he recalled “we were mostly drillers and fixers”. As a young graduate he had continued his professional development, setting up a study group to explore the possibilities of transferring skills from best international practice. Arguably, he was among the pioneering dentists in the UK to see the benefits of preventative dentistry. Still within the NHS he began to assemble teams including a dental hygienist. The National Heath Service system in the UK was (and still is) the dominant provider of dental services, augmented by a smaller private sector.

In the 1980s, his interest in dental innovations drew his attention to advances in dental implants. “It was Brånemark’s work in the 1950s [Professor of Anatomy at Gothenburg University] which led to the technical breakthrough” he explained. The research had discovered by accident that titanium probes inserted into a rabbit within an experimental programme could not be removed afterwards because bone grows around the surface of the titanium [“osseointegration”].

Nobel Biocare

The implications for human applications and particularly dentistry became recognised. They were to change practices had been around for thousands of years. Smith was introduced to the implant approach because the commercializing company, Nobel Biocare, had already known of his interests in dental innovation.

This was to be one example of a sequence of innovations. Ian Smith had set in action a continuous learning process which helps understand how this business has been able to renew itself over time. He later took an opportunity to acquire a private practice, while still working where he had built up his patient base. “I had to hope my patients would come with me.” he recalled “They mostly did. Since then, I’ve given talks to other dentists who say, ah yes that might work in Didsbury [a prosperous South Manchester location] but not for most places. That’s nonsense of course. You just have to explain what’s going to happen, face to face. Some patients I’d given a lot of time to just walked away. But it wasn’t a case of only keeping the better-off patients.”

He shows deft people skills. The author of this post had become one of his new patients around that time. It had been a decision based on word-of-mouth recommendation (No pun intended). It is clear he has a calming impact on people. There is something of the horse-whisperer about him.

The digital revolution

By the 1990s, information technology was becoming available throughout the professions. “Digitalization which was another big change” he recalled. “I could see that the costs were going to pay for themselves.” He is a bit of a technology enthusiast. He has the researcher’s interest in trying out new ideas, getting immersed in the application process, whether it is a new system for digitalising records, or fixing the bells and whistles of his dental chair.

Restless for Innovation

His story reveals a pattern of dissatisfaction with the status quo, and decisiveness in investing in introducing changes. In is said that entrepreneurs are not risk junkies, but are more prepared to assess risks and act accordingly. They are calculative risk-takers

The premises were acquired at a time when little attention was being paid to the psychological climate for patients. Ian Smith talks fondly of ‘the refurb’, the major redesign which he commissioned, and in which he appears to have been involved with considerable attention to detail. Rooms are now decorated in rather subtle shades of creams and yellows. Colours were important,” he recalls “I spent a lot of time getting the right colours for relaxed psychological conditions.”

And now its CEREC

He took me to part of the refurbished practice which housed his latest innovation. We passed a patient doing what patients do, (waiting, patiently). Something looking like a mini-lathe had been installed in a small location which reminded be of a mini-laboratory you find in a high-technology engineering department of a University.

“Cerec” he explained. “It’s revolutionising dental treatment. We’ve been using the same sorts of methods as the ancient Egyptians”. I suppose he meant archaeological evidence of ancestral scrapers and spatulas. Millennia later, you still needed close encounters with your dentist involving albeit with modern anaesthetics, and heavy duty drilling. Now a computer scan (“much lower radiation levels”) permits design and installations of “metal free dental restorations”. The mini-lathe I had seen in action, complete with cooling sprays, was carving out a precision tooth from a little block of ceramic. The patient waiting-time would be twenty minutes, followed by an immediate fitting which itself would be of a high-precision and less-invasive kind.

The Human Side of Business

Parkfield Dental practice is a business that has been engaged in a process of regular innovative change. It is easy to develop a story line based around its entrepreneurial leader, and the transforming power of new technology. You have to look more carefully to tease out aspects which might be called the human side of the process. However, the outward signs are that the practice has established a good staff climate.

Parkfield has renewed its working practices in a way which seems unlikely to have happened without the influence of Ian Smith’s leadership style and strategic decision-making. I left the premises musing on the nature of entrepreneurial leadership, technology, and the people skills needed in successful business renewal.

Acknowledgements and Disclaimers

This post was prepared as a business case suitable for study on leadership and related business courses. The image of Professor Brånemark is from Nobel BioCare’s web site. My interest in medical innovation in Sweden was deepened during a visit to the University of Upsalla’s junior faculty workshop on creativity in 2009. The author acknowledges the generous time given in preparing this post by Ian Smith and staff at Parkfield Dental Surgery. However, no financial sponsorship was provided, or promised for the future by Parkfield or any other person or Corporation in the preparing the materials contained in this post. Permission to use the post for teaching purposes will be freely granted with appropriate acknowledgement.