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FREE service for all companies that have been funded by business angels or venture capitalists | June 2007 |
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| 'Welcome' from the Editor |
Dear Reader Exciting news! AngelNews has reached West Africa with the sign-up of a great company called Novacel which is based in Angola. You can imagine our whoops of excitement when the email came into our inbox. Novacel undertakes projects for the telecoms industry specially targeted to mobile GSM and CDMA network operators. It also has a virtual prepaid card system in development. Hearing about Novacel gave us food for thought on where great innovation is happening in a global context. Luckily for us in the West, there are still plenty of cutting edge companies – you can read about some more of them in the Profiles of AngelNews Companies below. We are looking forward to seeing lots of you at our FOR THOSE WHO MATTER event at BT Tower on 26th June and also hope to catch up with some more of you, just beforehand at the IPO Forum at the Institute of Chartered Accountants, Moorgate, London on 22nd June at 9am. I know that flotation is something that many of you consider all the time, even if you are not yet doing anything about it. This will be a great opportunity for people to learn more about IPO as a funding option (as an alternative to angels/VC?!) and to meet other like-minded entrepreneurs and investors who will be at a similar stage in their thought processes as you are. There are more details below, but if you are planning to attend you must register beforehand and I would love to know if you are coming so I can look out for you there. This month we have largely focused on the areas around people in businesses. Starting at the beginning we have garnered the thoughts of Dermot Hill, of our Preferred Partner, Intramezzo, in The Interview on taking the right approach to recruiting the right top talent for a business – he very strongly believes that the “traditional” method of finding your senior management from your own and your friends’ networks is passé. Really clever investors do a proper planning exercise on who they want, when, why and for how long. Then they go out and find them. This sounded horribly right when I heard it. We have also reported on Trinamo’s research findings that showed that we also get it wrong in terms of incentivising people, especially sales people. Read our article on Why UK software companies underperform. It’s clear that even though this is a very specialist sector, the lessons learned by Trinamo are applicable to all. As I am pretty much my own salesperson, I have now set myself some highly focused quarterly targets. I am not sure yet how I will compensate myself for out performance, but was thinking about an incentive package that includes visits to Monty’s Spa (+44 (0) 1749 342008 or www.charltonhouse.com) near where I live, which is just the most amazing luxury experience ever. If you can think of anything else I should add to my putative package please let me know!! If you are thinking about buying one of your entrepreneurial friends or even another angel investor a present you could do worse than get hold of a copy of Luke Johnson’s new book “The Maverick – Dispatches from an unrepentant capitalist.” We liked it so much that we have given it a review to encourage you to get hold of a copy. There are lots of news stories, events and even a passable joke again this month. Keep sending in the stories and you can always email me with views and opinions. I love hearing from you all. It is always best to email me modwenna@AngelNews.co.uk because I am often rushing around, but if you need to leave a phone message ring +44 (0) 1275 333 443. Modwenna |
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| That’s neat, that’s
neat, that’s neat, that’s neat, I really love your…. ...with apologies to Mud
For more information on these stories look in the rest of the AngelNewsletter Online |
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| Why UK software companies underperform. |
| Everyone is challenging the government to help us create more billion dollar companies in the UK. Why don’t we have more Microsofts, Googles, Ebays and Skypes on this side of the pond? Stephen Allott, Executive Chairman of Trinamo and formerly part of the team that built Micomuse from £1m to £140m in six years believes that he has the answer. Based on his own experience at Micromuse and after looking at many other software companies he came to believe that most UK companies were getting something wrong with their sales strategies which inevitably flowed down into their failure to grow their businesses. Having founded Trinamo in December 2004 to provide management consulting for UK technology companies, by 2007 Allott finally had a sizeable grouping to use as a dataset for a research project to see if his assumptions were correct. Crucially he found that many of Trinamo’s clients did have sales plans, but they did not remotely resemble the sales force compensation plan and quarterly focus that had worked so successfully at Micromuse. A selection of 15 UK clients in software/telecoms with more than one salesperson were chosen to research and to see if the Trinamo concept, when applied, would have a significant effect on sales. All the companies had turnover in the range of £1m-20m. A couple were publicly listed. The research revealed serious problems with the plans compared with best practice, including the use of annual targets rather than quarterly ones and low usage of cash bonus payments if targets were hit or exceeded. Crucially the quotas were set unscientifically using bottom up forecasts where sales reps in effect set their own targets, instead of a more analytical system using external benchmarks or historical results. Trinamo recommended to these clients that they implement a system of quarterly targets based on a productivity model using external benchmarks and historical results. In addition a system was put in place to ensure that sales reps received cash bonuses when targets were met or exceeded each quarter. The results showed that the more closely the companies adhered to the methodology, the higher the annual percentage growth in turnover. In other words – it works. Even if you are not in the software or telecoms market, the Trinamo results suggest that you should look again at your own sales force compensation plans and see if this is the reason why you are not achieving the results you think you should. |
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| Not so tricky... |
| Q. What is interim management? A. Interim management is the contracting in on cost efficient terms (you only employ them until the project is complete) the services of a senior executive specialist. This industry in the UK is worth in excess of £1bn and there are about 10,000 interims in the market. 70% will find their work through networking. They normally enjoy an excellent lifestyle, whilst being paid at the appropriate rate for their skills. They normally expect to work about 9 months of the year. Most will travel to projects on a weekly basis and some will work on an ‘equity only’ basis. Q When do you need to use it? A. Most companies need an interim manager most of time. This is driven by the sheer pace of change and the growth of many successful companies and the sad and often rapid demise of the less fortunate organisations. The advent of the “Agile Business” is here for good, driven by the relentless pace and pressure of globalisation. Executive Directors and Managers ignore the power and performance of the well appointed interim manager at their peril. Q. How do I find an Interim Manager? A. A traditional source is right place right time in one’s own network. There are directories which companies can turn to for multiple sources but the reality is that this is a people business and much more can be achieved by the considerable added value which comes from using a trusted supplier. This supplier would have an independent view, an extensive network of their own and deliver consistent performance in finding high calibre candidates, quickly.. Q. What sort of package should you offer an Interim? A. This is best answered by the value directly contributed. Packages are never standard and can include: Day rate; Contingency or payment linked to results; Equity Only where the executive funds their own costs for a period in return for equity; Hybrid or mixture of these options. The deal must work for both parties and have the ability to last for the duration of the project. You will need advice on the package when you recruit so you understand current market conditions. Q. Do interim managers ever become permanent members of staff and if not, when do I know their job is done? A. Yes – sometimes you and they
may know or hope for this from the beginning and sometimes it becomes
clear during the project. Keeping open the channels of communication between
the interim manager, yourself and the people who found them for you will
ensure that you will know when the job is done and the time to switch
between interim and permanent. |
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| ICAEW Promotion Event |
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| Whats in a name |
| In every generation there are only
a few great entrepreneurs who are remembered. In the eighteenth century
there was Wedgewood, Watt and Boulton. In the nineteenth there was Edison,
Carnegie, King C Gillette, Ford and Barnum. In the early 20th century there
was Mars among many others. It will be interesting to see who, in a century’s
time, will be seen as the greatest entrepreneurs of the twenty-first. I
suspect Dell and Dyson will be on the list as well as one or two others.
Why you ask, have I singled out Michael Dell and James Dyson for special
mention in our own time?
It is pretty important, if you want to stand the test of business history, to get your name associated with your product. Edison may have been reputed to have invented the lightbulb along with his 1000+ other patented inventions, but in fact Joseph Swan, a British inventor, invented his carbon filament light bulb 10 years before Edison announced that he had invented it. Swan had even been granted a patent a year before Edison’s announcement. In the resultant court battle, Edison lost and was forced to name Swan as a partner in his British electric company the Edison and Swan Electric Company. Swan did not make much money out of the settlement and even more importantly is not generally remembered for his key role in the commercialisation of electricity to a consumer market. (By the way there is a small moral in the story for tech innovators out there – Swan published his initial findings and preliminary designs in a journal – Scientific America, which is where Edison probably saw them and then, improved on them to make something that worked and people would buy – so watch out who sees your designs before you are ready to go commercial.) Giving your business your name can tell a story in itself. Wedgewood, Gillette, Ford, Dell and Dyson say it all. Making yourself synonymous with your product has unforeseen advantages. And it is not just because the founders descendents (such as the Mars’ and Fords) are still around to run the business if need be. I am sure Virgin will surely be around a long time after Richard Branson has gone, but will Branson’s philosophy remain or will the group become just another global corporate? Certainly, Apple learnt its lesson when Jobs left, $billions was wiped off the value of the company as it lost direction, only to see a massive renaissance when Jobs himself returned. Is it significant that Google really started to challenge Microsoft just about the time that Bill Gates started to step away from such close involvement with his company? I would moot that there is a greater reason to keep the founder and his philosophy associated with a business – he or she is the creator of its DNA and without it, the company is thrown into the free market whirlpool with everyone else. So for you entrepreneurs who want to leave behind a business that will be able to celebrate its centenary, consider giving it your name. Because with your name will remain the association of the ability you developed to read the market and adapt to commercial change which got you off the ground in the first place. |
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| Something to make you smile |
| A sales rep, an administration clerk, and the manager are walking to lunch when they find an antique oil lamp. They rub it and a Genie comes out. The Genie says, "I'll give each of you just one wish." "Me first! Me first!" says the admin clerk. "I want to be in the Bahamas, driving a speedboat, without a care in the world." Puff! She's gone. "Me next! Me next!" says the sales rep. "I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of Pina Coladas and the love of my life." Puff! He's gone. "OK, you're up," the Genie says to the manager. The manager says, "I want those two back in the office after lunch." Moral of the story: Always let your boss have the first say. |
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“If you are a cheetah, admit when the wildebeest has beaten you” But Lucifer says “Think before you aim for a kill that cannot be achieved, go for easier prey which you can get faster and cheaper.” |
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| The Maverick – the must read book of summer 2007. |
| Luke Johnson is an ultrapreneur. I know this because the academics have said so. To be an ultrapreneur is even better than being a serial entrepreneur. So you will catch my drift. We should listen to what he has to say. Johnson is also a historian and a philosopher – not in the dusty academic sense, but in the real world sense. He believes that one of the best ways to become a great capitalist is to read and learn from the history and philosophy of business. He has a point – learning about the tragedies of great businessmen (and it was usually men – with the notable exception of Phyllis Pearsall – see below) alongside their triumphs puts our own growth plans into perspective. The good news is that Johnson himself has now started to impart some of his own experience and governing philosophy, so that we can learn from him too. And he has put it down on good old fashioned paper in his book “The Maverick – dispatches from an unrepentant capitalist,” Harriman House Ltd, 2007. The Maverick contains 84 of the best articles from Johnson’s eight year sojourn as a weekly columnist for The Sunday Telegraph. As with so much stuff you read in the newspapers, which become tomorrow’s chip paper, these articles may have been lost if it were not for this excellent book. The musings of Johnson from the late nineties to the mid noughties make for great reading at the end of the day or when stuck on a train or tube. He covers off everything from the stock market to business history to the current fashion of Twenty First Century philanthropists. He also tells us the stories of many great entrepreneurs – including Phyllis Pearsall. Amongst the lovely anecdotes in The Maverick we learn that Pearsall, who invented the A-Z and founded The Geographers’ Map Company, delivered her first orders in a wheelbarrow. For us internet babes who are used to receiving our information in quick and easy sound bites, each 750 word article will satisfy our craving to have a bit of what Luke’s got! If you want to buy a copy of The Maverick, go to http://www.harriman-house.com/pages/book.htm?BookCode=167314 where you can get a copy for £9.89 which is a third off the list price of £14.99. |
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| Events |
| We know you all want to meet each other, get more out of us and our Preferred Partners and generally make AngelNews work for you. So we have decided to up the ante on the number of events we would like to invite you to. Here is a list of them. We do hope you will be able to make it to one soon.
[Top of page] |
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| Personnel story of the month |
| Retail giant saved by use of unknown saviour in roll-out implementation An unnamed retail giant which had promised the market that it would launch one shop a week for the next 15 weeks, faced a shock departure of its retail roll-out manager. The fall-out if this had been public, not least on the retailer’s reputation as one of the most effective roll-out operators in the UK, would have been terrible. Needless to say the departure had to be kept secret and a replacement found within days. Somewhat ironically the interim replacement turned out to be better than his predecessor – not only did he complete the roll-out to time, but also identified and surveyed a further 40 suitable sites. He departed quietly having also ensured the successful appointment of his permanent successor. Job done and the market never knew. |
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| The Headlines |
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| Profiles of AngelNews companies |
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| People moves |
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| Job ad of the month |
Senior sales and business development (UK govt/defense)
 We are
looking for a senior sales and business development manager to focus on
the UK government and defense sector. The candidate should have existing
relationships and a track record of selling IT security products and services
to this vertical market.
We need someone who can interact at senior level within the UK government and at the same time be able to work without the back end support of a large and structured marketing department. Your daily role will be to sell directly to the end users and to identify and bring on board technology and system integrator partners to close more complex and challenging sales. You will have excellent written and verbal communication skills, a flexible can do attitude and be a highly motivated self starter. The ideal candidate will possess an MBA from a leading university and have worked for both large companies and small startups.
Salary starts at £50k GBP but we are willing to negotiate for exceptional candidates.
Cellcrypt is an equal opportunity employer. For more information about the company and its products please visit http://www.cellcrypt.com For recruiters/headhunters interested in this position we offer a non-negotiable commission of 3% on salary if your candidate is hired. |
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| Our own and Preferred Partners’ news |
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| Networks' and fund managers' news |
| For the full stories please click on the story and login at www.AngelNews.co.uk
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| Best
Modwenna Rees-Mogg AngelNews
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