Encouraging enterprise and innovation

I notice that people can now get a tax rebate if they invest in a business. However this only applies if they own less than 30% of the business.

This excludes the vast majority of people who decide to risk all and start something new.

If they are willing to risk their money, their home and their family in trying to start a business which will pay tax and help the rest of them, it seems unfair not to give them a rebate.

Most 1, 2 or 3 person startups fall outside these rules. But this is how many of the 4 million small businesses in the uk started, and many of the larger companies too.

So encouraging these startups to take risks is the quickest way in increase innovation and business creation in the uk.

Using business directories to find new customers and suppliers

This seems to be a gradual progression between directory websites, and websites that allow you to list your business, but also do something useful for you.

Directory sites allow you to have links to your website; some offer this for free whereas others charge.

I take the view that really this is such a basic service that it should really be free. Companies that do charge, do so because are very high in Google’s rankings and advertisers are tying to piggy-back on this success.

So directory websites are less about people finding you in their directory, than getting Google to recognise your existence and show you in searches.

The situation now is very like the situation that business directory books were in the 1880s when Kelly’s was the best known, but there were many others as well.

Kelly’s was generally paid for by subscription, whereas the others were paid for by advertising. Businesses took the most cost-effective solution for their business based on who their customers were and which directory they used.

Now we’re in much the same situation with intense competition between many of these directory websites, and with some having to close to further subscriptions, as can’t make a living out of taking on new companies.

The next question is; if you’ve got a website that allows people to register and create a business listing, what else can you do to that is useful?

The most useful things of course are finding suppliers and more importantly finding customers.

The most obvious approach to finding a new supplier is to say who has recommended them on websites like LinkedIn.

LinkedIn does give you some depth of knowledge about who it is that is recommending a supplier. So you may be able to spot a bunch of friends from the same area who all recommend each other.

You can also see if some of the recommenders are useful, competent, high-level people, which tells you the potential supplier is competent and worth contacting.

The next approach is to find out if your potential supplier does something you can see in concrete form. Is there anything you can find which demonstrates that they are able to do what they say they can do.

For example in the case of a SEO (search engine optimisation) consultant; if he or she says she can get your website to the top of the Google rankings, has she managed to do it in the past? Have a look at some of the projects she has worked on, and see if she has succeeded.

In the case of an architect; have a look at the buildings they have designed and see what you think of them.

However many consultants work on a confidential basis and you cannot see evidence of their work because it’s confidential.

In these cases you need to be able to see slices of their knowledge. Examples of what they know; evidence of their core competence and their ability.

The best way to do this is to find things they’ve written which demonstrate what they know and how they think.

It may be in the form of a blog or a report, and should show their logical approach to problems and how they actually do things.

Whether these are free of have to be paid for, if they seemed reasonable, competent and intelligent, then the potential supplier should do a good job for you, and that’s what Gibli does.

Oil, Bad Management, Need and Greed

Sometimes we do bad things so that we can later do good things.

Take for example the Gulf oil spill which is now being blamed on bad management. If you put oil in your car or truck you are at least partially to blame for this most recent disaster. And of course here have been others in the past and there will be more in the future.

Oil is nasty stuff and as it becomes rarer as the resources become more difficult to find, more risks will be taken with deeper wells and more remote and probably environmentally sensitive locations.

The best thing we can do is reduce our dependence on this toxic, politicly charged, black sludge. This means moving toward green technologies and trying to avoid using oil.

However if we all switch to battery powered cars, the issue becomes one not of oil but of lead and cadmium which are even more toxic than oil.

This means that better solutions need to be found to our transport dilemma.

I think that the future is not one of cars at all, but of tethered electrically powered vehicles.

This means:

1. No oil or liquid fuel

2. Only a small battery to get through no charge black spots

3. Not necessarily car based

If we could develop a new way to transporting people in electrically powered and tethered  ‘pods’, we could reduce the resources needed for transport dramatically, as :

1. You wouldn’t need to own a car at all,

2. You wouldnt need liquid fuel

3. Electrical power could be locally generated

4. Less lead, cadmium or other toxic metals needed

The future of passenger transport is I believe is not the one we expect, but an easier, simpler, more cost effective lateral one.

Is your business a jellyfish or a sea anemone?

The world of business is like an ecosystem.

Businesses need resources (money, water, fuel, electricity etc) in much the same way plants and animals need air, food and water.

This analogy therefore allows us to compare one with the other. For example a chemist is dependent on the customers who walk past her door in much the same way a sea anemone is dependent on the food which drifts past on the ocean currents. And an ice cream van is like a jelly fish because while it is still dependent on passers by, it can move.

We can therefore chose an animal or plant, more or less at random, and find a business which opperates in the same way.

How about a flight of swallows? They migrate over large distances, feed on the wing and go around in groups. The business model that would most closely fit this natural model would be perhaps musicians, some of whom will move from country to play Bach or Maler, and will meet up with colleagues when they arrive.  Possibly business speakers and singers are the same.

This analogy process also allows us to look at things which happen to the natural analogue, and see if they allow us to find how evolution might suggest improvements to the business model.

For example plants and animals do need to distribute information in the form of DNA to breed or spread their species. In the same way businesses need to distribute information through marketing to find new customers.

Some plants for example use bees to distribute their pollen in the same way that businesses use google to distribute their adverts. In the natural world some animals are better at this than others, squirrels eat the majority of the nuts the collect, and only a minority grow into trees. Bees are more efficient as they are communal and only eat a small amount of the pollen. In nature plants and animals evolve to favour the most successful strategy, so bees may be dropped in favour of flies if the flies are more efficient at pollination. In the same way the online agents which try to find us new customers (ie Google) may be dropped if better or more efficient ones appear.

Using natural metaphors to help us innovate our marketing strategies

I have found metaphors useful in making complex situations easier to understand, and I find a interesting parallels between the ways in which we promote our companies, and the way plants distribute pollen and seeds.

Both entail the distribution of information, be it an advert or a package of DNA. Both use a variety of mechanisms to distribute the information, and both have mechanisms which work well and mechanisms which don’t work so well.

Tweeting for example is like producing pollen or seeds in large numbers and letting the wind to do the distribution (ie fungal spores).

Email is like producing larger seeds and using a combination of gravity and wind to do the distribution (ie Sycamore seeds).

But in nature agents (ie squirrels plant acorns and bees distribute pollen) are used much more than we use agents to promote our companies in te business world.

Google could be described as an agent, as if we invest in pay-per-click they are trying to find us customers.

But in nature some techniques some work better than others, as the energy invested in producing the seeds or pollen is rewarded by increased chances of furthering the species. In fact communal bees pollinate more crops that solitary bees.

This means that the next development in business promotion is likely to entail getting more for our money than just a click, and using community websites as agents which are more efficient than Google.

The other issue which comes in here, is how do we attract other users to our ad or profile / the bees to come to our flower? I think this means having nectar which is sugary enough to entice them, which in the business world means a reward.

The reward doesn’t have to be free, as bees will fly long distances to collect nice sugary pollen. It just has to be good enough to draw them in. I like knowledge in the form of white papers or reports as it can be collected online, and doesn’t need anything to be sent.

That leads me to the concept of Knowledge Trading, which means using these reports as bait to attract potential customers. These could be free or to be paid for, but the free approach is like including all the stray beetles and grubs which by chance land on our flower, and does not discriminate enough in favour of bees – ie potential customers.

Paying back the National Debt

There’s a lot of discussion at the moment about whether we are in a recession or an age of austerity.

However I wonder if this is not a permanent situation with the massive national debt that we have to pay back.

I was recently told that my share of it was £227,000, and consequently it may take us generations to pay this back.

The government will have to start thinking about cutting services and benefits in order to begin paying back the loan rather than just the interest.

With this we will have to expect increases in taxes, like the increase in VAT to 20% on the 4^th January 2011.

However in the longer term we have to find ways of exporting things that make here.

As many products and services which were originally invented in the UK are now made or performed cheaper abroad, we will need to being thinking about new things.

If this is the case we will need to encourage our scientists and engineers to come up with new products and services.

The government fortunately does offer grants to well conducted scientific research.

However one group which does get ignored is the lone or small group inventor.

These people have come up with ideas which have later turned out to be world beating, but there are a number of problems to be overcome before we can ‘hot house’ these mavericks.

Firstly, the experts in their fields may criticize their research and oppose any grants or assistance offered.

This may be correct for 9 out of 10 due to bad science or poor engineering, but the 10^th could be the one that makes us export revenues.

The second problem is the cost and complexity of the patent system. Taking out a UK patent can cost up to £5,000, and a world wide patent up to £50,000.

These are huge hurdles to overcome, but if we can find a way to deal with them, we have a chance of paying the debt off early.

So come on you lone inventers. Get thinking about ideas which will change the world.

And let’s hope the investors out there will be willing to take a gamble on a few British eccentrics.