February 2008 Blog Archive

Smarta blog

Entrepreneurship in the UK

29 December 2009 by Jim

How does the UK compare to the rest of the world when it comes to entrepreneurship? According to the Global Entrepreneurship Monitor 2007, 10.5% of us are involved in setting up or running our own business.

This puts us at a pretty mediocre 15 out of 23 high income countries. Iceland, Greece and Ireland top the list, with the US coming in at number 6 and Japan at number 10.

Amongst the rest of the population, 24 per cent are 'potential entrepreneurs' who feel that they have the capabilities and opportunities to start a business. But fear of failure often holds people back - 37 per cent of people say it's an issue for them.

We're developing Smarta to give practical support and advice to people at all stages of the business journey, whether they're 'thinking', 'creating' or 'growing' their business.

What else should the UK be doing to encourage more people to take the step from thinking about starting a business to actually doing it?

Wear's your head at?

05 October 2009 by Jim

Here’s a business idea (well two business ideas, actually) with a twist. T-Post describes itself as a ‘wearable magazine’ designed to ‘rewire the structures of news communication’. Basically, t-shirts with news.

As a subscriber you receive a t-shirt every six weeks based on the designer's interpretation of a current news story. The news story is printed on the inside.According to co-founder and editor, Peter Lundgren, the shirts not only look cool but also provoke mental stimulation and social interaction:“If you’re wearing an issue of T-post, people tend to ask what it’s about. The next thing you know, you’re talking about the ethical treatment of robots or some bank robbers in Brazil who got away with 45 million bucks, you’re forming your own opinion, getting someone else to think about the topic, and it just keeps going from there."Because the news is printed inside the shirt, the subscriber is left with an opportunity to interpret and communicate the meaning behind the shirt. It really becomes the subscriber’s interpretation of the story.”

T-Post started in 2004 and has more than 2,500 subscribers across 50 countries. It only prints the exact number of shirts for subscribers and never issues reprints, ensuring members are part of a unique club.News on t-shirts might sounds strange at first, but as the American philosopher William James once said:‘A new idea is first condemned as ridiculous and then dismissed as trivial, until finally, it becomes what everybody knows.’

Profiting from recession

05 October 2009 by Jim

Interesting to see Moneysupermarket.com founder Simon Nixon attribute the company’s 57% rise in pre-tax profits to the current economic downturn.Far from worrying about a credit crunch, Nixon insists it’s good news for his company and other price comparison sites:"One of the big issues for price comparison is consumer apathy," he said. "People basically have been pretty well off the last three or four years and they can't be bothered comparing and finding the best deal on their mortgage or their loan or their credit card."And I think in times of recession where they have to tighten their belts they come to a price comparison website because every penny counts."Lucky for him, you might think, but it’s interesting to consider that while a recession limits consumer spending on the high streets it perhaps opens new opportunities for entrepreneurs to exploit.Smarta spoke recently to a high street bank whose model is based on limited support services but low rates and minimal charges. It too admitted a downturn traditionally sees its switcher figures rise.If the economic climate worsens it’ll be interesting to see what business models emerge and how the leading business suppliers react. Either way it’s worth reassessing not just how you price but also all your service agreements – there could be significant savings to be had!

Apprentices: You’re hired!

05 October 2009 by Jim

It's Apprenticeship Week, and no, we're not talking Sir Alan, Tim Campbell or that funny badger woman.Back in the day before business met reality TV, apprenticeships were the bedrock of trade skills and the preferred method of vocational training.Somehow we moved away from that and ended up with skills shortages, overpopulated universities offering BAs in Diddlysquat and a disenfranchised youth on benefits for life.Onto the good news. Not all businesses abandoned apprenticeships and the 130,000 that didn't have reaped the rewards, according to a report by the Learning and Skills Council.Four out of five SMEs running apprenticeships claimed they're more competitive as a result; 70% had higher productivity; 80% experienced reduced staff turnover.Two thirds said running apprenticeships were more cost effective than hiring staff and 87% claimed they led to a better-motivated workforce.Based on this, apprenticeships are what they'd call on The Apprentice while screaming into a mobile, 'a no brainer'.To mark the launch of Apprentice Week, the government's pledged a £1billion to increase numbers by 2010/11. Find out more at www.apprenticeships.org.uk.

Is your Facebook investor-friendly?

05 October 2009 by Jim

A senior police officer was overlooked for promotion after posting information about his ‘gay lifestyle’ on Facebook.We’ll leave you to decide if the Met would have reacted with such disapproval had he been superpoking girls not guys. It proves, however, that irrespective of what you deem appropriate for Facebook, others might think differently.If you’re not super vigilant with your settings, turn your back for a second and it’s easy to return to see pics of your best moments from Magaluf ’96. There’s simply no escaping your past.We’ve heard all about employers checking out Facebook pages as a part of the recruitment process, so surely investors are doing it already?How impressed would a VC be with ‘Joe’s staying in bed today cus that meeting can wait’?You could argument, of course, that if you’ve nothing to hide then where’s the harm? Isn't this all a bit Daily Mail?The Facebook page of one of Smarta’s favourite entrepreneurs – who incidentally has raised substantial finance in the UK and US – links direct to his flickr account and shows him have a stonking good Glasto.That's OK surely? You’d like to think so, but is that how investors see it? Would you take the risk?Be a shame if business had to turn its back on Facebook. Perhaps it’s time Facebook introduced a multi-page profile facility so you can pick who sees which persona?

UK consumer goes bananas for Fairtrade

05 October 2009 by Jim

It seems the UK is increasingly spending with a conscience. Already this year we've seen Jamie Oliver and Hugh Fearnley-Whittingstall prompt a 50% rise in organic, free range chicken sales and now the Fairtrade Foundation has announced sales of Fairtrade goods rose 81% in 2007 to £493m.

You know something's finally arrived when the big boys catch-up. Supermarket staples bananas (£150m) and coffee (£117m) accounted for the bulk of sales while Fairtrade cotton was up 660% to £35m.

Sugar firm Tate & Lyle has said it'll go 100% Fairtrade by the end of the year, while Scotland is attempting to become world's first Fairtrade nation.

"After years of chipping away, Fairtrade is finally beginning to make some significant impression on the way we trade," says Harriet Lamb, executive director of the Fairtrade Foundation.

As with most disruptive trends small business led the way, though.

Sophi Tranchell's Divine Chocolate is a favourite business (yes, and treat!) of Smarta and a fine example of a social enterprise that successfully entered a crowded marketplace with a premium and ethical Fairtrade product.

Marks & Spencer, Sainsbury's et al might be in on the act now – and of course that's a good thing – but the role of small businesses and entrepreneurs such as the late Dame Anita Roddick in pioneering ethical trading shouldn't be forgotten.

If you can’t show money show love

05 October 2009 by Jim

Today is 'Work your Proper Hours Day'. Before you clockwatchers start checking everyone’s in on time, actually, the idea is to highlight the adverse effect of the UK’s long hours culture.According to the TUC, today marks the point in the year when staff regularly putting in unpaid overtime, actually start earning money.And hang your heads in shame; apparently small businesses are the worst offenders. Thing is, according to Investors in People’s Simon Jones, it’s not a clever strategy:“Just because an employee is working long hours, it doesn’t mean they are being productive – in fact, a long hours culture can have the opposite effect and breed inefficiency.“Bosses need to be active in helping employees manage their workload so they contribute to a greater effect in the time they are at work. Those employers that take steps to encourage this culture are more likely to see a healthy, motivated and most importantly, productive workforce.”OK there will always be those must-meet deadlines and there’s an expectation of ‘mucking-in’ that comes with working for a start-up. But exploit that at your peril. It’s your baby, not your employees’.If you can’t give them money, give them love some other way, be it equity, perks, time-off in quiet spells, whatever.Innocent Drinks is championed as a great employer because it does just that and more, not because it pays best. It looks after its people and they look after it.Ask yourself, how much loyalty would you afford a client that keeps taking without paying?

Slaying the dragons

05 October 2009 by Jim

Imagine this: the Dragons’ Den producers have deemed your pitch entertaining enough to make the cut and you’ve sufficiently impressed Peter Jones or Duncan Bannatyne to take a punt.It’s down to the negotiation. But no matter how much you plead to cling onto your precious equity they just stare straight back at you with that ‘take it or leave it’ smug smile.Perhaps they’ll even throw in the old classic line, ‘what do you prefer, 50% of something or 100% of nothing?’ Then there’s the wealth of knowledge that comes with the investment to consider. Realistically, what are you gonna do but relent and take the cash?Say ‘no’ of course! According to research out today, 65% of you would be brave enough to turn their back on a dragon. Easy to say, I guess, but there is evidence it’s sometimes a wise move.Ling Valentine, owner of LINGsCARS.com, stunned Bannatyne and Richard Farleigh two years ago and has no regrets.“They wanted too much,” she says. “I refused both of their offers and LINGsCARS more than doubled turnover to £28m in 2007. I am really glad I walked away. Businesses who jump at their first offer must be desperate or barmy.”Gavin Wheeldon of Applied Language Solutions also walked away and admits he only went onto the show for the free publicity. “You can’t buy that exposure,” he says.Be interesting to watch the next series, if this catches on…

Smarta @ Second Chance Tuesday

05 October 2009 by Jim

Smarta spent a month’s worth of business cards in networking heaven as UK web 2.0’s leading web and investor faces flocked to Second Chance Tuesday last night.Charlie Muirhead of Orchestream, iGabriel, Nexagent fame, and all-round friend of the stars, was our choice pick with his brilliant new venture T5M. The online video service profiling ‘extraordinary individuals’ is still in beta but already boasts the likes of Nelson Mandela, Ray Winstone and Kate Bosworth.T5M uses Microsoft’s Silverlight technology and is part of its Accelerator Programme, which looks to support leading edge technology start-ups. Others on the programme were out in force last night, with notable mentions for SportsDo.net, Rugged Logic and Miomi. Check them out.The schmoozing was separated by a compelling interview with web trailblazer Niklas Zennström, who gave the inside track on his fascinating journey that began with Kazaa, which scored 300million downloads without ever turning profit, peaked with the incredible $2.6bn sale of Skype to eBay, and continues with TV site Joost.Niklas imparted too much to list here but key lessons were: timing is everything with disruptive businesses; the right product has more power than any amount of marketing cash; and persistence pays. Can you believe it took a year to fund Skype?!Look out for Ben Cohen’s round-up on More4 and check out the SCT website for future events.

Home sweet home?

05 October 2009 by Jim

If you’re looking to escape the 9-to-5 grind and stress of the rat race, starting a home-based business might seem the perfect solution.You can work hours that suit, save on travel and keep your overheads low in those crucial early months. You’ll see more of the family and enjoy a better work/life balance, right?Wrong. According to research out today by BT, 45% of people running home-based businesses struggle to separate work from home life. In many cases, they actually work longer hours and enjoy less quality time with their families.It simply doesn’t work for some businesses, either. Asking clients to hurdle trainsets, hold the baby and throw the dog a bone isn’t especially professional.Now the illusion’s nicely shattered, let’s look at the upside. The home can be a great place to start a business and many of the UK’s finest companies started on the kitchen table.It’s just start-up businesses themselves that aren’t great for escaping stress and freeing up your time.Okay, in theory being your own boss let’s you pick your hours. But if you’ve any intention of growing a successful business probably the best you can hope to swap ‘9-to-5’ for is ‘7-to-10’.Before you ask, no, that’s not a three-hour shift…