The only constant is change, Heraclitus.
Exciting things happened in the recent days. They motivated me to change my business compass. marketing strategies and product positioning again.
Time to look back a little - analyzing how I failed. Before I started my own business (1989), I worked for Austria's largest industry. My final responsibility: Factory Automation Software. I have described my technological background and skills here.
When you start your own business, it's just you and your ideas. My basic idea was: Work at the intersection point of mathematics and computer science, build a network of distinguished technology partners and transform the joint knowledge into margins.
You need to add customers. If you are lucky you combine the right product with the right market segments. You need to define the right marketing and promotion mix. What most of the entrepreneurs underestimate: you need to reinvent yourself quite often.
Work on things that matter and for those who care
Unfortunately, it is not that simple. We decided early for Open Innovation (in-licensing and out-licensing), do lab work, not industry work, ... but you need a brand promise, and don't forget to develop and maintain a company culture.
Did I get anything right?
Yes, I think the technology selection, the partner plans and the principle product-market fits. And I knew from my work at industry that you need to learn from turbulences and how to manage innovative teams.
Here is what I did wrong in the past and how we changed that
1. Don't diversify in a crisis
First, we decided to focus, from the beginning. If you want, we are a Mathematica and UnRisk company.
You have ups and downs and when the .com bubble bursted and at the beginning of the financial crisis, we suffered from revenue reductions. At the first I thought diversification will help. But if a crisis is caused by a drastic change of market correlations, diversification does not work.
After the financial crises, we focussed. And it worked so well.
2. Don't fall into the eager sellers and stony buyers trap
If you are bursting of ideas and have clever procedures and tools to turn them into products swiftly, you want to release new things often.
But the eager sellers and stony buyers principle tells us that the mismatch is nine to one: sellers overrate their innovations threefold and buyers overrate threefold what they have.
We overcame this by making the improvements really big and delivering know-how packages instead of software only. The UnRisk Academy was established to extend product use training with courses giving full explanation on what is behind the curtain.
3. Don't work to get picked - choose yourself
I just refer to one of Steve Jobs' strategic success factors: don't make profits make products.
In search of perfection, we ask ourself "is this the best we can do?". And there is the trap of striving for the perfect competence, leading to industrial work - you forget to disrupt yourself and you miss possibilities.
Work to get picked, is reactive - if you choose yourself, you set the pace. I have really underestimated the power of this view change.
4. Don't forget the numbers
I underestimated the financial side of the business. Even, if you are an estimated innovator, build great products, have selected your target markets right, a well received brand, ... you are still forced to understand the financial impact of your decisions - don't fly blind.
We are a comparatively small outfit, but I have built a system that tells me daily where we are. And "where" means business units across the cost structure (P&L) with bottom line at risk estimates (a simple color table).
And it is vital to integrate the teams into the control flow.
5. Don't take care of that all
I have managed an innovative business in an innovative industrial environment before. I reported directly to the board level. And, starting the new company, I thought I need to do it all myself. My first instinct was to not to hire a team ...
But management is to achieve your goals through your teams. And an indispensable driving force for innovation is co-creation and co-operation.
I now put energy in communication with the teams. My fear of shifting the status quo is much bigger than the fear to lose time in communication.
We want to continue creating more value than we can capture and I know I will fail again, but we have a real stable foundation now.
We will continue helping our clients to conserve capital, build quantitative skills and leverage technology.