Ask ‘Why’: Advice to startup co-founders, board members, investors

When I first met Virginie, she was sharing her board membership experience with a group of would-be startup board members. ‘Independent board members bring the external eye, experience and a buffer, when needed the most’. And in crisis situations which are never far away, as well as in exit negotiations, this is extremely helpful.

‘Before you join the board make sure you ask ‘Why’. The alignment is everything. You should know what drives the entrepreneur, what are his values and if they are aligned with yours.’  If this is the case, the adventure can start.

Virginie Verdon knows something about alignment. She is Chairwoman of Néos Solutions, a French waste treatment equipment manufacturer and independent board member of BPA, Swiss computer software company. She also runs a Startup Board Academy hosted by EPFL in Lausanne, Switzerland. Being a successful woman in  business comes  with  a lot of hard work, recognizing opportunity and seizing it. And with a fair dose of luck  too. ‘Women should support women’, she says. ‘But the competence comes first. One has to be ready before stepping into a board role. You cannot improvise, especially in a startup board where everything goes much faster.’

Women remain underrepresented on boards, although boardroom diversity is increasing. Looking at more than 3,000 global companies, Credit Suisse found that women held 14.7% of board seats in 2015, up 54% in 5 years. According to Catalyst in their Equity in Business Leadership Study.

Startup exits cannot be improvised either. Virginie believes Switzerland would have more successful exits if systematic focus is given to scaling up and growing the business. And that requires the right people. ‘Part of investors’ money should always be dedicated to recruiting the right team. US startups got it mostly right but Swiss ones still have a way to go’.

Virginie will be sharing more of her insights with the startup and M&A community on Exit Accelerator‘s May 2 event in Zurich. Check the panel below and join us there. Register here.

Exit Accelerator – Boosting startup ecosystems. Our mission is to foster and accelerate successful Exits.

Can exits accelerate the growth of Swiss entrepreneurship?

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One advice startups often get when developing a successful business is to think about the exit strategy from the early days. Admittedly, is not an easy thing to do as entrepreneurs focus on growth and the next phase in the life cycle of their venture. However, it is important to plan for that milestone even before the entrepreneurs embark on the financing path. Exits bring liquidity to the system, make it more dynamic and stimulate growth.

Venture Ideas @ EPFL asked in 2014 Swiss Start-up exits: Can we have more?.  One thing that both the M&A experts and entrepreneurs agreed was that taking business to the next level gets easier with a strategic corporate partner. The exit therefore has to be well prepared so that value creation is maximized for all stakeholders and that the growth can continue internationally.

WEF’s 2014 report on Europe’s Competitiveness – Fostering Innovation Driven Entrepreneurship offered a three phase life cycle model (Stand Up, Start Up, Scale Up). The cycle is conditioned by the individual factors (skills, attitudes and cultural framework) on one side and by the ecosystem factors represented by the regulatory and market framework as well as the network of support organisms such as advisers and partners on the other. Together they ensure a know-how transfer that creates opportunities for growth.

Source: WEF, 2014

This entrepreneurial life cycle turns into a loop stimulating serial entrepreneurship that is fostered by successful exits. Those serial entrepreneurs with multiple venture experience in turn become investors, role models and mentors themselves. They continue contributing to a more dynamic ecosystem and a more competitive economy altogether.

Pamela Dennis, a successful entrepreneur and adviser to Fortune 100 companies states in her recent book Exit Signs that 87% of small and mid-size businesses have no exit plan. This puts them at risk of being sidetracked or taken over at no terms of their own. Her advice to business owners is to focus on building the business into a saleable, attractive and well documented venture with a focus on building relationships with the potential strategic acquirers early in the business life cycle. This will, she says, allow them to be bought rather than having to sell when they decide the time is ripe.

Exit Accelerator is a grass-roots, not-for-profit association, with the aim to boost the Swiss start-up and SME ecosystem by promoting conversations about exits. We believe that exits are one of the important milestones in the life of a business. Companies grow and develop over multiple years, often with exits there is a change in leadership, and an opportunity appears for them to start building great new companies again. The money is recycled and reinvested in the startup ecosystem, creating jobs, and supporting other innovative ventures.

Entrepreneurs that lead their business to a successful exit have a story to tell that startups and more mature SMEs can learn from. Learning first hand from those who did it is second only to doing it yourself.  Exit Accelerator looks forward to open the stage to such conversations.

Four steps to benefit from the ‘sharing economy’

Already rented out your flat when you left on a vacation or stayed in someone else’s? Took a ride in stranger’s car or worked in a co-working place? If so, you were likely taking part in the sharing economy.

This new way to think the market place is there to stay for at least a little longer, so any traditional company should prepare to operate this altered framework. There are few things to keep in mind.

 

What is sharing economy and why does it matter?

A phenomenon that goes under names of access economy, peer-to-peer networks or the collaborative consumption represents an important shift in the way consumers are meeting their needs and the way companies are defining their value added.

We used to share trade and swap since the early days of the humanity. And now the sharing is back as a fast growing economic phenomenon. But the key difference that allows all this interaction is the digital interface. The consumer interacts directly with other private parties turned suppliers through an online platform.   This ‘platform capitalism’, facilitating the online economic meeting place between willing sellers and buyers, is resulting in some of the most staggering market capitalizations we have seen so far.

Beyond the names such as Uber or Airbnb that first come to mind, there are giants such as Etsy (crafts and vintage market), WeWork (shared workspaces),  Kickstarter (crowdfunding) or   Bla Bla Car (car sharing service).  And thousands of other app-driven market places for everything from jobs, knowledge, excess capacity or mobility and vacation, catering to consumers and businesses alike.

The growth of the sharing economy is set to quadruple in the next three years and reach EUR 100 billion as per the recent Deloitte report. So how will your company benefit from this massive trend? Or, indeed, prepare to compete in changing economic circumstances?

 

#1 Select the operating model that fits your business

 Understand what works and what not in the sector or the industry you operate.  If you are a retail business, you are probably present online for years now and digital is a part of your operating model.  Investing into one of the related peer-to-peer platforms or buying the one that is of particular interest may be the next logical step. The recent purchase of HomeAway by Expedia or Avis buying Zipcar are falling in that category.

If you are in machine building, the choices may seem different at first. But the questions remain:  How can you improve your customers’ experience? How are you designing, manufacturing or delivering the product to them? Is your existing business model still the only way to keep your customers happy?  Opening up the design process to the crowd like P&G’s Connect+Develop program or leasing the construction tools to the customer instead of selling them as Hilti does, can be an alternative. Caterpillar chose to partner with Yard Club, a platform that allows the heavy equipment peer-to-peer rental.

Embracing change before it leaves you behind remains the choice of the frontrunners.

 #2 Review your own resource usage

Company’s own resources tie up a lot of capital.  Many assets that companies own, from the office and the storage space, to manufacturing and transport equipment, remain underutilized. With security issues properly addressed, those assets should start generate revenue when opened for use to new partners. Be it a conference room or a spare desk rented through a platform such as ShareDesk, or a truck excess capacity shared through Cargomatic, the underused assets will be made to work.

#3 Select the competences that fit the need of the moment

40% of the workforce will be freelancing by 2020, according to recent predictions.   Economic downturn may have explained the starting point but now we see an increasing number of highly skilled contractors choosing to stay independent.  So when next looking for a specific expertise why not select it through a platform for highly skilled workforce such as Expert360.  Whether you are filling a part time, a full time or ad interim opening, the business preserves the flexibility of matching the evolving needs with the wide variety of competencies available at the freelancing marketplace.

#4 Take part in agenda setting for regulating the sharing industry

Staying in the game for the long term will mean to secure a predictable operating environment and the regulation in particular. In any industry that is being disrupted the regulator is the latecomer. But when the new rules arrive, things change for both the disruptor and the incumbent.

Those companies that are successful in sharing their vision on how that new space should be regulated will retain the first mover’s advantage. And the others will have to adapt.

 

 

How to keep “license to operate”

Complex regulations will remain a fact of life for most industries. How to cope?

By IMD Professor Carlos A. Primo Braga, with Sanja Fabrio

A new era of government activism poses serious challenges to leaders in the corporate world and may lead to unintended consequences in terms of global economic activity. Regulations are on the rise as a consequence of the global financial crisis, increasingly negative public opinion towards large corporations, and scandals involving household brand names.

In the aftermath of the financial crisis (2007-08), there was a rush towards retooling the regulatory environment for the financial sector. Efforts both at national and global levels proliferated with a view to tighten financial regulation and supervision. For example, the Basel Accord of 1988 (Basel I) – the first international prudential regulatory agreement for the financial sector – was only 30 pages long. Basel II (2004) encompassed 347 pages. Basel III (2010), in turn, is 616 pages long. It is not only a question of quantity, but also of increasing complexity as illustrated by the exponential increase in the related calculations required to estimate risk weights for internationally-active banks.

On a parallel track, as many countries entered into recessions and unemployment increased, there was also an increase in governmental interventions, including many beggar-thy-neighbour measures (such as subsidies, localization requirements, and state-aid) that discriminate against foreign companies. These interventions have not only increased complexity, cost and regulatory burdens, but also have often delayed needed structural adjustment.

If one adds to this mix the increasingly negative public perception of large enterprises based sometimes on facts and sometimes on misunderstandings of how markets operate, one can speculate that public opinion will continue to broadly support more regulation. In such an environment, to the extent that the “license to operate” needs to be continuously earned and that it doesn’t take much to tarnish a corporate reputation, attention to proper regulatory engagement strategies is a must.

How is business responding to these regulatory challenges and what can one learn from different approaches to regulatory engagement? These questions were asked to corporate public affairs officers, regulators, and academics at the IMD’s “Regulation and License to Operate” conference on October 22nd in Lausanne, Switzerland. Here are some of the highlights:

On engagement

A regulatory strategy is an important component of a comprehensive business strategy just as regulatory risk is one of the key considerations in mapping corporate risks. When properly developed, a regulatory strategy should be able to address most of the WHATs, WHYs, WHOs, WHEREs and HOWs of relevance to a company in terms of the regulatory environment. The design starts with a comprehensive stakeholder mapping, appropriate message development, execution planning, and – last but not least – adequate funding for regulatory engagement.

Engagement with the regulator, just as with any other stakeholder, is only effective when based on trust and a professional relationship. That allows adding value through collaboration and providing insights that help regulators understand the ways business operates and the constraints faced by companies in implementing regulations. Staying on message, being consistent over time, and choosing one’s battles improves the likelihood of being taken seriously.  continue reading

How is your company navigating the regulatory labyrinth?

Complex national and international regulations are on the rise and are significantly impacting all industries. Areas like the environment, competition, transfer pricing, market access, and data protection are just a few that are drawing more scrutiny.

IMD is hosting a daylong interactive conference on October 22 titled “Regulation and License to Operate” where experienced practitioners from various industries will share their industry examples on how to successfully navigate the regulatory process.

The event will provide regulator, policy-maker and business perspectives on the regulatory advocacy approach as well as explore questions such as:

» How can regulators better incorporate business concerns?
» How can international rules or standards best be leveraged to influence national regulations?
» What can business do differently to have its voice heard when it matters most?

Sessions focus on topics such as how to influence policy, use potentially threatening regulation to your advantage or deal with unintended consequences once new laws are passed.

Eduardo Pérez Motta, former President of the Mexican Federal Competition Commission will give the keynote address drawing on his vast regulatory experience in the telecom, financial services, and energy sectors.

Other panelists include leaders and authorities from multinational companies, governments, international organizations, regulators and academia.

Join us there and share your experience!

Agenda

Registration

Event photos – Executives International panel – April 30th 2015 | Seizing change – Turning global trends into opportunities

Lausanne, Switzerland

Guest Speakers: Sanja Fabrio, Fredrik Karlström, Tracey Keys
Moderator: Tony Johnston from World Radio Switzerland

Courtesy: Executives International, more photos here.

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April 30th 2015 | Seizing change – Turning global trends into opportunities.

Seizing change: Turning global trends into opportunities – Panel discussion on Thursday April 30, 2015 in Lausanne, Switzerland

Change is the continuous state of play for companies and individuals. The playing field, the roles and the players, all is changing. The change can often be daunting and sideline those who live and operate in the past.

Societal expectations of business are changing, with traditional institutions losing trust, even as regulators struggle to keep up with the changes around them. Regulation too changes at a constant pace, changing ways we operate and compete, produce, consume, plan, engage and who we partner with.

Come and share your views at the following event in Lausanne, Switzerland:

Executives International Panel discussion on Seizing change: Turning global trends into opportunities on Thursday April 30, 2015

In this panel discussion, we will take a look at some of the major trends reshaping the world today and their implications for us and our organizations; how the role of regulation and stakeholder management fits into this picture; and how the future of communications could impact our lives and work.

Embracing this new dynamics means abandoning the ways we are doing things, daring to drop the boxes altogether and accepting change as a way to work, live and think. Recognizing the opportunity and seizing change ahead of others often means success in business and in our individual lives.

Panelists will be:

  • Sanja Fabrio, Principal, Strategic Government Affairs and Partner, Visconti
  • Fredrik Karlström, Chief of Exuberance / MD, The Magic Pencil
  • Tracey Keys, Director, Strategy Dynamics Global SA

Moderator: Tony Johnston from World Radio Switzerland

For more details and to register please visit: http://www.executives-int.ch/event/panel-discussion-seizing-change-turning-global-trends-into-opportunities/

We look forward to seeing you there!