Monday, September 26, 2011

Startups Fueling Corporate Growth - IBM Banks On Small Start-Ups For Big Growth

People often ask me:
"VC Whisperer, what can big companies do to grow sales? Where can they find growth?"
I saw this article on the Wall Street Journal a few weeks ago. It discusses how IBM was looking to startups to fuel sales growth:

IBM Banks On Small Start-Ups For Big Growth

The reality is that this is IBM paying lip service to the startup community, and getting some good press. There is very little entrepreneurial that goes on at a company like IBM (or any other big company - not meaning to single out IBM). However, I think the idea is a good one. Big companies (like IBM) need to not only look at startups as potential growth engines, but rely on startups to fuel future growth. Many of these big companies have stagnated, and only with fresh ideas will they be able to find new revenue.

It's a major shift in thinking and a major shift in behavior that's required. Big companies need to partner with more startups. Big companies need to acquire more startups. Big companies need to allow more of their employees and business units to be entrepreneurial and operate outside of standard processes. Only by doing all of these things will they avoid the inevitability of stagnating revenues that plagues so many corporate giants.

Wednesday, September 14, 2011

Too Many Old People Running Companies - Canadian Businesses Slow To Act On Social, Study Finds

People often ask me:
"VC Whisperer, why don't big (Canadian) companies understand social media?"
The following study is worrisome. And the problem is likely not uniquely Canadian (but definitely worse in Canada).

Canadian businesses slow to act on social, study finds

The problem is two-fold.
  1. Most companies just aren't acting or taking advantage of social media. 
  2. And the ones that are, just aren't engaging sufficiently or correctly to make it effective. 
The first problem is an issue with many big companies. They usually don't act or take advantage of social media out of fear. Social media is "new" to these companies and they fear anything that's new. They fear the impact on their brand, and they fear loss of control.

The second problem is also a common issue. The root cause of this ineffectiveness is usually process. Big companies just aren't set up to allow for new ideas or new processes. Everything has to be done according to a long-established process. A month to approve a newspaper story might be acceptable, but requiring that same time to approve a blog post or a tweet would be debilitating.

The solution in both cases is to get rid of the old people. This doesn't necessarily mean the people who have been around 20 years (although it might). It means get rid of the people who have old thinking. Get rid of old processes. Start thinking young, start thinking new.

If Canadian companies (and all big companies) don't get younger, they will die, or become irrelevant. 

Tuesday, September 13, 2011

The 5 Steps to Making Successful Comebacks - Listen Up RIM

People often ask me:
"VC Whisperer, are comebacks possible?"
The short answer is yes, but not without quite a bit of effort. That question and the following article on Engadget got me thinking about comebacks:

Shareholder calls for RIM to sell itself or its patents, in critical open letter -- Engadget

RIM shareholders are furious, and demanding change. They want to believe in comeback potential for the business, but many are losing hope. Startups are notoriously good at re-inventing themselves and big companies like RIM could learn a thing or two. Only then will they have a chance at making a comeback. Here are the VC Whisperer's 5 steps to making a comeback (and advice that RIM is surely hearing many times over from its shareholders):

  1. Vision. Comebacks often require companies to change direction. And they always require everyone to be moving in the same direction. None of that is possible without a compelling vision being communicated from the top. 
  2. Focus. It's hard to be good at everything. Paring down projects, focusing on strengths, getting scrappy. These are all important to staging a comeback. Focus not only on the high level, but on the nuts and bolts as well. 
  3. Fresh Ideas. Clearly the status quo is not working. That means you need to bring in people with fresh thinking. Or encourage it from your existing employees. Stop worrying about process or "how things are done" here. Throw everything you knew about your business out the window and start with a fresh slate and fresh perspective. Hire MBAs from top tier schools who have crazy ideas and the energy to make them happen. 
  4. Risk-taking. Comebacks often require swinging for the fences, and that's not without risk. It's the homerun plays that will turn a company around. Risk-taking also means sometimes sacrificing a profitable (but declining) business in the short term, to ensure long term success. For publicly traded companies, this is especially difficult, when analysts only care about your next quarter. 
  5. Listen. To what people are saying about your failing business. They might have good ideas. And listen to your customers. They're the ones who are going to fund the comeback. 
What's most interesting to me is these happen to be all the things startups are really good at. Take note RIM, telcos, traditional media, and any other company/industry under fire: Companies in turnaround or comeback situations would be well served to learn from the startup world

Monday, September 12, 2011

He's BAaaacck... - The Return of the VC Whisperer

People often ask me:
"Paul, what happened to the VC Whisperer?"
The reality of startup life is that it can be all-consuming. And for that reason, my alter-ego, the VC Whisperer, was put on the backburner for the last couple of years.

In that time, I jumped in as the CEO of one of my portfolio companies, and successfully refocused it and turned it around. I also did some consulting to a very large corporation, bringing my entrepreneurial and business-building expertise.

Today, I am happy to announce the return of The VC Whisperer, along with some exciting new projects (which I will talk about soon!). You will be seeing many more blog posts, so check back often.

As always, if you'd like to get in touch with the VC Whisperer for a speaking engagement, project, or otherwise, please send an email to