Crowd-anything is a hot topic, and there are a myriad of crowd based alternatives to problems and their traditional solutions:
- Lending: Zopa
- Mutual funds: cutefund
- Startup capital: GrowVC
- Contact data: Jigsaw
- Encyclopaedia: Wikipedia
Crowd-anything is a hot topic, and there are a myriad of crowd based alternatives to problems and their traditional solutions:
This blog is inspired by two recent TV programmes and highlights some of the Scottish people who have made an immense contribution to the world, including inventors, entrepreneurs, scientists and others – some well-known and others not. If you’re not Scottish you might want to skip the next paragraph and go straight to my list of the top 5.
The first TV programme was a BBC series called “The Scots Who Made the Modern World” and profiled the Scots who made contributions to medicine, engineering, science, communications, commerce and finance. The other show could have been called “Scot-Idol” with viewers voting for “The Greatest Scot” in an online and telephone poll. It is this show that persuaded me to put pen to paper, or fingers to keyboard, as I remain disgruntled with the top 10 voted for by my fellow country-men. I know it’s just a nonsense TV show and I shouldn’t take it too seriously…. but really, as if it was not bad enough that the “Doctor Who” actor David Tennant was on the list in the first place, he ended up as the fifth greatest Scot – ahead of Andrew Carnegie, and even Robert The Bruce. Maybe I am missing something in David’s lighthearted portrayal of the time lord, or, maybe the people who watch STV are idiots. You decide. Lines are open now!
So here is my own list, with, for me a clear winner and another four deserving of mention. The criteria I used was to assess their lasting positive impact, not just on Scotland, but on the World. This list therefore does not contain actors, authors, comedians, pop stars, sportsmen, monarchs or war heroes, they either don’t have a lasting impact or if they did it was restricted to Scotland, or at a push, the UK as a whole.
Andrew Carnegie is an inspirational figure to me, and to many other entrepreneurs I suspect. In part because of his accomplishment of being the richest person alive at the time, but more so for what he did to promote and practice philanthropy which has both benefitted millions world-wide and influenced countless of super-rich ever since. The son of a weaver he emigrated with his family to the US aged 13. His first job was working in a cotton mill earning $1.20 a week; just 40 years later Carnegie Steel Company was the largest and most profitable enterprise in the world. He sold it to J.P. Morgan in 1901 making him worth $937M at the time. In today’s money that’s equivalent to almost $400Bn. He has been credited as being the principal figure behind America’s transformation from a rural agricultural country into an industrial power, and he vastly expanded the middle classes due to the layers of management he employed.
What sets Carnegie apart from other super-rich was his philanthropy; “The man who dies rich, dies disgraced,” he wrote in his essay, “The Gospel of Wealth”. The trusts he set up continue today, focused primarily on education and world peace they have assets of billions and it is thought that not a single person in the Western world has been untouched by Carnegie’s legacy. His most famous endowments are the incredible 2509 libraries built all over the english speaking
world, but his endowment also funded universities and museums and still provides educational grants to disadvantaged individuals.
Adam Smith is the father of the modern free market economics and has created a lasting impact with his masterpiece, “An Inquiry into the nature of causes of the Wealth of Nations”. This was published in 1776 but its appeal and influence continues to this day. It states that public interest is advanced by individual self-interest, productivity and wealth creation which benefits everyone and indeed raises everyone’s level of happiness. It is a commonly used text when countries start industrialising, and in recent times has influenced both Japan and China in their economic development.
John Logie Baird was a visionary inventor who pioneered television and thus created the most impactful medium of the 20th century. The first transmission using his system was in 1928 and is all the more remarkable that Baird was largely self funded; he did not have the resources available to his competitors at EMI/Marconi. Their competing system was eventually commercially adopted and became the standard. However, Baird was undeterred and embraced the superior electronic technology and only a few years later demonstrated colour, 3D and high-definition television systems using their systems. He was a prolific inventor and also filed patents on technologies including infra-red night vision, fibre-optics and radar. Although his original mechanical televisor fell out of use, a camera using his technology broadcast the pictures from the moon landing in 1969, over 40 years after his original demonstrations in London.
Sir Alexander Fleming is included here not just for his own breakthrough work which led to antibiotics, but for all the countless other Scots whose pioneering endeavours significantly enhanced the field of medicine. If there was one particular industry Scotland excelled in, this was it. During the heyday of the British empire 9 out of 10 doctors were trained in Scotland and the contribution made by Scottish physicians continues to this day. Other advances developed here include modern surgery techniques, antiseptics, anaesthetics, x-ray and ultra-sound. Additionally tuberculosis was eradicated and malaria controlled. More recently drugs including beta blockers were invented and more controversial advances including stem cell research and cloning were pioneered.
Finally, James Clerk Maxwell was a physicist and mathematician whose electromagnetic theory has enabled the development of wireless technologies such as radio, television, satellites, and mobile phones – and with these, huge leaps forward in technology and convenience for billions of people world-wide. He demonstrated that magnetism, light and electricity are all manifestations of the same electromagnetic field. This breakthrough is regarded as the second great unification in physics, after Sir Isaac Newton. Einstein described Maxwell’s work as the “most profound and the most fruitful that physics has experienced since the time of Newton. One scientific epoch ended and another began with James Clerk Maxwell.”
Of the runners-up in my list there were two who came close. Firstly there was John Law who invented modern finance techniques including paper money and stock exchanges. Sadly his methods precipitated the first financial bubble and so you could say he was the inventor of the boom and bust cycle. The invention by Alexander Graham Bell of the telephone has probably had an even greater impact on the world than that of Baird’s television, but there is some compelling evidence that Bell was perhaps not wholly responsible for the invention he is credited for.
Neither did I include any of the Scottish engineers who made the industrial revolution possible, the world owes this group of men a great deal and I feel guilty for leaving them out, but like most of the advances in medicine, it is difficult to single out the contributions of individuals. Among them were Thomas Telford, the civil engineer who built over 900 miles of roads alone as well as bridges and canals and James Watt, who although did not invent the steam engine, significantly improved it by making them commercially viable. Both played a significant role in the industrial revolution which placed Britain at the centre of the world.
Writing this was painfully difficult, the more I researched, the more interesting people I found and narrowing it down to this short list was not an easy task. A couple of unexpected finds included David Buick, the founder of the Buick Motor Company in 1903; B.C. Forbes, who founded Forbes magazine in 1917 and John Muir, the naturalist who petitioned Congress for the creation of National Parks. Overall the biggest surprise is just how much Scottish people have impacted American business and society, it seems the that our two countries are inextricably linked. [Update: I also found out that a Scottish businessman, Thomas Glover, was instrumental in the industrialisation of Japan and helped found one of their most famous companies, Mitsubishi.]
Andrew Carnegie still though in my view remains head and shoulders above everyone else. Yes, my opinion is biased, and no doubt highly influenced by my own personal interests in business and philanthropy. That being said, I don’t begrudge the winner of the Greatest Scot poll, which was Robert Burns. I don’t think his poetry has benefitted the world in as obvious a manner as that of Carnegie’s philanthropy, but it has certainly enriched us all and we should be thankful for that. Burns should be grateful to Carnegie as well; just think of all the millions of people world-wide who have been able to access the Scottish Bard’s works at a Carnegie library. This just proves the folly of trying to name just one Greatest Scot when there’s many of them, and hopefully many more to come.
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Earlier this week I attended one of many excellent talks organised by the Informatics Ventures and Edinburgh University Entrepreneurship Club. This week’s talk was by Sean Ellis of 12in6. Sean has worked in marketing roles at web companies LogMeIn, Xobni and Dropbox; amongst others. He is known for his metrics driven approach to customer development and in this talk he shared with us how you evaluate whether or not you’re at that critical moment in a startup’s life: product/market fit. I want to share with you the implication this moment has on raising and spending capital. I have seen that too many startups are obsessed with raising finance, but don’t appreciate the negative cost of this if taken at the wrong stage.
Although it was made famous by Marc Andreesen, I believe it was Andy Rachleff, co-founder of Benchmark Capital who coined the phrase product/market fit.
Product/market fit is being able to satisfy a good market with a good product.
But how do you determine you are there? According to Sean the key question to ask users is “how would you feel it you could no longer use our product?” If you achieve product/market fit you are looking for greater than 40% of respondents answering “very disappointed” to this question. If less than that you need to keep working on your product until you have something people really need. Sean’s made available a free survey tool and all the necessary questions pre-populated at Survey.io; if you have a product right now and you’re not sure where you are then start with this.
If you have P/M Fit you probably know it already; the sales are already piling up, the phones are ringing and there is press interest in your product. If you don’t know you are there yet then you’re probably not there yet. Assuming you’re not there and still struggling then a way to measure it will help you get there (and stop you from kidding yourself that things are going well).
Assuming you hit the jackpot and achieve over the 40% benchmark what comes next? Life after product/market fit is very different. It becomes all about the race to scale up; if you have found a successful formula speed is critical and you must go for growth and make the most of your advantage. Before product/market fit you focused on conserving cash, but now you need to change your mindset, you want to spend, spend, spend; assuming you can demonstrate the return. This is where Sean’s metrics driven approach to marketing pays off: relentlessly measure and optimise for ever greater conversion rates. Simply put, spend more on the areas that deliver the biggest ROI.
Spending money is only possible if you have it to spend, so you don’t want to get to this stage and discover you have a fantastic product, loved by the market but due to a lack of cash you cannot scale up and take advantage of your fortunate position. It is at the crucial point of P/M Fit where external capital comes in very handy, and it’s also the point VCs get interested as you have removed a lot of the risk and guesswork by proving you’ve got a valuable product. Luckily as you can demonstrate you have P/M Fit it’s also cheaper for you to fund raise at this time.
Much of success in business is about timing and external capital acts as a magnifier; it magnifies all the good and bad things in your business. I would caution that if you are not at P/M Fit you probably are not ready for that injection of steroids.
Matt Mullenweg, founder of WordPress explains it by likening VC finance to rocket fuel, put it in your car and it will do one of two things: it makes you go very fast or it makes explode. The magnification effect of VC finance acts on all aspects of your business good and bad. Once you have P/M Fit that is the right time to be going fast, before then you want to extend the time it takes till you fail, not speed it up.
The point of all this is… raising money is not what matters, focus instead on building a good product and getting early traction with sales.