Big Game Advisors

Ideas into Action

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Hi,

I spend much of my time connecting to, listening and learning from leaders in a wide range of spaces. You may lead a charity, social enterprise, public sector entity, fast-growth company with revenues of a few million or less, or a mid or large.

Whatever your size, type and scale, I’m insatiably curious to learn and understand leaders and their organisations. Through the people I meet, I identify themes and trends and write about them periodically to post, first in these periodic newsletters to subscribers, then as an archive on the #OpenLeadership section.

I also love to provoke leaders to think outside the goldfish bowl we each swim in, so this article is all about provocations around one theme:

“Could you go slower?”

Often the assumption in business is that being “fast”, needing to be “number one” or being “first to market” is the default, the best strategy, but is it always the best way forward?

In building businesses, we seem to emphasise speed, something exaggerated in the last decade or so by how capital seems to want so much quicker returns from investing in companies than we have seen historically, as well as the perceived rate of change and innovation, as well as our modern world of instant communication.

This article is a long read (get a cup of coffee and take your time!). It explores our choices around “Could you go slower?” in four sections:

  • Strategy = Long Term, Tactics = Short Term
  • Business: Are you building your business to last or to exit?
  • Brand: Do you want to be number one?
  • Product: Should you be first, second or late to market?

Strategy = Long Term, Tactics = Short Term

It seems that business and product cycles are becoming ever quicker, as well as trends, particularly in tech innovation.

A pretty recent example of this was the “ICO” boom, where again and again I saw people look to start up and fund a business in a huge rush, knowing full well that the ICO “boom” for funding would not last long.

So, let me begin by putting it to you that Strategy = Long Term, Tactics = Short Term.

By long term, in terms of building a business or product of sustained and sustainable value, I mean a period of at least three to five years.

To paraphrase Warren Buffett: “the easiest way to make money is to think longer term than the next person.”

So, let’s move from that thought to considering timing and your strategic timeframe for, in order:

  • a business
  • a brand, then finally
  • a product

Business: Are you building your business to last or to exit?

Are you building your business to exit quickly, or are you building it to last?

My own bias is building to last, particularly as in recent years I have seen so many founders focussed more on the next round (or rounds) of funding than building something sustainable.

If you see a market gap and your plan and vision is to go from idea to launch to scale to exit within 18-24 months, then go for it. It is a high risk, high return game, but what is being built there is not a company, it is something to be acquired by someone else who will then fold the business/brand/product into what they are doing. Again, if that is what you love, go for it.

If however, you are looking to build something to last, then perhaps you could take a different approach?

To me a great example of this is the company Basecamp, founded by and still owned (after nearly twenty years) by Jason Fried and David Heinemeier Hansson. They were always planning to build their company to last (not to exit and be swallowed by a larger company).

This has meant that they have wanted to build a company independent of funders needing that exit, so from the very beginning they chose a business model where they have been profitable since day one.
As they have evolved, they have also chosen a way of working focused on being there for the long term.

This is beautifully encapsulated in their book on how to build a “calm” company: “It Doesn’t Have to Be Crazy at Work”.

Some of their thoughts:

If it’s constantly crazy at work, we have two words for you: F*** that. And two more: Enough already. At the heart of it all is an unhealthy obsession with rapid growth. Towering, unrealistic expectations drag people down.

It’s time for companies to stop asking their employees to breathlessly chase ever-higher, ever-more artificial targets set by ego, not need. It’s time to stop celebrating this way of working.

Over the last 18 years we’ve been working at making Basecamp a calm company. One that isn’t fueled by stress, or ASAP, or rushing, or late nights, or all-nighter crunches, or impossible promises, or high turnover, or over-collaboration, or consistently missed deadlines, or projects that never seem to end, or manufactured busywork, or incorrect assumptions that lead to systemic institutional anxiety.

No growth-at-all-costs. No constant, churning false busyness. No ego-driven decisions. No keeping up with the Joneses Corporation. No hair on fire.

And yet we’ve been profitable every year since the beginning.

Now, you may recognise the phrase build to last, perhaps from the book from 1995, “Built to Last” by Jim Collins and Jerry Porras. The sub-header of this article about the book hits home for me:

“IN A WORLD OF CONSTANT CHANGE, THE FUNDAMENTALS ARE MORE IMPORTANT THAN EVER”

I read this book over twenty years ago and it had a profound influence on me, perhaps subconsciously influencing the opening paragraph on the home page of this site:

“Command-and-control leadership is losing its grip. A new way is emerging: #OpenLeadership, embracing change as constant, encouraging individual thought, relying on intuition more than data, fluidity more than hierarchy, trust more than fear, and putting the common good ahead of profit.”

I encourage you to build to last, focus on the fundamentals, build a calm company.

Your choice of timing in your strategy is critical. If you intend to build to last, ensure you begin with that end in mind from the beginning and that you bring onboard people, funders, shareholders, customers, suppliers who also believe in and align with that strategy.

Now, to finish with a contradiction, I always encourage my clients to build their business “as if it is for sale”, whether they are a few years old or an ancient family business. When I say this, though, I remain focussed on their fundamentals, building value for all stakeholders over the long term. This “build as if for sale” maintains a discipline on the business as a separate entity to the owners, a separate “legal person” if you will.

As Benjamin Graham, mentor of Warren Buffett, famously stated:

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

Build to last and you will build value.

Brand: Do you want to be Number One?

“When I became CEO in 1981, we launched a highly publicised initiative: Be number one or number two in every market, and fix, sell or close to get there. This was not our strategy, although I’ve often heard it described that way. It was a galvanising mantra to describe how we were going to do business going forward” ~ Jack Welch

Under his leadership, Jack Welch took GE up to being the highest valuation company in the world under his leadership.

Going back to our theme of “Could you go slower?”, one of the drivers I see behind leaders pushing to go fast is this driver to be “Number One”. I often use the adage, slow down to speed up later, and both of the companies used as case studies in this section did grow and grow fast, but only after they had taken time to slow down, then create a strategy to NOT be “Number One”.

Note, it absolutely can be valid to need to be Number One, I am simply giving you two alternative thoughts, each of which may potentially give you a new perspective.

One more note. To me “Brand” is “Who you are”, so this section is all about the strategic choice of who you are and who you want to be.

First, what do you mean by “Number One”?

As anyone who has worked with me may be tired of me emphasising, it is key to have definitions of core words for your business, your strategy.

In 2015 I worked with the new CEO of BDO Canada, Pat Kramer, as he took on the mantle from his predecessor, Keith Farlinger, now CEO of BDO Global. The accountancy industry is dominated by the “Big 4” firms, BDO at the time was focussed on creating a position for themselves as #5 in the world with “clear space” between them and the #6,7,8 firms.

BDO Canada was and remains a key firm in BDO Global. Pat, as the new CEO, started out his term as CEO by going on a long “listening tour” around Canada in the depths of icy winter (or, as the Canadians call it, ”spring”). From this and many workshops and facilitated meetings, came one word. Yes, one word, which was BEST.

From that, BEST was then defined by the 400+ partners at their AGM in 2015 as “Best – in our chosen markets”. This definition was aligning and energising, as clearly there were areas to leave to the “Big 4”, but also areas where they could focus to being best, or perhaps “Number One”.

Fast forward four years and BDO Global (with Pat Kramer part of their Board) saw a 10.1% increase in global revenue to $9.6bn. Clear space indeed.

So, BDO Canada chose to be Number one – but focussed on their chosen markets

Second, what if you decided to be Number TWO?

Around ten years ago, a colleague told me a story of being asked to meet with the leadership of Holcim, a huge global player in cement at the time. Most of their revenues came from emerging markets.

Given the complexities and issues with buying into emerging markets, Holcim had made a strategic choice to NOT be “Number One” in any geographic market, but instead to look to be “Number Two”. My recollection around this was that if they acquired enough local companies to make them “Number One”, then it may draw too much attention to them in the country, so they preferred to stay as the “Number Two” so they could stay focused on the business itself rather than any local politics that could have emerged.

This business made a strategic choice to be “Number Two”.

So, do you want to be number one?

Product: Should you be first, second, or late to market?

I use the word “leader” and the term leadership all the time, but does leading always mean going first?

That tends to be our common connotation, but what if it really means setting a direction, a strategy, where that may mean going second, or perhaps even “late” to market?

A few case studies and ideas for you on this:

Streaming – first, or late?

As I write this article at the start of 2020, there is currently a huge rush underway into the TV Streaming market.

The first big player here was Netflix. Many will remember that Netflix was in the DVD rental and delivery business for years, until their CEO, Reed Hastings, made the bold step to exit that business entirely while it was still profitable, instead turning to being first to market to streaming. Initially, the stock market reacted by seeing the share price crash, but over time it was shown to be a fantastic strategic choice.
Remember my reference to Benjamin Graham earlier?: “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

So, today we have Disney, Apple, HBO and others in various global regions, all fighting to gain market share, yet to me as a consumer, they all look pretty similar. Just as the lessons of Ben Graham from over 70 years ago still stand, history shows that most markets end up with four major players. I don’t know who they will be, but my bet will be that Netflix will be one of them, plus in their move to be so early to market, their shareholders and ecosystem has already massively benefited.

I’d say that in streaming, going first will create more success than going late, but hey, timing the market is often a losing game, so I could readily be wrong!

Consumer electronics and being second

In the late 70s and early 80s, there was a “format war” for market dominance in the new industry of consumer videotapes between two formats VHS (championed by JVC) and Betamax (Sony). It is a fascinating story worth looking up, but to simplify, Betamax was first to market and (many argue) a far better format, but it lost, VHS won and dominated the market.

The two format champions were Japanese companies, with a key moment in the “format war” coming when another huge Japanese consumer electronics company, National Panasonic, backing VHS.

Roughly ten years later, a little known Scottish software company had developed one of the very first uses of visual hyperlinks, using them on, for example, visual engineering manuals for oil rigs in the North Sea, where engineers could click on links to see the next image on a CD-ROM.

Seeing the extendable value of this concept, they were bought by National Panasonic but were then surprised when the Japanese company chose not to use the technology and ideas to launch new products.
You see, the National Panasonic strategy was not to be first to market, but to be second or even late to market, but when they entered, to have first-class products and technology to gain profitable market share once the hard work of new product category launches had been done by others.

Uber is replaceable

In investment parlance, I have been “short” Uber as a concept since very early. Sure, they have raced to market dominance. Uber, like WeWork (yup, hugely ”short” on that idea too) and others, have taken huge amounts of investor capital that they have burned through with multi-billion dollar losses in order to create a market-dominant position in a new market space.

However, Uber is, to my mind, eminently replaceable. In London, for example, Uber drivers have no loyalty, it seems, often sitting in their cars (remember, for all the billions they have burned through, Uber owns no cars) signed in to multiple apps through which they can accept customer requests. Using other investment terms, they don’t have a wide enough “moat”, or “barrier to entry”.

Uber has certainly changed the way customers look to hire a taxi, but they have lost billions. My bet is that being the best call here is being late to market after Uber has done the hard work of establishing a market.

Videoconferencing. Zoom and taking your time

Do you use video conferencing software for meetings and personal video calls?

Having lived in Cayman for many years and worked with clients where commuting to the client so often meant one or more flights, I’ve been using various video options since the days of ISDN fixed data lines.

Skype was a good early option, but then Citrix cannibalised their own inhouse software by buying in a company with better software that cost less, which they called GoToMeeting. Other players were Webex, as well as Google Hangouts. For years, though, my business paid $000s for seat licences for GoToMeeting, until we started to notice, more and more, people asking if we used Zoom.

Zoom, with the ironic name, has slowly and patiently built themselves. As a consumer, their product simply works, better than the competitors. As to “could you slow down?”. the founder took nearly two years to develop the underpinning software before launch, then they have been profitable since day one, plus their pricing is low, so unlikely they will be undercut by others seeking to gain market share.

The ironically named “Zoom” seems to have shown that “could you go slower?” can be a winning strategy.

Don’t be TOO late to market

A last thought as a warning.

Question: Which company invented digital photography?

Answer : Kodak

Yes, Kodak. A Kodak engineer, Steve Sasson, made the first digital camera in 1975. Kodak offered its first consumer cameras 18 years later. 18 years. You see, their business model was all around film cameras.

President Obama awarded Mr. Sasson the National Medal of Technology and Innovation at a 2009 White House ceremony. Three years later, Eastman Kodak filed for bankruptcy.

Future themes

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This newsletter is sent out periodically with a focus on contextual themes relevant to “Big Game” leaders, as well as tools to take those ideas into action. Some current themes brewing for future newsletters:

  • Setting and Holding the Context
    “Get clear on the Why and the How is easy”
  • Secrets to complex decision making
    Find “simplicity on the other side of sophistication”, make the right decision in what can feel like impossibly complex situations.
  • Making the right decision fast
    How to cut to the chase and know you’ve made the right decision.
  • Mastermind
    Learn how to connect to other leaders with facilitated groups in a way that drives lasting learnings, connections, value for you and your business.
  • Seven Leadership Archetypes
    Learn how to lead your team through challenges by adopting different energetic and functional styles, adapting situationally to the environment and team.

I would love for you to contact me to share your own idea and themes you’d like to see me share a tool for you and the audience. I’ll then look into them from both my own toolkit and/or additional research, then create a newsletter around that idea to bring it into action.

In addition, now that I am offering diagnostic calls, I know that many of those conversations will catalyse my thinking around new and further tools to offer to this audience.

Diagnostic Call – Book Yours today

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My clients say I “see what others don’t see”, synthesizing thoughts, ideas and insights to provide high value with cut through.

To experience this for yourself, book your diagnostic call now. Bring your story and an opportunity or challenge you are currently focussed on in your leadership. I’ll listen and reflect with a keen focus on what it will take to get you to the next level.

Supporting you to play your "Big Game"

Why mention Big Game Advisors Ltd. in this newsletter? It is my UK business and that name came to me as I love working with leaders playing their “Big Game”, to make their own dent in the universe. After all, why else be here? We are not here to play small! So, those are the people I love to work with. For more on the four qualities of such leaders, visit the #BeMoreYou page.

For more on how we can work together, the Services page has been set up to focus on what I offer and how I deliver services to clients, added to which the Testimonials page gives a sense of the impact of that work on clients around the world through the lens of those clients.

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