Lack of time and money: Living as an entrepreneur

Large companies have the luxury of not having to think about cash flow and their daily survival, like a startup does. When I went from a senior manager at Tele2, the second biggest mobile operator in Sweden, to a startup more than a decade ago, a quite brutal reality hit me like a fist punch in the face. We talked about having a lack of time and money within Tele2, but that was nothing compared to the startup environment. Since we had no external capital in the startup, and we were up to our ears in debt, on the 15th of each month, we talked about what we could sell to pay the wages in 10 days’ time. On the 20th, we were trying to sell our office furniture over the phone to whomever would buy. That’s when you have a lack of time and money! In addition to finding out what a bleeding ulcer feels like, you also learn the importance of focus in such a business. Without focus, 20 employees had to leave the company by the 25th every month. It was merciless. The focus, however, gave birth to creativity and solution orientation, and it taught us to break rules. Just because we had gotten an invoice didn’t mean it necessarily had to be paid on time. It’s always negotiable if you can give the creditor an upside to something else. We had growth as our main weapon, and we used it to solve everything. So, we traded “getting paid today” against “more growth tomorrow if we can slide for 30 days.” Some call it hustling, some call it inventiveness and others call it cheeky. We called it “pick up the phone and ask the question.” The lack of time and money also taught us three very basic things that I have brought with me, and these lessons are just as important for all organizations that are either building, transforming or trying to disrupt their business. The common denominator for all of these three endeavors is the pursuit of growth. That pursuit has a pretty simple formula, but we figured it out the hard way in my startup, and I see evidence of it everywhere I look, in all organizations. The formula we figured out was “fast, tight, relevant,” and this book is about HOW to become just that.

Fast

As a struggling little company, you have the advantage of being able to be fast. You have no legacy or luggage containing old systems, products and agreements that you have to consider. It is also the most important ingredient to survive as a startup. You need to be fast at testing, fast at stopping, fast at prioritizing, fast at finding the money, fast at swallowing your pride and, above all, fast at changing your entire business when required. That ability allows you to quickly adapt to a changing business environment, changing customer demands and changing revenue streams.

Becoming fast is the biggest challenge for large companies trying to digitalize and transform their business. Many are failing miserably because they don’t have the foundation in place to become fast. What they need is not another IT system. Trust me, I’ve seen IT-transformation projects fail over and over again when you don’t address the real issue, which actually is basic business development. It has nothing to do with IT. The big problem is not the understanding of WHAT kind of capabilities the companies needs but HOW to create and build them in their companies. The task that many companies undertake is similar to rebuilding a Boeing 747 in midair during flight. But it does not have to be that difficult. Large companies have big assets to use. When used right, with the right leadership, big companies can change. Just look at Microsoft under Satya Nadella’s management and at IBM when they went from hardware to services. Focusing on the business fundamentals is key for success.

Tight

The biggest question we asked in the startup company was, how can we scale this up to completely insane levels without hiring a single person? That question was many times our rescue. It forced us to build super simple, waterproof processes that could be automated. To get there we had to standardize and cut away all fluff and unnecessary steps until it wasn’t possible to take away anything more. Then we took away another bit to check if it worked anyway. The balance was constantly to increase production speed without affecting customer experience. What we found was that customer experience only increased every time we simplified the decisions and removed steps in the process of our customers. One example was when we reduced the customer data collection process before delivery to our customers from 100 points to 7. The other 93 were still there, although we made a decision to standardize those settings based on our knowledge from other customers. Customers loved that we decided the other 93 for them so they didn’t have to. We automated the shit out of the latter 93 so a small web system, built for a few thousand dollars, could do all that for us. That took us from 2 months to 14 days in standard delivery time. Best in class and with the happiest customers.

Large companies have had the luxury of throwing more people onto their problems, which has created a great need for process specialists. The processes themselves are made so complicated that a specialist is needed to understand them. Process failure often occurs because the people who should follow the process don’t know how to, or even worse, they don’t know that the process exists at all. A process is like an operating system: without it, the machine should not start. If the machine is running without it or on a faulty process, it’s a crappy process, and it’s the creator’s fault. It’s the process designer’s fault, always. The hardest thing you can do is to make something simple. That was where we had our strength. Our processes were so simple that we could hire people right from high school and they could deliver a world-class customer experience on the first day of work. This is something big companies and startups must learn and, above all, they must dare to make the decision to simplify.

Relevant

As a small company, one has to fight to become relevant. You need to know why your customer should buy your gadget, what they profit from it, how it develops their business, and how it makes them more effective and better. If you don’t know what benefits your customers can get from what you sell, you are out before you even had a chance at that free cup of coffee in their office. Big companies have huge assets in brands, reputation, existing products, systems and investments. It has enabled them to only present their product and what attributes it has. Then, it is left to the customer’s imagination to figure out what it’s actually for and the benefits that can be made from it. But when the uniqueness of you company’s assets is taken away by more competitors, the power is transferred from your company to your customers. Customers now know that there are at least two big options and a bunch of smaller players in the same area of business, and everyone can do just about the same thing. The choice of supplier will end up on the one who comes to me and shows me exactly how to use the product/service to get the right value for me or my organization. The one who knows exactly what value or job I need the product or service to do for me in any given moment will be the most relevant provider for me. That value doesn’t have to be connected to the asset it’s based on at all. It can also just solve a problem I have accessing or using that asset, just like Uber solves the many problems with hailing a taxi. Big companies simply have to shift the focus from knowing their own products to knowing their customers. When they do, they can set out to solve real problems and become relevant again. It doesn’t sound that difficult, but big companies have the ability to make it extremely complicated, but there are simple solutions to do it quickly.

Before we dive into all the details about HOW and WHAT to do to become fast, tight and relevant, we have to start from the beginning with the background of this book and a bit about my background.