Oh to be an OIC!

A what? An OIC – an Opportunity Investment Company.

Sounds grand, but what is it and so what anyway?

I said before that our vision was hazy at best but we did have a long-term view of what we wanted to be doing in 5/ 10 years time.

To build our own business into a global name with a number of operating companies under the same brand, each with a distinct business idea but all contributing towards the umbrella brand and thus benefitting from each other’s success. (wow, that sounds like mission statement to me, help this management speak is catching!)

But that was only part of the vision.

Jeoff and I were (hopefully still are) very receptive to other people’s ideas and were confident that as we developed our own business we would come across other people with great ideas who needed help getting them off the ground. And so part of T2G would develop as an OIC. Investing time, effort and money in other entrepreneur’s opportunties – a VC of sorts.

But wouldn’t that affect our own businesses?

There is always the danger of being over-stretched and neglecting your own business when you become involved in others but with the right discipline and strong day-to-day management teams in place, I still believe it is possible.

After all how is that an empire like Google can absorb a blogging business, a video business and many others?

What is important though, is to allow each of these individual and often unrelated businesses to flourish in their own way and through their own creativity. Imposing someone else’s ‘corporate structure’ will work in some cases but in this rapidly changing world, long-term success will only be gained by allowing imagination and ambition to flourish. That can’t be imposed.

This is not to say, there aren’t benefits to be had from being part of a larger group. We always expected that T2G as a group would provide central functions and there are a lot of benefits to be gained from having access to a wide network of trusted colleagues.

And of course, there would always be opportunities for cross-selling, joint promotions etc. But each ‘unit’ must be allowed to develop its own identity and be responsible for its own destiny.

But why OIC? Sounds more like what you might hear in the farmyard.

I’m not big on terminolgy and jargon. All too often it’s the refuge of idiots who use it to confuse and impress. There is a place for it and every industry has own valid jargon but please just explain it in a language I can understand. Then I might do business with you.

So why call yourselves an OIC? With any jargon or trade language what is important is why you use it & what you do with it.

If it’s there to score points, forget it. Grab your coat and have a nice life!

If you use it to establish the level of understanding on the listener’s part and then either go up from that if you’re talking with a like-minded soul or come down from it if he or she is not familiar with your area of expertise, that’s fine by me.

Talk my language if you want to do business with me and likewise I’ll do the same.

But OIC is not about jargon. I made it up simply to grab attention – a gimic if you like.

Sums up what we were about but in a quirky, fun way.

If you asked me what T2G did and I said ‘we’re an OIC’ – I’ve probably got your attention for at least a few seconds. Purpose served.

One BackRub & a Ph.d please!

Surely, Google started with a vision?

I believe it did but not a commercial one.

In early 1996, Larry Page and Sergey Brin as part of a Ph.D research project wanted to test whether relationships between web sites would give more accurate and relevant results than existing search engines. Search engines in the mid 1990s produced results based on how many times the search term appeared on the page.

Remember though this is the mid 1990s.

The commercial internet is still in its infancy, the world is not awash with web sites, connection speeds are slow and the general public has not even heard of the internet let alone used it. So how could Larry and Sergey possibly have a commercial vision for what they were doing?

They may have had the conviction of true techies, believing this emerging technology would day become all-consuming but could they ‘hand-on-heart’ really believe they had a commercial winner on their hands. Nobody in the mid 1990s, even the most ardent web pioneers, could possibly predict the turbo-charged adoption of the internet.

Their vision was academic at this stage.

The commitment to what they were doing lay almost exclusively in the world of research labs and doctorates than in creating a money making machine.

Originally called BackRub, (thank goodness they changed the name or history may have been very different – we’ll look at names another time) the project set out to prove that the pages with the most links to them from other highly relevant web pages, would give search results of most relevance to the user. Interestingly, a similar project called RankDex was also testing a similar theory. So Google did not have the land to themselves.

Originally the search engine used the Stanford University website and went by the domain name of google.stanford.edu. Not until September 1997 was google.com registered and not for another year in September 2008 was Google Inc registered at a friend’s garage. By this stage a vision was emerging as their efforts were starting to produce convincing results but it could have all been so different.

A loyal following was developing among mainly students especially who were attracted to its simple and uncluttered design. Visual distractions that were becoming the norm on established search engines such as Alta Vista were conspicuous by their absence on Google. Yet it had taken nearly three years to move from a research project to a commercial entity.

And even at this stage what was the vision?

To create a search engine that produced better results than the competition or to index the world’s knowledge and information?

The latter was definitely still around a very long corner.

But if there had been a vision at the outset would progress have been quicker? Possibly. But what would the vision have been given the immature state of the internet, the low user base and the inferior technology available? And even if there had been a clear vision, what if it had been wrong or misguided?

Sometimes, the vision just creeps up as a consequence of the blind faith efforts of the people involved. We ‘know’ we have something we just don’t know what!

EchoBay.com & The Pez Candy Dispenser

Just like You Tube so another great internet success story didn’t start with a comprehensive business plan or any clear direction in mind. Just an obsessive founder with a ‘tinkering’ mentality and a fascination for technology. In particular a new platform – the internet.

So Echobay.com home of the most famous online auction site on the planet? Well not quite.

When Pierre Omidyar wanted a name for his web consulting and freelance technology business he thought Echo Bay Technology Group ’sounded cool’. Unfortunately a Canadian mining company already owned the domain name and so was born.

Not the home of online auctions. Just the home for yet another tech consulting firm.

Already a seasoned techie with experience across a range of IT businesses Pierre became fascinated by a developing techonology and wondered whether ‘the internet’ would help level the playing field between buyers and sellers, between insiders and joe public.

Pierre had begun to wonder whether it was possible to create a ‘perfect marketplace’ that gave everyone access to the same information & let buyers fight it out & produce a real market price for the transaction.

Pierre knew nothing about auctions and auction theory. Just frustration at seeing insiders make big gains on stock deals before the small investor got a look him, made him wonder.

Urban myth has it that Pierre wrote the code that would become Ebay to help his fiancee Pam Wesley, who was having difficulty finding other collectors of PEZ dispensers to trade with since she & Pierre had moved from Boston to The Valley.

The truth is slightly different but still as quaint just maybe not quite so romantic.

With Pierre’s interest in the internet and perfect marketplaces growing, it was time to test the notion. Adding a page to his ebay.com consultancy web site the results would soon be in.

With its block text on a dull grey background this was true pionerring internet – the listings reflected the standard of the day, Usenet newsgroups (the online home of techies in the mid 1990s).

Pierre had no idea what to sell or what people would want to buy but computers being his obsession the first items seemed obvious – computer parts.

As for marketing. A few mentions on Usenet groups was the limit producing a startling result – a traffic free day. It was Labor week-end and the moderator of the all important new site newsgroup had taken time-off.

But soon the trickle started.

An early sale on eBay was Omidyar’s broken laser pointer for $13.83.

Why would anyone buy a ‘broken’ laser pointer? Pierre contacted the buyer to confirm he knew it was broken. The e-mail response was “I’m a collector of broken laser pointers.”

A collector’s heaven had been born. And a new form of trading, accessible by all. The perfect marketplace.

Before we draw any conclusions and bring in comparisons with T2G let’s look at one more example – the biggest internet story of them all?

You Tube – Vision or Glorious Accident?

When you’ve just sold a business for $1.6bn to the most famous internet company of all, does it really matter whether it was planned or not?

It shows that whether you have a vision or not and whatever the reason for starting, if you capture global attention the business can take off in a matter of months. There probably hasn’t been a business that has grown so quickly as You Tube – even Google can’t match it’s first year growth.

So let’s spend some time having a look at You Tube and for comparison some other internet giants – Google and Ebay. How important has vision been to their history?

The simple answer with You Tube was that it wasn’t. It probably didn’t enter the equation at least not for a few months.

YouTube.com was founded by three employees of Paypal – Chad Hurley, Steve Chen and Jawed Karim. The domain name was registered in February 2005 and over the coming months the web site was developed until its official launch in late 2005.

In its short life, this latest dot-com success has grown at a rate unheard of before and received global press & media attention. Tapping into the popularity of online grass roots video and through clever marketing gimicks and word-of-mouth, You Tube has grown to the global phenomenon we know it for today.

Yet why was it set up? Did the three friends have a clear vision in mind? Did they even think they had a business?

Or did the idea take on a life of its own so quickly that they realised they were sitting on a global gold-mine and were forced to build a business around it almost overnight. If they had failed to add a solid business structure so quickly, You Tube would probably have collapsed under its own weight and allowed someone else to capitalise.

If the ‘official’ history is true then You Tube is one of the greatest commercial accidents of all time.

Frustrated at being unable to easily share home-made videos of a social occasion, the three friends set up their own platform which I’m sure they expected friends and colleagues to make use of, but did they really believe it would allow them to give up the day jobs so quickly? Probably not.

You Tube was to put it simply ‘right time, right place’. If they had started a couple of years earlier they would probably have disappeared without trace. If they started now they may have missed the boat or at the very least would require deep pockets and sympathetic investors to keep going long enough to be considered long-term.

But just like Google and Ebay and by letting the internet do what it does best, word spread…and spread..and spread.

And the vision is?

Hazy.

That was a good start then!

In the early days I don’t think we had a clear vision, certainly not one that could be articulated easily or that had an easy to understand business model alongside it.

Like so many other people all we knew was we wanted to start a business, we wanted it to grow quickly and would be very happy if it became a global brand name. We were confident we had plenty of ideas many of which had sat in my head for too long. But through T2G they would see the light of day along with many other ideas that would gradually emerge.

We weren’t worried that there was no clear focus at the outset. We both knew what skills we had and were confident that these would be sufficient for any idea to flourish and until the ideas started generating money, those same skills could be used to generate much needed income.

Our confidence was high and our dreams big enough.

Even now, I don’t necessarily subscribe to the notion that a start-up must have a clear vision from the outset. History is full of household name businesses that started as no more than an extension of the founder’s hobby or as a way to escape the rat-trap with no expectation that it would ever turn into anything more than just a nice lifestyle/ income business.

Many times a business with no more vision than ‘making a few extra bucks’ or doing something for the fun and enjoyment has grown way beyond the original expectations of the founder.

The recent history of the internet is full of such examples some of which I’ll gradually come back to.
In fact, maybe too much vision right at the start could be a hindrance, limiting the openess to other broader opportunities. Letting the vision emerge and develop in the early days months may be an advantage. The trick is recognising the vision and the opportunity when it presents itself and being flexible enough to take advantage of it.

Let’s look at some examples.

We’ll start with the name on everyone’s lips …. You Tube

Where on Earth?

Jeoff and I started The Squared Group on my wife’s birthday. A memorable day for many reasons then. We’d started collecting our thoughts before then but Feb 18, 2002 was the official birthday of the business as a legal entity.

Jeoff and his family had moved into our street the summer before having moved to the UK from South Africa where work for management consultants was becoming harder to find. Bringing up a young family in an increasingly dangerous country was also a driving force to their move.

As with many so many friendships between families ours developed as a direct result of the kids being similar ages and going to the same school.

But how did starting a business together enter the equation?

Again like so many events it wasn’t planned – rather it was the result of pooling efforts to try and get an idea for a TV gameshow off the ground. The idea had been in my head for a long time but as with many of my ideas over the years that was where it had stayed.

Where On Earth? was the working title.

This was in late 2001/ early 2002 when Who Wants To Be A Millionaire and You Are The Weakest Link were battling with each other for top-spot in the TV ratings and being successfully re-sold around the globe.

Gameshows were flavour of the month and we reasoned that my idea which had originally been conceived as a board game would translate well onto the small screen. A very visual game with the opportunity to win big money and other prizes as the contestant travelled the world. The board game would then be a natural spin-off.

Christmas 2001 was spent refining the idea and preparing presentation material although we had no idea what a production company would be looking for. Our first mistake – lack of research, which led to the second mistake – too much preparation.

Anyway, to cut this part of the story short. Jeoff is very good at opening doors. Very good at cold-calling and convincing the other person that they should be meeting with us. And so we met with one of the founders of a London based TV format company.

Ben liked the concept, said that we had over developed the idea ( that was his job!) but ultimately declined the concept. Too many quiz shows which companies like Celador (the makers of Millionaire) were getting fed up with – pigeon holing them as a one-trick pony.

And so we shelved Where on Earth for another time.

Maybe that was another mistake. Giving up too early and basing our decision on just one person’s viewpoint. But we had other fish to fry.
The process of developing the gameshow had shown Jeoff and myself though that we appeared to work together well and both wanted more than just a pay cheque at the end of the month. We both had different skills and backgrounds that would compliment each other.

We were confident the ideas would come after all I had a folder full of scribbles and if we networked we would come across others. But the decision to go into business together was based more on what we epexcted T2G would become rather than having specific product ideas or opportunities in mind at the outset.
And so The Squared Group was born. Or T2G as it more conveniently became known.

DoB: February 18, 2002

Time to Backtrack

So far we’ve started to look at vision and how it relates to other people’s businesses. But perhaps it’s time to backtrack and have at look at T2G and why it went wrong.

Vision or Mission?

Isn’t Vision just another name for a Mission Statement?

Maybe on one level it is. Maybe to some people they amount to the same thing. But I don’t like mission statements. All too often they’re created when the consultants are on the payroll and end up being a fairly meaningless statement that is forgotten about the next day but….

….heh, we’ve got our mission statement and it only cost $10000!

Mission statements are nearly always either bland or brash with no picture that anyone can understand or interpret and yet a framework for action is meant to be derived from it. Mission statements are flavour of the month, a ‘me-too’ actvity to show how forward-thinking management are. Unfortunately no one can ever remember them, no one knows what to do with them and in the end nobody cares about them, not even the consultant!

What does world-class customer service involve? Who defines good customer service?

What does the leader in financial services mean? Leader by whose yardstick?

Doesn’t our mission statement sound too much like the next guy’s? And what will next year’s mission statement be?

In the end the statement ends up in the ‘miscellaneous file’ to be forgotten about forever more. All too often mission statements yield zero action.

What makes a difference is vision (followed by strategy, decisions and actions).

Vision gives something for people to hang their coats on. The big brush strokes that set the scene and start to bring the game alive.

And yet is vision essential to every business? The answer depends on the ambition of the business by which I mean its owners and key people.

Hey, Donald – Speak Up, I Can’t Hear You!

Why Donald Trump?

The easy answer would be to say that everybody has heard of him. Everybody knows about his success.

Right from when he hit the headlines with his high stakes divorce from Ivana through to The Apprentice, Donald is true Rock ‘& Roll. Larger than life, known as much for his personal life as for his business achievements.

Yet his business career has not always been full of gold stars. His report card has often said ’should do better’.

In 1990 journalist Mike Kelly referred to him as ‘a third world nation’ – $900m personal debt, $3.5bn business debt.

Yet he continued to dream big. And make those dreams come true.

Maybe I should spend more time researching him , maybe one day I’ll meet him. But he always strikes me as someone who always is thinking of his next big project, another landmark to put his name to but also someone who always sees things in simple terms – vision.

The Trump World Tower was a complex construction project yet when you look at it, it’s just a towerblock. So what makes it special?

The vision. Vision sees the simplicity in something and turns that into the unique appeal. The construction, production and delivery process may be complex but The Vision is simple.

The vision is what takes it beyond just being a construction project. What will its unique appeal will be? How will it compare with its neighbours? The glamour of the interior, the unique design of the exterior. The experience that the guests will enjoy and how the visitors will remember The Tower.

Vision sets an idea apart from the also rans.

And Donald Trump has vision. Even the name – eponymous & grand, ‘The Trump World Tower’. Hey Donald, shout it from the rooftops!

So I like Donald Trump. I’m sure he’ll make another guest appearance in this blog. And of course he’s not the only business person worth talking about.

Gradually, I’ll add to the Rock & Roll page with my thoughts on other business heroes but for now let ‘The Donald’ take center stage.