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Finding the Market for Your Technology

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We come across lots of gifted would-be founders. Some are the business-school or ex-financier type. Others have more specific expertise: product, engineering, AI or machine learning. For those with specific skills, and particularly those with deep technical aptitude in AI/ML – we often find an amazing piece of technology, new process or a proprietary algorithm that has been developed without a market to aim at.

Key takeaways:

  • Not everyone has to have gone to Harvard Business School to identify a killer use case
  • Teach yourself some basic top-down market analysis and layer on some common sense
  • The size of the market will drive who you should be looking to raise from

For all those of you who can identify with this… Forward Partners are here to help. We’re investors in Applied AI businesses. Taking technical know-how and applying it to a big use-case can seem like a daunting task. Hopefully this article can provide you with a 5 minute MBA, at least in regard to finding a market for your work. We’re going to do a ‘top-down’ investigation of a potential use-case for computer vision and, at a later stage, machine learning.

If you’ve been building, for example, technology or a set of algorithms – you’ve possibly been ‘going from the bottom up’. You’ve been applying your set of skills to a problem that you personally know a lot about. That may, or may not, be applicable for a large amount of people or a big market: the use-case. We’ll come to the importance of market size later.

Finding and validating that killer use-case will probably take some top down thinking. The best place to start is to identify industries and verticals where there are big problems yet to be solved by technology in any real way. That sounds a bit abstract but it’s fairly easy to interpolate. A good assumption as to the degree of tech substitution or advancement in a consumer market is the rate of inflation in a given category.

You can see, from this graph, that education and care are areas that are ripe for technology to come in, solve some problems and release some value. Given that 1-on-1 or in-person education is assumed to be the best way to learn for the time being, and thus hard to substitute technology into that equation meaningfully, let’s take healthcare forward.

Now it’s time to do a little bit of common sense validation. What are some possible macro-trends driving increasingly expensive health care? We all know that we are living longer and therefore there are more elderly people. Our environment is also changing, contributing to a wider range of potential health problems that we may suffer from. Knowing this, it’s a decent assumption to think that the price rises in healthcare have been driven by job creation and an increase in manual tasks. I just typed in “rise in number of healthcare workers” into Google and this next barchart is the 4th image result.

 

This is a really interesting result. We’re getting somewhere with identifying a killer use case: we’ve got a massive market and price rises likely being driven by increased employment in relatively-low skilled jobs. This is an almost perfect use-case for software.

That’s where you come in. If you’re an technical expert, you’ll know best about what is a tractable problem that you could help to solve. Talking to a nurse or medical assistant or two should reveal a couple of insights about what they spend large swathes of time on. I’d guess that you could drive huge efficiencies by helping to solve for the amount of paperwork that has to be done e.g. using computer vision to transcribe physical, handwritten records to digital. That’s no easy task. Nor is deriving insight from the data that you’ll end up with. Though these are the kind of tough problems in markets ripe for disruption that talented founders go after and that VCs love to back.

One important thing to know, regardless of what you’re working on, is that if you’d like to attract institutional funding you’re going to need to go after a big market. At Forward Partners, we need to be able to be convinced that every investment *could* return our fund. We have a £60m fund so that means that if we were to own 10% of your business we’d need to see your business have an exit value of £600m. There aren’t that many markets where that’s achievable, so that should help to narrow it down. The healthcare markets are massive and so the value that can be released by streamlining processes and improving outcomes is often well above the minimum market size bar. If you land on a slightly more niche area, this is something to bear in mind.

The final point is that, much like we’re not expecting the classic MBA-style founder to possess in-depth technical knowledge about computer vision, we’re not expecting founders with highly specific skill sets to come in and hit us with a pitch deck and business plan a la Harvard. There’s a minimum bar though, and hopefully we’ve been able to demonstrate that it’s pretty easy to overcome.

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About the Author

This article was written by Matthew Bradley, Investor at Path Forward Path Forward. The Path Forward was developed by Forward Partners, a VC platform that invests in the best ideas and brilliant people. Forward Partners devised The Path Forward to help their founders validate their ideas, build a product, achieve traction, hire a team and raise follow on funding all in the space of 12 months. The Path Forward is a fantastic startup framework for you to utilise as an early stage founder or operator. The framework clearly defines startup creation as being comprised of three steps. The first step of this framework involves understanding customer’s needs.Nic is Head of PR & communications at Forward Partners. Over the course of a 10 year career in communications, he has working with global brands including Orange, Warner Bros., BBC, and amazon.co.uk.

Entrepreneurship

How to Change Faster than the Competition

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“The only sustainable competitive advantage is an organisation’s ability to learn faster than the competition.”

But how do we do this? How does an organisation gear itself to being able to not only learn, but learn quickly? There is a strong relationship between a learning organization and an organization which has a culture of continuous improvement. This holy alliance between a learning organisation and continuous improvement can be logically explained. After all, to improve something, one first needs to learn something new and have the willingness to experiment with it. Without learning, continuous improvement will remain ad-hoc, fortuitous and unsustainable.

But this culture doesn’t just happen. It’s not a tool or an app which we can install, go for orientation on and be handed a booklet titled ‘How to do continuous improvement’. It is a culture that is engrained in every level and every facet of your organisation. It is a culture which embraces change, rather than shy away from it.

We build on our previous post on new ways of working by providing ways in which an organisation could welcome change which leads to a culture shift towards continuous improvement and ultimately become a learning organisation.

New Ways of Working v1.8_Learning

Why a Learning organisation?

Moore’s Law, described in 1965 by Gordon E. Moore the co-founder of Intel, still holds true today. Technological enhancements are doubling approximately every two years. These enhancements are being realized in areas such as processing speeds, memory and connectivity bandwidth. This fact, accompanied with lower than proportionate increase in cost results in a consumer’s ability to access services / information quicker, cheaper, anytime and without sacrificing convenience or quality.
Not only does this result in our customers’ needs changing, but also our actual customers are changing as well. To keep up with these external changes, organisations need to learn and fast. Organisations need to learn what the customers want (the first principle of Lean is ‘The customer defines the value’) and we need to learn a new way of doing things and ultimately adapt the way we work. Therein lies the problem. Adapting implies change and inherently people resist change. Or more accurately according to Peter Senge “People don’t resist change. They resist being changed”.
But to improve, we need to apply our new learnings which results in changes in the way we acted before. Simply put, Improvements are applied learning.

Learning + Change = Improvement

The fear of being changed

Consciously we fear change because it introduces uncertainty. Daniel Kahneman in his book ‘Thinking fast and slowsays that human beings would rather be wrong than uncertain. He in fact goes on to say that our hierarchy of outcomes is to be right (based on our own set of views and paradigms) then to be wrong and lastly to be uncertain.
I’ve seen this fear of uncertainty play out first hand while facilitating a workshop a few years back. I was to change to the flow of work in a delivery team and while running the workshop, the team lead kept on interrupting me with an apparent dire need for me to take into account the work that she needed to do daily on a Work In Progress Report. Eventually I asked her to give me some information about this report that she had been doing since taking over the team lead role eight months earlier. I went on to do some investigation and found that the report wasn’t needed, in fact was a waste and that she should please stop sending it. When I gave her this feedback I was expecting to see relief or even frustration. Instead, what I observed was fear. By telling her that something which she had identified with and gave her a sense of control was about to change, what I did was I had introduced uncertainty. Uncertainty for what was she going to do now, was her role still important, will she be able to do whatever else this change introduces?
There are also other conscious factors such as loss of control, lack of motivation and fatigue or “we’ve tried something like this before, they all failed and so will this”.

Subconsciously we fear change because that’s physiologically how our brains are wired. We trick ourselves into believing that if something’s been the way it is for a while (or decades in some examples) and we’re still alive or perceive ourselves to be delivering value then it must be good enough. The old adage of ‘If it ain’t broke don’t fix it’ sits right at the core of this perception. A study in 2010 performed at the University of Kansas found a bias towards things that have been around for longer. One experiment involving acupuncture showed that participants favored it more when they were told it existed for 2000 years as opposed to the group who were told it existed for 250 years. The same bias was seen when a group of participants was given the same chocolate wrapped in different colored wrapping. They were described as one being sold from 73 years ago and the other from just 3. The chocolate that supposedly sold 73 years ago tasted richer and creamier according to the participants!

All forms of change invokes some form of stress (even the good changes, like upgrading your car or going on holiday) and this stress triggers one of three reactions.

Fight – Because if it’s something different, I might need to fight it to maintain my safety or maintain my ability to exist. Like a wild cat when we were cavemen or in today’s age to resist new methodologies or technologies.

Flight – Run or hide from a wild cat or delay adopting new technologies, denying any enhancements and backing off into a silo.

Freeze – Just stand really really still, hopefully the wild cat won’t notice me or in today’s organisations pretend not to be aware of changes in technologies and way of working.

These forms of reactions are hardwired into our DNA.

Changing Legacy Systems

Our paradigms are made up of experiences and beliefs that we’ve gained over an extended period of time. The longer we’ve experienced them this way, the more engrained the paradigm is. The same can be said of the cultural paradigm of an organisation. Let’s call these cultural paradigms ‘Legacy Systems’.
The reason why startups encounter less resistance to change is exactly because of this fact. They have smaller and less engrained Legacy Systems. But this is by no means implying that big organisations with their deeply engrained legacy systems cannot change. Big organisations can and have started to change these legacy systems. They do so by adopting evolutionary change rather revolutionary change.

Evolutionary change – This type of change is small, continuous, and gradual and is reliant on the people to perform the change. As a result, it is well adopted by large organisations and becomes the make-up of the new cultural paradigm. In Toyota culture of Kaizen (Kai = Change, Zen = Good). Kaizen is a culture of continuous improvement, in small, sustainable, self-driven iterations using Deming’s scientific method. Kaizen requires empowered employees to firstly identify opportunities for improvement and then have the resources to institute the change. The author Imai (in ‘Kaizen: The Key to Japan’s Competitive Success) defines kaizen as “organized activities involving everyone in a company- managers and workers, in a totally integrated effort toward improving performance at every level”

Revolutionary change – This is a bigger more radical change and is reliant on the leader to describe and give mandate. These types of changes are often reactionary, i.e. a decline in market share or a department failing an audit. Revolutionary changes seldom, if ever become part of the culture of an organisation. In Toyota this form of change is called Kaikaku.

Change to Learn

Changing the way people think in large organisations is a daunting task yet remains absolutely necessary if we are to stay relevant. Dan Pink says that ‘Management is an invention, much like the television’. Perhaps, what’s happened is that management, the invention has not kept up with the evolution of change in our work and as a result now needs to be revolutionised? Below are some suggestions on how to enable change and learning:

  1. Create the case for change. What is the desire for this change? Answer the question of “what are the possibilities on the other side of uncertainty?”
  2. Empower the people. Give people the skills, tools and endorsement to make changes.
  3. Leaders should be visible and available. Make yourself available for questions, concerns and ideas (Hiroyuku Hiranu said: ‘Ten person’s ideas are better than one person’s knowledge’)
  4. Create the environment. Create a safe environment for experimentation and even failure without victimization. Favor intrinsic over extrinsic motivators.
  5. Make the change personal. Understand the individual aversion to this specific change and ask the question “what would you like to see / do differently?”
  6. Involve the entire organisation, from ‘C level’ execs to junior staff. People want to be heard. This also breaks the notion of ‘Us and them’ or ‘This change is being done to us’.
  7. Make time for honest reflection or ‘Hansei’ in Japanese. “Hansei is really much deeper than reflection. It is really being honest about your own weaknesses. If you are talking about only your strengths, you are bragging. If you are recognizing your weaknesses with sincerity, it is a high level of strength.” Jeffery Liker, The Toyota Way. Hansei helps you to recognize the problem, take ownership and responsibility of the problem and drives the individual towards a plan of action to improve.

Organisation leaders should understand that there will be resistance to change but resistance should not spell the end for change. Ultimately a realisation that through learning, better ways of work can be achieved.


About the Author

This article was written by Adrian Ryan, a Lean-Agile coach at Standard Bank South Africa. He has a passion for organisational change and is a Six Sigma Ninja.

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Entrepreneurship

Darren Chan, Founder of TheSugarBook

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So what’s the real story behind Darren Chan, the founder of Asia’s first sugar daddy dating site? Definitely much more than meets the eyes, Darren graduated with a Masters of Business Administration (MBA) from RMIT University, Melbourne, Australia. During his time there, he collaborated with fellow peers and was exposed to the F&B, music and entertainment industries.

Upon his return to Malaysia, Darren was keen on exploring different business opportunities. In 2014, he partnered with an associate to form Endeavor Capitals, which most notably funded Malaysia’s Live Entertainment Booking Platform, Gigfairy. Gigfairy is the community marketplace for users to book live entertainment and musical acts.

Within 8 months, Gigfairy was acquired by Tune Studios of Tune Group Sdn Bhd for an undisclosed amount together with Brickfields Asia College (BAC) Founder and Managing Director Mr. Raja Singham, joining in the later stages as investor.

Shortly afterwards, Darren embarked on Endeavor Standard which developed TheSugarBook. Seeking to provide the freedom and security for like-minded people to meet and form mutually beneficial relationships, Darren’s goal is to connect people by giving them the power to be honest and transparent based on their unique wants and needs.

In your own words what is TheSugarBook?

TheSugarBook is a niche social networking platform for people to connect, meet and build mutually beneficial relationships.

How did you come up with the idea of TheSugarBook?

A couple of years ago, I read a study stating that 40% of individuals chose ‘financials’ as one of the top criteria when selecting for a partner.

I then did some research and found a study by a team of health, social and behavioural scientists from UCLA, Chapman University, Rutgers University and Indiana University of over 27,600 heterosexuals which had a summarised conclusion that men favor beauty while women prioritize finances when it comes to the importance of differences in long-term partners.

That got me thinking and with the rise of online dating, I decided to build a platform for like-minded consenting adults to connect, meet and build mutually beneficial relationships that are upfront, honest and transparent. That was how TheSugarBook came to be.

Could you walk us through the process of starting up TheSugarBook?

Our very first hire was a brilliant web developer who had faith in the platform from day 1. Then came a UI/UX developer followed by another developer.

We began with building and fine tuning the website at www.thesugarbook.com before we moved on to developing the app.

In the meantime, we started curating the marketing and communications team.

Did you encounter any particular difficulties during startup?

The only difficulty I recall was hiring. For starters, people thought we were crazy. Some thought we were too ambitious and wanted a regular job that is more stable instead.

Hiring was near impossible with the small amount of budget we had. It was with sheer determination and dedication that we overcame it.

How have you been developing TheSugarBook since startup?

For these first 2 years, our focus will always be on product development and growth.

What kind of feedback did you get for TheSugarBook so far?

We’ve got a mixed bag of feedback so far and we do appreciate every single one of them.

With every business, there will always be naysayers on a side and cheerleaders on the other but we’ve been thankful that we do receive a lot of support from peers in the industry and also, our loved ones.

Do you face a lot of competition in this industry? 

TheSugarBook is a global company but our focus is more on Asia. That said, we have not encountered any competitors with the same concept as us in South East Asia so far. We are the 1st Sugar Daddy Dating platform in Asia.

However, we do look towards our western competitors as a mean to push us

to improve even more. The strategy is to always be improving and be proactive and able to adapt.

If we focus too much on our competitors, that will in return hinder us. We’d rather analyze certain case studies and learn from them.

What can you tell us about the industry?

The dating industry is a lucrative business. As of year 2017, the global market size in Asia alone was over USD$1.5billion with a potential growth of over 36% in the next 4 years.

Our plan is to expand to Thailand, Indonesia and the global economic superpower that is China.

How do you plan to stay relevant in this industry?

The future of online dating will probably lead to a more niche market, exploring in different sub-cultures rather than a general dating platform. Also, that we will be integrating digital and onground with events and parties in 2018.

Were there anything that disappointed you initially?

I’ve always been a positive person and can honestly say that there hasn’t been any significant incident that would affect me negatively. In every situation, one must be able to see the solution or an opportunity rather than be beaten down.

What do you think about being an entrepreneur in Asia?

I studied in Melbourne, Australia and lived there for many years. When I was there, I had the opportunity to be exposed to different industries; such as hospitality and entertainment and I do not find there to be any momentous difference between being harder or easier. There are cultural and bureaucracy difference but nothing that cannot be handled with the right team on your side.

There is a huge opportunity to grow in Asia as the tech industry here still has a wide margin for development.

What is your opinion on Asian entrepreneurship vs Western entrepreneurship?

I wouldn’t be able to comparatively separate the 2; I think that entrepreneurship in itself takes a lot of guts; the ability to recognize an

opportunity and the courage to seize the moment. Also, being able to improvise, adapt and overcome.

What is your definition of success?

To be able to create value and grow TheSugarBook to a wider market.

Why did you decide to become an entrepreneur?

I saw an opportunity and I took it.

In your opinion, what are the keys to entrepreneurial success?

To never stop learning and having the patience to grow a business from its seed to fruition.

Any parting words of wisdom for entrepreneurs out there from your personal experience?

Whatever you do, do with your all, be dedicated. Wherever you go, go as a leader. Have the courage to lead. If you serve, serve with passion.

“Two roads diverged in a wood, and I – I took the one less traveled by, And that has made all the difference,” – Robert Frost.

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