Three Ideas we Must get our Heads Round in 2018


It’s generally believed that the oldest board game that has been continuously played is Go, dating back to China more than 2,500 years ago. For those of you that haven’t played, the aim is to surround more territory than your opponent. The game is played on a 19 x19 grid and it’s far more complex than chess: the number of possible moves is put at 2 x 10170 – or, more simply, there are more potential moves in one game than there are atoms in the universe.

So quite a lot.

Anyway, last month Google-owned DeepMind introduced AlphaGo Zero, their latest evolution of a computer programme which defeated the Go World Champion earlier this year. You remember those possible moves? More than there were atoms in the universe? The programme mastered them all in less than 72 hours – with no human help.

The simple fact is that machines are going to surpass human intellect in any given intellectual task: right now, the AI community believes that 2060 is a reasonable estimate for its arrival – but not so long ago driverless cars weren’t going to be on our roads until 2040…

We all need to get our heads round Artificial Intelligence and we need to do it quickly. Worryingly US Treasury Secretary Steve Mnuchin says he isn’t worried about AI and automation: it’s so far away apparently, “that it’s not even on my radar screen.” Presumably he’s not yet read McKinsey’s report saying that robots will take 800m jobs worldwide by 2030…

Meanwhile Home Secretary Amber Rudd cheerfully stands up at the Conservative Conference and admits she doesn’t really know how encryption works.

Well no – we don’t need our Home Secretary to pop back to her bedroom after a Cabinet meeting and do a bit of coding. But it would be useful if our political leaders had a vague idea of what’s coming down the track. Google, Apple, Amazon and Facebook most certainly do know what’s coming – and it is going to impact your business.

Let me give you a simple example. I don’t know how many possible ‘moves’ there are in deciding whether to lend you or me £250,000 to buy a new house or build that new factory. I do know that it is significantly less than the number of atoms in the universe. I’m acutely aware that sooner rather than later I’m going to need to offer Dan and Rory some careers advice: bank manager may not be top of the list.

Now a rather more basic idea that far too many people still need to tackle: like AI it needs to be on your to-do list at the start of 2018 and crossed off it by the end of the year. The very basic idea is equal pay.

I was reading a salary comparison produced by a TAB member: very clearly, women in North Yorkshire – even in senior roles in the professions – are paid less than men. One line in the report leapt out at me. In comparison to men, women effectively work for nothing from November 7th onwards.

Just say the following out loud. “I’m sorry, you’re bald, we’re going to pay you 80% of what we pay people with hair.” Or try this: “Yes, well, obviously it would have been £3,000 a year more but you’ve got ginger hair…”

…And if you still have a problem with equal pay, go and sort it out now. Equal pay is ethical, it makes business sense and – bluntly – it is just the right thing to do.

And the last idea? Disruption. Henry Ford disrupted horses, Uber disrupted taxis and – as above – AI and ‘fintech’ are going to painfully and permanently disrupt traditional banking. Oh, and the nice, cosy world inhabited by Gillette and Wilkinson Sword and impossibly good-looking men with impossibly smooth chiselled jaws? I’m very sorry, but the Dollar Shave Club is coming to the UK.

Whatever industry you are in – and not for one minute do I exempt peer-to-peer coaching from the list – it is going to be disrupted. We need to be the disruptors, not the disrupted. At the very least, we need to be thinking a long way outside the box, so that we’re prepared when the Dollar Shave Club – or its equivalent – appears on our horizon.

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The Irresistible Rise of the Entrepreneur


Mid-November. Dark, cold, gloomy. You leave your house in the dark, you come home in the dark. It’s freezing, the fog hangs in the Vale of York – and only the brave travel from Pickering to Whitby without a clove of garlic and a silver bullet in the car…

November is by common consent the most depressing month of the year: which is why I am going to write one of my most upbeat blog posts, celebrating the irresistible – and very optimistic – rise of the British entrepreneur.

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It’s not just November: the bickering continues around the Brexit negotiations; the Bank of England have said inflation will remain high, placing more pressure on wages; we have a rudderless Government and an Opposition committed to turning us into Venezuela.

Despite all this, the optimism, endeavour and commitment of the British entrepreneur continue to shine through.

New research from the Hampshire Trust Bank and the Centre for Economics and Business Research (CEBR) has revealed that the number of small and medium sized enterprises (SMEs) in the UK has grown by almost a quarter over the last five years. The FSB now puts the number of private sector businesses at 5.5m.

Leading the way in the CEBR survey was the ‘office administration and business sector’ with the number of SMEs increasing by 76% between 2011 and 2016. Second place went to ‘human health services’ with a 50% rise.

The cynic might retort that this is not real growth; it is simply people becoming virtual assistants or personal trainers.

But it is Friday morning: the glass is not so much half full as running over. Every business has to start somewhere: Apple was once a college dropout building a computer in his garage. Virgin was once someone who left school at 16 selling records in a student magazine.

Small businesses are unquestionably good for the economy – they are innovative, they drive growth and they stimulate local economies. If Tesco want a shop fitting out they use a national firm: if it is the local florist, then there’s work for the local electrician, joiner, glazer and plumber.

Some interesting statistics also came out of HSBC’s second Essence of Enterprise report, which found British entrepreneurs looking to the future with confidence, on average expecting their businesses to grow by 62% over the next five years. Perhaps worryingly though, Britain is creating fewer technology start-ups than other countries – 17% compared to a global average of 24%. (And yet half of our schools still don’t offer a GCSE in Computer Science. Madness, Mrs May, madness…)

Perhaps the most interesting point to emerge from the HSBC report was on motivation. Today’s entrepreneurs are driven not solely by money (sometimes not even by money) but by a desire to have a positive impact on society – something which absolutely chimes with the philosophy of TAB, not just in this country but around the world.

What I find fantastic is that the entrepreneurial flame burns at both ends of the age spectrum. Over the last ten years the number of businesses run by the over 55s has risen by 63% – but that is eclipsed by the number of entrepreneurs past the theoretical retirement age. People over 65 now run 140% more businesses than they did ten years ago.

But if you want to be really encouraged, read this report on the festival of young entrepreneurs which has just taken place in London. It holds out so much hope for the future of the country – although with entrepreneurs as young as nine, it makes me feel positively old.

But someone who is even closer to a new hip (well, hopefully…) is Philip Hammond who, on Wednesday next week, will present the first Autumn Budget. He has a lot to do to build bridges with the small business community: many people are still angry at his ill-conceived raid on the self-employed in the last Budget.

So what do I want to see from the Budget? More than anything I want to see a Budget which shows the Government understands what it means to be an entrepreneur: that they understand the risks – both personal and financial – in setting up a small business. Entrepreneurs and SMEs are not a cash cow to be milked, they are a source of employment, innovation and growth. They are the future of the economy.

Let’s hope that the Chancellor recognises that – or he risks a lot of those very optimistic and ambitious young entrepreneurs deciding that Berlin, Lisbon or San Francisco might be a more attractive place to develop their business…

Big Brother? He’s Sitting on your Desk…


In the old days advertising was very simple. You developed a product and went along to Madison Avenue. You consulted Don Draper – he put his Lucky Strike and his secretary to one side for a few minutes and came up with a catchy slogan. The artwork was done and your ad targeted with laser precision. It went up on a billboard at the side of the interstate: everyone who drove past saw it. In theory…

Fast forward 57 years: last week Facebook announced soaring third quarter profits, bringing in more than $10bn in advertising revenue. Profits for the three months rose to £4.7bn (£3.5bn), which is up 80% on a year ago. Much of that revenue comes from small and medium sized businesses – exactly like ours – which make up the bulk of Facebook’s 6m active advertisers.

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Meanwhile Amazon boss Jeff Bezos once again leapfrogged Bill Gates to become the richest man in the world, as Amazon shares surged thanks to Q3 sales being 34% up on the same period last year. Sales were $43.7bn (£33.5bn) compared to $32.7bn in 2016. And if you are wondering how much $43.7bn is – it is equivalent to the economy of Slovenia.

Facebook now generates more advertising revenue than most major TV networks. So why do SMEs advertise in such huge numbers with the company? Why are the projections that ever more businesses will join them? And most importantly, what does the future look like?

In the early days you had a business page on Facebook. ‘No, no, we don’t need to advertise. We’ve a Facebook page.’ Sadly, Facebook business pages have pretty much gone the way of the penny-farthing. ‘Organic reach’ is dying out, with estimates suggesting that less than 1% of a business’s ‘fans’ actually see the updates the business posts.

But businesses still need to advertise – and the first thing that attracts them to Facebook is the sheer scale of the numbers. Facebook has 2.07bn active users – strip out 10% of that figure for duplicate accounts and you still have around a quarter of the world’s population.

More than 1.5bn people log into Facebook every month, with more than a billion now logging in every day. With people spending ever increasing amounts of time on social media – studies suggest that the average American now spends up to 2 hours a day on social networks – there is plenty of time for advertising to connect.

Secondly, advertising on Facebook is cheap – and scalable. You do not have to commit to a billboard or a TV slot. Businesses can set their own budget and ‘dip a toe in the water’ with a spend of £40-50 getting an advertising message in front of 5,000 to 10,000 people. After that, it is scalable: the ad doesn’t work? Scrap it. It does work? Spend more money and increase its reach.

But the real reason advertising on a platform like Facebook is so attractive is the very specific targeting. Businesses can target users with Facebook ads by location, demographics, age, gender, interests, behaviour and connections. Everyone in North Yorkshire between the ages of 25 and 35 interested in being an entrepreneur? No problem: how much would you like to spend?

It’s the same story with Amazon. Once a book store, Amazon is now arguably the world’s most trusted and effective search engine. Marketing technology company Kenshoo reported that 72% of people visit Amazon if they’re planning to buy something online. And why wouldn’t they? The Amazon search engine is fast, it’s accurate – and the product listings page has everything a shopper could want to know: price, descriptions, pictures and reviews.

But even if you don’t buy the product from Amazon, you’ve researched it – and Big Brother has quietly stored the information away, ready to make recommendations next time you drop by.

We all know the feeling of being ‘stalked online.’ You look at something – and seconds later ads for it are following you round the internet. The first time it happened to me (it was for work shirts, honestly) I found it quite unnerving: now it is an accepted part of being online – but it still leaves me feeling that Big Brother is watching me. That feeling is only going to increase – and if Amazon and Facebook ever merge then believing in privacy will be like believing that the Earth is flat.

So what does the future look like? As I wrote last week, ‘algorithms will do the heavy lifting.’ The buzzwords are ‘deep learning’ and ‘machine learning’ and the ‘machines’ are only going to go on learning. However good you think your insight is, it won’t be as good as the Amazon/Facebook algorithm. My desire for work shirts has been noted – and will never be forgotten.

Over the next ten years, advertising will move from communicating to predicting. Content and advertising will be so intertwined that we will not be able to tell which is which. As brands learn more and more about you, your emotional commitment to them will strengthen: a recent study by neuroscientist Paul Zak claimed that three out of eight people already love their favourite brand more than they love their spouse. (Checks to see if wife is reading over his shoulder…)

And advertisers will know exactly how much we like their brands because our pulses (via our smart watches) will tell them. And with that chilling thought I’ll leave you to enjoy the weekend. Just remember to take your watch off before you log on to Facebook…

Just Eaten?


When Dav and I were first married we’d often watch a video on a Saturday night. “Why don’t we stay in and watch a film tonight?” my lovely wife would say.

What she meant was, ‘Why don’t you drag yourself away from the fire, put your coat on, drive down to Blockbuster, rent a video – and a tub of ice-cream – and bring it home? And then tomorrow you can do exactly the same and take it back.’

…And as the rain lashed down I’d think, ‘There has to be a better way.’ And now there is. Amazon, Netflix, on demand… The idea of going out into the dark and the cold to rent a film is simply ludicrous. Dan and Rory fall about laughing.

Blockbuster? At its peak in 2004 it employed 84,000 people worldwide in more than 9,000 stores. It filed for bankruptcy in 2010 and its last stores were sold the following year.

Until recently, I felt much the same about takeaways. “Oh, I can’t be bothered to cook. Why don’t we have a Chinese or an Indian?” But it wasn’t a takeaway: it was a go-and-collect.

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Then the takeaway shops started to deliver – and technology and big business eventually came together in a plethora of Just Eat signs. The company started in Denmark in 2000, is now headquartered in London and operates in 13 countries around the world. It’s just posted a 44% increase in revenue for the third quarter and is the most visible face of our love affair with takeaway food. There are now more than 56,000 takeaways in England, up by 4,000 over the last three years.

So let me pose a question: could Just Eat eat the restaurant industry?

Ever since this blog started in 2010 ‘nothing is impossible’ has been a constant theme running through it. ‘Don’t think it can’t happen because, today, it can.’

So could the restaurant industry – that basic staple of birthdays, anniversaries and targets achieved – be under threat? According to accountants Moore Stephens the answer is yes. They cite the rising cost of imported food because of Brexit and problems with increasing business rates – due to rise by 42% in some parts of London this year – and suggest that 20% of the UK’s restaurants could go out of business.

Factor in the rise and rise of the takeaway and the number could be even higher. ‘Go and collect it’ has become ‘tap the app and have it delivered.’ Eating out means getting changed, booking a table, going into town, one of you can’t drink because you have to drive… “Let’s just stay in, order a takeaway and watch a film” is quick, easy and convenient – and a lot less expensive.

But business rates and Brexit are one thing: a fundamental shift in consumer behaviour is quite another.

And right now the words ‘fundamental shift’ apply everywhere: ‘don’t think it can’t happen because it can’ probably ought to give way to ‘don’t think it can’t happen because it already has.’

Five years from now chatbots will be interacting with your customers, autonomous vehicles will be reducing the need to own a car and machines will be learning. As a recent article in Forbes put it, ‘Algorithms will be doing the heavy lifting.’

…And that’s before we consider voice control. With Alexa – or her second cousin – sitting in every home and on every desk, controlling everything in your home and office with voice commands will be second nature.

It’s easy to see the future glass as half-full. Amazon drones flying overhead delivering everything we need and Just Eat and Deliveroo drivers knocking on the door with all our meals. Throw in the ability to work from home and we may never need to leave the house again.

But you won’t be surprised to know that I see the glass as very much half-full. Yes, change is coming and it will impact areas of our lives and businesses we thought were set in stone. But change always brings opportunity – and who better to capitalise on it than the members of TAB UK?

The 6p Café – and the question You Should Really Ask


Just a note before I start this week: I’ve written more than 300 posts on this blog, but last week’s was much the most personal. I’d like to say thank you for all the comments and replies: some of them were touching, some heartfelt and some even more personal than the original post. One in particular buoyed me for the whole weekend: so thank you again.

Anyway – on to business. And a simple question: how much did you pay for your last latte? I’d guess anywhere from £2.40 to £2.90: that’s the going rate and it is, of course, completely ridiculous. Invest not-all-that-much in the right equipment and you can stay in your kitchen and make a coffee that’s equally good for a fraction of the price.

But that’s not the point is it? Because as we all know, Nero, Starbucks and your local coffee n’ cake shop don’t sell coffee. They sell something else entirely.

…And now a café has started charging for it.

Let me introduce you to Ziferblat, a café in Manchester that charges 6p a minute. That’s right, 6p a minute. Stay as long as you want; eat and drink as much as you want and use the Wi-Fi. 30 minutes costs £1.80 and an hour is £3.60.

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At first glance that seems remarkably cheap: why do you need to pay rent on an office? An eight hour day at Ziferblat costs £28.80 with no need to go out for a sandwich at lunchtime. Well, they make a profit and the chain is expanding. But it’s not their balance sheet I want to discuss; it’s their willingness to look at an established concept in a wholly new way.

I have plenty of my meetings in various Costas, Starbucks and Neros around North Yorkshire. Am I paying for the coffee? No. That’s the last thing on my mind. I’m paying for convenience, for somewhere to meet, for thirty minutes with a friend, Board member or potential client.

I’m buying the coffee in order to rent a convenient meeting space for thirty minutes. The owners of Ziferblat have recognised this: as one of them says in the video, “Everything is free, except the time that you spend.”

Some of you may remember a post I wrote early in 2014: it was about American restaurants charging different prices for their food depending on when you ate. Re-reading the original piece – and thinking about ‘the 6p café’ – that still seems entirely logical to me.

The reason I make these points is simple. We’re now well into ‘making plans for next year’ season and there’s a fundamental question to ask yourself: what do I really sell?

Do you sell coffee? Or do you sell the convenience, the surroundings and the meeting place?

Quite rightly, you’re now turning the question round and asking, ‘Fair enough, Ed. What do you really sell?’

Let me answer that, because it illustrates the point exactly.

Do I really sell 1 to 1 meetings and peer-to-peer coaching? No, of course I don’t. So let’s look at the reasons entrepreneurs ‘buy’ TAB York:

  • They want to solve a problem and/or address some pain
  • They don’t want to feel isolated/lonely any more
  • They want a fresh perspective on their business
  • They’re stuck in a rut
  • They know they’re ready to ‘take the next steps.’ But they don’t know how to do it, and may not even know what the next steps are

So TAB York sells solutions to specific problems, an end to loneliness, a new way of looking at problems and opportunities, motivation and – as I wrote two weeks – a glimpse of what life and business could be like: ‘permission to dream’ as I termed it.

Clearly, TAB York sells different things to different people – and that doesn’t change even after someone becomes a member. The reasons why entrepreneurs continue as Board members can be very different to the reasons why they joined:

  • The Board meetings are an insurance policy against things going wrong
  • The routine of the monthly meetings forces members to work ‘on the business’ not ‘in the business’
  • It’s the only place they can really talk about their business with people who absolutely understand…
  • Who’ll give absolutely impartial advice…
  • And who care about your success and the success of your business

So in no way am I selling the monthly meetings: I’m selling reassurance, a framework, and the experience, objectivity and commitment of the other Board members. And ‘commitment’ is the right word: members of TAB York have an emotional investment in each other’s businesses.

All the above points have come from Board members over the years – and yes, when entrepreneurs ‘buy’ for so many reasons it makes it difficult to define what my colleagues and I ‘sell.’

The same may very well be true for you and your business. But take your time to define exactly what you do sell – and don’t be afraid to emulate ‘The 6p Café’ and think a long way outside the box. It’s a really worthwhile exercise and the answer may well surprise you – and have a significant impact on next year.

In fact it’s something we could cover at a 1 to 1: maybe over a meal. I’ll drop an e-mail to the Star Inn the City and offer them 6p a minute…

Should We Worry about Germany?


No, I haven’t travelled back to the 1930s. Or to extra time in 1966

But in this era of increasing globalisation – and especially in the aftermath of the Brexit vote – ‘should we worry about Germany’ is a valid question. Specifically, should companies in North Yorkshire worry about European competitors poaching their top talent?

There was an interesting – and disturbing – article on the BBC business pages earlier this month. The gist of it, drawing extensively on quotes from the fund manager Neil Woodford, was that the UK is “appallingly bad” at funding tech start-ups. Small companies aren’t receiving the funding they need to grow: “We’ve been appallingly bad at giving these minnows the long-term capital they need,” said Woodford.

So if start-ups can’t get the funding and support they need in the UK, where will they go? And will talented young people become disillusioned and be tempted abroad?

There’s been no shortage of articles recently championing Germany – and Berlin in particular – as the likely new ‘start-up capital of Europe.’ ‘Berlin to usurp London’ as Geektime put it. No doubt about it: the coming years are going to be exciting for my TAB colleagues in Berlin: ‘Guten Morgen’ to Frank, Thomas and Ralf.

But it’s not just Berlin: the website EU-startups lists the top 15 start-up hubs in Europe: the UK has just one on the list and – post-Brexit – the situation won’t improve.

The anecdotal evidence is there as well: every friend I have with older, university educated children says the same thing. The children all voted Remain, and they all see their future in the UK as a part of Europe, not in the UK as an isolated country. “Two days after the vote he came home for the weekend and told me he wanted to live in Berlin,” as one person lamented to me.

So could the UK – and more pertinently could you – start to lose top talent to Europe?

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It’s not a danger we should under-estimate. Taking Berlin as an example, the arguments in favour of moving are well-rehearsed: the cost of renting around half what it is in London and a pool of talent from all over Europe. And Germany is by any standards a remarkably successful economy – a trade surplus of €20bn or thereabouts month after month after month. Some parts of the Eurozone may be struggling but the German ‘engine’ keeps on running.

And they’re enterprising: soon after the Brexit vote many of London’s start-up technology companies began receiving letters from Berlin. A promotional bus from Berlin drove round the streets of Shoreditch. As Berlin senator Cornelia Yzer put it: “We’re a vibrant city, we attract talent from all over the world. Maybe it’s the right location for a London based company … to make sure they’re part of the EU in future.”

London today, York tomorrow? After all, if you’re going to be part of ‘Generation Rent’ you might as well be paying a lot less rent…

I don’t think so.

York remains an outstanding place to start – and build – a business. As we’ll see at York Business Week in November, there’s a real buzz about the place, a real sense that anything is possible. In many ways the atmosphere in York reminds me of the almost tangible feeling of potential in Denver.

And York has plenty to offer start-ups with The Hub, The Catalyst and the business support available at the Eco Centre.

But talent is scarce – and in greater demand than it’s ever been. Some businesses in York have to fight against the ‘lure’ of Leeds, never mind Berlin!

So the onus – as ever – is on you. Another buck stops on your desk…

The best way to recruit and retain the best talent – whatever the competition – is to lead. That means setting out a clear direction for your company, involving everyone, delegating, recognising your team’s achievements and, above all, making sure they all buy into your vision.

Do that successfully and the burghers of Berlin can drive as many buses as they like round the York ring road!

Time to Dump the Hairdryer?


Anyone who’s ever watched a game of football will have heard of ‘the hairdryer’ – the phrase coined by Mark Hughes to describe the dressing room rages of former Manchester United manger, Sir Alex Ferguson.

As Wayne Rooney said in his book, ‘My Decade,’ There’s nothing worse than getting the hairdryer. The manager stands in the middle of the room and loses it at me. He gets right up in my face and shouts. It feels like I’ve put my head in front of a BaByliss Turbo Power 2200 … It’s hard for me to take and sometime I shout back. I tell him he’s wrong and I’m right.

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Well, let me have a pound on who won that particular argument – but top marks to Wazza for getting the product endorsement in there…

So why am I writing about football in England when I’m still out here in Denver? Especially when the Broncos have started their pre-season games and anyone with any sense is at Sports Authority Field

Simply because a day old copy of the Times reached me, that’s why. And once I’d read about Newcastle’s latest victory and inevitable return to the top flight (being in the USA breeds confidence…) I turned my attention to an article by Matthew Syed.

I’ve written previously about Syed’s book Bounce – the Myth of Talent and the Power of Practice. I didn’t agree with the central thesis of that book, so as I started to read his article in the Times I was getting ready to take the opposite view again.

But I think he was spot-on: and I think there are valuable business lessons in what he had to say.

The title of Syed’s article was, ‘Why a manager’s touchline rantings could be doing more harm than good.’ He’s writing about conventional wisdom and yes, the accepted wisdom is that football managers have to rant – and get the hairdryer out. ‘What’s he doing? We’re two down and he’s just sitting in his seat!’ ‘Well, whatever he said at half-time has certainly worked. They’re a different team in this half…’

But all the evidence shows that ranting from the sidelines doesn’t work. Syed cites children’s sport – where the coach often barks a stream of instructions, ‘despite the empirical finding that this undermines the ability of [the] children to think for themselves and slows learning.’

According to Syed, the conventional wisdom in football is almost all wrong – and he contrasts it with Formula One, a sport which – in the words of Paddy Lowe, Mercedes technical director – there is no conventional wisdom and “standing still is tantamount to extinction.”

Like football, business is riddled with conventional thinking and accepted practices. Why are we doing it this way? Because we’ve always done it this way.

I’ve been so busy in Denver that I’ve had to push my ‘key things I’ve learned’ post back to next week. But there’s been one theme running through every conversation I’ve had and every presentation I’ve attended: with the business world constantly changing, ‘because we’ve always done it this way’ is just about the most dangerous belief there is.

Out here in Denver you can almost feel the ‘wind of change’ blowing from Silicon Valley. The Denver/Boulder region has even been talked of as the next Silicon Valley. There’s a palpable start-up buzz in the air and no business will be able to rely on ‘we’ve always done it this way.’

Matthew Syed ends his article with a compelling phrase; ‘It is innovation, not convention, that holds the key to success.’

He’s absolutely right. ‘If you always do what you’ve always done…’ is more true than it’s ever been. And now it appears that the result will be the same if you always do what everyone else has done as well.

Two words are on everyone’s lips in Denver: ‘Why not?’

Why can’t it be done a different way, a better way?

Whether it’s sport or business the old beliefs and the accepted wisdom are being challenged and rejected. So don’t be afraid to ask yourself ‘why not’ over the coming months – and expect the phrase to echo round the TAB York boardroom tables.

Why is Starbucks so Successful?


Last week the blog made a simple claim – you don’t need to be outstanding to be successful – and I used the Howard Schultz/Starbucks story for much of the background.

So is Starbucks outstanding? If you use coffee as your yardstick, then the answer is a resounding ‘no.’ I doubt that more than five people reading this blog would name Starbucks as their favourite place to grab a coffee. Give me thirty seconds and I can list half a dozen places where the coffee/cake/ambience/service – or all four – are better.

But those half dozen places are all one-offs. They’re successful – but on a small scale. There are not 23,043 of them around the world, up from 21,366 last year and 19,767 in 2014. In 2015 842 of those Starbucks outlets were in the UK, split more or less evenly between company-operated and licenced stores. Revenue and profits continue to grow strongly.

By any standards, that’s a success story. If ever there was a company that knew where it was going and paid attention to its KPIs, it’s Starbucks. Remember, we’re not taking about apps, iPhones or technology here: we’re talking about cups of coffee.

But why is Starbucks so successful? Ask Google and the search engine returns 12.4m results, so I’m not the first person to wonder.

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…And there are plenty of articles as well, many of them extolling exemplary qualities. Start small, expand carefully. Leadership, be efficient, training… But those are simply good management in any business. Based on my own career – hundreds of meetings in hundreds of coffee shops – here are three Starbucks qualities that really stand out for me.

Remorseless attention to detail. Howard Schultz is famous for this – and if you want to read a case-study in getting the little things right, read this book by journalist Taylor Clark. Let me pick up on just one example: the tables are round. Why?

So that if you’re on your own, you don’t feel awkward. Someone has to arrive first for the meeting – and even a 1:1 needs a table for four. But sitting at a rectangular table with three empty chairs feels downright awkward. You can’t put your finger on why you didn’t have the meeting in the other coffee shop; Starbucks just felt more comfortable.

This attention to detail extends to the pictures, the length of the counter, the height of the window seats. If genius is an infinite capacity for taking pains, then there’s a lot of genius in the layout of a Starbucks.

Secondly, consider the cups: short, tall, grande, venti and trenta. Starbucks doesn’t do regular, it doesn’t do medium. Supposedly three out of the five cup sizes are in a foreign language to cater to the ‘collegiate’ needs of Starbucks’ clientele. Howard Shultz wanted to foster a feeling of belonging, of exclusivity. He wanted Starbucks to be an experience, in the same way that Disney was an experience.

Lastly, Starbucks innovates. Use of first names when you’re ordering your coffee; among the first to adopt mobile payments and Starbucks has worked with PayPal to create its own mobile payment app.

So small wonder that there are more than 23,000 outlets around the world: the coffee may not be better in Starbucks, but the relentless attention to detail, appreciation of their customers and willingness to innovate has produced one of the world’s best known and most valuable brands, with a market capitalisation of $85bn.

If it works for Starbucks, it can work for you: damn it, all they do is sell coffee and cake…

You Don’t Need to be Outstanding


…Or ground-breaking. Or develop a wonder-drug. Or an app that no-one’s ever dreamed of before.

If you want to be successful in business, you don’t need to do any of those things.

You just need to be 10% better than your competitors.

And now let’s travel back in time. The year is 1985. The place is Seattle. A husband and wife are having a conversation…

Wife: This is madness. I’m pregnant with our first child and you want to throw in a good job and start a business based on a trip to Italy!

Husband: Yes

Wife: And how much do you need?

Husband: $400,000

Wife: Do we have $400,000?

Husband: You know we don’t

Wife: So you’re going to borrow the money. You’re going to risk everything – including the future of our child – because you want to open a coffee shop. Like the world needs another coffee shop. For God’s sake, Howard, you have a good job with Starbucks…

If you haven’t guessed, the husband was Howard Schultz – then just about to sink $400,000 of borrowed money into Il Giornale, a coffee shop based on a trip to Italy – where they sold excellent expressos, where coffee shops acted as meeting places and where there were 200,000 of them. Two years later the original Starbucks management decided to focus on Peet’s Coffee and Tea and sold its Starbucks retail units to Schultz and Il Giornale for $3.8m. The rest, as they say…

But in many ways, Mrs Schultz was right. The world didn’t need another coffee shop.

The world didn’t need another operating system either. Windows? IBM, Atari – about half a dozen companies already had operating systems.

Neither did it need another social network. It already had Friendster and My Space.

And with seven search engines already operating, the world most certainly didn’t need Google…

But Howard Schultz – along with Bill Gates, Mark Zuckerberg, Larry Page and Sergey Brin – knew he could do it better.

And that’s true of 99% of the business successes I’ve seen. For every one ‘why has nobody thought of that before’ idea, there are 99 businesses that have succeeded by simply doing it better.

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Unless you’re a creative genius, the very-high-chances are that the business idea you’ve just had has already been thought of. In fact, as soon as you’ve had the idea you’ll find that everyone is doing it.

That is not the time to be discouraged. Exactly the opposite: all you’ve done is proved that there’s a demand for your idea. Now, you simply need to go out there and consistently deliver a better product or service.

Starbucks isn’t significantly better than its rivals. But – as I’ll describe next week – the remorseless attention to detail that Howard Schultz ingrained in the company’s DNA means it is that crucial 10% better in several key areas.

Let me finish by returning to that conversation between Mr and Mrs Schultz. The numbers and the business may be different, but I’ll wager heavily that a lot of people reading this blog had exactly that conversation.

And no – the world didn’t need your business. But like Howard Schultz, you had the drive and the vision to believe that you could be 10% better: the 10% that makes all the difference.

The world didn’t need another peer-to-peer business coaching company either. After all, anyone can get together with a few friends and create a mastermind group. Just make sure the group is a good fit, commit to meeting each month, find someone to coach you and you’re away…

Except it’s not quite that easy.

Like Starbucks, Google and Facebook, I absolutely believe TAB does it that crucial 10% better. It’s what makes our business model so successful – and if you’re not a member of TAB York, it’s what could add the vital 10% that would make all the difference to your business.

Good Decision, Bad Decision, No Decision


Over the very-nearly six years I’ve been writing this blog I’ve quoted some of the best business thinkers of our age. I’ve drawn on their wisdom, their experience and their recipes for success. And without exception, there’s been one thing they’ve all agreed on.

Action.

Especially in your decision making.

As that deep-thinking business guru Tony Soprano put it, A wrong decision is better than indecision.

You can correct a wrong decision. You can put it right and move on. Indecision? You haven’t a hope. Paralysis by analysis as the old saying goes.

The late (we think) and much missed Tony is supported by any number of real life businessmen. Here’s Scott McNealy, the co-founder of Sun Microsystems:

The best decision is the right decision. The next best decision is the wrong decision. The worst decision is no decision.

…And Anthony Robbins, Awakening the Giant Within:

At any moment the decision you make can change the course of your life forever.

Obviously, I agree with them. It’s what I’ve preached for years. Nothing happens without action. Soprano, McNealy, Robbins, Reid – united as one.

…And apparently, completely wrong.

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Along comes business psychologist, Professor Adam Grant. He sets out his thesis in Originals: How Non-Conformists Change the World.

Grant says that procrastinating – putting off difficult decisions or delaying starting a project – can actually open an entrepreneur’s mind to more creative thinking and “lead to a more opportune time to launch a new product. Procrastination lets you have time for ideas to percolate … and new technologies to emerge.”

I’ll absolutely concede that non-conformists see the world differently. Yes, I agree that giving yourself time to think, keeping an open mind and asking the right questions are all important. But you cannot wait for ever. As Norman Schwarzkopf says in his autobiography, It Doesn’t Take a Hero, “when you’re placed in command, take charge.”

Ask most of my generation who’s ‘changed the world’ the most and I’d guess that a good percentage would say Steve Jobs. Now no-one would call Jobs a conformist (especially if you’ve seen the biopic…) but he emphatically didn’t change the world by not making decisions.

And, clearly, he didn’t wait for new technologies to emerge. You simply cannot do that today. We’re now living in an age where a ‘new technology’ emerges every week. If you put off making decisions because you’re waiting to see what happens with technology you’ll sit at your desk until it’s time to retire, watching an endless stream of new apps whizz past you.

There are almost as many different ways of being successful as there are successful entrepreneurs. That’s one of the great beauties of business. But I simply don’t believe that avoiding decisions is one of them. It may be superficially attractive – and it’s certainly easy. But it’s also potentially fatal for your business.

Fortunately, there’s an antidote – to both the wrong decision and no decision.

I refer to your colleagues round the TAB boardroom table. They’ll do two things: firstly their collective wisdom and experience will go a long way towards helping you make the right decision. Secondly they have this really irritating habit of holding you to account – of saying, ‘So what’s happened in the last month?’

‘Nothing’ isn’t really the answer they’re looking for. But to date no-one has tried, ‘I’ve been sitting at my desk waiting for new technology to emerge.’ I’ll look forward to that one. The replies should be spectacular…