Farcebook and internet bubbles

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

I’ve found it difficult to watch the recent Facebook flotation, subsequent drop in share price and clamour of litigation without shouting “I TOLD YOU SO” at the top of my voice. Way before the flotation many analysts queried Facebook’s $100bn+ valuation given its relative lack of revenues but their voices were drowned in the hype. Just look at the number – with 1 billion users that’s a hefty premium per subscriber.

Obviously the growth statistics behind Facebook are impressive and there is still potential for it to grow in different areas around the world and by offering new services. But this is all potential rather than actual. A good comparison is Google – when it IPO’d in 2004 it had a valuation of $23 billion. Most of the services we now know Google for simply hadn’t been introduced, and the stock was priced according. Google has since increased its share value six-fold, giving it a market value of  $196 billion, helped by annual revenue of $39 billion.

There’s a decent chance that Facebook can ‘do a Google’ and monetise its users, probably through services that Mark Zuckerberg hasn’t even thought of yet. But equally it could languish in limbo in the same way as LinkedIn post-IPO without really demonstrating a vision for charging customers without losing them.

The bigger worry for me is that Facebook is continually held up by the likes of David Cameron as a posterboy for what British tech businesses should aspire to. And consequently we have a move to create frothy, social media driven businesses without clear business models, inevitably HQ’d in Tech City. It reminds me a lot of first generation dotcoms and the bandwagon that became. While some of these businesses may succeed, we need to look at what will create real value in the UK tech scene (the likes of ARM, CSR and Sage all spring to mind) and focus the best minds on solving real business problems rather than simply another cute network without any revenues.

So if the Farcebook float can change people’s perceptions that user numbers are good, revenues are not essential, then I think that’s a price that the gullible should have to pay. As the old saying goes, if it looks too good to be true, then it probably is.

Related articles

• Farcebook (washingtonsblog.com)

Autonomy loses its autonomy

Image via Wikipedia

The news that Cambridge technology leader Autonomy is to be bought by HP for £7 billion has led to plenty of soul-searching and editorialising about British tech know-how being (again) being subsumed into an international megacorporation.

Like many people I’m sad that Autonomy is no longer independent, but it was definitely coming. Autonomy had put itself in the shop window – for example through sports sponsorship of both Spurs and the Mercedes Grand Prix team (interesting that HP is a previous Tottenham shirt sponsor) and CEO Mike Lynch has had a robust/adversarial relationship with the city, characterised by complaints that the company share price didn’t reflect the real value of the business. And HP paying a premium of 64 per cent on yesterday’s closing price seems to bear out his stance.

But this isn’t the end for Autonomy or its impact on the Cambridge tech scene. While overseas operations may well be merged into local HP offices, it makes no sense to shut down R&D in Cambridge as HP doesn’t have any similar technologies within its software portfolio. Autonomy is at the centre of a Cambridge cluster of businesses based on intelligent search (in one form or another) and this can only continue and grow if, as promised, HP invests in its new acquisition.

Add to this that there is now a serious amount of potential investment floating around Cambridge in particular and the UK in general for new tech ventures and, over time, this can only significantly strengthen the UK software scene. So time to celebrate success and look to the future rather than indulge in hand-wringing about British assets falling into foreign hands.

 

Related articles

• HP to buy Autonomy for $11 billion (ft.com)

Creative vs Business?

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For too many people a ‘creative business’ is a contradiction in terms – with lots of creative types unable (or even unwilling) to balance being artistic and actually making some money. Whether a designer, illustrator, artist or PR person there are many ways that the artistic temperament can get in the way of running a successful, money-making enterprise.

At this week’s CamCreative, James Cotton of onespacemedia entertainingly outlined some of the pitfalls that creative people plunge into when running a business. You can download the whole presentation here.

I’d split the eight areas he talks about into two big themes – not being confident in your own abilities and not thinking as a business. The first point is probably part and parcel of being creative, but if you spend your time comparing your £500 website design to the works of Leonardo da Vinci you’re not going to be satisfied. More and more time gets spent chasing perfection, destroying any chance of making money on a job.

Saying that creatives need to think in business terms isn’t about wearing a suit or spending your days ploughing through spreadsheets. Issues like not getting a decent brief, doing speculative work, saying yes when you should say no and poor administration aren’t making you into a slave of the machine – they are making sure you deliver creatively, avoid disputes and essentially get paid.

There’s something in James’ presentation for everyone in the industry. Most of all it should be a wake-up call for all creative businesses – time to realise you need to marry both sets of skills together if you are going to both wow your clients with brilliant work and pay the rent.

 

 

Related articles

• 123 Tips: Developing Creative Business (abundanceadmin.com)

Sky News sell-off – missing the point?

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The news that Rupert Murdoch is free to bid for the remainder of BSkyB will redraw the UK’s media landscape, due to the sell-off of Sky News that Jeremy Hunt has mandated when agreeing the deal. While this has been hailed as an elegant solution to avoid concentrating too much power over the news within a single entity, I think Murdoch will be more than happy with the outcome.

While Sky News has dramatically grown its reputation over the last few years it is still loss-making. And with media fragmentation there is nothing to stop BSkyB launching branded, cross-promotional channels (The Times News at Ten?) or even bringing across the low brow Fox News concept to the UK. So news is a bit of a red herring to me.

The bigger prize for News Corporation is the synergies between print, online and broadcast. Heavily promoting Sky shows in The Sun and Times (perhaps with exclusive content), bundling deals (if you have Sky TV and broadband adding a paywall subscription is just an incremental payment) or using both media to rubbish the competition all seem eminently possible. And that’s just some quick thoughts – I’m sure News Corp has teams of people beavering away at this now.

These are the areas that regulators need to watch to avoid the News Corp juggernaut unfairly squashing the competition. Though Murdoch still has to complete the acquisition…….

 

 

Related articles

• BSkyB takeover gets green light (bbc.co.uk)
• News Corp. Wins Approval for BSkyB in Return for Sky News Sale (businessweek.com)
• This Sky News plan is good not just for Rupert Murdoch | Steve Hewlett (guardian.co.uk)
• Rupert Murdoch and the BSkyB takeover: how powerful will it make him? (guardian.co.uk)
• BSkyB bid: Jeremy Hunt gives Rupert Murdoch’s Sky News hive off plan green light (dailymail.co.uk)

Throwing a lifeline to SMEs

Growing a small/medium sized (SME) business isn’t easy at the best of times. Managing directors and owners have to possess an incredibly wide range of skills, often way outside their core competencies if they are to compete with the big boys. And there isn’t normally the safety net of a multinational’s deep pockets if something goes wrong.

Add in the current economic downturn and things get even harder. Given the number and variety of businesses within the sector SMEs need to be the engine for recovery to balance out public sector cuts. But like any engine you need the right fuel, which in the case of SMEs are skills and money. I’m not going to go into banks and their lending policies but a new event aims to deliver the skills and motivation that the people running SMEs actually need.

Called the Big Business Mastery Weekend (disclosure – Measures Consulting client), it provides the practical training that companies need, in one place, from top trainers like entrepreneurship guru and author Robert Craven. So rather than death by PowerPoint, delegates actually get involved and learn things that they can put into effect with their own organisations. Split into the key skills of sales, marketing, time management, profitability, leadership and social media, the aim is to give businesses the knowledge and motivation to immediately create a plan that will grow their company.

Based on a US model, the first Big Business Mastery Weekend will be held on 9/10 July 2011 at the Hilton Hotel, Coventry. Early bird tickets start at £546 plus VAT and can be booked online or by calling 0207 870 1097 (to get early bird rates just quote discount code BBMC when booking). Let’s hope that SMEs embrace the chance to equip themselves with the skills they need – for the good of the entire UK economy.

Related articles

• Business Running on Empty (online.wsj.com)
• How are the fastest growing SMEs in the UK boosting their online traffic? (weblogs.hitwise.com)

Time to bring in the consultants

As a PR and marketing professional I’m often taken aback by the response to mentioning that I’m a consultant. Across the business world consultants generally get a pretty bad press – in fact, one positive point of the economic crisis is that bankers have displaced consultants in the most hated stakes.

The general impression of consultants is of expensive individuals who parachute into a company (or organisation), fail to take the time to understand the business problem, recommend change that is either impossible to implement or requires more expensive consultancy and then swan off in their BMWs waving cheques in the air. And yes, there are organisations that bring in 20

year olds straight out of university to tell you how to run your business (or scarily, govern the country).

But all the consultants I’ve met, whether finance, marketing, IT or business-focused aren’t like that. They combine skills and experience to help organisations grow – and they aren’t as expensive as the scare stories like to make out. Here are five good reasons that consultants deliver results:

 

1          Skills you don’t have
Not many businesses (unless they are multinationals) have the skills in-house to do everything outside their core functions, particularly in current economic times. Consultants fill these gaps, whether it is helping with change management, social media or IT. After all, as managing director you don’t want to be learning programming skills to build your website.

 

2          Value for money

Consultant day rates can look expensive – but you are only buying the time you need. For a start-up to employ an experienced financial director would be economically unfeasible, but bringing someone in for a couple of days a month delivers value without breaking the bank. And you don’t need to pay the hidden costs of employing someone such as National Insurance, pension and benefits.

3          Knowledge transfer

Smart organisations make sure they get real value from consultants by learning from them. Get them to train people as part of their assignment and not only do you increase your skills base but you gain even more value from them.

4          Networking

Good consultants spend their time talking to lots of organisations and individuals, learning what they are doing and storing away information and contacts. And they can then use these contacts to help you – whether it is bringing in new partners, sales channels or resource that can help.

5          Independence

Consultants should be (by their nature) independent from the organisation they are working with. This means that they provide a realistic view that isn’t clouded by being too close to the business itself – particularly if they are from smaller consultancies or are just one man bands. It does mean you can blame them for unpopular decisions, but as a business leader you’d surely be better doing that yourself?

I don’t for a minute claim that every person that claims to be a consultant delivers all these advantages, but good ones do – and deliver value way beyond the initial investment.

Can Facebook bridge the business/consumer divide?

Image via CrunchBase

When it comes to social media most people are schizophrenic – using specific tools for business and personal life. Generally this means your contacts on Facebook are different from those you interact with more formally on LinkedIn. Twitter can be either (dependent on the person) while blogs tend to be either ‘What I do in my spare time’ or ‘Why I know what I’m talking about in my field of experience’ (hopefully Revolutionary Measures fits into the second category).

But as part of its plan for world domination Facebook is looking to change this, with the launch of BranchOut. Essentially it builds a LinkedIn-style network on top of your Facebook friends, using the power of your contacts to find and match you with job opportunities. It is simple to import your LinkedIn profile so you can be up and running quickly, but here are five reasons I don’t think it will work:

1          People

Your Facebook friends tend to be just that – mates, mates of mates or people from down the pub. Do any of them have access to the jobs you are looking for – and after seeing you down the pub, would they employ you?

2          Language

I may be forty something and out of date but how I talk to my friends and business contacts is different. Even if someone spans both groups you change your approach and language dependent on context. Hence using different networks for each group makes sense.

3          More spam

Due to the opt-in nature of BranchOut you need to request your friends to join your network – which could well be seen as more spam from people you only vaguely know – and then not in a business context.

4          No interactivity

LinkedIn worked hard to move away from being a static CV database, introducing news, company listings and relevant groups you could join. At the moment BranchOut seems to be early LinkedIn – you sign up and then not a lot happens.

5          Flavour of the month

There’s a tremendous number of apps, widgets and games available for Facebook with more being launched all the time. Evolution dictates that lots of these wither and die, while others retreat to their niches. BranchOut is the current new great thing, but after the initial euphoria has waned, will users still sign up?

Time will tell, but my bet’s on BranchOut not having enough to dislodge LinkedIn from its top spot – even with the backing of the world’s biggest website.

Related articles

• Facebook Takes a Swing at LinkedIn (businessesgrow.com)
• BranchOut Lets Users Spam Others, Explodes In Popularity (allfacebook.com)
• Branch Out with Facebook’s Career Center (ariherzog.com)
• Should LinkedIn Be Afraid of BranchOut and Facebook? (gigaom.com)