As mentioned on their website, The Fifth Conference is a platform for vision, innovation and entrepreneurship. They publish a quarterly journal, organise events and make their website.
On Wednesday June 9th, 2010, The Fifth Conference organized GROW, a panel discussion on growth and enterpreneurship. It took place in the evening from 19h00 ’til 23h00 in the machineroom of the Thermotechnical Institute of the K.U. Leuven. And what a venue (see the pictures) that is for a conference that find its inspiration in the 5th Solvay Conference Physics on Electrons and Photons. In October 1927, the world’s leading physicists debated in Brussels the newly formulated quantum theory. It brought about 29 scientists of whom 17 were or became at least one time Nobel Prize winners!
The GROW event spurted quite an interesting format: the evening was divided in two equal chunks of 3 presentations on more or less provocative ideas, to instigate the subsequent panel debate. As with any debate of this type, focus tends to shift quite often. But in this post , I’ll try to highlight some of the major topics discussed.
Growth
Psychologists and philosophers seem to state that man is the happiest and most comfortable in a progressive state, rather than at its full complement. It is even hard in the stationary, and miserable in the declining state. So there seems to be a tendency, even inclination, to strive for growth. Frank Boermeester (The Fifth Conference) adds a number of facts in his presentation to make the point that Belgium at this moment is in a declining state. A number of structural fault lines create a difficult environment to start and/or grow a business.
Note however that growth comes in different forms and can mean different things when applied to different situations. So one has to carefully evaluate the situation and adapt to his proper goals. Jeroen Meens (Cynex) applies this to 4 stages in corporate evolution:
- as Startup you should focus on your product and resist temptations to sidestep, but adjust the business plan to reality and keep your ideal customer in mind,
- when reaching your Ceiling start looking for scalability in your business and make time to seek leverage in what you are doing
- until you reach the point for the Great Decision to look for the added value and properly assess the risk(s),
- so to Extend by focusing on the long term strategy and as owner by letting go of the organization to become an entity of itself.
Advice
To succesfully evolve through those different phases, all panel members seemed to agree on one fundamental requirement to start, run or grow a business: you need to attract proper advisors. Make sure you have a sounding board at your disposal to reflect on your ideas and criticize your decisions; to learn from practical experience. That sounding board can have many different faces, e.g. an auditor or board of advisors.
Maarten Vandenbroucke (Gatewing; presentation) rightly raised the question how to attract advice when, as a startup, you do not have sufficient resources. And how to distinguish true mentors from consultants? Just asking the number of businesses a candidate advisor has started or runned himself, must be the first litmus test, so says the panel. Somebody from the audience also pointed out that most seasoned enterpreneurs would be more than willing to share their wealth of experience.
Cashflow
The first rule dictated by experience, happens to be the common theme through all the different presentations of the event: manage your cashflow … thoroughly. Make sure your invoices are paid so your not the bank of your customers. Hold an eye on expenses. Sven Bally (Colibricard.be) spends a full presentation on the topic and summarizes as
Revenue is vanity, Profit is sanity, Cash is reality
Jurgen Ingels (Clear2pay) explains how to turn simple time sheet information into dashboards to manage by financial metrics. This allows his company to balance growth and profitability. His advice? Swap a year of growth with a year of profitability!
But how to build you business cost efficiently? Steven Coppens (GIMV) conveys a good approach for growth in his presentation: first build, next proof scalability, then duplicate. It’s like going from proof of concept through construction into production.
Most common reasons for …
So it’s clear that growing an enterprise is the art of balancing a lot of different business facets. You can imagine that, during the debates, this reflection did lead to the biggest question on business reality: What are the most common grounds for business failure? A summary …
- Founders share the same background
- Me, founder, I have to be the CEO
- Engineer driven
- Forgotten to sell
- Under-capitalized to realize the goals