But he didn’t look like a tramp. Occasionally. On a Sunday morning.

It wasn’t because he was skint – no, he’d always invested wisely right into his 90′s and had a bank account stuffed with savings when he finally popped his clogs. It was because he only spent money on the things he truly valued – which, it turns out, was nothing more than a chair to sit on, a regular supply of newspapers to moan into, and enough food and shelter to stop his belly rumbling and feet getting wet.

Why am I furnishing you with these odd factettes? Well, it struck me that while this sort of austerity might not be especially attractive in this day and age, many of the lessons of frugality are. Things like spending only on the essentials. On things that really make a difference to improving your effectiveness and your wellbeing, while keeping a check on purchasing priorities throughout the business. Reducing the direct cost of spending (what it costs) and the indirects (what it costs in time and money to do the buying). Reducing maverick purchasing (non-authorised spend) and having a central place where all spend can be monitored, reported and is visible throughout the business in as simple and effective method as possible.

Technology is great for this – but it has to be underpinned by a real top-down desire to spend only on business essentials – on what will make the business more efficient and it’s staff more effective. We’ve done this in our business and have driven procurement costs down and effectiveness up. We’re free with spend that will drive people’s ability to work effectively and adds value to ours, our suppliers’ or our customers’ businesses. But anything that falls out of these essential categories, is scrutinised very closely indeed.

And grandad did this in his daily life. True, he did it the old-school, analogue way, but he bought prudently and focused only on the things that mattered – and guaranteed his own long-term prosperity because of it.

Having said all that, the first time my girlfriend met my grandad he had his flies down, a dew-drop wobbling defiantly on the end of his nose and was gesticulating while talking, waving around a dead mole in a trap for emphasis.

Thinking about it, maybe he’s not the best example after all…

first mover analogy not really relevant, luck, timing & best!

best= #1= simplicity= making ONE use only but do it really well

spotify = playing music as quickly as possible ( find and play within 3 seconds), others do sharing music, finding music, etc

this way you increase the usage

change is the only constant

their differentiator is in the business model and in the legal issues

“burning desire and love” for it’s industry

people like to be part of change

they found that no-one knew how to licence globally music, so they became the expert- they were solving a problem that no-one else has ever solved before.

the idea is 5%, the execution is 95% of the difficulty and the solution!

not being from the industry= a big competitive advantage- didn’t have the “industry prejudice”

you’re breaking the eco-system, so you need to educate the eco-system there is a new way to do things that benefits them

you will get a lot of negatives- BOUND to.

instead of hiding problems, tell everyone you can as quite often they will tell you the solution you can’t think of yourself

you learn by listening, as quite often there are blogs that will give you the solution

failure is caused by lack of FOCUS

one idea, done well, used within 3 seconds= success!

If you’re a business person of any importance to a business, then what are you doing spending time on woolly, non-core activities like Twitter? Successful business people aren’t spending their time twittering or face-linking, they’re doing business. Selling stuff, buying stuff, making calls, fighting the everyday fires they have to fight to keep their business going.

2. Only marketers and students are twittering

Spend a day with Tweetdeck and all the ‘relevant’ messages you find are either management/marketing evangelists enticing you to check out their recycled ‘how to’ lists, or youth, posting indecipherable & non-relevant personal messages strewn with @ and # signs, flirting or trying to get laid.

3. Your target audience aren’t on there

If you do persist – if you are seduced by the promise of marketing Nirvana – you’ll undoubtedly find that in the majority of cases, oh dear, you’re a B2B company and of course your target market aren’t on there. Quite a few consumers will be there and, who knows, they might just be up for buying the latest Nokia from you or patronising your greasy-spoon. But for the 70% of businesses out there who aren’t interested in courting the attention of 18-year-old Arlene from Arkansas – don’t even bother. Business decision makers are few and far between in the Twitterverse.

4. There’re much more effective ways to market yourself

And even if you are a consumer business, and you find that your consumer is, possibly, maybe that very same person spending their time twittering to their mate across the city, and you do manage to ‘insert’ yourself into their conversation about why Cheerios are better than hot muffins and how they vomited out of a 3rd floor window onto the neighbour’s cat last night. Is it really worth your valuable (expensive) time? Aren’t there more effective methods? Ok you can ‘communicate directly with your demographic’ but isn’t finding that buying-demographic en-masse just as obscure an art-form today as it has always been?

5. It takes too long to learn

And OK, so you’ve been convinced by the amount of people banging on about how great social media is for marketeers, and you’re going to see for yourself. It’s guaranteed that you give up after the first week and turn to your neighbour in exasperation and exclaim (using no fewer than three dozen f & w based expletives) that, gosh, wasn’t that a waste of your time and that, blimey, I really am no wiser about how to effectively twitter than I was at the beginning of this week. You may chalk it up to experience and feel better for the learning experience, however futile it turned out to be. Or you may try and forceably remove twitter from your Operating System with a chisel and lump-hammer.

6. But it’s all about connecting with decision-makers

In time-honoured tradition, I refer you, dear reader, to my first answer. And if you indeed do persist and, against all the odds, manage to connect with these fabled ‘decision makers’ (and I stress here that this is in no way an admission that they do actually exist on Twitter) then it’s a pound to a penny that all you end up with are the same ‘decision makers’ as yourself with equally far too much time on their hands as you optimistically and aimlessly searching for this same vague notion of useful social technology that has driven you online to look for them in the first place.

All of which it’s pointless me telling you here because you, my dear elusive friend, are too busy working to notice or, just probably, too busy twittering to matter?

Ladybird book of Business Wisdom Vol 3:

Repetitive Advantage (rĭ-pĕt’ĭ-tĭv ăd-văn’tĭj) adj. n. a business advantage that’s repeatable and sustainable.

OK, so no messing about. Let’s get straight into the practicalities of getting sustainable and repetitive advantage over your competitors.

There are 3 main areas that all small businesses need to focus on:

1. Driving sales.
2. Product/Service differentiation.
3. Business efficiency.

And of course Quality of Service. Four. Four areas that all small businesses need to focus on. Oh, and Price – mustn’t forget price. Five main areas that any small business needs to focus on. Of course, many of these elements are interlinked, and it’s business efficiency that links them. Run an efficient business and you lower costs, lowering margin required to cover costs  and lowering price needed to maintain that margin, driving sales into the bargain.

One of the tools which can help drive such efficiency is sourcing software. E-sourcing software (sometimes lumped in with the term e-procurement) is there to allow you to manage and communicate with a larger number of suppliers – and get prices from them. It’s traditionally been the preserve of larger organisations who could afford the time and cost of implementing complex installed applications – and have the staff to run them. Obviously, the benefits in cost-savings made this worth their while, even after the purchase price and staffing was taken into consideration. However, the great thing about the SaaS revolution means that small businesses can now benefit from the same processes that the big guys have employed. Applications don’t need to be installed and can be accessed through the web-browser at little or no cost above the time taken to learn them.

There are a few solutions out there and I’ll be honest, I don’t know how effective they all are. I’ve tried a few but have found them of little or no use to anyone outside of the US – and then to larger orgs only. However, I do know the features you should look for:

Simple. It’s got to be simple. If it’s overly complex, then you’re not going to use it – Fact. I know this from our own purchasing platform development – there’s a direct relationship between complexity and uptake, so software designers need to continually strive to minimise complexity and maximise effectiveness.  

Supplier Onboarding. The process of getting your suppliers onto the system needs to be as painless as possible. Software can make this relatively easy for purchasers to minimise their data-input, although time does need to be spent educating your suppliers to drive adoption rates.  

Getting Quotes. Again, a simple mechanism that allows buyers to request quotes from their suppliers – to define the entire spec. of an order and reduce negotiation times – indeed the best software can remove negotiation altogether. It needs to easily display quotes and make it easy to see cost-savings.  

Feedback. The best purchasing and sourcing tools are very powerful in providing data to buyers and suppliers alike. This can uncover both price savings and supplier-quality data, heavily influencing future purchasing decisions. Some solutions really add value to suppliers too – further driving adoption. www.freeprintsales.com for example gives UK printers substantial data about their commercial Unique Selling Points and for the first time gives printers a view on vital metrics about their service offering – direct from their clients.

Where to go? Of course, we’d like you to get in touch and use www.yourwebtrader.com – it’s designed specifically with SMEs in mind and is free to use. But a Google search on either e-sourcing or e-procurement will find a wide variety of vendors pushing platforms of varying maturity and pricing.

Whichever way you go, take one evening this week, cancel the dinner with the spouse, stick the kids in front of the Wii and spend some quality time with an e-sourcing solution – and start to drive that business efficiency.

And I’m not talking about cheap sourcing from China and the fact that your three pack of socks that used to cost £5.99 are now £2.99 for five. And even though I’m desperate to know why new socks wear out faster than a wet-tissue in a wind tunnel, I’m not even going to stray there for a moment, otherwise there’s no telling where this might lead (325 page rant on the deteriorating quality of my sock cupboard anyone?) And don’t even get me started on pants!

No, I’m not going there. What I’m going to do is enlighten you. Because, although you may not have noticed,  the next big change in pricing is going on in business purchasing and procurement. These key (and oft overlooked) areas are undergoing a silent but seismic shift. Hardly anyone outside of Small Business owners and procurement departments are noticing it, but quietly, inch by inch, and with the force of a glacier – the business world is becoming a different place.

You see, some time ago, in a bygone world when people were sane and computer-free, purchasing for a business was a straightforward affair. Their cast-iron Fluffle-valve broke, so they’d send simple-Jim down to the local blacksmith to order another. Old Smithy would tell them when it would be ready (usually an entirely random date) and charge them whatever price he could get away with. Smithy was happy, Jim would moan about Smithy’s prices down the pub (but he’d pay it) and that would be that – the world carried on in this sweet way for the next several hundred years.

The interesting dynamic here is that, even though these are the days of yore where ricket-ridden children laughed and limped away the endless smog-clogged days, playing never-ending games of stick-and-hoop, Smithy was the only blacksmith in town and he knew it. He could therefore more or less guarantee five things:

1. He could continue being a miserable, moaning git and get away with it.
2. His customers would try and befriend him to get great service and a good price.
3. They would usually fail.
4. Smithy could charge what he wanted and deliver late.
5. His customers would return the next time.

This state of affairs has continued for a scarily long time. The only real modern innovation in this process is that as competition came in, Smithy started to have to be friendly to his customers. Fortunately, he found that by doing this, some of his customers would feel awkward talking money with him so he could charge even higher prices. He also found that if he was friendly with them, they’d not bother shopping around – they were happy to stick with him.

However with the onset of the modern internet age, things have changed. And about time too. Web-based tools now mean that buyers can see how good suppliers are and get prices from them. Sure, you’re sometimes told it’s tricky. Suppliers of touchy-feely products or services might kick and scream that they’re different and it’s not easy to give quotes – and that you can’t compare prices from company x to company y.

All I’d say to them: the day that procurement is pushing the advertising business around and calling them to account, then the day of pricing transparency is here.

And, oh look, that’s exactly what’s happening.

One successful strategy for surviving a recession – one which also has the handy bi-product that it also maximises your profit – is to target operational efficiency. Basically, working lean, purchasing as little as possible and when you do, getting maximum bang for your buck. It’s a strategy that companies such as www.ryanair.com and www.webmartuk.com target obsessively – much to the benefit of their bottom line. Reading Ryan Air boss Michael O’Leary’s recent Biography illustrates one man’s determination to cut fat and work lean time and time again – to fiercely focus on procurement – driving hard bargains with suppliers, with negotiating ruthlessly with airports, aircraft manufacturers and chopping unnecessary spend from every conceivable angle. And it’s this obsession with purchasing and procurement efficiency which ultimately has lead to Ryan Air becoming Europe’s largest carrier – and one of it’s most profitable – despite maintaining such low, competition-busting fairs.

So what Ryan Air’s story tells us is that spend is a critical area of focus. Sure sales are vital, but an equal determination to reduce input costs are arguably of equal importance when you’re driving for quick and sustainable growth. Indeed, it’s a hard-won lesson that those of us who have advertised our products and services on pay-per-click sites know only too well – in the new transparent marketplace, you quickly realise that it’s all well and good shouting from the rooftops that you sell the latest, greatest product – but if you can’t sell it at a more competitive price than Dave in Dublin or Ahmed in Abudabi, you’re throwing increasing amounts of adspend at dwindling return.

And advertising apart, if you can reduce unnecessary bleed through cutting operating costs – energy bills, purchasing costs, travel expenditure, rent – then that has to be broadly A.V.G.T. (a very good thing) for any business – and especially SMEs – no exceptions. You don’t have to be servicing the value end of the market to benefit from lower overheads and reducing procurement costs.

So what to do? How do we achieve it? Well in our own experience, there are two elements that need to be in place. First, a firm and unwavering commitment from the business owner to cut costs. This has to be lead from the front and has to include incentives for the troops to join in the cost-cutting so that everyone buys into it, and benefits from it’s success. Secondly, you need an appropriate tool to help locate, organise and track purchasing savings made – to provide metrics and comparisons on what you have spent.

In the case of Webmart, we developed our own sustainable print procurement tool – which went live about a year ago and has been hugely successful. It helps us work with more suppliers (reducing risk when printers are going pop pretty regularly) and allows us to find savings already in the marketplace without driving down prices – a crucial point in a market where printers are going to the wall, often after a last-gasp that includes cutting their own throats on pricing.

An important point here – and one which makes business fairer and more profitable for all – is that, unlike Ryan Air who arguably negotiate hard to the ultimate detriment of their supply chain – Webmart work closely and positively with their supply partners. We try and find the win-win in every relationship because it is only when there’s a commitment to work and prosper together that you get real traction within a relationship – so it’s an area we work hard on.

As for the buy-in of staff, we have a Senior Executive Incentive or Sexi scheme – which is a bit of a misnomer because everyone in the company can become a part of it. It’s essentially a profit-share scheme meaning that all savings made in every area of the business go directly into the pocket of all our employees.

In the next scintillating installment, I’ll get right into the nitty-gritty of how a procurement/purchasing platform can work for you – and how to develop your own motivational reward scheme.

Anyhow, I guess the most popular initial answer included themes along the lines of fame, fortune and buxom blondes (yep, we’re all blokes). But as the discussion developed into something more meaningful, we tended to split into two camps. There were the more hedonistic ‘live now and have fun’ group and there were the more reflective and – let’s be kind – ‘mature’ group who raised thoughts about security, happiness and more wholesome and meaningful goals.

It doesn’t seem that long ago that I was very much in the first camp. And it’s true that when your business gets some decent monetary success, it can be hard to not let your imagination run riot. I have first-hand experience of starting up a small business that quickly found success – and I did start to think about what I could buy with it if it carried on (to cut a long story short, it didn’t!) But nowadays my priorities are a bit more grown-up. Maybe it is an age thing, but I suspect it’s a bit more than that.

You see, our business is a little different from the norm. There are several possible names for our style of business – indeed when we show our efficiency-graphs to our competitors – it’s amazing how many new and surprising names they come up with there and then! But we’ve plumped for Marxist-Capitalist – partly because it does what it says on the tin – and partly because it somehow catches the eye, which is never a bad thing for a PR-hungry SME.

So what does it entail?

In a nutshell – it’s all about using the strength of capitalism to do what it’s good at – generating profit. Then distributing the proceeds of that profit amongst the team who helped create it – the workers. All of which is probably something Marx would have smiled upon (although, looking at his pictures, he does seem to be somewhere on the grumpy side of Ronald McDonald). Maybe he smiled more at Xmas.

I’ll go into how it works in practise in a later article as there’s lots to tell. It’ll include things like staff retention, our charitable trust, spreading the goodness to our supply chain and collaborating with other Small Businesses to help them use our technology. But Suffice to say it’s rather motivational and it doesn’t hurt staff-retention levels.

Where the Marxist-Capitalist moniker is quite an effective label for what we do, I’ll leave it to a companion of mine – the Winston Churchill book of Quotes – to give a hint of where we genuinely hope this kind of ‘work together, win together’ ethos might go. A heady and probably unrealistic goal – but think big and you never know where it might go.

If the human race wishes to have a prolonged and indefinite period of material prosperity, they have only got to behave in a peaceful and helpful way toward one another. Winston Churchill

Next Stop. Small Business Collaboration.

THINK BIG!

It’s underlined too so it must be important. And it kinda resonates and sticks in my mind because it’s written down from a seminar given by some top bod at Google – one of the founders I think (although I wouldn’t know the names of the Google founders any more than they’d know mine). But as I sit tapping away, it’s a thought that seems to have lodged there somewhere in the shinier parts of my mind. And it’s becoming a bit of a guiding principle for our software development. Through all the distractions & the temptations that regularly prod you towards a smaller, more niche proposition – or try and pull you towards cutting the dev back and settling for less – those words keep on coming back.

And it’s something Brits in particular should heed (I’m based in Barnsley in the UK). Aside from the incredible fact that we seem to have inadvertently invented the wwweb itself (would never want to besmirch the great Tim – but I don’t think selling 3am Live Chat Peep Shows across 3 continents was what he actually envisaged at the outset, so it’s commercial success was presumably somewhat surprising) I can’t think of many UK-based internet products that have gone global. And Katie Price muff shots don’t count.

The relevance of this simple message is something I’ve really taken to heart. While you’ve got to be flexible enough to seize new opportunity and grow with an ever-changing world – you’ve also got to maintain focus on your goal. I’ve been through the mill enough times to know that desire and focus – and Thinking Big – don’t necessarily make for a winning end result. But I’m sure they’re a pretty good starting point.

Of course, history tells us that ending up with something truly global doesn’t usually start off like that – most global success stories tend to work from a small user-base serving a specific need (much like the early www itself). Fortunately that’s where we are at the moment, with a highly successful Print Procurement Platform fuelling growth in our equally successful Print Management company.

So our path is pretty clear – grow the platform from where we are now into The Next Big Thing. Should be a piece of cake.

Next up – our motivation and our Marxist Capitalist Business model.