Creating new ideas using systematic approaches
In Rainmaking we have made some experiments using structured brainstorming sessions and the like to facilitate the process of creating new ideas. These structured approaches have generated many ideas and some of them will eventually be tested and hopefully turn into real companies.
It is, however, our experience that most ideas just flow out of our heads when on vacation or when inspired ny reading a newspaper or attending a conference. This is fine and I am very pleased about the quality of the ideas. The challenge, however, is that this source of ideas can not be planned and boosted when needed.
It would therefore be extremely useful if we can develop or find a framework which could be used to find new ideas in a more systematic way.
We have heard about the 6 thinking hats but have never really used it. Have you tried this?
Or can you recommend other useful tools/frameworks/methodologies, which we should try?
GruppeKoeb is turning 3 months!
GruppeKøb has now been around for almost 3 months and I will here on the blog tell you a little bit about the results and experiences we have made so far.
It has been 3 very exiting months where we have received many positive inputs and much feedback from our concept. For that we are very grateful because our concept is based upon participation from our GruppeKøb-buyers.
Here is short sum-up of our results so far:
Visits on our web site: More than 20.000 unique visitors.
Sold products: 510 sold products.
Popular news letter: 2000 people have signed up to our news letter.
Revenue: 1,2 mill Kroner generated revenue for our suppliers. Expected turnover ultimo July 2009 is 1,8 mill Kroner.
PR: Beautiful press coverage in the P3 radio news!
Large user involvement: More than 450 product suggestions from interested GruppeKøb-buyers.
Construction of a large network of suppliers: Cooperation with more than 20 distributors of quality products.
We think our selves that these results are really good in comparison to our own expectations for the first 3 months of business. Are there anyone out there, with more online experience than me, who can set our results in perspective to other new businesses and their web site visits etc.
Rainmaking in Erhvervsbladet again
Rainmaking is in Erhvervsbladet again - even as one of the topstories of the day!
This time as 1 of 5 so-called "experienced entrepreneurs" who give good advice to other entrepreneurs.
See the article on http://www.erhvervsbladet.dk/article/20090417/news03/90416172/&page=3
Videointerview on Youtube with Lars Kolind
Lars Kolind led Oticon to great international success and has written an international bestseller togehter with Wharton Business School. In the last 10 years, Lars Kolind has acted as investor, enrepreneur and opinion former. Moreover, Lars has one of the most read blogs in DK. CEO in Frokost.dk, Mads Aarøe Mathiesen, has conducted an excellent 3 min. videointerview with Lars Kolind on entrepreneurship.
Watch the video at http://youtube.com/watch?v=G7o1UhsPPRM
Seven advices for entrepreneurs
In Rainmaking we have gathered our experience from the last 3 years work and 6 new ventures. The result is a 7 minute video with 7 pieces of advice that can make all the difference between success and failure.
Watch the video at http://www.youtube.com/watch?v=kir5xZ3xgiQ
Post a comment if you too have advice to share.
Flirt with carpool concept
With the founder of www.gomore.dk, Matias Dalsgaard, we have discussed if Rainmaking should join his project, and put full steam ahead to spread out this sympathetic and environmentally important project. The idea is that users can find a ride to the concert 100 miles away from home next Sunday – or reversed find someone to join the ride when you on Tuesday are driving 200 miles to visit your old aunt. That is, putting more people in the same number of cars. Both the car owner and the passenger save money, roads will be less worn down, and the environment also benefits.
The challenge is to find a credible revenue model – “where is the money?”. Banner ads are a poor reply for such a niche site, so we had a look at countries abroad for inspiration to stronger revenue models. In UK and Germany we found both subscription based models, BTB software licence sale and companies that make real money. However, a leading player in a big country like UK or Germany seems to be able to make less than one million EUR and employ a staff of 10-20 persons. The business potential in a small country like Denmark seems to be too small.
If we instead were to enter one of the big markets we would face another problem; our competitors have critical mass (which is crucial when you want to connect two groups online), and they offer their services at quite low prices. So they seem hard to beat green field. An interesting alternative could be to buy a big player in UK or Germany and then optimize the revenue model. But that is a completely other ball game, that demands teaming up with a capital fund. Anyway, a couple of days ago we agreed with Matias that he wants to focus on his PhD thesis and we will prioritize other projects. But it has been very interesting to get to know Matias, and we hope we can work together on another project some day.
What´s in it for you?
Sometimes it is sound to pause for a second and consider what others can use your company for: What’s in it for you?
Investors
If you invest in a Rainmaking project, you will first and foremost receive a solid return on your investment. Today we have 9 experienced and competent business angels, who have jointly invested 25 million DKK in Rainmaking and since the sales of CityLasik they have started to earn a yield. But our investors not only get a good ROI, they also become part of a strong network that meets 4 times a year to share knowledge, contacts and learning. Because we actually listen to our investors’ input, we only take on "wise money" and get enhanced chances for success through their experiences.
Team member
If you become part of our team, you will have a unique job. You will be starting up companies from scratch together with other skilled business developers, specialists and the Rainmaking partners. One month you might be testing a new business idea, and next you will spend 3 months increasing the bottom line in an existing company followed by 6 months spend on getting the first 20 customers and first 5 employees in a brand new firm. In Rainmaking we spend a lot of energy helping each other to become even better through day to day coaching, courses, seminars and sharing of knowledge and experience.
Partner colleague
If you have the right competences, values and motivation you can become partner in Rainmaking on equal terms with the 4 existing partners. As a partner in Rainmaking you own a range of firms together with like-minded people. You can either work your way up internally or come straight in if you are e.g. a successful entrepreneur, a partner in an acknowledged consultancy, a manager with proven results, or if you in some other way can contribute massively to the further development of Rainmaking. Our partnership is cordial and we want to stay that way. Life is too short for internal fights, "me"-attitudes, sub-optimisation and bad vibes.
Entrepreneur
If you are an entrepreneur you can become part of Rainmaking Club. This is a place for help and support to succeed in your projects in exchange for a small share of ownership. In this way we are in the same boat and we set our competences, network and sparring at your disposal. We send no invoices as we want you to spend your money developing your company. We will rather have a small share of the upside if you create a success. If you give us 10% of your company, we dare to promise that your chances for success are increased by 10% and that the success will become at least 10% larger. It is a win/win partnership where you do the hard work and make the calls – and we help you to overcome those stones on your path which often knock down entrepreneurs and to gather momentum and pick up speed.
Outside-in
About a week ago I spoke to an entrepreneur who I respect very much, Jacob Nagel who owns the cateringcompany Gastronomiet. Jacob and I have known each other for 3 years and have followed the other’s development as entrepreneur.
The meeting with Jacob reminded me how important it is to think outside-in – as opposed to inside-out. Thinking outside-in implies taking your customers needs as your point of departure, instead of your own. How is the reality of your customers, what do they need and what would amaze them?
Way too may companies – including entrepreneurs – think inside-out. The trap is easily fallen into and I do myself on a daily basis. Sentences such as "our system can’t handle that", "our organisation is not geared for it" and "it will take too long to change" reveal that an inside-out mindset has sneaked in to your organisation.
So, if you meet any inside-out thinking out there (or at Rainmaking!) please write us for a common scare and warning.
Ideas from other Entrepreneurs?
Supplementing the questions of the journalist, who Martin just wrote about, I can add another question that we often get, most recently when Thomas Mølgaard and I visited the Iværk fair yesterday:
Do you accept ideas from outside Rainmaking and cooperate with other entrepreneurs?
We might be getting some pretty good ideas in Rainmaking, but in all likelihood there are even better ideas in the world around us. So why do we love our own ideas so much then? We probably could cooperate with other entrepreneurs with excellent business ideas, but lack the execution power?
The Rainmaking Way
When we start a new project it is crucial to be able to do it "The Rainmaking Way" without large hesitation or resistance. This e.g. means that we typically run a small test of the business model and only carry on if we believe that the company can be sold at a three digit million amount within 5 years.
Consequently we have a high degree of portfolio-thinking in our approach to our companies and are not afraid to kill "zombie firms", that don’t create the expected value and hence causes defocusing. Subsequently The Rainmaking Way requires a high level of cold-bloodedness which is rare amongst entrepreneurs who enter a project with all the time, savings and lifeblood and neither can’t nor will let go, even if the potential proves to be smaller than hoped for.
Open to ideas and new partnerships
In this way our reservations can be boiled down to two criteria: (1) there must be a potential for a three digit million exit within 5 years and (2) we must be able to conduct the project The Rainmaking Way. The latter doesn’t necessarily mean that we need the dominant part of the ownership, but we do need the authority of decision and hence be able to carry out the project as a part of our culture and best practices.
Within these boundaries we are always open and ready for dialogue. We even have a policy stating that Rainmaking will give up a 5% share to the originator if the company is based on an external business idea. Such ideas can come from creative individuals or companies who see a market potential, which they can’t or will not meet but still prefer to see the idea launched rather than forgotten.
Write about your business ideas on this blog or comment on our attitude to cooperating with other entrepreneurs.
Where do all the ideas come from?
A journalist asked me that question yesterday and we would like to share the answer with you here on our blog.
If we look at our current companies, they are all (except one) related to two ideas that arose approx 3 years ago.
"The eye-idea"
In 2005 I had a laser operation at Hamlet and haven’t needed glasses since. I was really please about my operation and told my good friend, Morten K, about my experience. He used lenses himself and soon decided to go for a similar operation. However, he went through the trouble of searching the net for information and found a clinic in Malmoe who perform the exact same operation – at half the price.
Morten travelled for 45 minutes and got the operation for 20.000 DKK. My transportation to Hamlet was only 30 minutes but in return I paid 40.000 DKK. We compared our experiences and concluded that quality and service was at least as good in Sweden. We wondered why no Danes knew of this possibility and Morten soon got the idea to make a company which should promote Swedish eye operations at the Danish market.
We made a referral contract with the Swedish eye clinic, and had taken our first steps. Today this company is called GodtSyn (www.godtsyn.dk) and this year we are sending 2.000 patients from Denmark, Norway and Sweden to our Swedish partner clinics.
18 months ago Morten and Carsten had the idea to expand the activities to Germany. The market was ideal and we made a joint venture with the Swedish eye clinic, which gave us control over the machinery. The new business was named CityLasik (www.citylasik.de) and has just been sold to the leading chain of eye clinics, Memira, which is owned by the Swedish investment group Investor AB.
"The lunch-idea"
In 2005 I worked as head of business development for the gastronomic entrepreneur Claus Meyer. One of his firms had a lunch kitchen which catered for 500 people Monday to Friday. The kitchen experienced deficits and I assumed the task of learning why. A high customer turnover proved to carry high sales expenditures and spells of excess capacity. I interviewed the customer who had left and asked them why. They made it clear that after a while they wanted variety and had decided to find a new cater for their lunch.
These findings inspired the idea for at network of many different lunch kitchens, between which the customers could swap. This should make it possible to retain the customers in the network AND satisfy their need for variety. Thinking led to doing and today Frokost.dk (www.frokost.dk) serves 6.000 meals every day produced in 20 kitchens which the customers alter between.
Six months ago we felt ready to investigate if the concept could be expanded to other cities. It was not easy, but we eventually settled for a suitable city: Oslo. Hence, we are currently testing if Lunsj.no will be the next company in Rainmaking.
And the future?
Besides Lunsj.no we are at present testing three different ideas. The first is an online purchasing network, which is an idea of Morten K (based on personal experiences once again). The second idea is a chain of fertility clinics, which Carsten felt like testing in the wake of the fast success with eye clinics. The last idea is consideration on extending CityLasik to other countries, if there is a market with favourable conditions for a chain of eye clinics.
In addition to this we would like to grabble with a high tech project, e.g. within CleanTech. Hence, we will not try to arrange visits at universities, research offices and laboratories. We will look for an idea, close to launch and with obvious advantages for the customer.
Generally speaking we will be more systematic in the process of idea development in the future. We will follow some clearly defined selection criteria and will evaluate many ideas every time we chose one. We believe that it is important to have a wide selection of ideas, so that only the best are selected.
What do you think about our approach to idea development? Please write us a comment.
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