In the 1920s, Ernest Hemmingway sat around a table of fellow writers and bet them that he could write a story in just six words. With great disbelief, the writers took his bet. Hemmingway quickly wrote six words on a napkin and passed it around the table. The words were: “For Sale, Baby Shoes, Never Worn.”

Hemmingway’s story was complete. It had a beginning, middle and an end. Needless to say, he won the bet.

Hemmingway has so beautifully proven that you do not need pages of writing to tell a story. This is something that even William of Occam would have been proud of.

But why does such simplicity matter?

It matters because people’s attention spans are becoming shorter as they have to juggle, sort and process this overabundance of information. It matters because if your message is too long and too hard to read, you will lose people.

In 1971, Herbert Simon, a professor from Carnegie Mellon University was one of the first to articulate the concept of attention economics when he wrote:

“…in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it”

Next time you write a message, whether it is for web content, marketing collateral or an email, remember that in order to gain someone’s interest, you first need to gain their attention. If they like what you have to say, they will trade their attention for your information.

Matt Leeburn is co-founder and Managing Director of Interaction Dynamics and Click Logic. He has extensive experience in new business development, marketing and digital strategy. Follow him on Twitter @intdynamics.

Poor cashflow is the biggest killer of promising startups and SMEs. Here, Alan Sharfman outlines some simple steps you can take to improve you cashflow situation.

As a finance professional, I am often approached to assist my clients with a cashflow solution. Now while I do not profess to be a magician, often some simple yet practical steps are required to make significant changes in the way a business manages its working capital and, more significantly, its cashflow.

When directing my clients on the planning of their short and long-term funding requirements, I always stress the importance of forecasting likely cash requirements rather than projecting profitability. In fact, every business owner should not only measure results via financial statements but should also ask the critical question, “Where is the cash?”

Cash fuel drives you in business, just as jet fuel keeps a plane aloft. A pilot is very careful to accurately predict the fuel requirements. You should place the same importance on cashflow control because, if at any point in the future you run out of fuel, you’ve got a big problem.

The first step to boosting cashflow

So what methods should be applied to improve cashflow liquidity so that business debts can be paid and cash surpluses secured? Well, your finance professional will, in most cases, correctly project changes in balance sheet accounts together with detailed income statement movements to show expected cash positions. In fact, your smart accountant might even build some surpluses in your budget for unforseen events and split investing and operating activities from financing activities. This is great accounting and it’s wonderful to track your forecasted cashflow against actual results. This discipline can be performed weekly, monthly and yearly — a great business tool to help management/business owners make prudent decisions.

How else can you improve your business’s cashflow?

Are your customers paying their invoices on a timely basis?
Are you extending payment terms to ensure customer retention and thus financing your company’s growth?

While most businesses would like to achieve high sales and customer volumes, extended payment terms could be detrimental to cashflow.

It’s more than likely that the product cost has already been met by the business and is thus financing the purchase of these goods. Thus, when payment is received in arrears of its due date, cashflow pressure is created. The sale is reflected in the profit and loss, but where is the money? Am I going to receive payment this month? Next month? Worry, worry.

While not all clients will pay cash for purchases, a clear and rigid collectables system needs to be in place. The lesson here is not to burn your cash in support of customer retention

Good cashflow practice should only allow for the payment of purchase invoices on their due dates. If financial constraints are preventing this from taking effect, manage those creditors who could extend your terms. I have always followed the motto of paying yourself first and then pay your creditors.

If the business used cash to purchase fixed assets, this cash outflow will not be reflected in your income statement and hopefully has been budgeted for in your balance sheet. Options are available for capital expenditure in terms of finance leasing, operating leases, etc., but the future cash effect of such purchase would need to be analysed from a cost-benefit point of view.

Do you have more stock than you can sell within several normal sales cycles?

Your cash outlay in stock might be too aggressive and you could have slow moving or obsolete stock items. Stock requirements need to be strictly managed based on demand as much as supply. If stock turnover is at lower rates than previous years, the amount of stock on hand needs to be reduced. A great financial indicator to manage stock levels is comparing gross profit percentages (Sales – Cost of Sales) from previous years and months.

Could you possibly have theft or internal losses?

I am of the belief that senior management and SME business owners should be signing off their monthly bank reconciliations to have a hands-on feel as to the monthly movement of cash. Also, appropriate security controls should be in place to effect bank payments, receipts of money. Often two signatories and authorises are a good control to ensure cash control is not only in the hands of one individual.

These tips and a strong internal reporting system are critical factors in cashflow management. The objective here is to simplify your cashflow strategy to make your cash king.

Alan Sharfman is Principal of iDeal CFO Solutions.

Photo: williamnyk

As I’ve lived my life I have become more convinced that the entirety of human endeavour is in no way altruistic, mystical, religious, noble, righteous, “a journey” or any other such nonsense.

Humanity is quite simply the pursuit of shiny objects.

I’ve touched on the “shiny” phenomenon in previous posts and I am by no means the first to suggest this. You don’t have to watch too much comedy to spot references to this phenomenon. Google it and see what I mean.

Sure we may get distracted along the way by non-shiny things. We may choose to get a job, have kids, travel or whatever. But the distraction from the main distraction doesn’t last long.

All humans want is to touch and own shiny objects. I am pretty sure it is hard-wired into our brains right alongside breathing, pumping blood, sex and sleeping.

Evil boffins are well known for exploiting our weakness in this area. Apple is probably the evilest and smartest of the boffins. Surely you don’t need me to elaborate on that point? Car manufacturers are arguably in second place.

Quite some years ago I read an article by a marketing person in an industry dominated by shiny things. This person said, while observing passers-by at a trade show displaying their latest innovation, “We knew we had a winner because everyone that saw it wanted to touch it.”

Pure evil!

So my assumption is that we are motivated by something visceral rather than pragmatic. That’s OK. There’s not much we can do about it. Most humans assume they are better than that though.

When our technology fails us, and we need to replace it, the shiny beast is hard to control.

Chances are the thing you are replacing can’t be replaced with one exactly the same. There’s usually a new model, new competitor, a new version and, worse still, even if a replacement is available you may have decided you don’t want that type of thing anymore.

I often have conversations with my clients about their upcoming technology purchases and it still surprises me how often an outsider’s perspective can reveal the need behind the shininess and the pragmatics behind the emotion.

At the moment I am reading a book called “The Power of an Hour” by Dave Lakhani. One of the early chapters is about critical thinking. It is essentially about stripping away the bullshit you are presented in the form of “facts” and doing some assessment of the data and the likelihood of it being accurate enough for your purposes. To control the shiny beast you need critical thinking.

Recently, a friend’s laptop failed. We had several conversations both before and during the purchase process. He was keen to jump platforms. The problem I saw, and he’d previously communicated to me, was that he doesn’t like change. Sadly, due to the age of the failed laptop, he didn’t have much choice but to embrace a change in operating system no matter where he went. We also talked about how he worked, what he does and what he needs and wants to do with the machine in the next two years (because that is how long the new device will most likely last). And, of course, we spoke about dollars. The resulting purchase was something neither of us had considered but entirely appropriate for the tool that it needed to be.

I’m the last person to label myself the voice of sanity. Sanity is quite dull. In this case, I was a voice of delay and consideration. They, too, sound dull, but they save money and prevent frustration.

Do you have access to such a voice be it internal or external?

Jumping fast at shiny objects can be costly and painful. Just ask my cat.

David Moore has 25 years experience in the computer industry and is now Principle PC Hater at ihatemypc.com.au.

Two days of desert highways, roadside dining, sleep deprivation and feverish coding by 25 strangers delivered two web startups and a whole lot more, writes Matthew da Silva.

Aboard a bus built to hold 52 passengers, 25 software developers are assembled in ragged groups, chatting while staring at their laptop screens as music plays and the empty landscape flashes past largely unnoticed.

This is coding in transit.

The Startup Bus was the brainchild of Australian tech maven Elias Bizannes, whose company Vast.com has offices in Silicon Valley and Austin. This bus is bound for Texas and the legendary SXSW tech conference, where their business plans will be judged by a panel of venture capitalists and mentoring specialists.

“Everyone was sitting in their different groups,” Bizannes tells me over the phone from the Austin conference centre. “You had some guys sitting in different teams just because we had some configurations where you had four seats with a table in between and others were two-seaters.”

There weren’t always teams. At first there were just 25 individuals Bizannes picked from a list of applicants. And before that, Bizannes had simply aired an idea at a Silicon Beach party in Australia, which has an 800-strong mailing list of hard-core Aussie tech entrepreneurs.

“The original intent was actually a joke over beer,” he says.

“On my farewell drinks, I said, ‘We really need to connect Aussies to the US scene. Why don’t we try and do a road trip from San Francisco to Austin?’ This is where the beer bit came in. I was saying ‘Why don’t we try and launch some businesses by the time we get off it?’ Everyone was half laughing and half thought I was being serious.”

The Startup Bus founder, Australian expat Elias Bizannes

Once in San Francisco, he kept talking. Some encouraged him to put up a website. Then popular blog Tech Crunch wrote about it and “all of a sudden” Bizannes had 50 applicants from three continents.

To screen the applicants, Bizannes drew up a short test.

“I put a questionnaire that everyone had to answer. I seeded it with questions that gave me an immediate way of working out if these people had the right attitude to approaching things.”

Applicants had to answer questions like: ‘Do you know what UX is and do you think it’s the most important or the most overhyped thing in a business?’ The aim was not merely to learn if an applicant read industry blogs.

“The second thing I was testing is just their awareness that the user experience is the most important thing in a web service, because the product you’re providing is the experience. If you don’t understand that user experience with that product, then you’re going to fail as a web startup.”

Work started even before the trip south began. Developers lucky enough to make the grade — including eight Australians — built a real-time mapping location technology and a gaming technology.

Once on the bus, the troupe headed for Cupertino, in Silicon Valley, where they met and listened to a talk by Hewlett-Packard CTO Phil McKinney. After leaving the building, Bizannes got participants to pitch their ideas on the bus. Through a series of eliminations, they cut the viable ideas down from 20 to six and organised into teams.

And it wasn’t all just coding. To address the marketing side of business, Bizannes got the teams to pitch their ideas to random strangers at Santa Monica, a seaside town near Los Angeles.

“A lot of people said, ‘Nup, I wouldn’t use that.’ Other people were very encouraged by it. It was a good way for the teams to get some market validation for their ideas outside their own bubble on the bus.

“Based on their conversations it gave them an insight, not just on their idea, but how to pitch it. Because as they kept pitching it to different people that had no idea what they were doing, they had to use better language and be more concise.”

View from insdie @TheStartupBus (photo provided by @ppeach)

Another marketing exercise took the form of a game where the team member who accumulated the most ‘bus dollars’ was named the chairperson on the team website. Using Twitter and other social media, team members tried to make visitors click on links leading to The Startup Bus website. Each unique visitor earned the person who published the referring link ten ‘dollars’.

“We had people furiously battling it out on Twitter, sharing links trying to raise money,” says Bizannes. “It was quite funny to see.”

After more stops in Palm Springs, Phoenix and El Paso, the bus arrived in Austin, where the teams pitched their ideas to the judging panel at a party. Two winners shared the prize: DormDorm.com, which converts university dorm rooms into accommodation and vacation rental for hire over the summer months, and DateBrowsr.com, which scrapes information from dating websites and allows a user to rate people based purely on their appearance.

Winners get coaching from angel investor Naval Ravikant in order to qualify for the startup list along with opportunities for introductions to investors.

“But the funny thing is it went so quickly. It hurt, people were exhausted but they all said they’ll do it again. You’re just so challenged by the project that you were working on, working at the technical issues, the bus ride did not feel that long.”

And the winning teams were not the only winners, says Bizannes.

“I don’t think you could replicate this experience on a train or a plane for the simple fact that it would be too comfortable. It really is bizarre. We had the media before the bus launch saying, ‘This is going to be an absolute failure.’

“We all walked out of it thinking the bus made the experience what it was. It was so intimate sitting next to each other. You’re in each other’s faces. You’re overhearing all the conversations. It created a much more intimate surrounding. And that intimacy formed an emotional bond between the groups, which was remarkable.

“Once we arrived at SXSW, every single night everyone’s been roaming the streets partying together. They’ve all become good friends. It’s kinda cool to see.”

Such bonds are invaluable, Bizannes thinks.

“What makes a successful business isn’t the idea, it’s the team.”

He says this is because often the initial idea pitched always evolves with team input.

“What you’re really looking out for is the type of personality that can maybe pitch an idea, but also execute and react to an idea. Real success in a startup is being able to evolve a product and that’s more of a personality thing than an initial idea thing.”

Bizannes links such teamwork to Silicon Valley’s tech world dominance.

“I’m a firm believer that the reason why Silicon Valley has taken off, and remains steps ahead of everyone else, is because they have these alumni networks of people that have collaborated and worked together. Many years might pass, but they all know each other well enough that they’ll pull each other back into companies on their second or third go.”

So The Startup Bus is not just a good way to build new web businesses, with exhausted participants saying that they would like to do it again.

It is also a valid excuse for collaboration, with one of its main aims being the building of an alumni network for the future benefit of the Australian tech sector.

The judging panel comprised:

• Bill Wood: http://www.silvertonpartners.com/team.php
• John Price: http://www.vast.com/info/team
• Kip McClanahan: http://www.capitalfactory.com/mentors.html
• Michael Trafton: http://www.capitalfactory.com/mentors.html
• Joshua Baer: http://www.capitalfactory.com/mentors.html
• Simon Anquetil: http://www.estrategygroup.com.au/about-us.aspx

Matthew da Silva writes feature stories to fulfil a dream after working in communications and technical writing roles for two decades. He grew up in Sydney, lived in Japan for nine years and now lives on the Sunshine Coast, in Queensland. He blogs daily at Happy Antipodean.

There isn’t just satisfaction and dissatisfaction, there’s non-satisfaction and non-dissatisfaction too. It’s important to know the difference.

I did some research once on bank customers and found out that they weren’t hoping for satisfaction, just no dissatisfaction. And it really made me think.

Some things satisfy:

• Food
• Entertainment
• Travel
• Sports
• Friends
• Dancing

Some web businesses satisfy:

• We Are Hunted
• Blurb
• Posse
• Moshcam

And some things you just want to not be noticed;

• Cleaning
• Banking
• Administration
• Paying bills

Some web businesses are about ‘not-dissatisfying’;

• Online backup
• Live In Australia (online visas – though when you get the visa you’re very happy)
• Google Docs
• Search?

When was the last time you said “Wow, this hotel room is so clean – I’m really happy!”

Here is a bit of a chart to show you what I mean:

It’s useful to think of your product and features according to these. Is this feature going to make them happy or is it just going to make them mad if it doesn’t work? Of course, this is all in the eye of the beholder, so perception is everything here.

“But what about focus?”

Yes, focus is key here. Can you imagine if you put more than one type of customer on this chart and tried to keep them all happy? You can’t. Start with one, make them very happy AND not unhappy, then move on.

Your Turn

Mick Liubinskas is one of Australia’s leading web strategists, having served in head marketing roles at Kazaa, Zapr and Tangler. He now runs Pollenizer, the business incubator he co-founded with former-Kazaa colleague Phil Morle.

This post was first published on the Pollenizer blog.

Attracting new clients to your business can be as simple as finding out what turns them on.

I’m talking about how to uncover the secret desires of your audience in order to really tickle their fancy and best excite and seduce them into becoming your clients.

Take singer-songwriter Lady GaGa, who has carved out a successful career writing hits for the likes of Britney Spears and the Pussy Cat Dolls before exploding onto the music scene with her own debut album, The Fame (2007).

Lady G’s most impressive talent isn’t actually in her acclaimed song writing ability, her voice or even her alleged pole-dancing abilities. Rather, it is her acute understanding of the secret desires of her target market. The Fame tapped into this perfectly by being an album all about (in her own words) “how anyone can feel famous”.

The bold, uncompromising lyrics of tracks such as Beautiful Dirty Rich created an instant sensation and got the media all excited, touting her as the new “material girl”, taking over the mantle from Madonna.

What has this got to do with your business?

Take a look at your existing client base. Can you imagine the myriad of secret insatiable desires in their lives? You may say there’s no way you can know, but let me ask your subconscious this question: If you did know what they were, what would they be?

Take yourself on a mental flight of fancy and see what you can discover. Are there any secret desires seething along under the surface that you could use as themes in your marketing and communications campaigns?

What do you imagine your customers want to achieve?

What do their patterns of behaviour and buying habits reveal to you about the things that turn them on?

There are more of us harbouring secret desires like these underneath conservative corporate suits than you may have ever realised before. Aspirations such as:

• Being rich
• Being famous
• Being acknowledged
• Being thanked
• Being accepted
• Being happy
• Being sexy
• Being thin
• Being buff
• Being conversed

Take some time out to really think up a whole host of creative ways to transform your business offerings to cater to the hidden desires of your key clients. What can you do to make your goods and services so addictive that they just can’t get enough? Offer them rare diamond insights and gold nuggets of information that your competitors aren’t communicating effectively enough. Zoom in on that which can substantially impact their lives.

What you’re selling doesn’t have to be new (objects of desire have been around for as long as the people who create and covet them) but it does need to take a fresh approach, be a new spin or a new angle — something shinier and more exciting than the way what you’re selling has ever been presented before.

Create new and exciting ways to present fresh themes and perspectives your clients can’t get from anybody else. Once you nail this, it’s like you’re serving up a platter of their favourite delights on a regular basis and they will know exactly who to come to every time they feel hungry.

Ben Angel is the author of the brand new controversial and revealing book, ‘Sleeping Your Way to The Top in Business – The Ultimate Guide to Attracting & Seducing More Customers.’ Grab your copy today by visiting www.benangel.com.au

Generation Y has been slammed in the media for a lack of work ethic. To find out what business leaders think, Jack Delosa caught up with Janine Allis, founder of Boost Juice, to learn about how she turned this generation into her greatest asset and what Gen Ys can do to take advantage of the recent media attention.

The Issue

Articles such as “Why bosses hate Gen Y” and “Gen Y too lazy and unfocused to hire” have been peppering the media at an increasing rate. Recent media attention has labelled Gen Y lazy, unfocused and disloyal, with some companies going as far as to say they’re no longer hiring people who are in their 20s. It seems that corporate Australia and the media have thrown their arms in the air when it comes to the issue of Generation Y.

So how do Gen Ys differentiate themselves in the marketplace and what can employers do to capitalise on the talents of the select few?

A recent study indicated that 70 percent of employers are dissatisfied with the performance of their Gen Y employees. Forty-eight percent of SMEs also expressed disappointment with the communication skills of their younger employees. To make matters worse, 90 percent said that Gen Ys are more demanding than our counterparts and that we’re 79 percent more likely to ask for a pay rise.

Although this data paints a bleak picture for Gen Ys in the workplace, it represents an opportunity for the ambitious Gen Ys who are willing to defy the trend. Similarly, organisations that know how to speak the language of the younger generation will be able to attract energetic and tech-savvy talent.

Janine Allis is one person who has managed to turn the troublesome Gen Y into a strong commercial asset. Founder of Boost Juice and the winner of several awards, including Telstra Business Woman of the Year (2004) and BRW Fastest Growing Franchise, Allis has been listed several times in the BRW Young Rich List as a result of her entrepreneurial aptitude.

The Problem

“They’re coming in too entitled,” Allis says to me of Gen Ys. “If I was a young marketer and I wanted to get involved with a brand like Boost, I would come in to the Marketing Director and say, ‘I’m in. Whatever it takes. I’m in. I’ll work for one month for nothing and prove to you that you can’t let me go.’”

Some of her highest performing employees came in this way, starting at the store level and working their way up, gaining a practical education of how the business works. But that’s not typical of Gen Y.

“Instead, they come in and say, ‘I want $105,000, but I don’t want to work after 5:00pm.’ I think the mistake is they lose perspective of the fact that it’s a business and we have profit and losses.”

With Boost Juice, Allis has managed to create a youthful brand that not only attracts Gen Ys as customers, but employs them as the bulk of their workforce. Allis explains that although there may be a higher portion of Gen Ys that come into the workplace feeling “entitled”, it’s about recruiting the right people that are suited to the culture of your business. “We’ve got the right Gen Ys in the business. By getting the right Gen Ys and giving them a direction and a goal, that’s the answer.”

The Education Myth

When asked if the fact she left school at 16 years of age has ever put her at a disadvantage, Allis replies, “Never. Never once.”

With such a high emphasis being placed on tertiary education and good grades, SMEs and corporations can fall into the trap of placing too much importance on the grades of a student rather than the character of the person. “I wouldn’t not hire you because you don’t have a degree,” says Allis. “If you had an MBA, great, that’s nice, but I wouldn’t hire you because of it. I go by the attitude, the drive, the passion, the ability to succeed. That doesn’t come with a degree. That’s inbuilt.”

She also indicates that she is not worried in the slightest that some companies hire purely on a grades basis. “There are some who are old school, who won’t hire people without a degree. But I love those people because what that means is that these people who didn’t do a degree, these great people who will help me make my business successful, are free.”

The Practical

Gen Y has drawn criticism due to our lack of practical experience in the real world. This is a position which is consistent with the majority of business owners I have come across. It is a downside which the most ambitious of the Gen Ys are overcoming through self-education.

Education can no longer be viewed as something that happens within the four walls of a high school or university. University is fantastic, sometimes even necessary if you’re looking to become an accountant or a lawyer. However, this can’t be where the education stops. The Gen Ys who realise that the majority of their education needs to happen outside of those four walls will ultimately break free from the pack. Education in the real-world comes from making mistakes and gaining experience.

Having left school at 16, the vast majority of Allis’s education took place outside the classroom. “Talking about university courses, I see lessons in mistakes. I did a $300,000 course in site selection. I did an $800,000 course in getting the right person to do brand. I’ve done a lot of courses to get to where we are today.”

“Every generation needs a new revolution.”

— Thomas Jefferson

The Opportunity

According to Allis, recent media attention puts ambitious Gen Ys at an advantage.

“There are some amazing Gen Ys that are passionate and driven. They’ll make a lot of money and be highly successful because there’s less competition.”

The biggest challenge for companies is to find good people that will genuinely help them drive the bottom-line of their business. “The greatest challenge for the milk bar down the road is the same greatest challenge they have at BHP, and that is people.”

The revolution will come when a select few Gen Ys put their hands up as the achievers of the bunch. Because of the negative media attention around the younger generation, the ones that do stand up as leaders in their field will be very visible.

In the words of Allis, “For those great people who are willing to do anything to succeed, you will be able to write your own ticket.”

Jack Delosa is the General Manager of MBE Education. Jack has been named as one of the top 30 entrepreneurs under 30 in Australian Anthill’s 30Under30 Awards and BE was recently featured in the Fast 50 by Smart Company. jack [at] mbeeducation [dot] com [dot] au

A few weeks back, Eventarc founder Scott Handsaker asked Anthill readers for advice on how to maximise business opportunities while attending a US trade show. This is his follow-up post after manning the Eventarc stand at the recently concluded SxSW trade show in Austin, Texas.

You get to the end of the show and you cannot tell one from the other. They all spend their budgets in order to stand out, but it has the opposite effect. They blend in.

We came to the SXSW 2010 Trade Show as eight seperate startups from Australia, with Eventarc being one of them. We all have fantastic potential, but we don’t have the funds to compete with the big corporates in decking out our spot on the trade show floor. So how do we stand out?

We do the opposite.

If everyone is shouting, try whispering. If everyone is spending tens of thousands of dollars, try spending $200. Instead of adding everything you can think of to the stand, go minimal.

If you do that, you end up with something that is memorable. Something that stands out. Something that people were literally taking photographs of because it was so unique.

They stopped, they stared and they discussed.

I present to you a creative concept from the great minds at Michi Girl. Think minimalist art gallery with about $200 worth of materials.

The little touches helped. Such as the couch.

and the footpath.

Sure we got some weird looks when we were setting up, but the proof is in the pudding, yeah? It worked.

When everyone else is zigging, you should probably zag.

Scott Handsaker is the co-founder of Eventarc, an online registration and ticketing startup based in the Docklands, Melbourne. He hopes you like Eventarc enough to tell all your friends about it.

Re-published with permission from Scott Handsaker of eventarc.com. The original article can be viewed here.

Much of the discussion about business innovation and commercialisation in this country focuses on technology transfer and public R&D. However, it’s worth reminding ourselves that agriculture and primary industries still constitute a large proportion of Australia’s GDP. And these sectors are crying out for innovation reform too. Brian Ramsay explains the significance of the upcoming Productivity Commission inquiry into rural R&D corporations.

The Productivity Commission inquiry this year into rural research and development corporations is a pivotal review. The terms of reference are broad and the outcomes could open the door to transformational changes in how rural R&D is funded and managed.

The rural R&D model is two decades years old and has remained essentially unchanged. In this time it has served the industry and government well. However, the imperatives for reform have been building for some time.

The reform pressures flow from the fundamental changes to Australian agriculture over the past 20 years. Agricultural businesses at all levels have innovated, with supply chains consolidating and the development of alliances and collaboration to capture productivity gains and create value for consumers and for Australia.

The last 20 years have seen momentous shifts in the way information and knowledge is sourced and used by businesses. Alongside this change, the role of commercial entities in research and its commercialisation has increased. Declining government investment, internationalisation of markets and a push to integrate research more closely with commercial supply chains and businesses to achieve productivity gains have driven change.

It is increasingly obvious that conventional approaches to research, extension and adoption are of declining relevance. Research in some rural industries has shown that traditional sources of information are at best reaching and providing useful information to only 25% of the potential audience. In those industries, the commercial allied services and supply chain businesses are now the significant information source for over 75 percent of farmers. Government funded R&D must demonstrate productive relationships with commercial innovators to remain relevant.

Knowledge has become globalised over the past 20 years and progressive businesses maintain international networks as sources of information for decisions. Government funded R&D has to be similarly tapped into developments overseas.

The need for a lift in the performance of the R&D model is recognised by levy payers and reflected in surveys that measure levels of satisfaction. Interestingly, the issue is not so much a lack of commitment to investing in research, but concerns about how effectively knowledge is being translated into business value. While the political debate usually centres on levels of funding available to researchers, the need is for a fundamental shift in emphasis towards investing for the application of research by businesses.

The prospect of change and reform is unsettling — especially for those directly affected. The natural tendency is to seek to preserve the status quo, though it is a high-risk approach when seeking different outcomes. Groups with the most vested interests in the current system can be expected to be most vocal. However, the rural R&D model is no more insulated from change and innovation than are the businesses that make up the modern, internationalised agricultural industry. The opportunity ahead is to help shape the changes required to take rural R&D to the next level. It should be embraced by all.

It is too early to predict what that future model should be. What is evident are the genuine needs for change and the opportunities for innovation to achieve better outcomes.

I can envisage a new model emerging that is more collaborative, more business-oriented, more globally integrated, more focused on application of knowledge and more needed and valued by Australian businesses and the community.

Only after looking at the best ways to achieve these outcomes can we identify future structures and required funding levels.

Brian Ramsay is Managing Director of Inovact Consulting, a specialist advisor to industry, government, research agencies and commercial clients. He was formerly CEO of the rural R&D company Australian Pork Ltd.

Photo: Olduser

Photo ©2009 Dave Sag

While in Copenhagen for last year’s climate change summit, Anthill contributor Dave Sag had an opportunity to test drive the Fluence, Renault’s 100 percent electric car. As Sag reports, the loudest thing about the Fluence is its indicator. But is it a game-changer?

There’s something quite amazing about a car that makes no discernable sound when you start it. And I suppose that’s just something we’ll all be getting used to as this decade — the teenies, as they have been dubbed — rolls on.

While in Copenhagen for the COP15 climate change conference last year, I was fortunate enough to run across Renault’s new 100 percent electric Fluence. I’m not so excited by the name, but the thrill I got from driving it was unlike any legal car-related rush I’ve experienced.

The Fluence is a production-ready electric car, one of the first in the world and certainly the first one I’ve had the opportunity to drive. Unlike the much lauded Tesla, this is a family car and will retail in Australia for around AU$45,000 or so — or so the Renault people in Denmark thought. We’ll find out when this car is rolled out here in Canberra early in 2011.

The Fluence has a maximum range of 160 kilometres on a single charge, which is not much use for interstate trips, but quite adequate for running about town. But this is no little run-about; it’s a big, family sized car. To recharge, you either plug in to a special recharge station, or, if you are in a hurry, you can pull up to any Better Place charge point and simply swap out your empty battery for a full one. This process takes a couple of minutes, compared to many hours to recharge the battery via a cable.

Better Place is rolling out the first electric car recharge network in Canberra later this year. The empty batteries can be recharged via solar or some other clean-power, making the running of the cars that use their network — such as the Renault Fluence, but also other makes of car — truly emissions-free. What’s also interesting is you can apparently draw-back power from your car if you so wish. You pay for the recharging and battery swaps on a plan, much like the data-plan you buy with your phone.

Photo ©2009 Dave Sag

So what’s it like to drive? Well I only had a short test-drive [video embedded below], but that was quite an amazing experience. First up, as I mentioned, it’s silent. The Renault tech had unfortunately left the radio on and tuned to a dead station which kind of spoiled the effect somewhat, but we soon turned that off and found that the Fluence just hums along: Indeed, the loudest part of the car is the indicator.

Once I’d navigated out of the hotel parking lot, through the petrol station I didn’t need, and past the armed soldiers that had been stationed to protect some visiting VIP, the novelty had started to wear off and it was really just like driving any ordinary car. It’s only got two gears, forward and backward, and of course neutral (is neutral a gear?).

The pickup is quite incredible; we shot to about 100kph in a matter of seconds before being forced to slow down to let a Danish pedestrian cross the road. Once I’d finished taking it for a spin I took a look at the engine and naturally it was as clean as a whistle. No oil, no grease, no moving parts at all. This car is going to do to the auto-parts industry what the iPod is doing to CD sales.

Of course electric cars have some way to go yet. The 160km maximum range, while a great effort on the part of Renault and Better Place, still means I’d have to recharge it three times on a drive from Canberra to Sydney, or about seven times if I wanted to drive to Adelaide. But if the Australian Federal Government is serious about greening their ComCar fleet, this would be absolutely perfect. Canberra’s much lamented taxi service could adopt these as part of a major overhaul, too (in my dreams).

However, battery density need only double three times and this car could easily make the trip to Adelaide on a single charge. And at the rate technology is advancing, we could hope for that to happen by around 2015 or so.

Widespread adoption of electric vehicles seems assured to me. Now we just need to convince people not to drive to their local shops. Electric cars are still no substitute for a nice walk or a pleasant bike ride.

Dave Sag Test Drives the Renault Fluence

Dave Sag is a founder, executive director and Chief Operating Officer of Carbon Planet, the global emissions management company. He lives in Canberra and does not actually own any car. Follow him on Twitter: @davesag

The Law of Success in Sixteen Lessons, Napoleon Hill’s 1,600+ page monstrosity published prior to Think and Grow Rich, contains a lot of useful information that can help you realise your potential. In this series, Joshua Moore covers each of these attributes in a practical way that you can apply to your life and work. Today he discusses Lesson Five: Initiative and Leadership.

Also in this series:

• Lesson #1: The Master Mind
• Lesson #2: A Definite Chief Aim
• Lesson #3: Self Confidence
• Lesson #4: The Habit of Saving

What is initiative?

According to Napoleon Hill, initiative is ‘doing what needs to be done without being asked or told to do it’. This might sound like a simple statement, but so few people actually engage in this process. Several employees of companies wait until they are told what to do, rather than taking the initiative and doing it beforehand.

There is a benefit to taking action before being told what to do. An employer will see that you are able to self-manage (a quality of leadership) and will acknowledge in their mind that it takes less effort to organise you than other employees. If you are able to self manage and do not need to be reviewed every five minutes while conducting your work tasks, then you put yourself in a position that will give you a competitive advantage above your competition when it comes for a promotion.

The same is true for entrepreneurs. Entrepreneurs who take the initiative and prepare proposals for their clients that outline problems as well as a list of solutions they can implement have a definite edge over other businesses. A possibility may be not only to outline these solutions in a proposal but to actually begin taking action towards them before the proposal is accepted.

What are you doing today that is showing initiative (i.e. without being asked to do so)? If you are reading this post, chances are you are already conducting research and trying to improve yourself without being asked to do so. Find other ways to take initiative and leave a comment outlining your results.

Once you have mastered initiative you can then advance towards leadership.

What is leadership?

In his book the 21 Irrefutable Laws of Leadership, John Maxwell states that “Leadership is influence. Nothing more, nothing less.” I’m pretty sure that Napoleon Hill would have agreed with this definition wholeheartedly.

An interesting point that Napoleon Hill makes about leadership is that it is never found in someone who has not acquired that habit of initiative. Many people who have titles may feel that it is an entitlement but rarely will someone end up in a position of authority in any endeavour without having first become a master of doing things without being told to do so.

Napoleon Hill offers some steps in the Laws of Success to develop the skills of initiative and leadership. They are too long for the scope of this article, but in summary they are:

• ‘Master the habit of procrastination.’
• Embrace the philosophy that ‘the only way to get happiness is to give it to others’.
• To become an effective leader, one must work to develop a co-operative attitude with others.
• ‘Be an example to your own men.’
  ‘Be prepared to invest financially in your own men.’
• ‘Give more than you expect to receive.’ This giving does not have to be only financial.
• ‘Know your men, know your business, know yourself.’

Leadership is not developed in a day. It takes time and work on a daily basis to make connections, to touch people and to give freely of yourself for quite some time before you will begin to see the compounded results of your investment.

Anthill is a perfect example of this. The Editor in Chief James Tuckerman explains how when he first started Anthill he began with 150 subscribers after sending out emails to a 2,000 person database. From here, he has continued to expand and grow the business until a point where it serves tens of thousands of people each week. It was only through initiative and leadership that this was made possible.

Actions:

• Assess yourself in relation to your initiative. Are there things you could be doing without having to be asked to do so?
• Do one thing to begin taking initiative in your employment, your business or your study today.
• Find ways to kill procrastination. Haven’t finished an item on a to-do list? Break it down into smaller tasks.
• Co-operate with others, always giving more to help them than you expect to receive.

Joshua Moore is the founder of Moore Thought, a website dedicated to helping people tap their mind and reach their potential in life.

If you use Twitter as part of your personal or company marketing, Frances over at Edublog asks interesting questions: “When potential contacts are researching you on Twitter, will they judge you by the people who follow you? Should you therefore invest time in checking your follower lists and blocking the spammers, scammers and pornbots following you? Does it reflect poorly on you if they are there?”

First, my usual word of warning: nobody really knows yet.

No matter how impressive the social media guru or digital strategy expert, this is still shortly-after-dawn in the Age of Social Media and nobody really knows anything for certain yet. Social Media was born as a means of subversive online communication — it only recently and reluctantly began to bend to the will of marketers. The industry is still developing the methodologies that will one day tell us for sure the answers to these big social media questions.

In the meantime (as Quasimodo said to the archdeacon) I have my hunches. Here they are.

Relax, don’t do it

No, I don’t think a follower list full of spambots and pornbots reflects poorly on you. I don’t think you should prune your follower lists. I believe, in most cases, people will not judge you by the calibre of people following you on Twitter.

If someone does judge you on the kinds of people who follow you on Twitter, it’ll vary greatly by age, industry and nationality. You won’t find the same standards applying in Paris as you do in Texas, or between tweens and seniors. Twitter is a very international community and there’s no easy way to track location or demographics of the people who view your Twitter profile unless they also choose to follow you.

So why worry about unmeasurable opinions of people you can’t identify?

There are more productive things you can be doing

For most of us, the investment required to curate our follower list will not equal whatever return we get from having a ‘clean’ follower list or the risk we take by not having a ‘clean’ follower list. (This may not be true for conservative politicians, church leaders and captains of industry.) I have 1,700 or so followers currently and I’m not even going to try to keep so many followers in line. The spambots and pornbots will eventually wither and die from neglect if Twitter’s own anti-abuse team don’t get to them first.

You won’t see me saying this often…

Let’s take a leaf from the pages of Old Media History. If you own a television set, TV networks can’t stop you watching their programming. There is no ‘block’ button on the control panel at your local TV station. Yet the demographic composition of a TV audience is essential to the success of a television when courting advertisers.

How do they change their audience composition? Through means much more subtle and yet even more effective than a ‘block follower’ button. They use programming changes to change the content being broadcast and when it is broadcast. And they use audience research to learn more about not just who their audience is, but what sort of content they need to offer in order to reach the audience they aspire to.

What is the Twitter equivalent of ‘programming changes’? Change what you say, change when you say it. Change what you reply to, and how rapidly you reply to it. Encourage interaction with the followers you aspire to have more of. Seek less interaction with pornbots. Respond less often to phishing scams. Please, for all our sakes!

‘Audience research’ on Twitter is not dissimilar to TV: time-consuming, inaccurate and prone to erroneous conclusions. But it’s still worth a try. Pick a follower who typifies your ideal audience. Take note of who they follow and what they reply to. Mimic. Repeat.

No undo

Remember, I’m making this up as I go along, based on what I observe every day and what I can find in my hunch bag, but here’s the big take-away: I am not a fan of the ‘block’ button. If you decide to block followers who your business contacts won’t approve of, what next? Because there’s no ‘undo’.

What if you’ve just blocked someone still finding their way around social media etiquette the hard way? What if that person might have become a valuable business contact or customer if you’d just given them another chance? Even if you keep following them after blocking them to see if they turn over a new leaf, you’ve sent them a message: you don’t want them following you. It’s a small thing to not follow someone, but a very large thing to not let them follow you. There’s no undo.

No wonder TV sets don’t have a ‘block viewer’ button.

Alan Jones is Chief Hindsight Officer at Doing Words. Since 1995, he has consulted to early-stage companies and new product development teams, helping with online strategy for communications, product development and marketing. He also has hands-on experience founding and co-founding web and mobile startups, as well as senior management experience in larger companies including Yahoo!, News Digital Media and Microsoft.

According to the latest Global Innovation Index by INSEAD, Australia is losing its way as a country supportive of innovation. However, Australia’s innovation outputs are on the rise.

There are numerous programs and indexes launched each year to assess a country’s innovation capabilities (several are listed below). Among the most comprehensive and credible is the Global Innovation Index prepared by INSEAD, which last week released its 2009-2010 report, revealing some unexpected outcomes.

Firstly, the USA lost its number one spot, tumbling to 11th place. Secondly, the country to take its numero uno position is the troubled nordic economy of Iceland. Soumitra Dutta, an INSEAD professor of business and technology, who oversaw the survey, explains that, this year, size did indeed matter. But, in this case, it’s the smaller that have done better.

The most populous land in the Top 10 is Sweden, with 9.2 million people. It finishes second. Several of the biggest nations in the developed world cluster just below the US — Japan is 13, with Britain at 14 and Germany at 16. Of the so-called BRIC giants in emerging markets, China comes out best, at 43. Trailing are India (56), Russia (64), and Brazil (68).

Such an outcome should bode well for a remote island nation with a population just barely 22 million.

So, how did Australia perform?

Most innovation indexes rank countries according to innovation inputs and innovation outputs. If you’re keen to get your head around how the process works, these are the most widely cited of the global reports, excluding the INSEAD Index: The Economist Intelligence Unit (EIU) Report, The Atlantic Century Report, The European Innovation Scoreboard and the BCG Report.

What is an innovation input?

Inputs are factors that are influenced by the political environment, access to technology, education and government policy. Traditionally, Australia has ranked relatively well (in the teens) for its innovation inputs. This is not a particularly impressive claim, as most advanced, stable, western democracies perform strongly according to this metric.

What is an innovation output?

Outputs are the evidence of the results of innovation inputs, such as numbers of patents, trademarks, royalties, creative products and services, employment in knowledge-intensive services, high technology exports and business ownership rates.

Using a model that looks something like this (below), countries are measured according to their innovation inputs and outputs, giving an overall rank.

Global Innovation Index by INSEAD, 2009-2010

Australia’s Global Innovation Index Ranking

So, what is Australia’s overrall Global Innovation Index Ranking for 2009-2010?

Drum roll please.

In 2009-2010, Australia ranked at number 18, wedged between Belgium and Ireland. This is an improvement on 2008-2009, when Australia ranked 22.

While the PTBs (powers-that-be) are likely to hail this outcome as a triumph, it’s important to recognise that this improved placement came about despite an evident fall in the extent of innovation inputs.

Australia’s innovation ranking on the input index fell from 13 in 2008-2009 to 16 in 209-2010 (Sweden holds the top spot for innovation inputs), suggesting a decline in Australia’s capacity to support innovation.

As such, the true stars in this Index are the Australian entrepreneurs and innovators responsible for the ‘outputs’ of innovation over this period, which showed an improvement from 28 in 2008-2009 to 20 in 209-201, despite a tricky economic and, so it seems, policy environment.

Strengths and Weaknesses

According to the report, the following factors pose our greatest strengths and weaknessses.

STRENGTHS (Australia’s 10 best ranks)

Interestingly, many Anthill readers might be surprised to discover that, in terms of availability of venture capital, Australia made it into the top 10. This might also have something to do with a global ‘tightening of the purse strings’ that strongly affected most capital markets last year.

WEAKNESSES (Australia’s 10 worst ranks)

These weaknesses are obvious to most of us, perhaps with the exception of ‘Education Expenditure’. While Australia ranks highly for ‘Quality of education system’ (14) and ‘Quality of scientific institutions’ (10), it seems that we aren’t spending on this innovation input the way that we used to. I also found it personally frustrating that Australia should rank so poorly with respect to ‘Creative products and services’ as an innovation output.

To get full definitions of these strengths and weaknesses, please download the report (INSEAD Global Innovation Index)

Last time Anthill talked with Domenic Carosa, the former CEO of Destra Corporation, he spoke philosophically about losing his founding stake in the public company, as one of many casualties of the Opes Prime collapse.

Not one to rest on his laurels (or get bogged down in ‘minor’ set-backs), the serial entrepreneur explained in the linked video how he would be taking the lessons he learned starting and growing a public company from scratch and applying these skills to a portfolio of internet startups by launching his own venture capital fund.

This week, Carosa’s Future Capital Development Fund (FCDFL), Australia’s only internet-focused Pooled Development Fund, announced its plans to raise a new round of capital in the lead up to an IPO. It’s current portfolio consists of approximately 15 companies, including MP3.com.au, which he bought back from Destra last year.

So far, Carosa has already raised more than $2 million of a target $3 million from existing investors, including former RealEstate.com.au CEO Simon Baker and Flexigroup founder and rich list member Andrew Abercrombie. Carosa then plans to list the fund on the ASX in late 2010 or earlier, in a float that he expects will raise $10 to $20 million.

Why float?

Talking very briefly to Carosa earlier today, I asked, “Why list and why now?”

He replied, with his trademark charismatic guile, “Timing is everything,” before emailing a handful of powerpoint slides.

It’s clear that the Future Capital Development Fund and its backers have an end goal in mind.

And I believe that goal is a sale.

This might seem a strange assumption to make, particularly after explaining only sentences ago that the fund plans to go public, pulling an additional $10 million into its coffers through the process.

Why now?

There is that old saying, a rising tide lifts all boats. If the market is gaining momentum, it pays to become part of that tide. The timing will soon be ripe to raise those additional funds through an IPO.

However, as Carosa would only be too happy to point out, many larger companies are also likely to want to start taking advantage of this change in shareholder sentiment and the most obvious (and generally preferred) way to do that is to start gobbling up smaller companies.

Not only does an acquisition create a good story to tell, it also can do wonders to a company’s balance sheet, piping in additional profitablity if the acquisition is a profitable business.

But here’s where it gets really interesting.

Price Earnings Multiples for Listed Companies

The average Price Earnings (PE) Ratio for a publicly listed company on the Australian Stock Exchange in FY09 was 19.5. For those not completely familiar with stock market lingo, this simply means that shareholders believe that the company is worth almost 20 times the amount of money it earns.

In the private sector, these sorts of valuations are almost unheard of. If I wanted to sell a coffee shop, for example, the buyer would look at my EBIT (my annual profit, to simplify things) and then multiply that by, maybe, three… if I’m lucky!

As such, a small private company might be worth three times its earnings. A large listed company is worth 20 times its earnings. This means that any additional profitability will increase the value of a listed company 20 times the additional profit. No wonder acquisitions are such as attractive growth strategy for listed entities!

Internet companies attract an even higher valuation. SEEK Ltd (ASX Code: SEK), for example, currently attracts a PE ratio of 34.1. The sector to which it belongs is valued according to an average multiple of 20.4.

By ‘rolling up’ a series of profitable internet-based companies to list on the ASX, the FCDFL could indeed be positioning itself for a very profitable takeover.

And here’s the cherry on top.

The FCDFL is a pooled development fund, a structure that affords significant tax concessions for investors, including tax-free capital gains on the sale of their shares. Should its backers achieve a sale or merger, the proceeds will offer its investors, including those joining the fund in the current round and future rounds, a tax-free capital gain.

I’d love to win an Edison Award, but to be honest, it ain’t gonna happen.

I’m no inventor, so unless they open up a category for new cocktails and mood-enhancing aromatherapy recipes, I’m fresh out of luck. The award I would perhaps have more than a snowflakes chance of winning is a new type of award that celebrates more the ‘Edisonian method’ — commonly referred to as ‘trial and error’.

This proposed new awards ceremony would be about celebrating the journey entrepreneurs take and acknowledging that iterating, growing, learning, changing or modifying the plan according to evidence and experience shouldn’t ever be seen as a ‘failure’ of the original plan… but is in fact ‘business as usual’.

Personally, I live by the theory that the only way I can fail is to actually give up. Having already taken the biggest leap and made it through the first hoop of entrepreneurship by getting in there and ’starting’ something, I can honestly tell you I’m never, ever going to give up. So if you fancy yourself as a chance against me at the inaugural Edisonian Method Awards (although, we definitely need a much sexier name for the press release — any ideas?) you’re going to need a damn good story to tell.

My journey into entrepreneurship started out pretty well…

It was about this time two years ago that I was sitting on the beach having a little moment to myself and relishing that I’d just sold my first business. I’d started the business, a Natural Therapies Clinic, with the end in mind. I created systems for everything, insisted on Swiss-like punctuality from therapists and worked hard to market the clinic as the most convenient and professional destination for stressed out execs and local business owners to unwind.

The one thing I wasn’t great at was keeping overheads low, so when it came time to sell after four years, I achieved a price that was about twice my earnings before tax (EBIT). Problem was, my EBIT sucked. My net profit growth over the four years hadn’t kept up (as a percentage) with the revenue growth of that time. I learnt a big lesson there about the way a business is valued.

Although I had expected to come out of it with a little more cash in the bank, I was still really happy with the sale. I’ve since begun to understand what I would have to do next time to increase both net profit and the multiplier applied to realise a better price.

Spurred on by initial success, I embarked on my next adventure.

Business number two, started in 2006, Gorgeous Things, is my entry in the Edisonian Method Awards. My journey over the last three-and-a-half years has been full of thrills and spills, expensive ‘learning experiences’ and outright stuff ups. There’s been continual iterations and even a complete business model change.

If my faith in the ‘trial and error’ method and my own ability to change and grow will ever be fully tested, this is the business that’ll do it. It’s also taught me that you have to be prepared for the path you set out on, to take you to a very different destination than you might have planned for.

What started out for me as a direct sales business promoting the natural, organic and Fairtrade products that I am so passionate about (with an online store mostly for re-orders) has morphed into what is soon to become a small scale (initially) online magazine for the community of women we’ve established over the last few years who want to look fabulous and feel great naturally. How did I start by selling a hand-picked range of products only to arrive a few years later at becoming a publisher?

I’ll happily air the dirty laundry of my last three-and-a-half years in my current business if it means I can help a fellow entrepreneur avoid making some of my gaffs. Like anything in business, the devil is in the detail. If you happened to catch my previous post here on Anthill, you’ve already heard one of my tales from the trenches — the ‘disaster recovery event’ that saw my e-commerce site and blog get hacked — and that’s just the tip of the iceberg!

Before I do share more though, I’d love to hear your story. Have you, like that lovable scamp GOB from Arrested Development, ever “made a huge mistake”? Or, did your business start out on one path only to end up somewhere you never expected?

I’m all for embracing these realisations, whether they take the form of major stuff-ups or a systematic series of iterations that lead to a better way of achieving success in our businesses. It’s the best way we can all learn from each other.

So, leave your entries below in the inaugural Edisonian Method Awards. But know this: whatever it is you’ve done that you think is such a clanger of a mistake, you’re not the only one.

Lesley-Ann Trow is a seasoned bootstrapping entrepreneur who loves to share what she learns with other SMEs. Her Consulting talents range from asking ‘why?’ roughly 17 consecutive times to assist clients develop their razor sharp cut-through WOM marketing message to helping SMEs protect their reputation and bank balance as they navigate the online world. Start following Lesley-Ann on Twitter @150dominos and please tell her if she makes a mistake.