Ignite Issue 2

The magazine of SIE

scottish institute for

enterprise

Winter 08 Issue 2 • Academic Year 08/09

copyright dan castro 2008

Ignite is published quarterly by the Scottish Institute for Enterprise, and is funded by the Scottish Funding Council.

For all enquiries:Tel: 0141 330 8793Fax: 0141 330 8790Email: [email protected]: www.sie.ac.uk

EditorialEditor: Jennifer LovattTel: 0141 330 8788 Email: [email protected]

ContributorsJohn Coll Kevin DorianMartin IzodJennifer Lovatt Philip RossHilary Singer Paul Sturrock

Advertising, Subscriptions& DistributionPlease contact Jennifer LovattTel: 0141 330 8788Email: [email protected]

Design by d8www.weared8.com

The views, advice and opinions expressed within this magazine are those of the individuals therein and do not necessarily reflect those of the Scottish Institute for Enterprise. No part of this magazine may be reproduced or copied without permission.

Ignite Winter 08 Issue 2

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Our mission is to encourage an enterprising spirit in Scotland’s students, and help them become the finest entrepreneurs and leaders of tomorrow.SIE provides a free service committed to helping Scotland’s students explore a world of enterprise. We can provide you with free business advice, inspire you at some of Scotland’s most exciting student events, and help you get off to the best start in your career or start-up company.

8am, 13th November - Innovation Tournament Launches! 17th – 21st November - Global Enterprise Week5pm, 17th November - Innovation Tournament Closes25th November - Student Enterprise Summit: Edinburgh27th November - Student Enterprise Summit: Glasgow2nd December - Student Enterprise Summit: AberdeenFor more information on all SIE Summits, visit www.sie.ac.uk/summit

Calendar of Events

Congratulations to Daniel Castro, from Edinburgh College of Art!

His artwork won the ‘Design the Front Cover’ Competition. Admire his handiwork on the front cover of this issue, whilst Daniel himself enjoys the £250 cash prize.

Ignite Autumn 08 Issue 2

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my groups Interested in Social Enterprise or perhaps Women in Business? Join forums and groups to share ideas, meet like-minded people, and be the first to hear of new exciting events across Scotland.

my podcasts Catch up if you’ve missed an SIE event, with our highlight videos. Hear what some of our student companies have to say about the ins and outs of running their own business whilst still at Uni. Share your own videos. Inspire and be inspired.

my photos Been to an SIE event lately? You might be online in our photo galleries! Upload a few of your own too.

my blog Let the world know what you’ve been up to: at University, with a new idea, or your own start-up plans!

my friends Meet new students at your University and across Scotland, get to know our Interns, and keep in touch.

get connected

Alert! Innovation Tournament To find out more about your local Innovation Tournament, and watch winning entries from previous years, join the Innovation Tournament Group on mySIE. More info on page 8.

Become part of a growing, vibrant, and invaluable online network for all Scottish students and entrepreneurs alike.

mySIE

Putting the meaning back into value

“The first thing to remember is that value is always relative to a specific person and context.”

Paul Sturrock, Director of Slingshot Ventures Development, defines the need to recognise value and create meaning in any idea or business start-up.

Valuing customers, value-added, value chain, value proposition. Sometimes, we hear some words so often that we stop listening; and that’s what’s happened with “value”. We’ve heard it so often that we’ve forgotten what it means.

In the case of a business, value is important in two ways. First, ‘making value’ is by definition what a business does. It makes a product or delivers a service which its customers value enough to buy. Second, when the time comes that you want to

sell a business you’ve built, the price or ‘value’ is mostly determined by its reputation and track record for developing products and services its customers’ value.

That’s why I like Guy Kawasaki’s advice on how to create value:

“Make Meaning: The best reason to start an organization is to make meaning—to create a product or service that makes the world a better place. So your first task is to decide how you can make meaning.”

Simply put, value is meaning and meaning is value. Any social system will only survive as long as it provides enough meaning to justify its existence. This applies to businesses, schools, governments, charities, clubs, families and friendships. They all need support to thrive, whether it is in the form of money, time, effort, votes, or love. And they only get this support if they provide meaningful value, or a value that has meaning, in exchange.

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make meaning

“The first thing to remember is that value is always relative to a specific person and context.” Ignite Winter 08 Issue 2

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Creating Value

So how do you create meaningful value if you are a business? The first thing to remember is that value is always relative to a specific person and context. A diamond has no value to a starving castaway on a desert island, whereas a meal is worth its weight in gold.

I’ve sifted through a lot of business ideas, and have often found that the most common mistake people make is describing their idea as a product, a service or a technology. Whilst explaining the product or service, they have forgotten two key elements: the type of person who will use the product or service, and the situation in which they will use it.

Geoffrey Moore has built this into a toolkit for developing a robust value

proposition: “an eggbeater, a cook, and the baking of a cake combine to create a value proposition called ‘saving time and energy,’ which can be used to sell the eggbeater to the baker.” It’s only by putting these three elements together, the product (eggbeater), the user (cook) and the situation (baking a cake), and thereby defining the context, that you can make meaning and create value.

Choosing Your Value

The next question to ask yourself is what kind of a value are you going to provide? In “The Discipline of Market Leaders” Michael Treacy and Fred Wieserma point out that there’s actually only three ways of creating value, or ‘value disciplines’, a business can choose. These in turn create only five types of customer benefits:

Operational Excellence: Make your operations so lean, mean, and effective that you can provide them with the most reliable product or service at the lowest price. Remember that convenience is a form of price: time is money. IKEA, for example has stripped down its operations in everyway it can in order to supply well designed furniture at rock bottom prices, even to the point of leaving assembly to its customers.

Product Leadership and Innovation: These are the companies that are constantly innovating to develop new products or services at the cutting edge of performance. They can be relied upon to release exciting new products, and their value lies in their creativity. Dyson and Apple both create this type of value.


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“The key to success for any business, but especially start-ups, is to define your niche and dominate it. You need to be the biggest fish in your pond.”

1. Operational Excellence

Lowest price

Most reliable

Most convenient

2. Product Innovation

Best performance (state-of-the-art)

3. Customer Intimacy

Bespoke

Greatest choice of products

Customer Intimacy: These companies focus on tailoring their product to each customer. At the extreme, this means a completely bespoke service. If bespoke is not feasible, the alternative is to provide a larger range of product selection than the competition. Bespoke tailoring is the obvious example. Amazon is another when it comes to selection. In the case of best sellers, they compete on price. But the majority of their sales are due to the instant, nearly infinite product selection they provide, supplemented by personal recommendations.

The key point is that you can’t choose all three of these; you can’t be all things to all people. Successful companies, like the ones mentioned above, focus their efforts on excelling in one of these dimensions and aiming to be merely good enough in the other two.

The key to success for any business, but especially for start-ups, is to define your niche and dominate it. This is just another way of saying that you need to be the biggest fish in your pond. The elements outlined above are a recipe for a niche strategy: first

choose your pond by defining your target market in terms of your customer’s context. Who are they, what are they trying to do, and what product or service benefits mean the most to them? Then decide what kind of fish you are going to be by defining your ‘value discipline’ and the benefits you will excel at delivering.

There’s your simple recipe for building any business: just add initiative, imagination, sweat, determination and a good pinch of luck.

3 alternatives for creating value, and their benefits:

You’ve had an idea for a new product or business, but how do you know whether it will sink or swim? Scout the market. 1. Identify your market

Establish who your customers are and where they are based. There are a variety of government and commercial market research sources that can assist you in this process. Mintel www.mintel.com provide useful consumer profiles on many niche sectors while SCROL www.scrol.gov.uk/scrol/common/home.jsp and UK Census Data http://digbig.com/4xrhk provide detailed demographic data on Scotland and the UK.

2. Quantify your market

Knowing the size of your market is a key requirement of any business plan. You can use government sources

such as Regional Trends http://digbig.com/4xrhp or Family Spending http://digbig.com/4xrhq to obtain data on UK expenditure on a range of products and services. Free web resources such as Marketsearch.com or Researchandmarkets.com can help you identify what commercial research has been published. You can also contact us at SCOTBIS to find out whether any of these reports are accessible through the National Library of Scotland.

3. Spot the trends

Ensure your research covers trends within the industry that you are focusing on. Is the market likely to change soon? Is your key demographic group increasing or declining? Good commercial market data will cover such questions. For more wide ranging observations of trends there are a number

of useful sites including http://trendwatching.com/, http://www.psfk.com/ and http://www.trendcentral.com/.

4. Know your competitors

From free sources such as yell.com through to high cost company databases there are a range of sources to help identify your competitors or suppliers. SCOTBIS includes links on its website to a range of free company sources. You can also get access to data from our subscription databases by using us in person or requesting information. If you are a postgraduate student you can even access some of our resources remotely. Contact SCOTBIS for more information www.scotbis.com

How to Guide No.3


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How to... conduct valuable market researchby John Coll Scottish Business Information Service


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What’s the catch? The object won’t be revealed until Thursday 13th November, and you’ll only have 4 days to complete the challenge.

we challenge you...to create as much value as possible from a common, everyday object08

Value can be measured on any scale you choose.

The mystery object will be revealed on Thursday 13th November, on the homepage of SIE: www.sie.ac.uk

Teams can be of any size, and you can use the object in any way you wish, to create your chosen value. You’ll need to record your work on video over the 4 days, then submit your finished video by Monday 17th November on youtube.

Go online to get all the details & rules, watch entries from previous years, register for the Tournament, and get ready to stretch your Imagination!

http://eweek.stanford.edu/ global2008/signup.fft

tournament 2008

innovation


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Register for the Innovation Tournament: To take part in the Innovation Tournament, you must register before Thursday 13th November on the Innovation Tournament Homepage. All information and registration here:

http://eweek.stanford.edu/global2008/signup.fft

we challenge you...to create as much value as possible from a common, everyday object 09

How much

value could

you create from:

‘06: Post-it Notes

‘07: Rubber Bands

‘08: To be revealed!

To find out more about your local Tournament, and watch winning entries from previous years, join the Innovation Tournament Group on mySIE:

Compete against students across the world

Round 1: Your University Round 2: Nationwide across Scotland Round 3: It goes global!

Win cash prizes

National Winner: £750 Three Regional Prizes: £250 each Local Finalist: entered into the Global round!


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PEOPLE PAGES

Internal Affairs

On a bright, cold day last week, I was walking the quayside in Newcastle. The city is reminiscent of London, with a lively riverside district marked by chic restaurants and a tree-lined boardwalk. Like the Thames, the River Tyne is spanned by a variety of bridges, including a pair of sleek white arches called the ‘Millennium Bridge’.

And like the Tate Modern, Newcastle also has its own large, riverside, 50s-era industrial plant (in this case, a former producer of flour, not power), renovated by the city into a modern art gallery.

Architecture is one of the most transparent manifestations of innovation, as evidenced by Newcastle’s striking BALTIC gallery.

From the transformation of raw materials into the building’s new interior, to the reinterpretation of the old flour mill’s social role, the sense of reinvention was unavoidable.

Architecture also illustrates a salient fact about innovation: new ideas must often work within the constraints of an existing form or process. Looking at the BALTIC, it is clear that such realistic constraints to innovative thinking are a guide and a foundation, not a hindrance to creativity.

Fundamentally, innovation is about creating value. As Enterprise Week and the Innovation Tournament approach, I’ll be thinking about types of value, different catalysts for its creation, and how my current resources can inform and direct my own work.

At the BALTIC, I found myself chatting with a beatboxer—part of a human installation on the second floor—about his favourite sounds. As he took a deep breath and launched into a solo act, his nose and mouth turned into an electric guitar, bass, snares, and a crooning female vocalist. Here was innovation in the act.

Hilary Singer SIE Student Intern University of Edinburgh

“From the transformation of raw materials into the building’s new interior the sense of reinvention was unavoidable.”

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There’s little chance of doors closing on the business aspirations of former SIE Business Plan Competition winners Phillip Ross and Martin Izod.

Winners of the SIE Business Plan Competition in 2006, Philip and Martin developed ideas for, amongst others, a collapsible swimming lane divider and the world’s first portable epilepsy alarm, but it’s SafeHinge, a “no-gap” door hinge, that is on its way to making the largest impact.

Anyone with a young child knows the risks only too well. The time-honoured method of hinging a door leaves a small gap where little fingers can get trapped and the effects can be traumatic.

SafeHinge eliminates this danger. By affixing special

hinges to the top and bottom of the door, the gap is eliminated, with no compromise to door performance – doors using SafeHinge can easily open up to 110°.

Phillip comments; “We took SafeHinge to the Concept Product Awards Show, part of the Ideal Homes Exhibition in London and generated a great deal of interest and positive feedback. People instantly see the benefit and capability that Safe Hinge offers them. The child safety aspect and aesthetic appeal of the product are clear advantages over anything else on the market.”

In April last year SafeHinge moved into premises at the Hillington Park Innovation Centre. Having won £5000 as SIE Business Plan Competition Winners

- matched with £5000 in-kind support, the company went through a fund-raising round, through the NESTA Starter for Six programme, the Prince’s Scottish Youth Business Trust (PSYBT) loan scheme and a SMART Scotland funding award. This totalled around £100,000 which the company used to take their product through a rigorous fire testing programme.

Securing their first sales recently and with two highly experienced non executive directors in place the future for Safe Hinge looks to be in safe hands.

PEOPLE PAGES

Company Profile


Visit SafeHinge online at: www.safehinge.com

To hear more from Safe Hinge, including some tips on starting a business, watch their podcast at

There are one or two students at each University in Scotland that think SIE and enterprise is so great, they want to tell every other student about it; so we employ them to do just that. If you want to be a part of an exciting, dynamic and different group at University, get in touch with your local SIE student intern. They run all sorts of events, competitions and social meet-ups to get you involved.

Frank CraigRBA for Glasgow, and West

[email protected] 07810 876298

Simon FraserRBA for Dundee, St. Andrews and North


Peter van BruchemRBA for Edinburgh, Stirling and Perth



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SIE @ Your University

Edinburgh College of Art

Glasgow Caledonian University

Glasgow School of Art

Heriot Watt University

Napier University

Queen Margaret University

Robert Gordon University

Royal Scottish Academy of Music & Drama

The Open University in Scotland

UHI Millennium Institute

University of Aberdeen

University of Abertay Dundee

University of Dundee

University of Edinburgh

University of Glasgow

University of St Andrew’s

University of Strathclyde

University of Stirling

University of the West of Scotland

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We’ve got the people for you. Our Regional Business Advisers offer free, confidential mentoring to students. Whether you have a business plan, a new start-up company or that one inspired idea, they can help; so get in touch.

Got a business idea?

Ignite Issue 2

Documents

Transcript of Ignite Issue 2