Peter Christo

07 Sep, 2008

Stem Cell Research & Entrepreneurship

Posted by: admin In: Entrepreneurship

The Age had an artricle yesterday titled “Infighting clouds stem cell centre’s future” about the Australian Stem Cell Centre’s inability to choose a path between research and commercialisation.  They talked about how the organisation had stalled due to this differing opinion in approach.

This is a perfect example of corporations being illinformed as to the appropriate approach relating to entrepreneurship or commercilisation in these types of organisations in partuicular (ASCC or CSIRO etc).  I suggest that these organisations should be solely focussed on their research.  Their agenda should be determined by the source of thjeir funding.  Giovernment funding should have a ’social good’ agenda and a human agenda (in this case anyway).   The organisation should be generating a plethora of new technologies relating to stem cells and offering themr up to entrepreneural organisations who think they can take them to market at a profit.   The organisation might have a number of external relationships with organisations who have the mandate to commercialise in this space.  The ASCC should havever have a section within their organisatiuon that manages these external relationships and allows their IP and knowledge to enter the economy.

That activity is a seperate function.  Like electricity that comes out of the wall, one needs the same effect with these types of organiosations,.  They need to be free to think and go where ever they choose in terms that work for them or their finenciers so disconinuous innovation and true leaps forward can occur.  If the organisation is government they their may be both a social and human mandate and a commercial one.  The commercial one belongs to the entrepreneur or entrepreneuriial organisation that knocks on the door and says, hey, let’s do some business.

21 Aug, 2008

Introducing the Hybrid Entrepreneur

Posted by: admin In: Entrepreneurship

I was interviewed recently, about the stresses associated with being an entrepreneur. Soon after the interview commenced, I was described as a serial entrepreneur. Until a year or so ago this was arguably the case, mind you, no keys to the Tuscan villa yet. This time however, I responded with a ‘No!…I’m not a serial entrepreneur; I am more a parallel type of guy”. I was joking of course, but there was an element of truth in it.

I run MCR, Christo Partners, and am a one of three in Pitch Club. Three bone fide businesses all taking my time to varying degrees during the week.

Every one who has ever advised me insisted that I needed to focus on one venture at a time, but for me it does not work. Of course if I ran 10, I would be dead from exhaustion and confusion, but three works for me nicely. It keeps my risk spread, and keeps me interested.

The interview got me thinking about how I managed to navigate my way through the last 2.5 years in terms of stress, cash-flow and the occasional night sweats. It’s not an easy thing, even for those of us who are hard wired to seek that risk. What about people who are in corporations looking to get out via entrepreneurial endeavour? Are they stuck with the either or option, job or venture, and the prospect of a wild business ride which may or may not (as is mostly the case) result in financial freedoms?

I had been discussing this with a buddy of mine Kelly McGowan who runs an online web site for six figure salaried people looking for work (sixfigures.com.au) and we talked about the changing landscape of employment and what I called the “hybrid entrepreneur”. I believe there are smart folk out there who actually don’t quit their job, but effectively use a downshift model or a job share to free up some time to undertake a venture.

The thing is that some of these people have no intention of leaving; they just hack away at their venture until it can stand on its own two feet and actually keep their job. Mad I know, but it’s effectively the same thing I do. They split their risk in half rather than work 5 days and drop savings into investments which just go up and down with the mystical ebbs and flows of the economy.
To me this hybrid career makes much more sense. It’s more interesting and it has big upside potential.

Interestingly, a Hybrid Entrepreneur (HE) in adopting new skills, will inevitably become more valuable to their employer also. Imagine someone who had to learn financial management, marketing and some online skills by actually doing it.

I think that this type of approach works well for younger entrepreneurs who don’t know if they have ‘it’ and for older people who might have families, particularly young kids or on the way.

The same skills apply.

There is a common directive communicated down through large organisations that permeates in many cases to the coalface: - “Be more innovative!”, of course this means taking risks and trying things that have never been tried before, and in most cases not even thought of. This request and policy in some cases, is generally met with cynicism because the very structure of the organisation rests on process and the eradication of risk and uncertainty.

The traditional role for innovation was the R&D lab, but businesses have come to realise that R&D is not enough. Many millions of dollars spent on R&D have done little in either research or development, and in fact it has become obvious that a big gap exists between the company’s ability to create new products and its ability to get them to market at a profit. In more recent times, businesses incentivise their people so that they will undertake intrapreneurial (entrepreneurs within the organisation) activities and, some companies create large corporate programs and even departments and management roles (eg: Innovation Director) to support this endeavour. A range of consulting companies has popped up to assist with just that. The success of such initiatives has been less than impressive.

This paper seeks to argue that what is described as being innovative in business is simply efficiency, not innovation.  Really, it is nothing different from management and business theory espoused over the last five decades. Furthermore, that undertaking innovation and commercialisation activities by imitating the business angel rather than the traditional R&D approach would yield better results and deliver more value to the business strategically, operationally and in terms of profit.

To R&D or not to R&D.

I suggest that many in-house R&D departments do little to serve the firm’s short or long term viability or ability to generate profits. Consider the following scenario; A business with a budget of $10M for R&D allocating that money in a traditional setting, employing scientists, engineers and all the associated support required for them. Consider now the economic and productivity merits with this budget (or half of it in fact) being allocated to three well trained and educated people who jump on planes and scour the globe for new businesses and technologies that fit with the organisations strategic goals (of course they have the whole gambit of technology and network management tools to assist). The organisation would be presented with a number of candidate opportunities to consider.  The organisations options then include (other than rejection) acquisition, license or even partner at a fraction of the price it would have cost to develop internally.
In many cases these small enterprises have not only developed the new ‘widget’ but commercialised it to a degree by bootstrapping and thus have de-risked the opportunity for the right buyer. The next phase for these start-ups is normally to raise growth capital in the realm of a few hundred thousand dollars. This range of investment is trivial in comparison to the costs of internal R&D. The challenge is having the skills and frameworks within the business to manage the identification process, evaluation and then the engagement or acquisition.

Supporting my argument further, I believe that the enterprise, no matter how big, is no match for the billions of thinkers on the planet, particularly in the free market economies who value entrepreneurial behaviour.  Some of the most innovative and profitable companies are now starting to think like this.  Take a look at Venture Beat and Techcrunch talking about Google’s new VC fund.


It should be noted that some organisations do very good things with incremental innovation (via R&D labs), building on already successful and commercial products.  What I am referring to in here is disruptive innovation that are ‘trend breaks’ and set the pace for the future (Think Amazon, iPod, Google, etc).

The enterprise as the business angel.

Business Angels normally ‘hook up’ with up to three or four business ventures and inject some capital and knowledge to take the venture forward beyond what the entrepreneur could achieve on his or her own. I suggest that enterprise needs to behave more like the Business Angel to achieve legitimate commercial and strategic goals, when operating within the rapidly changing economic and geopolitical environment. The Business Angel works with the entrepreneur, guides and assists and uses their own networks and other resources to assist the business to move forward. The reality is that large enterprise has little in the way of internal skilled staff that can take on this type of function and effectively engage with entrepreneurial businesses from the external world that have some appeal to the enterprise strategically and/or commercially.
The large enterprise needs to document its collective strategic agenda with respect to its strategic business plan, then establish a framework and find people with the right experience (probably successful entrepreneurs with some corporate experience) to manage the portfolio of ventures for the firm. This could take a project management type approach. The BA (business analyst) is in effect the project manager and the venture management office works like a Project Management Office (PMO) giving the ‘top table’ visibility on progress and contextualising in terms of the rest of the businesses success.

In Conclusion

Large enterprises are better off ‘sticking to their knitting’. Attempts to innovate internally are really wasted energy, and business would be better served to spend its efforts on creating the equivalent of a business angel function that works in a similar way to a PMO.

Enterprise should work with external consultants or businesses to quantify and agree on their strategic goals with regard to innovation and then act to find these opportunities and engage them accordingly.

Special Thanks to Eric Seuret for contributing to the discussion re this topic.

09 Aug, 2008

Welcome

Posted by: admin In: Entrepreneurship

My name is Peter Christo. I am a professional entrepreneur based in Melbourne Australia. I am also a doting father of two. I mention that because the entrepreneurial profession, while wonderful when fully swinging up, also has consequences on the way down, especially on the people we cherish. I have had my fair share of testing times, and who knows may have again.

This blog brings together the juxtaposition of being a professional entrepreneurship, a father and a mortal soul. Certainly much of what I discuss is to do with the tools of the trade and at the same time pushing the bounds of thinking as a business person living in a market driven economy. Sometimes its about balancing life’s needs with business needs. It’s as much about remaining conscious of why I am here for me as well as what I am doing. If that sounds strange, relax and sit back as it gets worse.

Finally, one of the hats I wear is as adviser and educator of eager minds attending a business degree focussing on entrepreneurship. I have to say, that working with aspiring entrepreneurs, eager to get in the fight is both humbling and frightening. It’s also exciting and I love every minute of it.

 

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    About

    I have been self employed or involved in business ventures (in one form or another since 1995), having only worked for 2 years in industry after my undergraduate degree. I undertook a number of business ventures some more successful than others. After a wild ride between 1999 and 2002, I undertook a Masters degree in Innovation and Entrepreneurship and simultaneously got married and became a dad soon after. These two events re-orientated my perspective on life as I knew it. I am now involved in multiple business ventures. I also lecture in entrepreneurship and I am a “doting dad”. This blog is mainly about that revised perspective, and is an opportunity to reflect on the current juxtaposition between business ventures, fatherhood and just being a man. Thanks for visiting!