Category: Insights

PWC Teach at #NHSClinEnt PitStop 7 on the Financial Journey of a Startup

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Adnan Zaheer and Lynell Peck are both Finance Partners at PWC.

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Adnan was the formal financial director at Arena Flowers and Smart Pension. He is experienced in building up small businesses into medium-sized ones. Now both working for PWC.

Lynelle trained as a speech and language therapist but then pivoted to accounting.

Most companies don’t have a great system for fulfilling their legal obligations financially.

Filing late impacts your company in terms of fines. It also impacts your companies credit rating and it can also damage your own personal credit rating.

The monster can grow very big, very fast and sometimes it can get really really ugly.

When should you hire a finance director?

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Adnan would advise that you get a finance director earlier on rather than later.

Tony suggested getting an accountant – otherwise, mistakes will be made. You need someone to keep you on the straight and narrow. It will keep you from getting into trouble.

You cannot withdraw dividends unless a company is making a profit. The articles of the company will stipulate what one can and cannot do from the start, however, these have to be within the law.

They would recommend you find someone who you can talk to and build a relationship with over time. However, if you want your company to grow rapidly then you will need a bigger firm.

PWC will be launching an application for SME’s soon.

Randeep Grewal then talked about cash flow from the back of the room. Does your business generate cash flow in a positive way? (ie. the working capital is negative eg. Tesco). He again emphasised the importance of a decent finance director.

Adnan again – SEIS and EIS schemes are enormously helpful in stimulating investment in SME’s in the UK.

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All you need is an assurance certificate. SEIS is up to 150k. EIS is £100k – 5 million. There needs to be UK taxpayer in there to get the tax relief. SEIS – people can even invest in themselves. You have to incorporate within 2 years to get SEIS.

There are also R&D tax credits – particularly web/system development side. If making a loss in that year you can get up to 33.5% money back on your web development. If you make a profit you get 22.5% back. Nifty is PwC’s platform for this.

You have to offer a pension to your employees. (Auto-enrollment). There should also be benefits packages.

Regulatory audits have to be done when you have more than 50 staff. Due diligence, tax health checks, cyber-security health check, restructuring support and risk assurance / corporate governance all need to come in after this.

Finally, people need to tax-plan for their business exit.

Types of Finance Advisor

Book-keepers manage payable accounts at about £10-12/ hour. A management accountant will probably be at least partially qualified and can do some analysis – put it into a reporting form (ie. cash flow forecast.) Accountants will be fully qualified and chartered.

Finance directors come in 3 different types:

  • Accountants – who will do tax and reporting.
  • Strategic Partners – sit on the board and have relationships with external investors.
  • Catalysts – they do the ops and strategy but they also drive the business (normally they are number 2 to the CEO.

My finance partner (PwC app) helps you with all the different levels here. They also have My Lawpartner, My Tax partner.

Raising money

 

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Thanks Anna Vital for this

 

  1. In the beginning you with incorporate. Then you will raise family and friends money, angel – SEIS or EIS, crowdfunding, startup loans, grants, (innovation grand, r&d tax rebates, Innovation Vouchers, Regional Growth Funds, Mayor of London etc.). Pension-led, incubators and accelerators.
  2. Next around the time of Series A: Business angel investors, family offices/corporate venturing, VC (professional option), Crowdfunding, Business Growth Funds, Loans (Bank, Asset financing, invoice financing, Mezzanine Finance [where the debt turns into equity if it is not paid], Bank Referral Scheme).
  3. Finally in additional rounds or either as the company nears exit: Private equity, VC, Debt Finance (from  both banks and non-banks), Mini-bonds (Loans from small-scale investors), Alternative debt financing.)

Will they invest?

  1. Debt is cheaper than equity – investors will lose interest later on.
  2. Previous success
  3. The investor’s confidence is high (market forces have a massive effect).
  4. Investors will look for the right team, idea and execution and exit plan.

You have to pre-plan – it takes 9 months for the average round to be closed.

Get someone impartial to do the negotiating for you – as the entrepreneur, you are too close to the project to get the best deal.

The role of the Medical Director

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The medical director is the manager of the medical consultants. The speaker likened it to being a bit like Manchester United. The medical director is the manager and the players are the consultants.

The players need to be kept as happy (through good management), with good team-working and the best possible patient outcomes. There are 350 consultants in this hospital. This was the model that Salford adopted. Focus on valuing your consultant workforce and focus on safety.

Recruiting Consultants

In recruitment terms: IBM would probably spend days recruiting people over a several day interview. John Lewis has a much flatter structure. The Princes trust has a different structure. All the decisions are values based decisions in these above organisations.

The NHS is still often using older models based on short 1 hour interviews. This causes some problems when it comes to medical recruitment and allows some of these different characters into the consultant workforce. Some of the more eccentric types include:

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The difficult ones – professors etc. Lots of idiosyncrasies. Need a few but only a few.

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The throw the toys out of the pram type – poor insight. They will cause fights and distract department focus.

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The Mr Burns type – moneybags. They will drain resources.

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Saboteurs – few but very destructive. Even one of these can decimate your department or even your hospital.

It has to be emphasised that these groups do not represent the majority. The last 3 – no insight, Mr Burns and Saboteurs that they are trying to screen out. Some ‘professors’ are necessary but only a few.

The Medical Directors’ Roles

The Medical Director has to deal with Job Planning, Doctors in difficulty, SUI’s (serious incidents), SIRI’s (serious incident report investigation), Conflicts, Dysfunctional Departments, Consultant morale, Trust performance, Patient safety, Clinical performance.

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The Consultants

Everyone will look at the consultants to lead and make decisions. They are the leaders in the hospital.

They are the key decision makers. They may be perceived as difficult from the outside and sometimes from within but they have to think differently because they are key decision makers.

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The key question is where do you put them? They are a finite resource and you need to put them where they are most required.

The consultants need to be team players. They need to teach and manage. They need to know the business. They are the guardian of the quality agenda and outcomes. They forge partnerships between doctors and management. They have to be adaptable.

Previously there have been clinician lecturers, clinician scientists/researchers and clinician service providers. However, now the clinician manager is coming to the fore.

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The idea is that clinicians will be forming and developing their services. We shall see whether or not people engage with this.

At the end I asked the group how many would consider becoming a clinical manager as their primary role. At least a quarter put their hands up! Impressive. Perhaps there has been a significant scene change of late.

Types of Clinical Developer #Doctorswhocode

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There are lots of different kinds of clinical developer but they generally fall into 6 different broad disciplines as represented by the different colours of the octagon above. In a way the disciplines are somewhat artificial, as what really matters is getting results and not which broad category you fall into. For instance you cannot be a frontend developer and not be at least slightly interested in user experience design. However, they help to give others some idea of your background strengths when it comes to building a team.

Note: Not all of these roles even require much coding skill. Some developers can get by without coding at all! I will cover this in future posts.

Clinician Frontend Developer

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‘Frontend’ generally pertains to the parts of the website that you as the visitor can see. These developers focus on producing visible web presence. They range from those who rely entirely on pre-built products (this is a completely acceptable way to start and can actually get you quite far as I will show you) to those who code in HTML, CSS, Javascript, SQL and often other languages as well. If your main aim is to produce a tangible web-presence then this is the route you want to take at the start. 

Clinician Backend Developer

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‘Backend’ is all about the things you can’t see. This type of developer tends to deal with everything from servers and members-only areas on websites, to fully functional web-apps and sometimes whole online platforms. They tend to code in some of the higher-order languages like Python, PHP and Ruby. It is quite difficult to be a backend clinician developer without having at least some basic coding skills. However, there are all sorts of frameworks that make things much easier (I will explain about these as we go on). If you want to build web-algorithms or fully functional websites with members areas etc you will need to know at least some ‘backend’ skills.

Clinician IoS/Android App Developer

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These clinicians focus on phone apps. These require a whole different framework in order to build. I won’t go into it now but this whole area is changing extremely quickly and standalone phone-apps probably aren’t the best way to start-out if you are starting a business. However, once you have an established product there is definitely sometimes a place for building a ‘phone presence’. Some clinicians have built incredibly successful businesses using phone apps.

Clinician Data Scientist

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This is my personal area of interest. The clinician data scientist knows how to use computers to solve complex data issues and build algorithms. They generally code in Python or R and use algorithms to analyse data. Machine learning problems are solved by this group and I believe we are only just at the beginning of seeing the impact data scientists will have on our clinical lives. However, the problems specifically require detailed experience and understanding of the problem in order for them to be solved. This is where the clinician data scientist has a massive advantage.

Clinician UX Specialist

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UX stands for user-experience design. These clinicians focus on making things flow by reducing ‘friction’ and making things ‘human’ shaped. This can be achieved by relentless testing, market research, attention to detail and most importantly focussing on what would best solve their own problems. The clinician is well placed to be a UX expert as they have deep personal experience of the issues which beset those they care for and fellow clinicians. It requires a very open mindset and is not so much about the technical aspects, although many are very adept coders as well. If anything is going to work it needs good UX to be woven into it. 

Clinician Full-Stack Developer

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This is the full package. Fluent in many languages they can basically do everything above to a degree but possibly not to the depth of someone well versed in one discipline. If you need one person to test out ideas quickly this person is your best bet. They can also network very effectively with other developers and because they can iterate ‘build’ very quickly they are a real asset to any development team. In the future they will be common but at the moment they are rare.

To find out more visit : www.clinicaldevelopers.org   – signup to our mailing list for updates, tips and tricks.

Damibu – Dave Burrows’ story #NHSClinent

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Social impact tech company based in Liverpool.

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The founder started as a programmer. He always knew he wanted to be a programmer. Used to work in gaming after his engineering degree. He used to work for Sony doing games programming (worked on Wipeout), post ps2,3. Small studio in a big company = great fun.

He won programmer of the year and was technical director. 2008-2009 he ended up in the group deciding how the playstation network would work (he was one of 15 doing this).

Then in 2009 two top guys left playstation and he decided to leave. March 2010 he started Damibu. He knew a lot about team management, IP and programming. However, he knew nothing about business, finance so he had to transform himself into a business person.

Handsome Businessman Portrait - IsolatedHalf businessman, half hacker.

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We all have a worldview.

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Don’t confront that worldview face-on. Don’t underestimate others.

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Don’t assume they don’t understand or come in telling them your wrong. Don’t ‘Do Business’ – people by from people not necessarily the best solution.

Do – do procurement and economics. Do Ask questions.

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Do network – show your face, do plan – they use tender direct to try and find the right projects (obtain as much information from others as you can. Look at other companies and see how they got there.) Work backwards.

 

Business Planning for Success – Workshop with Paul Gaudin #NHSClinent

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Without the right product and heart in the right place you will never become a multimillionaire.

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The key is partnership. You need to partner in order to succeed because this will reduce the odds of failure.

You have to sort out the legal infrastructure of your business otherwise you will fail. The IP issues are massive. You will have people issues and management issues as well.

Critical Success Factors:

Start at the end and work backwards. Sense check – the outline business plan or lean canvas. What is the likelihood of success? This is something you just learn over time.

Distribution – what is the best/fastest/most profitable route to market to achieve your plan? How many mouths to feed on the way? – This HAS to be in your model.

Are you a product or a business? (If you are just a one product business then this is highly volatile and risky)

Are you in a position to pull this off. Do you really need a CTO etc? How quickly can you pull it off and are you in the position to pull it off?

This is all about patient care and these things deserve to be in the market.

What do you want to achieve?

Are you in the right place in your life? Training, personal financials, relationships, skills, etc.

Have you got the right team? (This needs to evolve along the way). Shareholder agreements when people fall out are a nightmare. You have to plan it into your business journey. As you change gear your on the cusp and red line the business. Then you solve the problem and hopefully rescue it, however, its much better to plan for this!

What is your business model? How will you generate cash.

Have you got the capital to see it through? Nobody ever has enough capital. Double everything (once the plan has come together).

Where is your market? Setting up offices in major markets – they are different all over the world! Even in China things are changing and starting to get better. There are massive healthcare markets there.

How big is it and what % can you expect to convert? (0.1% or even 0.01% is an amazing start)

The 4 P’s.

Reasons for Failure:

  • Lack of experience, (this is learned)
  • Poor leadership, (you can learn this)
  • Lack of research, (This is critical)
  • Lack of focus, (too many ideas, but lack of focus)
  • Lack of capital, (common)
  • Lack of realism, (get real)
  • Poor team dynamics, (if you don’t address the cracks it will split)
  • Wrong skills, (get the right skills and the right people. Otherwise they will be finite (which is ok as well but it needs to be planned)
  • Lack of distribution, (what channels can you use)
  • Over trading, (don’t overtrade or you run out of working capital, look at the bottom line). CASH IS KING! Planning, planning, planning.
  • Lack of innovation, (others will catch up if you become complacent)
  • No strategy (don’t be afraid to adapt to the market). It is accelerating more and more at a rate of knots. The culture is changing. There used to be only a few entrepreneurs, now there are many and this is changing the culture.

What makes a successful innovation?:

Is it worth doing? Are you providing a service solution or a product. Can I make sufficient margin out of it? Is it valued> If so how much and by whom? Who pays? Follow the wave – be a fast follower. Is there evidence or research? What is the cost and the timescale to market? Have you got enough research and capital? (DOUBLE IT!) Will you gain sufficient distribution before competition overtakes you?

For the first time businesses are having to compromise on how long it takes to get a new idea out because they can’t afford to wait any longer. Don’t wait till its too late! Plan ahead. Evidence and research is becoming less important by necessity. What is the best chance of success to impact problem x (Diabetes for example.) A lot of businesses keep a low profile with secret partnerships, and then come out of nowhere because this is a great way to succeed.

distribution, strategy, margin, time , marketing budget – These are the things people tend to underestimate.

Other tools: OGSM – The 1 page business plan. Objective, Goals, Strategies, Measures.

Business Models

Business Model is quite simply ‘how you plan to make money’.

De-risking your model:

  • Synchronise with your main client of distributor
  • Discounting, freemium, up-sell, cross-sell, etc…
  • Deploy a responsive and multi-channel strategy with different pricing models delivered against a common RRP
  • Develop a loyal test consumer group who can act as your canary in the mine.

4 P’s: Product, Price, Promotion and …

Financial Modelling:

Sales – A

  • D2c
  • Distributor
  • International
  • Licence
  • Franchise

Sales – B

  • Production Cost
  • Sales and Marketing

Overheads:

  • Human resources
    • Directors
    • Management
    • Production
    • Sales
    • Admin
    • Other
  • Material
    • Rent and rates (how can you best find the lowest cost rent and rates and work it down)
    • Light and heat
    • Communications and IT
    • Professional Fees – (Lawyers you have to have them, they win either way) Patents require feeding and growing. They can cost an enormous amount of money. £7million case recently – took many years (extremely frustrating).
    • Marketing and PR
    • Finance Cost

Output – D

Operating profit is C – D

Profit percentages vary per industry. R & D costs and fixed assets are deducted from the profits to generate and end of year profit and contribute to the balance sheet. Massive variations between 100% gross profit and 30% depending on industry. Revenue is vanity. Profit is sanity.

Share capital can inspire confidence.

Liquidity ratios enable you to borrow money (look this up) – Available cash you have got to enable you to cover your debts.

Valuations – what are they valuing you on? Main measures – current and potential.

Investors are interested in shareholder value (this is very different to making money). Distribution channel, number of customers, revenues, profit, product, IP, patents.

EBITDA = net profit + interest + taxes + depreciation + amortisation.
Look at the chief exec. Are they growing the business or consolidating it? Are they a 2 year CEO = probably stay away. 3-5 they might be making long term value for the business. It’s the business cycle that counts.

Case Studies:

New York bagel company. 18 months R&D. $1 million startup costs, $1 million marketing costs. Took a year to get the water content right. Good repeatable revenues, high barrier to entry for competitors because of distribution and brand. Year 1 – 2m bagels – 5 year ROI. 10 years too early – nobody knew what a bagel was. Supermarkets wanted preservatives added. If they had started at the end they might have been able to bake this in from the beginning. They had to be sold as the bread roll with the non-fattening centre because people didn’t get them.

Q Score. Total pivot from bagels. Totally different concept. Single number that gives you a cardiovascular risk. Doing in conjuction with key healthcare people. Now moved into corporate wellness market.

Carebnb and Tutella – 3 hospitals signed up to enable social cohesion back to care. We are heading towards a big change in the proportion of carers to those who need care. Japan will hit 1 to 1 by 2050. The patients now have the data. They are becoming real experts. The money is migrating to the consumer which is a good thing.

Can UX Improve the NHS? #GiantHealthEvent

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Panel chaired by Dr Gyles Morrison of Dr-Hyphen.

UX is shorthand for user experience design. It is a hot topic at the moment, particularly as ‘UX experts’ like Apple move into healthcare.

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The premise was put to the group that NHS UX tends to suck. However, it is not just the user interface that needs to change but the problem needs to be looked at holistically from all angles. It’s no good if a piece of software becomes easier to use at the cost of overall utility. There will also be knock on – unexpected effects which UX seeks to solve. For instance the interface might look good and become very usable, but if the system slows down as a result this is an un-acceptable trade off. what-exactly-is-ux-design-01

Some of the panel then made the point that clinicians and frontline staff are not consulted by any of the decision makers. One of the panel members – an orthopaedic surgeon believes we need to fight back against the legacy systems we currently have.

One of the audience then suggested that part of the issue is commissioning. Managers will look for the simplest single solution that ticks the most government boxes and UX doesn’t come into it at all. He gave the example of script switch which almost invisibly switches your script around, saving money and time.

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UX crosses the boundaries of lots of different sectors. The orthopaedic surgeon then told a story about consultants in his hospital being told to see patients within 14 hours of their admission. This was agreed with the CCG than the hospital would hit a 90% target of achieving this. This was not discussed with the consultants until after it had been agreed. They then realised they had a major problem – the staff had no buy in and the managers had no mechanism to actually measure their success.

The GP in the audience then argued that the problems we are trying to solve are normally artificial. We should rather be working out which steps add value to patients, clinicians and managers.

One of the other panel members suggested that the key is to solve a single problem rather than try to tackle many problems at once. I then suggested there is a danger here that we end up like the app market where there are multiple individual proprietary platforms all competing together for money. This could lead to an increasingly fragmented health service which may not serve patients well.

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All were agreed that empowering patients therefore is important, but how this happens and how we cater for patients’ future needs will be key to whether or not we succeed in creating a better future for all patients or only some.

Partnership for change – What is your purpose? #GiantHealthTech

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From the founder of Remington and Mallowstreet – Dawid Ahulu @Dawid1.

These companies are both about saving for retirement. Partnership for change is his latest company and is much more about societal change.

To a worm in a horseradish the world is a horseradish. If you work in finance you know about finance and everything is finance. However, in contrast with everything else this is just a small pale blue dot in a vast universe.

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Why do I do what I do? Why did I get up this morning? He read Simon Sineks book: Start with Why and it changed his perspective. If you start with the purpose then it changes the whole gig.

He has been interviewing his parents the last few years to try and understand their why? He asked them what they would want now in life (in their 80’s). They wanted health, happiness and to stay at home.

Virgin Healthcare talk about health as 1) absence of pain, 2) having pleasure, 3) presence of purpose and 4) committed relationships.

Then he talked about: Dementia, Heart Disease, Cancer, Diabetes. The non-communicable diseases. Many organisations are trying to stop these things: technologists, healthcare staff, governments.

Savings technology. Oinky – moves your savings after working out your spending habits. This is another ‘horseradish’. Smart home-tech is another major field in another ‘horseradish’. Social-tech: Stitch for elderly people. Caring-tech: Cardiocity – using a sprayed substance on cars he managed to use it to detect people’s ECG patterns in an extremely cost efficient way!

His vision is for all these silo’s to connect and accomplish things together. That’s what partnership for change is about.

The ambidextrous organisation – one hand should be making the firm efficient at what it already does. The right hand should be innovating and looking for the next danger. This is what the finance industry is now looking at. Allianz and all sorts of massive finance sectors are interested in all this and they want to bring ‘purpose’ to their finance.

There is a why ecosystem and it’s important to work out where you fit into it.

The why revolution will involve integrating all these different aspects. They will all start to talk to one another.

There is also an extinction process going on. If you forget your just a pale blue dot then your in danger.

We are in the age of warp speed obsolescence.

There are ‘influencers’ but they will soon be replaced by millennials. They are connected, open, adaptable. They live in a ‘gig’ economy. People like Zuck and Bezois cross all the horseradish boundaries.

The world is changing. Figure out your why, broaden your horizons and chase your

You have to learn all the languages: finance, health, government, sustainability, civil society. Who are your 100 key influencers you need to meet in the next year? Meet them and build your network!

If you stay in your ‘horseradish’ and you don’t figure out who moved your cheese then you might be a dinosaur. If that is the case you might suffer the same fate.

Find your place.

The UK’s first ever exponential medicine conference

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Welcome to GIANT

This marks the beginning of a shift in the mindset of health technologists in the UK. There have been other events like the NHS EXPO but their purpose was very different.

This conference as illustrated by the programme is going to be very different.

This is exponential medicine conference, UK.

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The speakers at this conference are not your usual health technology conference speakers. I am currently sitting in the middle of an audience full of outside thinking, border pushers within healthcare. A mixture of professionals from medical, business and technology spheres all in one place.

This is the infancy of a small silicon valley type community for health technology in London but it has none of the glitz and glamour of exponential medicine conference. This has much more the feeling of the first DEF CON in June 1993 (I was not there, I was only a child then but I imagine this is what it was like.

Barry Shrier, the Founder started by introducing the term moonshots. These are radical innovations which lack any immediate method of becoming financially successful but have enormous potential in the future.

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The challenges that face us in healthcare now have never been greater. Therefore, the need for a ‘moonshot’ or more likely many smaller ‘moonshots’ to succeed has equally never been greater.

This is the interface at which they occur:

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Barry then talked about the ongoing impact of the NASA program. It is his conviction that we can achieve enormously big goals and we should set out to achieve them for the good of the world. The vision: “To improve the health and wellbeing of humanity, by supporting entrepreneurs and supping healthtech innovation.” He dedicated his presentation to the late Helen Keller. “Life is either a daring adventure, or it is nothing”. H.Keller

It is the spirit of ‘I can do it’ that will enable us to overcome the enormous challenges that humanity faces.

Notes on Lean Startup methodology with a veteran John Spindler aka Capital Enterprise

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I learned so much from this guy I had to share it with others…

Now is the Time

Why bother starting a lifestyle business. You are sitting on so much value and you want to share that with the world not just make your life easier. you don’t want a checklist business!

‘Big will not beat small anymore. The fast will beat the slow’ — Rupert Murdoch. Even he is aware of it.

Ask yourself: Where can your business be in 12 weeks?

Incumbents should note that there are hidden ‘gun’s’ (startups) in peoples garages which contain bullets with other companies names on them.

‘Think big, act small, fail fast, learn rapidly’ — Eric Ries

Lean Startup: Eric Ries

As an investor, John Spindler finds the lack of background research by entrepreneurs to be one of the most commonly encountered frustrating problems. To solve this he suggested:

Make 2 columns:

  1. Fact column- 2–3 facts you KNOW about this business plan.

2. Second column- Hypotheses. What things do I need to find out to build this thing?

Work out what is your OPPORTUNITY HYPOTHESIS. Build, Measure, Learn. Call it a project rather than a business because it is easier to fail fast. (I like the psychology of this idea and have already found it helpful).

In the experimental stage check your are measuring the right metrics, evaluation of them will lead to excellent execution.

Startup Owners Manual: Steve Blank and Bob Dorf

Don’t build something nobody wants

3 types of advice: validated, negative and useless. (Validated/Negative advice in 8 weeks can be tested to see if it works. Good or bad it will help you. )

However, 95% of advice is useless in the next 8 weeks. Therefore, shelve it because it’s useless to you now.

Lean is just about organising the chaos, reducing waste and risk, providing more learning and a common language. IF your core assumption is wrong you need to test that FIRST. Then you will save yourself a lot of time.

It’s a common language. There is jargon and as soon as you learn it you can communicate with others — be ‘in the club’ as it were.

If you are going to build, do a lot of thinking. Then build the thing that teaches you what you need to learn.

The number one thing an investor will look at is the team. If you can convince a quality person to join you that is a sign of success. If you can recruit a quality army this is your number 1 asset! What quality of ARMY can you recruit? Investors will care about this more than anything else as it is the biggest single determinant of success.

Get OTHERS to validate your product. Your own validation is not that valuable but multiple external validations are.

Testing Hypotheses

A good hypothesis is simple & clear, written as a statement, establishes participants (who), variables (what’s involved) and prediction of an outcome (evidence).

The Pepsi Challenge type scenario is NOT the right first validation exercise. You have to assume that the first answer is wrong. Ask 5 why’s & eventually you might get to the nub of it. AVOID CONFIRMATION BIAS like the plague.

Most people are NOT early adopters in ANYTHING. Most people have habits that are very hard to break.

MVP is not a crappy version of the product. It is a prototype. Consierge MVP is legitimate. It can be a simple landing page, it can be a proof of concept, it can be something for people to engage with, it can be a paper prototype, a pitch, fake demo video, or something to help a developer to understand. It is just a way to answer the questions you need to answer.

Thanks to JP at www.transformcustomers.com for this great cartoon

Consierge means it is not scalable. It’s just there to allow you to learn. Beware, If your hypothesis is circular then its not a hypothesis and you need to think again.

Key assumptions you need to make

At least several other people are working on the same thing right now. How you think this your business idea will work is probably wrong. Your main job is to learn faster than the competitors. That is why the team is the key. It is the process and the people that win NOT the product itself.

The market is not stable and anyone who doesn’t keep moving forward will fall behind.

Call it a project, give it a name, sell something, convince someone else to join, set a goal that will inspire you, live 6 months in the future, fall in love with the problem and not your solution. Follow Peter Thiel’s philosophy as per ‘Zero to One’ (find it on Amazon its a good book.)

Teams

There are two types of teams. Napoleon team — they will follow your every command. The best teams however are people who are smarter than you and can do things you can’t and you bring them on the journey with you. They don’t want to just be footsoldiers for your army.

Bare minimum you need a hipster (domain insight), hacker (builder) and hustler (seller) to succeed.

Paul Graham- You need three things to be a successful entrepreneur — a great team, proof that customers want it and a willingness to do it with minimal money!

Regarding Customers

‘Make something people want’ — Paul Graham, Y Combinator

Avoid wasting too much time trying to change the ‘stuck’ middle who don’t want to innovate because they are very good at using the current system. Are your people your assets or your problem?

Before building your business ask: What problem would someone else solve for me?

Another thought: The number of secrets in the world is roughly equivalent to the number of startups we need.

How did the companies that are currently successful scale. When you scale big you win even if your product is inferior. Unless you can bring 10* value you are unlikely to be able to displace an incumbent. (As per Peter Thiel).

Design Thinking

He would thoroughly recommend doing Stanford’s online course on design thinking (8–10 hours). Emphasise, define, ideate, prototype, test. Do it in groups if you can, it will radically transform your thinking.

‘Kick Ass’ products have evidence that they solve a customers problem in a big market. Focus on the early adopters. People you can beta test with. Commit 5 people. They need to know they are aren’t buying a perfect solution.

They are trying to find a home made solution. They want you to succeed, they will give you their time and honest feedback and you have a relationship of trust. Your mum is not one of these first customers!

Do you know the demographic? Needs and goals? Problems that need solving, Present behaviours? How do they go about solving those problems? Reference group? The behaviours and the psychology are key.

Behaviour Change

BJ Fogg. Head of behavioural theory at Stanford. B=mat. B=behaviours, m=motivation, a=pre-acquired ability, t=triggers (we are all contextual. We need external triggers to get us to change our behaviour. Every product is a behaviour change. Activation threshold affected by these three things, the triggers have to be enough to get them over the threshold.

Source: B.Fogg (Stanford) Site as per diagram.

Can you make something better than it already is? make something simpler? In an ideal world how would this problem be solved? Better, Simpler or emerging methods?

He suggests we build 5 actual profiles of 5 potential customers (actual people) . The more specific the better: Motivation, Habit , Income, Age, Location, Status, Backstory. Become intimately acquainted with there problems.

Then understand the full use-case lifecycle.

Source: @capenterprise — John Spindler

What do these personas do when ‘triggered?’

Entrepreneurship is a career. Startups are risky experiments. You don’t have to experiment full time. Start today with what you have.

Do you invest in startups who don’t use lean methodology? Yes but its rarer. Sometimes people just get damn lucky and hit a home run of first base but its the exception rather than the rule and it might not be repeatable.

Then he talked about financing and how ‘founders fit’ and how investors look at these things. Do you have someone resourceful, someone who can do x and y. The team you build now might well not be the team that takes it to the next level. Identify the task in hand and see if the team members can get you there.

Funders and investors must fit. An investor should never distort the function of the startup because this is your task. You have the hands on the controls. They are investing in you!

Suggested reading: Moms test by Rob Fitzpatrick, Running Lean by Ash Maurya and Lean Startup by Eric Ries.

This article came out of notes I took on a talk by @capenterprise at the first NHS clinical entrepreneurs pit stop – The beginning of a new journey. Or see my medium blog

Roger Harcourt @shake_lawyer on legal issues that startups face #NHSClinEnt – Pitstop 1

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Good legal governance leads to credibility. Helps us to maximise value and avoid costly disputes.

£130,000 to get to court

£600,000 to take a case through the IP court!

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Good examples of Patents that have succeeded: Ermil who developed the can pull and then sold it to coca cola.Before long he was making a lot of money with his few cents take per can!

Is your idea actually YOURS? If it is can you obtain freedome to operate and therefore commercialise the idea. In order to do thsi it will need to be protected.

Learning from Lord of the Rings. Keep it secret. Keep it safe. Or more correctly keep it confidential, keep it safe.

gandalf

As soon as you start to disclose the core of your stuff you need a NDA in place. As good practice you should still be trying to minimise the information you are giving (the secret sauce as it were). When you come to contracting make sure that there are things in place to stop people getting the full picture (drip feed the information).

Patents:

Consider if it is needed, can you afford it, can you afford to defend it, is it patentable.

If you do need one write it yourself because someone else won’t know your idea as well as you!

To Incorporate or not?

Sole trader, partnership or PLC? What to choose. There are advantages and disadvantages to each. If you do incorporate you have protection but you have to decide:

  1. How you divide up the shares in the company.
  2. Creator, founder, entrepreneur, manager, funder. Look at the contributions now and future contributions and then decide how to divide up the stakes. You are looking to make up an equity split.
  3. Documents, articles, officers, directors etc. Lots of things to think about.
  4. What is the rule book – governance of the corporate structure.
  5. Shareholders agreements whill cover all of this. What are the rules. Who are the directors and who are the shareholders. governance, IP, how to transfer shares, dispute resolution, restrictions and leaver provisions are all in here.There needs to be a structure to protect the shares.

Its about building a contractual mechanism to resolve these disputes in order to avoid a court case later on.

Employees

Must have contracts but can have policies which fit everyone.

Your employess represent an operational risk. HR can be tough!

Confidentialitiy, IP ownership, Restrictions and Policies, One size fits all.

Our IP

National contracts do not talk about IP however, local policies might say that individuals do not own IP if they are working in the context of their trust.

Tony suggested potentially writing to the employer explaining that you are building something in your own time and that it is your own IP but also being willing to work with the NHS to make things better for patients.

Roger explained that it is a negotiation.

The whole room is massively engaged at this point

As a businessperson you should also sign up to an LPA just in case something happens to one of the founders. Make wills which tie in your shares, Assignment of intellectual property and other agreements.

Business Model and Contracts

SAP (standard operating procedures) and quality control – document this so you can demonstrate ‘due process’. Also trading contracts whether they be NDA’s, standard terms, bespoke contracts. Don’t sign it if you don’t understand it. and contracts

Bespoke contracts. key terms, compliance, reflect – make sure it fits with your business model and insurance cover. Negotiate.

Joint ventures are particularly important to get right. Define contributions, milestones, outputs. Licences – Get the scope and the outputs correct.

A contract should be a ‘living document’- it needs to keep up to date with the business!

Financing Options

Venture capitlists – are they scary? The key is to find the right VC. If they don’t fit don’t work with them.

The room is fully engaged. Well done Roger!