Friday 31 December 2010

Endings and Beginnings

Nearly 10 years after we first thought up the concept, Matt Cooper and I sold Bmycharity earlier this year.  By the time of the sale, we had helped raise over £30 million for hundreds of UK charities,  and in the capable hands of its new owners, Help for Heroes, Bmycharity continues to provide commission-free online fundraising services to more and more charities and change the way people fundraise for the better.

It was an exciting journey from back of the envelope to exit by trade sale, and now that the journey has come to an end I have had the opportunity to take stock and reflect.  I've been enjoying talking to a very wide range of people over the last few months of 2010 and, together with a wonderful family holiday in Australia for the whole of November, this has given me the opportunity to prepare for the next steps in my career.

Now I am focusing on 3 sectors - online financial services, healthcare and renewable energy.  Each of these sectors shows great potential and I've been talking to some of the people who have been shaping each of them.  I look forward to new beginnings in 2011 - and I hope you have a wonderful new year too!

Wednesday 17 November 2010

Surfing and watching dolphins in Byron Bay

I'm taking some time out in Byron Bay - back next month :)

Tuesday 19 October 2010

Name and no shame - in praise of great suppliers

Yesterday I met up with Craig Dearden-Phillips for the first time.  Craig is embarking on a new venture - Stepping Out - and you can follow his entrepreneurial journey on his blog here.

We discussed the pros and cons of working with other people - the pleasure of finding those with real talent and commitment, and the challenges of creating incentive structures that align the interests of all the people involved in a project.

This set me thinking about some of the most rewarding relationships I have experienced with suppliers (in the broad sense - people or organisations that supply resources, labour or capital).  Over the years I've been lucky enough to deal with some very impressive people, and I set myself the test to work out what shared characteristics they have.  Here's my list so far:
  1. Great passion for what they do
  2. Curiosity about how they can help
  3. Willingness to share risk
  4. Sense of humour
This list may not be complete, so please suggest any additions or amendments, but for me it is a pretty good guide.

Here are some examples that stand out for me - people who've really gone above and beyond the call of duty:

Bellamy Studio

Paul Bellamy designed the branding and layouts of Bmycharity and Giftshare, and as we developed our services we came to look on him as the third member of our team.  He is a creative designer who coordinates seamlessly both with technologists and marketeers, and sets himself and his team exacting standards.  Although I've worked with Paul for several years I've never met him in person - but I have no hesitation in recommending him.  He is a pleasure to work with, and he really delivers.

Richardsons Chartered Accountants

Simon Husband and his team are the most entertaining accountants I know.  After discovering that our original accountants were overcharging, I approached Richardsons and they demonstrated that they could deliver more for less.  Simon's jokes about VAT on carrots are funny, but they also belie a deep knowledge of his subject and an imaginative streak that promises to find the best way to achieve bottom line results.

Capital SCF

James Clark and his team at Capital SCF advised us on our corporate strategy as we prepared to sell Bmycharity.  James introduced me to the expression "skin in the game" - and he joined us in the risks as well as the rewards of what we were doing.  James's knowledge of technology and business strategy is exceptional and I'll want him on my side of the table next time around!

Do you have any suppliers you think merit a mention?  Or can you think of other characteristics of great suppliers?  Please share your ideas here!

Thursday 30 September 2010

For an entrepreneur starting out - some tips with hindsight

In September 2000 I was just setting out on my first entrepreneurial venture.  I was working as an investment banker at JP Morgan at the time, but on a skydiving trip Perris Valley I had hatched some plans with Matt Cooper.  We returned to the UK and set to work on evenings and weekends. 

10 years on we have sold the business we created then.  Older and a little wiser, I'm writing a note to my 2000 self and sharing the benefits of hindsight.  If you're an entrepreneur getting ready to jump, I hope you'll find it useful.  And if you've already jumped please share your comments below.

Balance enthusiasm to jump with readiness to "cut away"

Entrepreneurship is like skydiving - you have to be willing to leave the safety of employment and leap into the unknown.  That takes enthusiasm and courage, but personally and professionally it is very rewarding.  Determination and confidence when dealing with uncertainty are vital - as a friend recently explained to me "you have to be ready to make 100% of the decision with only 50% of the information".  The unpredictable movements of markets, competitor activity and the breathless rate of technological and regulatory change all keep you fit and on your toes.  Cut through this complexity and uncertainty by sticking to your aim and avoiding distraction.

But sometimes a skydiver has to be prepared to cut away a malfunctioning parachute and rely on his reserve.  Focusing on your aim is very important, but if the environment changes, your aim may need to too.

Hindsight:  Our environment changed when our major competitor secured additional funding in 2003.  While we were very happy to take on larger and richer rivals, their access to a $100m fortune made a difference that even the most determined and focused challenger should think carefully about!  At that point we lost the opportunity to dominate the market, but we still achieved excellent growth and profitability.  But when a second major rival (with even bigger reserves) began to prepare to enter the market we knew it was time to prepare our exit.

Capitalise - and choose a big market

A simple rule of thumb is that VCs won't invest in businesses in a market worth less than $1bn per year.  So unless you can finance your growth by other means, avoid markets that don't have massive potential.  Capital is vital to ensure that you can develop your business with a longer term vision, rather than basing every investment on immediate cash-flow constraints.  You wouldn't jump out of a plane without investing in a decent parachute.

As well as providing funds, raising capital can also introduce additional talent - and passion - into the team.  There is nothing like having "skin in the game" to make people share your aim and work to realise it.  You can apply the same rationale to your advisors and suppliers - try to structure your deals with them so that they share in your success - it's a great indicator of their commitment. 

Hindsight:  The total projected value of our market in the UK was £50m - well below the threshold to interest most larger investors.  We designed our business so we could quickly run from operating cashflow.  Before 2003 our better capitalised rivals were losing money fast and many of their first-round investors wrote off their investments, so raising finance would have been difficult for us.  After 2003 the market appeared over-priced and any returns on new capital were likely to be negative or low.  We were able to eke out good returns on our original investment because we continued to deliver excellent growth and margins, and developed an exceptionally lean operating model.  But we were unable to attract new money.  Talking to potential investors was a constant source of stimulating and challenging ideas, energy and enthusiasm though.

Innovate and benefit from the innovations of others

Keep new ideas coming, and stay abreast of the latest trends and technology.  Moore's Law determining the falling cost of computing power, and the constant innovation of others ensure that what is impossible or prohibitively expensive now can quickly become cost-effective.  Anticipate this and be ready to integrate the innovations of others.

If a high proportion of your costs are technology-related, be ready to be bold with your strategy.  When cost structures change this can create opportunities for bold new entrants with disruptive models.  Be ready with branding and pricing policies that take advantage of these changes.  Above all, continue to invest in research and development so that you stay at the cutting edge of your market.

Hindsight:  We generated plenty of new initiatives in our battle to outmanoeuvre our rivals - service extensions, affiliate networks, disruptive pricing and an array of exit options.  Meanwhile, we stayed at the cutting edge of technical innovation and stripped out cost at every opportunity.  With free or nearly-free tools from Google, Skype, Facebook, Twitter and LinkedIn and with the reducing costs (and increasing reliability) of cloud hosting, we reduced our operating costs even as our business volumes grew at a compound annual rate greater than 50% for several years.  We stood on the shoulders of giants whenever we were able to do so.

Network, network, network

One of the best things about starting a business is that you get to meet great people.  Your first customers will be, by definition, "early adopters" and you get to meet people who specialise in a wide variety of areas.  Their willingness to explore new possibilities is a great source of encouragement and a real learning opportunity.  Time spent talking (and especially listening) to people is very rarely wasted, and if someone has interesting things to say that don't directly relate to your current plans it's still worth developing a dialogue if you can.

Competitors deserve a special mention here - of course you are rivals, but in fact you have more in common with each other than with anyone else.  It's well worth keeping a dialogue going with your competitors - one which is respectful, and maybe even playful.

Hindsight:  I've met some amazing people in the last 10 years.  But I wish I had devoted even more of my time to getting to know people.  It's tempting to focus on service design and delivery - especially when you are understaffed - but every business is really about people.  And it's the most fun bit too!  I've recently qualified to skydive in formation, so I can now build networks in the sky.  I've been very lucky to be a member of some great teams in the Royal Marines, at JP Morgan and with Bmycharity, and now I'm looking forward to joining my next team...

Looking forward to 2020 vision

Writing with hindsight is easy - but I wonder what I'll write to current self 10 years from now - with the benefit of 2020 vision.  I could use some tips on swimming technique and my cooking has a long way to go - but I'm sure there are plenty of business lessons still to learn too.  I'm confident that networking in particular will remain central - after all it's in dealing with other people that we are able to create lasting value.  So I hope to deal with many more great people over the next 10 years, while building the relationships of the last decade too.  And I hope I'll be a much better skydiver by 2020 too!

If you've any tips you'd like to share with your earlier self when you set out as an entrepreneur please share them here.  I'm grateful to Jason Baptiste for the idea of writing a letter to my younger self.

Wednesday 15 September 2010

Climbing the Brabyn family tree

Following our trip to scatter my father's ashes, there has been plenty of activity on Facebook and the Gigrower website as Brabyns from all over the world have got in touch.  Several people are compiling family trees and asking me how the family fits together - and someone has even produced a family coat of arms.

I'm very happy to host the discussion here so we don't have to rely on the Gigrower moderators to put us in touch with each other - please feel free to leave your comments here and we can piece the family history together!

There's talk of a gathering later in the year too, so spread the word if you would like to get everyone together...

Wednesday 8 September 2010

Creating value from data - secrecy, invention and layering

I once knew a vital national security secret for a period of 10 minutes.  I could have sold that secret for a high price during its 10 minutes of importance.  I didn't.  Moments later, the information was no longer vital or secret - and it flowed into the public awareness barely remarked.

Recently I've been studying the ways a number of organisations use data to create value, and I identify 3 broad approaches: secrecy, invention and layering.  My interest is in helping organisations build sustainable value positions, so here I briefly consider the pros and cons of these approaches and how they inform business development.

Secrecy - creating value by trading data

Trading state secrets is tricky, since the market is very imperfect.  Counterparties are unreliable, transaction costs are high and the market is hard to predict.  Quality is notoriously variable and verification difficult.  Penalties are high.  As a result, it's best avoided unless you have deep pockets, ideological convictions, and ideally, a state sponsor.

Commercial, technical and personal secrets also have the potential to command a great premium in the right market - but making and sustaining these markets is tricky.  Networking and transaction costs remain high since security must be tight to protect sources, but the real or perceived value of the information may make these costs acceptable.

The whiff of Martini and intrigue can help canny participants to increase the premiums paid, but trading on secrecy of this kind is ultimately a niche activity since volumes are small, relationships expensive to maintain and pipelines hard to predict.  Most worryingly, secret information can lose its value at any time.  To build sustainable value the information must be protected.

Invention - creating value by creating data

Inventors get to harvest the sustainable value of their information by securing intellectual property rights.  Of course this is only an option for those who can demonstrate that they are the creators or developers who have added a distinct definable intellectual asset.  Once protection is in place then depending on the quality of the asset, it can be developed and delivered.

While this is the basis of many a successful sustainable enterprise, it depends on the creation of proprietary intellectual property.  If you don't have any on the drawing board, you can still create sustainable value from data in other ways.

Layering - creating value by comparing data

The quantity of freely or very cheaply available data continues to grow geometrically, and without the Research and Development costs of invention, or the transaction and protection costs of secret information, it can provide a versatile feedstock for value creation.  It is often a simple task to create value by adding information from different sources, or to discover correlations in unexpected places.

Free information - for example from a mapping service like Google Maps - can be supplemented by time-sensitive information - traffic, weather, fuel price etc, to create premium packages that retain their value but have low marginal costs.

Services like Wonga illustrate the benefits of analysis and iterative learning.  By gathering client data, cross-referring against socio-demographic profiles and credit data it's possible to identify profitable market segments (in Wonga's case for short term loans) which previously went unserved.

At Bmycharity we found correlations in our data that gave insights into donor and consumer behaviour that reached far beyond charitable giving - and guided our strategy as we set out to disrupt the commission-pricing model of the online fundraising market.

Now, with the development of ever-more powerful analytical tools like Hilbert and ever-larger data sets, The Economist notes that some organisations are embarking on ambitious efforts to identify a wide spectrum of targets, from valuable social influencers, to fraudsters and terrorists.

Creating value by layering and analysing data offers the prospect both of sustainable value creation and a ready stock of raw materials.  With the continuous improvement of analytical tools available, this part of the market for creating value from data will grow and grow.

Thursday 26 August 2010

A verray parfit gentil knight

My father Freddy Brabyn died on 6th August 2010.  10 years of dementia had robbed him of much, and I believe his death was a liberation.  I miss him, but in the weeks since his death I've seen a great deal to celebrate.


For much of my adult life, my father was, to varying degrees, dependent.  Dependent no more, he thrives in the memories of the many people who have been in touch to remind me and my sisters of his charm, gentleness, inventiveness and iconoclasm.  In dozens of conversations I've encountered him in his prime: encouraging, challenging and fun.  I've been surprised how many women of all ages miss him especially!  I even find mourning giving way to envy of a man who was reportedly part Angry Young Man, part Austin Powers and part Richard Burton.  But of all the adjectives "gentle" is the most recurrent.


Among the many acts of kindness I've witnessed, two stand out especially.  Canon John Wilson came out of retirement to deliver a very personal and thoughtful funeral tribute to a man whose courtesy he compared to Chaucer's Knight from the Prologue to the Canterbury Tales - "He was a verray parfit gentil knight."

I'm very grateful too to Paul Willis and the Ladies A crew of the Padstow Pilot Gig Rowing Club.  I called Paul, chairman of the club and asked him a curious favour.  He instantly agreed, and as a result we were able to scatter my father's ashes at sea from the club's newest gig - the "Brabyn".  This sleek craft is named after Steven Brabyn, my great great uncle who owned a boatyard in Padstow in Cornwall.  My father worked in the boatyard as a young man, played in the sea nearby as a boy and fell in love with the ocean while serving in the Royal Navy.  I cannot think of a more fitting resting place.  Many thanks to the crew, who (with me causing chaos in the bow seat) rowed my father on his final journey and then delivered a very moving silent raised oar salute.


I'm not the only Brabyn to have discovered the launch of "Brabyn" - since posting on the Gigrower forum I've been contacted there and via Facebook by several second and third cousins around the world.  I've even been invited to join a gig rowing club!  Although my father is no longer with us in person he has helped bring together the Brabyn diaspora around the world.

Monday 26 July 2010

10,000 to one - how smart design boosts customer support performance

When you're managing (or planning) a high-growth online service, one of the key considerations is customer support.  While you can increase the capacity of your servers and boost the bandwidth to meet demand, your reputation could fall apart if you're not able to support growing numbers of visitors.

While banks and retailers often plan on a visitor to customer support ratio of 500:1 and a typical ISP may achieve 1500:1, many online services aim much higher.  Here are two essential features of customer support:
  • it can help delight customers and win loyalty - especially among those who initially have a problem
  • but it contributes the highest share of variable cost to many online businesses
So, customer support is important, but expensive.  And it can be very hard to scale up.  If you want to scale fast you may have to accept that your service level will drop, and that your bond with some of your visitors may begin to fray.  Some organisations with millions of users respond by making it difficult to reach their customer support (when did you last talk to someone at Skype or Google?), while others swallow the costs of 24 hour call-centres and watch margins shrivel.

But with careful management it is possible to give your visitors accessible customer support without impairing growth.  The key is to provide the support, but minimise the chances that each visitor will want to use it!

This is a risky process - get it wrong and your customer support team will be under pressure - but the secret is to use poka-yoke design principles to ensure that visitors don't need any additional help.

Poka-yoke (roughly translated as "mistake avoidance" or "idiot-proofing") involves designing processes that reduce the chances of problems arising during a process - in this case the experience a visitor has of the service they are visiting.  Here are some design considerations that can help reduce the chances that visitors will need human customer support:
  1. keep site layouts simple
  2. minimise the number of options and decisions in the process
  3. use logical steps to break down the process into intuitive components
  4. use automated verification and form checking wherever possible and give real-time feedback
With careful design it is possible to manage and predict the load on your customer support resources by applying these principles in a continuous process.  As certain visitor patterns emerge, design can be modified to anticipate and address common concerns or complaints.  And it's worth remembering that visitors prefer not to have to contact support since it costs them time and effort too!

To serve the needs of 10,000 visitors with a single customer support team member, each visitor can occupy only 2.9 seconds of an 8 hour working day assuming that their support requests are evenly spread!  Since they never are evenly spread, and since the typical support request takes longer than 2.9 seconds to deal with, it's worth applying a queueing model to assist with analysis and preparation.

So, even assuming even distribution, if your customer support requests typically take 5 minutes (300 seconds) to deal with, you need to ensure that fewer than 1% of your visitors need help.

When we first launched Bmycharity we had a tiny fraction of the visitors that the service now enjoys, but we were very cautious about offering any real-time phone or online support, relying on webforms and email instead.  But over the years we systematically redesigned the site.  We made real-time phone support prominently available, and we addressed the design of every process element that feedback indicated caused visitors trouble.  We never perfected the process, but we were able to sustain dramatic growth in visitor numbers without increasing our customer support resources - and we regularly received recommendations for our prompt response to support requests.

Sunday 18 July 2010

Slow is smooth, smooth is fast - lessons from Commando training

This is one of a series of articles on lessons from Commando training.  Here is the full list.

On Friday 16th I visited the Commando Training Centre Royal Marines (CTCRM) just south of Exeter to Meet the Marines.  I was one of 30 guests of the C Group, an organisation that is building bridges between the business commmunity and the Royal Marines.  During the course of the day I was introduced to the latest developments and techniques used in Commando training.  It was 12 years since my last visit to CTCRM and in that time the trainers have developed many new capabilities that are valuable to both Royal Marine and civilian alike.

The day started with an introductory run around the assault course and a competitive shoot on the live firing range, followed by an unarmed combat demonstration.  Since I left the Royal Marines in 2000 attitudes to unarmed combat have evolved to cover the range of arrest and restraint techniques that are required in Afghanistan, and to reflect the fact that the traditional punch and kick moves are hard to carry out when carrying as much as 120lbs of equipment.  Several of the ladies in our group in particular were very pleased to discover some of the techniques they could use to restrain or discourage an assailant.  The key theme highlighted by our instructor was "simplicity".

Next we moved to the Coaching Advisory Team, who introduced us to the visualisation and memory techniques they use for training elite and special forces.  Alexei, a very impressive coach explained the effectiveness of linking and visualising (as soon as I have further reading on this subject to recommend I'll reference it here), and confirmed that this new element of the Commando training system has helped turn around 85% of borderline students by unlocking their mental capabilities.  That delivers savings of millions of pounds per annum.  After the presentation many of us queued to ask further questions!

After briefings on the unfolding situation in Afghanistan (where 75% of all Royal Marines will be deployed over the next year), and demonstrations of mine clearance and building entry, we were introduced to Modified Urban Combat - the process that the Commando units now use for attacking and clearing buildings.

Urban combat has always been considered among the most challenging phases of war - communications, resupply and command are all exceptionally difficult, and the close-quarters nature of the fighting requires aggression and control in equal measure.  We watched a demonstration of building clearance in which a team of Marines cleared a weapon factory using the dictum "Slow is smooth, smooth is fast".  The team worked steadily through a complex checking each room systematically, marking cleared areas, casualties and arrested suspects while minimising the dangers of friendly fire with methodical and simple procedures like waggling the muzzle of their weapons around the corners of walls.

True to the guiding principle, each Marine moved slowly, but the overall effect was a smooth progression as the whole compound was cleared as if a liquid was flowing through it (I was watching from a gantry above).  To ensure that the process was robust, the communications between the individual Marines was very simple and based on practiced routines, so problems and setbacks (one Marine's weapon jammed as he cleared a room) were easily overcome.  In this simple yet effective assault there were many lessons - simple procedures, interoperability, measured investment, delegated leadership and of course, the quality and courage of the team members.

Since I completed my Commando training in 1996, the intellectual and technical framework for training has expanded dramatically to include the lessons learned in Iraq and Afghanistan, and I was truly impressed by the rigour and adaptability of the Royal Marines.  Enthusiastic knowledge sharing was very evident - during the course of the day I met Americans, Australians and Saudis comparing experience and testing assumptions.  By combining the expertise of educational psychologists, elite sports trainers and anthropologists among many other disciplines, the Royal Marines are staying at the forefront of their profession.  I was one of several guests who determined to borrow from their hard-won lessons.

As we left CTCRM we passed the memorial wall where the 100 Royal Marines who have been killed since 2000 are remembered.  Many more have been greviously injured.  Our host, Colonel Jim Hutton, invited us all to join the Corps family and get involved with the support of those who are unable to continue to serve - giving mentoring, career advice and introductions where appropriate.  Count me in!

If you would like to find out more about the Royal Marines and experience some of the challenges of Royal Marines training, check out the Commando Spirit challenges. The Commando Spirit Appeal is part of the Royal Marines Charitable Trust Fund.

This is one of a series of articles on lessons from Commando training.  Here is the full list.

Monday 12 July 2010

Thin client lunch! A lesson in robust infrastructure

I met a friend for lunch today at a Thai restaurant in Isabella Street near Southwark Tube station.  The chicken satay was delicious and so was the green curry, but as I relished the flavour I noticed an unfamiliar spicy smell.  It became quite strong and eventually a waiter asked us to evacuate the restaurant since the building next door was on fire.

We took our plates with us and enjoyed the remainder of our meals in the street outside while the fire brigade took control of the situation and a crowd gathered to spectate.  As we forked down coconut and chili infused chicken and rice standing on a street corner, a distressed man rushed up and asked if we worked for BT - begging some big questions about BT's public image...

Once we'd finished our meals we tried to return the plates to the restaurant and settle the bill.  The staff waiting outside the building accepted the plates but wouldn't allow us to pay - they were unable to get into the building to process the payment.  We left them smoking disconsolately.

The friend I was meeting is responsible for some of the critical systems of RBS, ensuring that traders have reliable access to information and analytical tools under all circumstances including fire, terrorist attack and flooding.  As we walked along the south bank of the Thames past Tate Modern and the Millennium Bridge we discussed the effects that cloud computing are having in reducing the risk of single-site failure, reducing cost and increasing processing power.

It's not yet clear that cloud computing will help us determine genetic therapies to cure cancer and other illnesses (though there are reasons for optimism) - but if your infrastructure is vulnerable to single points of failure then you're accepting a huge risk which you can almost certainly eliminate - and save money.

Here are some simple questions about infrastructure which every business should consider - unless it wants to provide competitors, customers or criminals a free lunch:
  • Is there any single server cabinet, room or building the loss of which would put us out of business?
  • If workmen dig up our main internet connection are we unable to recover?
The answer to these questions does not need to be "yes" - even small and medium sized businesses can now enjoy the security and robust infrastructure traditionally associated with major banks like RBS.

Wednesday 7 July 2010

Beyond trade sale - and seeking CEO/COO opportunities with Private Equity or Venture Capital backed businesses

Now that we have sold Bmycharity, a business we developed from concept through profitability to trade sale and which I led as CEO, I'm seeking opportunities to put the many lessons learned to good use.  I'm advising a small number of companies on an interim basis, and looking for deals in which my management skills can make a key difference both to sales growth and to cost management.

Much of my research focus is on healthcare and renewable energy, but with 10 years of experience in developing online challenger marketing propositions and using new media and new technology to drive down operating costs, I'm seeing potential in a wide range of sectors where organisations are attempting to come to terms with the threats and opportunities of the new economic environment, and the accelerating pace of technology and new media innovation.

My co-founder and CTO at Bmycharity, Matt Cooper, is also hunting for new projects that will benefit from his technical leadership.  He's exceptionally good at delivering high-performance technology-based services at ruthlessly low costs, and we're collaborating on analysis of several potential value propositions.

This site will chart my search for leads and deals - though I'm always careful to protect confidentiality.  Please comment, challenge and join in!  I believe in "playing it forward", so if you want to get in touch to share ideas please do.  If I can't help directly I may be able to put you in touch with someone who can.