Tom Stewart recalls words of wisdom from M&A legend - 20/10/2009

In this fortnights issue:

• Tom Stewart recalls words of wisdom from M&A legend
• Public sector support for financial services innovation
• Squeeze more value out of your business
• Spotify teams up with 3 UK
• Interview with WGSN founder Marc Worth

You'll find interviews with many of the UK and Europe's leading entrepreneurs at www.entrepreneurcountry.net. Register while you're there and join the growing community.

Done Deal

by Tom Stewart, Chief Marketing and Knowledge Officer, Booz & Co

How sad that Bruce Wasserstein died just as it appears that the M&A market is heating up again. I got to know Bruce when I was editing Harvard Business Review; with one of my colleagues, Gardiner Morse, I produced one of HBR’s trademark in-depth interviews, published in January 2008.

Bruce was a curious guy, in both meanings of the word. His extraordinary mind was able to see deals through multiple dimensions simultaneously - he compared deals to prisms that should be turned and examined from every angle. The very complexity of his insight left him almost inarticulate sometimes; unable to express everything he saw, he would speak in what sounded like koans or riddles.

He was the ultimate power-player among investment bankers; but he was usually alone on his walk across Rockefeller Plaza to the 21 Club for lunch, not surrounded by aides and acolytes. He was a fierce and aggressive capitalist - but also a long time supporter of Ralph Nader’s work and co-author of a “Nader’s Raiders” report, The Closed Enterprise System, calling for more aggressive enforcement of antitrust laws. He was 24; I, 23, edited it.

Above all, though, he was a man you’d want on your side in a deal, whether you were buying or selling. And because he’s not here to offer his advice - and because many smaller companies couldn’t have afforded him if he were - here are a few things he said that stand out in my memory, and that entrepreneurs might value. Read more...

Support for innovation in financial services sector

In a move aimed to encourage innovation in the financial services sector, the Technology Strategy Board has announced the launch of a new Financial Services Knowledge Transfer Network (KTN).

The financial services network is one of a national portfolio of KTNs, each focused on a specific field, which bring together industry stakeholders to stimulate innovation through knowledge transfer.

Members will have access to a range of advisory services, including R&D funding and collaboration, project financing, supply-chain opportunity, technology investment and updates, market and policy information. The network will also provide networking and partnering opportunities. Membership will be free of charge and open to the entire financial services community, including industry, innovators, investors, academia, government bodies and regulators.

Iain Gray, Chief Executive of the Technology Strategy Board said: "This new Knowledge Transfer Network will help UK businesses to innovate and create wealth. It forms part of an already highly successful portfolio of Knowledge Transfer Networks run by the Technology Strategy Board that aim to boost the UK's innovation capacity by bringing people together around common challenges and opportunities."

Ideas for better lemon squeezing

by David Molian from the Bettany Centre for Entrepreneurial Performance and Economics, Cranfield School of Management

In the last ten years of working with independent businesses I’ve learned the value of lemon-squeezing. Does that make this a cookery show or a business blog? Well, I guess a bit of both. I use “lemon-squeezing” to describe getting more value out of your existing business and existing customer base. And, yes, it’s based on a cooking observation. Most people, when they add lemon juice to a dish, will tend to do the following:

Take a lemon. Slice it. Squeeze one half – partially. Discard. Take second, unsqueezed half, wrap in clingfilm (this is optional), and place in back of fridge. Open fridge two weeks later to discover mouldering piece of lemon and discard, unsqueezed.

Well, that’s how it works when I’m in the kitchen.

My observation is that this is also how it works for a lot of businesses. You extract a certain amount of business from your customers, just enough for present purposes. Then you put them in cold storage and when you go back to them, they’ve gone mouldy on you. Sounds familiar?

All the evidence suggests that most successful independently-owned and managed businesses grow through business development: they sell more of their existing products and services to their existing customers, and others who are like them. In other words, they become better and better at squeezing lemons.

Over the years I’ve been assembling hint and tips, based on anecdotes from entrepreneurs I’ve worked with. Read more...

Spotify teams up with 3 UK

Music-streaming service Spotify has announced a deal with 3 UK that will see Spotify Mobile delivered to 3's customers as part of a new tariff from November. The deal was not a unexpected, as 3’s owner Hutchison Whampoa is controlled by Spotify’s big private investor Li Ka-Ching.

The service will be available initially on the HTC Hero, 3's first Android handset, with users tied in to a 24 month contract. Spotify CEO Daniel Ek told a conference last week he wants to strike deals that take his service in to bundled mobile, broadband, TV and other services: “The key for us is getting music in to people’s existing billing habits.”

Spotify now has six million users, but less than 10 percent of them pay for the premium service, which removes the advertising and gives mobile access. It has recently upgraded the feature which allows users to buy and download MP3 files, making the purchasing option more prominent and easier to use.

Entrepreneur (and investor) - Marc Worth

When you've sold your business for £142m and got tens of millions sitting in the bank it might be tempting to just kick back and enjoy the fruits of your labour. Not for Marc Worth.

Worth, the founder of fashion trend and analysis website the Worth Global Style Network (WGSN), is one of those true entrepreneurs. For him every morning is an opportunity to make the coming day the one when the next big idea comes along.

Worth didn’t bother with the academic route to business success as the spirit of entrepreneurship ran through his veins. He joined the family children’s wear business straight from school and for 20 years or so worked in and eventually ran it.

“I learned a great deal about the fashion trade during those years of manufacturing children’s clothes. So by 1997 I knew there was a demand for something like WGSN. Something that would tell the trade about what was going on in fashion all over the world.

“There was a lack of information about new innovations in fashion and we were lucky that, right at the start of the internet boom, we had the idea. It was the right idea at the right time.”

Read the interview here