DIGITAL ENTREPRENEUR HAMBURG

Strategy Archive

Mittwoch

9

August 2017

2

COMMENTS

Amazon/Rossmann: wer profitiert mehr davon?

Written by , Posted in Kaufmann

yH5BAEAAAAALAAAAAABAAEAAAIBRAA7 - Amazon/Rossmann: wer profitiert mehr davon?

Über die Digitalkaufmann Whatsapp Gruppe bekomme ich, neben spannenden Diskussionen, auch immer wieder Gedankenanstöße für neue Artikel. Daher ein Danke an Digitalkaufmann-Whatsapp-Mitglied 0160 886XXXX und die Fragestellung „Amazon/Rossmann: wer profitiert mehr davon“? Das ist eine sehr interessante Frage, da der deutsche Einzelhandel ja grade mehr von sich reden macht, wenn es darum geht seine Parkplatzflächen optimal zu monetarisieren. Steigbügelhalter für Amazons Logistik zu sein wird aber hoffentlich nicht das Endziel dieser Initiative sein.

(mehr …)

Dienstag

18

November 2014

0

COMMENTS

Digitalisierung = Zentralisierung – wie sollen Konzerne agieren?

Written by , Posted in Kaufmann

Vor einiger Zeit habe ich einen spannenden Artikel von Johnson & Johnson als Veröffentlichung bei McKinsey gelesen. Hier beschreibt die Autorin, Gail Horwood – VP of worldwide digital strategy bei Johnson & Johnson – ihre Erfahrung bei der „Digitalisierung“ eines dezentral aufgestellten Konzerns. Ihre Erfahrungen überschneiden sich sehr mit den täglichen Problemen, die wir bei eTribes sehen. Viele Konzerne mit einem Brand Portfolio haben über Jahrzehnte einen internen „Wettbewerb“ zwischen den Brands entwickelt. (mehr …)

Montag

12

August 2013

0

COMMENTS

B2B and start-ups: a love story!

Written by , Posted in Strategie

B2BEarlier this summer I faced Deutsche Bahn and a delayed train + no internet + no phone connection while traveling to Berlin to attend the Uber B2B conference. Great to see how many start-ups are looking to go beyond the classical B2C mass market and to clearly focus their business model on B2B products and services. It was quite an eye opener that during the opening speech the organizer actually felt the need to stress that start-ups should be looking for B2B ideas. Even in over-hyped Berlin it should occur to founders to look beyond the often over reported B2C ideas and focus on the sector where the real money is – B2B continues to be a much better sector to start a business. Ticket sizes will in general be much higher and marketing  – especially in a B2B niche – is not reliant on ever more competitive online marketing tools. Keep thinking B2B and look for new opportunities here!

Montag

15

April 2013

3

COMMENTS

What to do with all this liquidity…?

Written by , Posted in Strategie

Encouraged by Alexander Graf and his critical analysis of the current digital environment I asked myself why so many irrational business seem to get an almost unlimited amount of funding. In Germany there is always Zalando as a great example of this trend. The business is so far not profitable and investments that by now are topping over a billion Euros will never be recovered but international money is being thrown at Rocket Internet with an ever increasing speed. Its business model is not closely examined and investors push new capital into the firm without even asking some of the most basic due diligence questions. Is it really a plan to buy up the fashion market and pray that your proprietary brands and size will eventually lead you to break even? How are logistics organized behind the shiny technology and TV commercials?  Why is there such an irrational rush to throw more money at these kind of businesses? Since we are now starting to talk about investments going into the billions I am going to take a macro economic perspective to create a possible explanation.

Due to the current monetary crisis money has been pumped into our economic environment – if printing presses would still be responsible for monetary supply we would be running out of ink.

Eurozone M3

Source: http://commons.wikimedia.org/wiki/File:Eurozone_M3_money_supply.png

As you can see from the graph above monetary supply has increased substantially. In Europe it is a fairly even growth story but it becomes even more drastic if you look at monetary supply expansion in the United States.

Source: http://commons.wikimedia.org/wiki/File:U.S._MZM_money_supply.png

Source: http://commons.wikimedia.org/wiki/File:U.S._MZM_money_supply.png

What are investor to do with all this capital that has been pumped into our economy? There is no substantial growth in the „real“ economic output within the developed word – in fact there is a decline based on the recession the European Economic Area and the United States are currently going through. In addition there is only so much capital that can be invested in „traditional“ economies in rapidly growing markets e.g. BRICS countries. On top of these factors investors are also scarred – the ongoing EURO crisis, horribel US economic data, emerging conflicts in the Middle East and Asia … all this has impacted the ability to invest large amounts of capital. Investors now have less opportunities and more importantly have come to terms with lower return expectations, while taking higher risks.

What does this mean for digital investments?

Based on the above described trends we will continue to see irrational capital allocation in digital growth projects such as Zalando. Investors will increasingly accept long-term returns that are barely above inflation just for a chance to allocate some of their access capital. It does not mean that it will become any easier to raise growth capital below EUR50 million but it is becoming easier to collect amounts above EUR250 millions for growth projects.

Entrepreneurs THINK BIG!

So in conclusion tech-savvy entrepreneurs: stop thinking about running a business on EUR10 million start to think how you could allocate EUR500 million!

Donnerstag

27

September 2012

1

COMMENTS

Preemptive obedience … or focusing on the right thing at the right time…

Written by , Posted in Allgemein

I just had a very interesting discussion with one of our CEOs. In essence it involved a heated debate on what to do with substantial accumulated funds of one of our portfolio businesses. Invest, save or distribute to shareholders – for me it was clear that a start-up needs to heavily invest if it sees an opportunity. Screw security, savings or distribution of returns! This often means taking on a substantial amount of risk and not focusing on those things that would be dear to a prudent eCFO. The CEO was totally surprised to hear that from me and said “that goes against everything you told us before. You made us focus on liquidity, told us we needed 3 month working capital in the bank and were not allowed to spend any money on stuff you considered not absolutely essential.”

This clearly showed me the danger of over emphasizing certain points.

Just because I firmly believe that liquidity is the one and only important measure for a start-up does not mean that once the business is generating cash it should not be re-invested. It also does not mean that I would suggest that savings and reserves should always be the right way to go. Each measure ALWAYS needs to be adopted to the environment it is applied to! Risks need to be taken once it has been sufficiently analyzed and understood – start-ups depend on the risk taking ability of its management.

For me this is an important lesson that as an eCFO you have to continuously further the education and situational awareness of your team and the people you work with. Never assume that people will understand that each measure is only applied for a certain period of a business lifecycle. It also means that I need to improve my communication in regards to a healthy balance between risky and risk adverse behavior.

Dienstag

28

August 2012

0

COMMENTS

Strategy – why do we even bother with all of this? (b)

Written by , Posted in Strategie

Balance sheet

Your balance sheet – yes, you have seen it when the yearly accounts were prepared but it really did not matter to your start-up. For you the one and only key was liquidity in the beginning, followed by profitability but what now? Yes, those accounts become important eventually. What do I mean by that – well, once you have established your strategic goals you will need to optimize your balance sheet accordingly. If you are preparing for a sale, potential investors (and their highly-skilled forensic accountants) will look at your accounts. Are you planning to change your debt to equity ratio and work with more capital? Will a bank lend you money? Are you going to build / buy your next office or remain a humble tenant?

There are a lot more questions to ask and you are now playing with the big boys. A Fortune 500 CFO will be very concerned with her balance sheet and watch movements in these accounts closely. As an eCFO of a start-up this is a new area for you and you should slowly get into it as your business develops.

In summary a balance sheet can also teach you lots of interesting things about your business and serve as an important stepping stone to your business’s next growth / development stage.

eCFO Tips: Do not be afraid to think about new things. If you are working in an innovative start-up there might be lots of balance sheet optimization questions that nobody has really thought about. Are facebook fans in generic groups that are rented out for advertising assets? Should the initial investment into these groups be on your balance sheet and depreciated over time? How do you value your investments in other start-ups? What happens with your old, cancelled projects? Make sure you have good advisors and get lots of support when tackling these questions.

Strategy can mean a lot of different things depending on your situation but as a general rule of thumb I would suggest that you consider anything that is not based around daily operational tasks as “strategic”.  Given your unique position in the business and access to information, you have the opportunity to support the other management team members in occasionally taking a look around and consider the bigger picture, away from the grind of daily demands. This is were you can add a lot of value and a sound strategy will help the business to develop faster and to reach goals that you did not think possible only a short while ago.

Sonntag

26

August 2012

0

COMMENTS

Strategy – why do we even bother with all of this? (a)

Written by , Posted in Strategie

So, why do we even bother with all of this? Initially, you need to make sure that your business performs well, does not run out of money and that financials analysis and data points support operational decisions. All of that you can do but if you are a serious eCFO this is probably not the stuff that makes you get out of bed every morning.

What really should get you excited is building a healthy, growing and extremely successful venture.  Your operational measures will support that but more importantly you should be influencing the strategic development of your company – if you are not doing that you chances are you will never be more than a glorified accountant.

Strategic decisions

In order to make a strategic decision you will need a strategy. This may sound a little too simple, but ask some start-ups about their strategy and often you will find that they either do not have one or are unclear in what it is they are trying to achieve. How much time do you think an operationally involved management team has for strategic discussion, decisions and evaluations? From my personal experience: very, very little. Daily business and the demands of a growing venture will eat up all available time.

This in turn means that your role becomes more important. As an eCFO you can provide plenty of data and input for creating a strategy. Often you will also be more shielded from client demands and product needs than the other members of the management team. Make sure you  that you add a discussion about strategy every now and then to the weekly/monthly meeting agenda.

Formulating a strategy will require a highly customized approach as your business will have individual needs, goals and problems. Nevertheless, I can assure you that if you have implemented the measures discussed on this blog, than you have all the necessary tools, processes and data to support and drive a successful strategy formulation and implementation process. This in turn will help the entire management team to make better business decisions. I have chosen a couple of strategic measures that can be undertaken to provide examples of what I consider to be strategic decision for an eCFO. As I said these are just examples and you should think long and hard about strategic elements for your specific business situation.

Profit distribution

So let’s assume that business is going well and money is flowing in. Operationally, you have fixed most major issues and business is good. With the money comes a totally new perspective for a start-up. You have to decide what to do with a refilling pool of cash – should you distribute to hardworking employees, enrich your shareholders, reduce prices for your valuable clients or invest like crazy? Again there is no perfect answer to this but a sound financial analysis will help you to make a better decision. You should start to think about concept such as ROI calculations to evaluate which return perspective each of your investment/payment decisions has. Furthermore, you need to open a dialogue with all of potential stakeholders to find out what exactly there demand and needs are. Often you will be surprised by stakeholder expectations. Note: it might be dangerous to communicate too much to each stakeholder on, as this may raise unrealistic expectations which then lead to disappointment.

eCFO Tips: Communication, communication, communication… when it comes to strategic decisions never assume that you know what each stakeholder wants. You will most likely approach a decision from a financial analysis perspective – most other (normal) people will not think that way – so make sure you talk to everyone and do not assume anything. Often you will be surprised – sometimes pleasantly and sometimes not so J.