HNW Magazine Sept/Oct 2012

LINKING ENTREPRENEURS & INVESTORS UK-WIDE

High Net World Magazine SEPT/OCT 2012

£2.95

INTERVIEW WILLIAM ADAM, THE NEW FACE OF ENTREPRENEURIALISM?

IN THIS ISSUE

GAMES WITHOUT FRONTIERS? Removing The Barriers To High-Growth

Also inside: HEAT: POST-EVENT PROGNOSIS FOR THE HEAT SCOTLAND 20 RUTHLESS: FRAUDSTER LEVEN’S £100M PONZI SCHEME INFOGRAPHIC: GETTING ELECTED THROUGH SOCIAL MEDIA INTERNATIONAL FOCUS ON… GIVE ME GREECE, OR...

PRACTICAL BUSINESS: A WRINKLE IN TIME MANAGEMENT W.A.W & W.E.N: FOUNDATIONS FOR GETTING FUNDED

STEEL’S POINTS OF FEW

THE DIATRIBE

HNW’S DIGITAL LENS

RECESSIONS & OTHER FANTASIES Page 15

DID YOU EVER COUNT TO 100?

Page 51

THE TECH S.M.A.C ADDICTION Page 17

Q Court, 3 Quality Street, Edinburgh, EH4 5BP For further information, please contact Stephen Paterson on: Telephone: 0131 625 5151 spaterson@hwca.com

THE EDITOR

HNW MAGAZINE SEPT/OCT 2012

Dinner Out There are a great many unsolicited opinions out there about how we can go about fixing things; business regulations, economic doldrums, global warming, and even life’s little certainties like death & taxes.

It’s the entrepreneurial mindset – see something you think can work better and then go and prove it at a profit.

And amongst this wonderfully British and socialist-heavy environment, said the plutocrat, we quite often find the masses suggesting the easiest place to lay the tax bill is at the feet of those with the deepest pockets.

Faint ye not all ye wealthy and those aspiring to be.

For this editor’s note suggests by example a tale that all should read, rich and poor alike, about how taxes work and what happens when you tax the rich too much.

Suppose that every day, ten men go out for dinner. The bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this.

The first four men — the poorest — would pay nothing; the fifth would pay £1, the sixth would pay £3, the seventh £7, the eighth £12, the ninth £18, and the tenth man — the richest — would pay £59.

That’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the

arrangement — until one day, the owner threw them a curve. And in tax language that means a “tax cut”.

“Hey, I only got a pound out of the £20,” declared the sixth man who pointed to the tenth. “But he got £7!”

“Since you are all such good customers,” said the owner, “I’m going to reduce the cost of your daily meal by £20.” So now dinner for the ten only cost £80.00.

But the group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They all still ate for free.

“Yeah, that’s right,” exclaimed the fifth man, “I only saved a pound too . . . It’s unfair that he got seven times more than me!”.

But what about the other six, the paying customers? How could they divvy up the £20 windfall so that everyone would get his “fair share?”

“Wait a minute,” yelled the first four men in unison who all ate for free, “We didn’t get anything at all. This system exploits the poor!”

The six men realized that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would end up being PAID to eat their meal.

The nine men then surrounded the tenth man, berated him, belittled him and then beat him up.

So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so it happened that the fifth man paid nothing, the sixth pitched in £2, the seventh paid £5, the eighth paid £9, and the ninth paid £12.

This left the tenth man – the wealthy guy - with a bill of £52 instead of his earlier £59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings.

“That’s true!” shouted the seventh man, “why should he get £7 back when I got only £2? The wealthy get all the breaks!”

Needless to say the next night the tenth man – the wealthy guy - didn’t show up for dinner, and the nine sat down and ate without him.

But when it came time to pay the bill, they discovered an overdue and very important lesson.

They were suddenly FIFTY-TWO POUNDS short of paying the bill.

Enjoy the issue…..

Emerson

HNW Magazine Editor

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REMOVING THE BARRIERS TO HIGH-GROWTH

CONTENTS P.5 Ruthless: Fraudster Leven’s £100m

Ponzi Scheme P. 6 Showcase: HEAT Scotland Entrepreneurs P.12 Networks: HNW Partners & Supporters P.15 Steel: Recession & Other Fantasies P.17 HNW’S Digital Lens: The 2013 Tech Sector S.M.A.C. Addiction P.19 Williams: We Won’t Be Fooled Again P.20 HEAT Scotland: Games Without Frontiers P.26 WAW & WEN: What Angels Want P.27 WAW & WEN: What Entrepreneurs Need P.28 Interview: William Adam, The New Face of Entrepreneurialism P.33 International Focus on

Give Me Greece, or...

P.34 Sales & Marketing Performance:

The Double Funnel P.37 Special Report: Social Media Electioneering P.41 Practical Business: Legal, Marketing, Money, Time and Tax P.51 The Diatribe P.52 HNW Events & Media

Image Courtesy Quantum Play

Published by HNW Magazine Limited. Registered Office 33 Oldwood Place, Livingston, West Lothian EH54 6UJ. The views expressed in HNW Magazine are those of invited contributors and not necessarily those of HNW Magazine Limited. HNW Magazine Limited does not endorse any goods or services advertised or any claims or representations made in any advertising in HNW Magazine, and accepts no liability to any person for loss or damage suffered as a consequence of their responding to, or reliance on, any claim or representation made in advertisements appearing in HNW Magazine.

By responding or placing reliance, readers accept that they do at their own risk. Reproduction in whole or part is forbidden without the written consent of the publisher HNW Magazine Limited. ©2012 HNW Magazine Limited.

RUTHLESS

HNW MAGAZINE SEPT/OCT 2012

Another Millers Tale Fraudster Levene’s £100m Ponzi Scheme BROOKLYN bookkeeper William F. Miller’s arbitrage scam in 1899, purported to fund high savings rates from investments, likely inspired Italian immigrant Charles Ponzi thereafter in 1920 to implement what has since become known as ‘his’ eponymous scheme.

Charles Ponzi’s modus operandi, exploiting minor changes in exchange rates by converting dollars to other currencies and back again, promised easy money with a 50% return on investment within 45 days.

It was a highly enticing offer and confidence game duping investors with a veneer of legitimacy.

And so William F. Miller’s tale became Ponzi’s legacy. But like Geoffrey Chaucer’s famous story of the same name (Miller’s Tale), reality always outs fantasy.

“In the game of greed people fall easily for the guaranteed get-richquick carrot. And so in the wake of recent fraudsters like Bernie Madoff and his infamous 2008 $65 billion hedge fund fraud – inflating the fund’s apparent returns and paying investors with the money from other investors – are we truly surprised at the arrival of Nicholas Levene?”

We shouldn’t be. The City financier’s recent £100 million fraud, conning business royalty like the Ivy restaurant entrepreneur Richard Caring and Stagecoach founders Sir Brian Souter and his sister Ann Gloag, is as old as it is common.

The Beano Nicholas ‘Beano’ Levene – nicknamed after the comic book - was recently jailed for 13 years and is the second fraudster

to be sentenced this year alone.

In March of this year, Kautilya Nandan Pruthi received a 14 year sentence for taking over £115 million from some 700 victims in what is now considered the largest and longest running Ponzi scheme ever brought before the Courts in this country.

Unsurprisingly, Levene lived a lavish lifestyle as he ran his Ponzi while over £300 million was paid into his bank accounts between 2005 and 2009.

But his own addictions, manifested in gambling and the high-life, led to his downfall as he burned cash on yachts, properties and a reported £500,000 family celebration for his son’s bar mitzvah.

Who’s Sorry Now? The 48-year-old would later admit one count of false accounting, obtaining a money transfer by deception and twelve counts of fraud, finally apologetic and saying in an interview with the FT on the eve of his jail sentence that he had been, “economical with the truth”.

But this was not always the case. In 2009 Levene rejected any suggestion of having operated a Ponzi scheme and even as recently as last summer painted himself as a victim of a misinformed fraud agency.

Levene attracted the attention of the Regulator when spread betting, big investment positions and speculative bets made to cover mounting losses eventually saw the business lurch out of control in 2007.

The Beano has now been jailed for cheating investors out of £32 million and is said to have been a major client of Europe’s biggest bank, HSBC, who extended him a £20 million overdraft facility which has since been maxed-out.

The Aftermath The Serious Fraud Office has ordered a confiscation order permitting regulators to confiscate assets obtained by those convicted as a result of their criminal conduct.

Those identified by a Telegraph investigation as linked to Nicholas Levene include drug dealer Daniel Baynes who is now based in Venezuela, weapons dealer Michael Lee, and three bankers who now themselves face fraud allegations.

The full list comprises some 4,388 people holding £699 million in offshore accounts.

Like Geoffrey Chaucer’s Miller’s Tale, Nicholas Levene’s all too common story reveals a hugely elaborate trick set up with equally huge care and eventually snaps shut; a fantasy exposed by reality.

His City career began as tea boy with brokerage Phillips & Drew in 1983, where he eventually found his way to the trading floor, and a burgeoning gambling addiction that he claims was brought on, at least in part, by a frenetic working environment that endorsed risk-taking.

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HEAT SHOWCASE ENTREPRENEURS

HNW MAGAZINE SEPT/OCT 2012

Programme Ambassadors

HUAN

Union Tech

Steven Moffat is a consummate entrepreneur, having founded 19 companies including a Design house, Internet Development, Fabrication, On-sales, Communications, E-commerce, Modeling, Publishing and Fashion.

Union Tech is part of the Union, one of the UK’s leading marketing communications agencies. In 2008 and 2010 the agency was the marketing Society’s Marketing Services Company of the Year in Scotland; as well as Scotland’s Agency of the Year.

Moffat spent most of the last 15 years leading the charge onto the Internet and creating a brace of ecommerce companies on his own platform and now has his eye set on our high streets.

The agency provides clients with the full range of integrated marketing communications services: advertising, design, direct marketing, sales promotion, field marketing, web design, online marketing and brand consultancy. Within the Union, Union Tech specialises in the development of websites and mobile applications for clients across all sectors.

Opening his first store in Edinburgh and promptly winning Scottish Fashion Award for Retailer of the Year, he is currently a finalist in the upcoming Drapers Fashion Awards having moved into fashion retail less than a year ago.

HEAT

Contact: Steven Moffat, Huan Limited: 111 George Street, Edinburgh EH2 4JN www.huan.co.uk

Contact: Robin Mehta Managing Director Union Technology Limited: Union House 18 Inverleith Terrace, Edinburgh EH3 5NS www.union.co.uk

Holoxica

Exec Air Charter

Component Sense

Holoxica is an award-winning company delivering a range of 3D holographic solutions: real out-of-the-screen 3D, the way it’s meant to be.

Execair, founded in 2006, is a boutique air charter consultancy specialising in a pay as you fly air charter service.

With 11 years’ experience in Electronic component resale, Component Sense has built and launched a “Cash Generation System” that utilises stock from large global electronic manufacturing companies, providing them with: Protection from Counterfeit Cash from surplus inventory Increased profit from their existing supply chain.

Our true 3D visualisation technology does not use glasses or optical tricks for viewing.

We make full-colour 3D-holograms for people who work in 3D to see their work in real 3D. Customers include scientists, engineers, designers and artists.

Designs range from bio-chemical molecular images and medical imagery to concept cars and complex machines. We make the holograms from computer models, scanned data or live images. Holoxica is also pioneering a holographic display, which is currently in the R&D phase.

Contact: Javid Khan, Founder Holoxica Limited: SMC, The Kings Buildings, West Mains Road, Edinburgh EH9 3JF www.holoxica.com

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We offer our clients an integrated and personalised service which exceeds their expectations and takes the stress out of travel.

We are Scotland’s first private aviation broker.

Execair work with a number of global sports and entertainment agencies, CEOs, VIPs and private HNWI clients providing a seamless point to point service.

Our mission is simple: To provide the ultimate travel experience every time you fly on one of our private charter services.

This allows us to provide staggering returns to our investors with minimal risk whilst providing world class service to our customers.

Component Sense is currently profitable, debt free and has revenue potential estimated to be in excess of $1Bn globally.

Contact:

We have scalable systems and processes in place and have already made in-roads with several “dream“clients.

Elena Torres, Managing Director Exec Air Charter Limited: 111 George Street, Edinburgh EH2 4JN www.execaircharter.com

Contact: Kenny Mcgee Group Managing Director Component Sense Limited: Fleming House, 5 Fleming Road, Livingston, West Lothian EH54 7BN www.componentsense.com

HEAT SHOWCASE ENTREPRENEURS

HNW MAGAZINE SEPT/OCT 2012

Desk Union

Bongomagic

ProperQA

Desk Union offers a new way of renting desk space by connecting the start-up and freelance community (tenants) with businesses that have wasted space (landlords).

We build collaborative crowd sourced environments that provide flexible and affordable desk space to tenants.

Bongomagic is a unique and exciting online relationship marketing tool.

Founded in 2011 by industry veteran Nick Barrett, Proper QA is a service provider to the video-games industry, specialising in Quality assurance testing and the creation of practical test management tools.

Desk Union hubs enable co-working and encourage collaboration, skills sharing and networking.

Landlords earn cash from their wasted space, engage and interact with the local business community and create a buzz within their business space.

Desk Union provides a practical solution to generating revenue from wasted space as well as engagement with the local business community.

The technology harnesses the power of ‘word of mouth’ referrals and recommendations by allowing users to refer and recommend products or promotions to their social networks.

This process is further enhanced with the ability to offer rewards and incentives to those who contribute to a successful purchase or placement.

Bongomagic enables businesses to leverage the strength of referrals within their existing staff and databases to connect with a wider reaching, and more receptive audiences, touching existing and potential consumers beyond ‘one degree of separation’.

Contact

Bongomagic generates significant savings in marketing and recruitment resource, time and expenditure.

Victoria Arnold, Founder, Desk Union, Caledonia house, Lawmoor Street Glasgow, G5 0US www.deskunion.com

Contact:

Proper QA works with Publishers and developers ensuring their products are of the highest quality before being released to market.

Since launching the company as an outsource management consultancy practice, Proper QA has been broadening the range of services on offer and while they are sill helping games developers get the most from their outsource partners, they also have a team of full time professional games testers for hire.

Contact: Nick Barrett, Director Proper QA Limited : 6 Gloucester Square, Edinburgh EH3 6EB www.properqa.com

Laura Sullivan, Co-founder & Director Bongomagic: 16 Cromarty Campus, Rosyth Business Centre KY12 2WX www.larosco.com

Mallzee Mallzee takes shopping online to a new dimension with a product that increases sales, engages brand loyalty and improves customer satisfaction.

Our software finds products suited to users’ personal tastes and then allows them to create a personal shopping experience via their own online shopping mall.

This approach sees increased sales for our partners, as users are able to interact with their friends via social media around the products prior to purchase.

We provide online shoppers an experience like no other and offer our 200 partner brands the ability to engage in a more effective manner with retargeted personally designed advertising, influencer engagement and customer insight.

Bebaroque

Memory Box Network

Bebaroque is an award winning luxury hosiery and body wear label creating innovative decoration for the body.

Memory Box Network (word count 112) The Memory Box Network is a social media based online platform that allows people affected by dementia to upload and share content such as photos and films for use in reminiscence therapy.

Unique design, at the heart of the bebaroque brand, is seen through distinctive screen print and hand embroidery, which combine to create a desirable signature style that is increasingly being recognised and celebrated within the industry.

Contact:

Our work enables people to find and use material easily. Dementia can be a terrible condition and affect both the person with the condition and their carers, friends and family.

All of our work is aimed at enabling a better quality of life for those affected by dementia.

Mhairi McNicol Co-founder Bebaroque Limited: Quadrant Building, 17 Bernard Street, Edinburgh EH6 6PW www.bebaroque.com

We look at new and innovative models in the 3rd Sector for production and funding in order to bring a commercial overview to charities’ normal activities, and allow them to become self-sufficient.

Contact:

Contact:

Cally Russell, Chief Executive Officer, Mallzee, c/o Ambassador Uni Limited, Caledonia House, Lawmoor Street Glasgow G5 0US www.mallzee.com

Scott Downie, Chairman The Memory Box Network Limited: 6 Panmure Street, Dundee DD1 2BW www.memoryboxnetwork.org

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Converge Challenge is expanding After another successful year, Converge Challenge is set to expand into 2013 and beyond – with the support of our new partners from the universities of Aberdeen, Dundee, Edinburgh, Glasgow, Heriot-Watt, St Andrews, Stirling and Strathclyde.

Key facts: Open to all Universities and Research Institutes in Scotland Over 130 applications received Connected with over 1400 aspiring entrepreneurs 50 Company founders trained 17 new companies created £150,000 awarded in business support If you are a business and would like to discuss sponsorship opportunities for Scotland’s biggest entrepreneurial competition, please get in touch with us – Dr Olga Kozlova, Enterprise Creation Manager, o.kozlova@hw.ac.uk Converge Challenge is proud to sponsor High Net World Magazine’s HEAT Programme.

To find out more about Converge Challenge, please visit www.hw.ac.uk/convergechallenge.

A selection of images from our 2012 Converge Challenge Awards Dinner, won by ArxBio of the Moredun Research Institute

Distinctly Ambitious www.hw.ac.uk/convergechallenge

HEAT SHOWCASE ENTREPRENEURS

HNW MAGAZINE SEPT/OCT 2012

KILTR

Surface Active Solutions Ltd

Gecko New Media Ltd

KILTR is a Social Media Platform for everyone with a connection to Scotland, founded with the local-to-international Scottish Diaspora at its centre.

Surface Active Solutions Ltd, based in Grangemouth, develops and supplies unique chemistries for the oil industry.

Gecko New Media Ltd is a digital agency that specializes in user-centred design, helping businesses make the most from their online interactions.

KILTR gathers together a clan of thousands of individuals with a connection to Scotland to share, exchange and work on new and creative ideas, goals and projects.

Joined by a shared identity, regardless of geographic location or economic status, KILTR forges new bonds through a vibrant international community driven by endeavour and enterprise and an exciting structure of like-minded people.

Contact: Brian Hughes Chief Executive Officer Kiltr Limited: The Printworks 10 Otago Street, Glasgow G12 8JH www.kiltr.com

SAS products reduce waste from exploration activities by 90% while reducing rig time by 70%. The use of SAS products in refinery waste recovers virtually all oil and reduces waste by 85%.

The company is owned and managed by its founders John Harrison and Mark Zwinderman. Active around the world, SAS owns a patent portfolio of six granted patents and 7 patent applications. The company supplies its products around the world to operators, waste management companies and service companies.

Contact:

Since 2003 we have delivered sustained growth and profitability by helping a diverse range of clients across the public, private and third sectors achieve their goals.

We are the first Certified Umbraco Solutions Provider in Scotland, Members of the Usability Professionals Association, and our Staff members have received the Google Analytics Individual Qualification.

Our experience and creativity helps deliver commercial success for our clients.

Contact:

Mark Zwinderman, Commercial Director Surface Active Solutions Limited: Grangemouth Technology Park Unit 1, Earls Road, Grangemouth FK3 8UZ www.surfaceactive.com

Mike Octigan, Managing Director Gecko New Media: 44 Melville Street, Edinburgh EH3 7HF www.geckonm.com

CluisTROM

Klick2Learn

Distrify

CluisTROM is a Scottish based company that carries a unique product portfolio from custom moulded noise plugs to cutting edge electronic shooting protection. Our earplugs allow the wearer to hear normal conversation while still being protected against damaging noise.

K2L has developed a unique learning management system with web conferencing facilities combining to create the most user friendly virtual classroom environment available today.

Distrify is the fast-growing online cinema with integrated viral marketing tools offering filmmakers and distributors the opportunity to reach audiences worldwide.

We are the sole distributer in the UK, Ireland and South Africa of the smallest hearing aid module in the world and the key note supplier of hearing services to the VisionCall group.

CluisTROM is the official hearing protection supplier to BAE systems, Babcock, TARMAC, SAICA Pack and The Murphy Group, and are now the sole supplier of custom hearing protection through the ARCO catalogue.

Contact: Neil Mcintosh Chief Executive Officer CluisTROM Limited: Olympia Arcade High Street, Kirkcaldy KY1 1QF www.cluistrom.com

The company specializes in developing engaging interactive content for the ESOL market and will deliver real qualifications, available virtually, approved by the Scottish Qualification Authority.

K2L has an in- depth knowledge of the needs of the ESOL markets, and an understanding of trends in the expanding global market of online education. The company will produce a range of exciting products encompassing games based learning and cutting edge avatar technology.

The Distrify model turns every trailer for a film into an instant VoD player allowing the customer on discovering a film to click ‘rent’ or ‘buy’.

Film fans are rewarded for sharing trailers with their contacts and film critics, online publishers and film fans are able to curate their favourite film collections and earn money for their efforts.

Not only does Distrify offer international distribution, but it also ensures that the majority of the revenue earned back by films is passed back to the filmmaker.

Contact:

Contact:

Tony Hamill Commercial Director K2L Limited: 50 Richmond Street Glasgow G1 1XP www.klik2learn.com

Peter Gerard Chief Executive Officer Distrify Limited: Glasgow Film Theatre 12 Rose Street, Glasgow G3 6RB www.distrify.com

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ARE YOU PAYING TOO MUCH FOR POOR INVESTMENT ADVICE? IS YOUR PENSION FUND GROWTH BEING HELD BACK BY EXCESSIVE FEES? HAVE YOU RECENTLY RECEIVED A LETTER INCREASING THESE COSTS YET AGAIN? DID YOU ASK WHY? HAVE A CLOSER LOOK AT HOW MUCH YOU ARE NOW PAYING AND WHAT YOU GET FOR IT, AND THEN COMPARE THOSE NUMBERS WITH THESE:

3% 0.6% 0.0% 100% 3

The annual growth your investments and pension fund have to achieve each year to simply cover the total annual and switch fees now charged by many wealth managers.(1) The maximum annual management fee charged by Scotland’s’ largest independent wealth manager – Alan Steel Asset Management.

The fees imposed by Alan Steel Asset Management on all portfolio and pension fund rebalances and fund switches.(2) The percentage of existing Alan Steel Asset Management clients who would recommend our wealth and pension management services to a friend or a family member.(3) The number of times Alan Steel Asset Management have been voted “Best UK independent investment advisers”. This is more than any other Wealth manager in the UK.(4)

01506 842 365

Or visit www.alansteel.com

The no obligation number to call today to find out how to get your investments and family wealth back on to a tax efficient, fair cost and better performing track.

Alan Steel Asset Management is authorised and regulated by the Financial Services Authority registered in Scotland No. 58014 / VAT registration No. 446593714 / Nobel House, Linlithgow, EH49 7HU / Fax: 01506 845074 Assumes annual charge of 1% and 2 x 6 monthly portfolio rebalances at cost of 1%.

(1

(2)

Source: ASAM (3) Source: Moneymarketing magazine. (4)Source: ASAM.

HEAT SHOWCASE ENTREPRENEURS

HNW MAGAZINE SEPT/OCT 2012

HEAT Scotland Entrepreneurs: Expressed Barriers to Growth CodeCreatedMe CodeCreatedMe is a tech business based in Glasgow that developed its first product, Travel Bit, as a web app and mobile app for iOS. Travel Bit eases the packing process for your holidays and provides a simple list of information all about your holiday destination.

We are also working hard to create a more vibrant and conjoined tech community in Scotland through RookieOven. RookieOven is a unique initiative that highlights the best events, startups and people involved in the nation’s tech scene.

CodeCreatedme founders include Michael Hayes CEO, Chris Sloey CTO, Kevin Ormond CCO.

Contact: Michael Hayes Chief Executive Officer CodeCreateMe: 32 Bellfield Crescent Barrhead, Glasgow G78 1HL http://codecreated.me

Transcribe UK Transcribe UK is an online transcription company that uses highly experienced UK based secretaries to convert audio files to word documents for business, medical and legal sectors.

We have been providing a cutting edge digital dictation transcription service throughout the UK since 2005.

Our award winning iVano™ Workflow Management and Case Record Management Solutions can be licensed, enabling other companies personnel to use iVano™ with the option to outsource transcription to Transcribe UK. We also provide tailored Admin Support packages, which include a telephone number with a dedicated receptionist and a transcription pool or dedicated secretary for dictation.

Contact: Ada Galloway Director Transcribe UK Limited: The Old Barn Offices, High Peacockbank, Stewarton Ayrshire KA3 5JG www.transcribe-uk.com

The below responses have been received directly by the next stage entrepreneurs attending on the day.

They break down into the following categories:

Marketing, Sales & Conversion:

Finding clients and convincing them your services is better than everyone else, but is that the best approach?; Finding clients for a new technology when professional as opposed to consumer market focus makes more sense as the latter requires enormous marketing budgets; Third-party vendors and paying for procurement list access and nothing coming of it in terms of actual business orders; Marketing spend on making ourselves look bigger than we are so we can sit at the right table; Changing the mindset and archaic rules on what 3rd sector organisations can do to make money;

Funding, Support & Transition:

Getting next stage funding; Approaching banks without collateral; Creative ideas to fund cash flow; Holding proven technology that generates large & repeat orders but require funding for targeted marketing and increasing sales capacity; Funding for rapid scalability – not just cash; How to find support when you’re not in the biotech or renewable energy sectors; Scottish Enterprise high-growth pipeline hasn’t helped at all – need a better business resource network; Moving from technology led to a market/ customer led business;

New Markets & Internationalisation:

Expanding into multiple new markets simultaneously; Logistics, money transfer, credit card payment issues related to large proportions of international customers and key suppliers;

Outgrown Existing Advisers:

In need of honest answers fast but not yet comfortable paying the big bucks that the big boys charge without proof; Looking for a lead in scenario for entrepreneurs into more experienced advisers and stage the higher charging until the money follows;

Staffing & Training:

Finding quality staff and spending 3 + months on them before they’re productive (if ever); Not being able to afford additional members of staff though they’re potentially vital to scalability.

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THE NETWORKS

HNW MAGAZINE SEPT/OCT 2012

HNW magazine prizes its relationships with leading organisations in the entrepreneurial and investor sectors and is delighted to provide direct links and information to these organisations below.

HNW Magazine Dis HNW Magazin

HNW Magazine Distribution Part

Angels Den

ASAM

Footdown

The only Angel investment network to provide free business funding clinics and one-to-one pitching at regular SpeedFunding events throughout the UK and Asia, with regional managers dedicated to supporting and introducing you to the right Angels.

If the confusing messages in the financial media leave you not knowing which way to turn, and you want to reduce your risk and organise your future with more certainty, contact Alan Steel Asset Management’s award-winning team.

Mentoring. Insight. Coaching.

Footdown is passionate about improving the performance and quality of leaders, and works from within a peer group to inspire, inform and help leaders respond better to all challenges.

www.angelsden.co.uk

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www.alansteel.com

www.footdown.com

THE NETWORKS

HNW MAGAZINE SEPT/OCT 2012

Gecko New Media

www.geckonewmedia.com The straight-talking Edinburghbased digital agency that helps you make sense of the web, providing strategic planning, design & build and leading edge solutions that help your business grow.

Kiltr

www.kiltr.com KILTR is a Social Media Platform for everyone with a connection to Scotland, founded with the local-tointernational Scottish Diaspora at its centre.

LINC

Jumpstart

www.jumpstartuk.co.uk The leading research and development (R&D) tax credits advisory business for companies throughout the UK with a 100% success rate for Government R&D Tax Credit applications.

www.lincscot.co.uk The national association for business angels in Scotland, with a membership network of hundreds of investors including those operating individually, many of the best known groups and syndicates, and a number of significant private offices.

Par Equity

www.parequity.com Par Equity is an investment firm with a difference. We bring a pragmatic, hands on investment approach and extensive business experience to investment opportunities that have the potential for significant returns.

Scottish Family Business Association

www.sfba.co.uk The SFBA is the definitive authority on family business issues in Scotland operating as non-profit solutionsfocused organisation created for and by family business people.

stribution Partners ne Distribution Partners

tners

HNW Magazine Distribution Partners

“

Scottish Social Enterprise Coalition

www.socialenterprisescotland.org.uk Social Enterprise Scotland is the national collective voice for social enterprise in Scotland, bringing together social enterprise and its supporters into a strong force for change.

Thrive for Business

www.thriveforbusiness.co.uk Thrive is a membership based networking organisation for business-to-business SMEs across Scotland bringing together likeminded individuals willing to share knowledge, ideas and contacts in an unrivalled atmosphere of talent and enthusiasm.

All successful people, men and women, are big dreamers. They imagine what their future could be, ideal in every respect, and then they work every day toward their distant vision, that goal or purpose.

�

Brian Tracy 13

STEEL’S VIEW

HNW MAGAZINE SEPT/OCT 2012

Steel’s Points of Few: Recession and Other Fantasies MUCH as I admire Warren Buffett’s thoughts and actions, his comment: “It’s when the tide goes out you discover who’s been swimming naked all along” should not be how our Financial Regulators conduct their business.

Surely it’s their job to spot who it is that’s heading for a financial deep end and hooking them before they indecently expose savers to serious financial loss.

In fact, they shouldn’t let them in the water in the first place.

But for over 26 years now successive Regulators wait for the tide to wane, when it’s too late and, as a result, we’ve had one financial scandal after another.

It’s hardly surprising we read headlines and reports about people not saving enough for their retirement. After 26 years of being stitched up, who can blame them?

“Since the Financial Services Act in 1986, there have been at least 4 major changes of Regulator. And they’ve all failed miserably to protect retail investors.”

So now the latest expensive so-called lifeguard, the FSA, is being dumped to be replaced by yet another massively expensive body who claim they’ve got the answer of ridding us of the industry’s conmen.

It’s a fantasy of transparency only revealed in the very very small print.

They’re Wrong Yet Again We’ve been saying for ages that Obama would be re-elected President of the US. But that’s not what the TV Talking Heads were predicting. “Too close to call” was their mantra right up to Romney’s demise. I watched Fox News listening to garbage about crucial votes cast somewhere in darkest Ohio being the key to a surprise victory!

And where did they collect this nonsense? The Polls apparently; so you ask a few thousand folk their opinion and extrapolate the answer over a couple of hundred million voters.

The last 3 months of fast rising commodity prices tells me the aspirations of billions of folks in emerging nations is a long way from being over.

No scope for error there then?!

Those who think otherwise are missing the chance to build serious wealth.

But you know in the short term, despite the howls from Republicans, history shows the best thing for the US Stockmarket is victory by an incumbent Democrat President. So don’t believe those who say otherwise.

Oops, Just A Wee Bit Out Anybody else notice the number crunchers got it wrong yet again?

Not that it matters. Obama will be the luckiest President in 80 years. US economic growth is powering upwards thanks to the enormous discoveries there of Oil and Gas fields equivalent, it seems, to that of 20 Saudi Arabias.

A few weeks back every news bulletin carried the definitive message from statisticians that we were all in the economic doldrums; double dips here and disappointments there, especially in the UK and the US.

Investors take note!

Now suddenly we’re told, very quietly mind you, that uhhhh ahem, uhhh they were uhhhhh wrong.

Broken China? I Don’t Think So Twenty years ago over in the US the S&P 500 Index stood at 410. Now it’s over 3 times that number.

US GDP was 6.3 Trillion Dollars and China’s was only 488 Billion Dollars.

Arguably the biggest story of the last 20 years is while the media and pessimists concentrate on what keeps going wrong world GDP has been driven ever upwards thanks, in the main, to the US consumer and Chinese workers.

The US GDP actually rose 2 pc over the last 3 months, instead of hardly growing at all. Meanwhile the UK GDP apparently grew 1% instead of falling.

Oh and by the way that doesn’t include inflation.

Ah, say the great thinkers, but that’s not the real world.

Oh really? Try going into your local shops tomorrow and insist inflation be subtracted from the milk and loaf of bread you’re trying to buy.

Now according to US Analysts Ned Davis Research US GDP is over 15 Trillion Dollars while China’s has exploded to a mite below 8 Trillion, up 15.3% over only 12 months.

Does that look like an economy going nowhere to you?

Alan Steel, Chairman, Alan Steel Asset Management

15

Business angels More than just money Millions of ÂŁs, Thousands of jobs, Hundreds of deals, One Network...

LINC Scotland is the national association and representative body for the business angel community in Scotland, and was a founder member of the European Business Angels Network (EBAN).

Since our establishment in 1993 our members have made investments in hundreds of companies.

In doing so they have provided tens

EUROPE & SCOTLAND European Regional Development Fund Investing in your Future

of millions of their own risk capital, on average levering three times more from other sources.

Just as importantly they have invested their own skills and experience in the next generation of SMEs. The companies supported have created thousands of high quality jobs in the Scottish economy.

www.lincscot.co.uk

HNW’S DIGITAL LENS

HNW MAGAZINE SEPT/OCT 2012

HNW’s Digital Lens Gartner & The 2013 Tech Sector S.M.A.C. Addiction On October 24, research and advisory company Gartner put out a list of 10 technology trends it thinks will be strategic to enterprises in 2013.

Not surprisingly, most revolve around what has come to be called SMAC, (social, mobile, analytics and cloud), their convergence and the disruptions this could potentially create in organisations.

GARTNER predicts that by 2013, mobile phones will overtake PCs as the most common device to access the web globally. By 2015, tablet shipments will account for 50 per cent of laptop shipments. The growing number of mobile form factors and consumerisation of IT will mean that companies will increasingly need to support a larger number of form factors.

Over time, people will also ditch the PC as a storage destination in favour of the cloud.

Gartner defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years. Factors that denote significant impact include a high potential for disruption to IT or the business, the need for a major dollar investment, or the risk of being late to adopt.

“We have identified the top 10 technologies that will be strategic for most organizations, and that IT leaders should factor into their strategic planning processes over the next two years,” said David Cearley, vice president and Gartner fellow. “This does not necessarily mean enterprises should adopt and invest in all of the listed technologies; however companies need to be making deliberate decisions about how

they fit with their expected needs in the near future.”

Mr. Cearley said that these technologies are emerging amidst a nexus of converging forces - social, mobile, cloud and information. Although these forces are innovative and disruptive on their own, together they are revolutionizing business and society, disrupting old business models and creating new leaders. As such, the Nexus of Forces is the basis of the technology platform of the future.

The top 10 strategic technology trends for 2013 include: See P25 17

MIKE FROM MANHATTAN

HNW MAGAZINE SEPT/OCT 2012

MIKE WILLIAMS: THE VIEW FROM MANHATTAN THE US Snapshot

advantage of when the future appeared dark, and

Here’s what America looks like:

• Record retail sales • Highest personal incomes ever • Highest level of home construction in 4 years • Record low mortgage rates • Solid earnings season so far, even though subdued and early, we still have a 63% beat on results • Record high corporate earnings (by the way, until, we have an earnings season where earnings fall across the board, they will each mark new record all-time highs)

So Ask Yourself This If we agreed to ignore the news for a moment and just sink back into our thoughts, despite all the things we’ve been told we need to worry about.

And in the course of reliving all of these “catastrophes” we arrive at two main conclusions:

1) Every one of these catastrophes has happened at lower financial levels than we are seeing right now, meaning they were ALL actually building opportunities; moments to seize upon and take

• Buying stocks when they sold off hard

2) We should learn to never sell when it seems darkest, with one caveat that states; unless we were immediately buying something else perceived as more valuable, in a worst-case scenario.

Review these two items above again and again.

To build wealth over time we need to simplify things. We need to recognize them both as fact and we need to control our emotions.

And we need to stop living by a preassigned clock that assumes if we don’t hit marks in a certain time period, we never will.

Moving, Not Static We cannot think of markets, people or businesses as static events.

When you read about a bad twist or terrible event, remember that it’s NOT as though the entire world stops.

We move. We adjust, we shift, and we change. We remedy, learn (sooner or later), reconfigure, move onward, and rebuild.

We can use the last 4 years or so to centre upon the idea that everything we feared was not worthy of massive action other than:

“

We won’t be fooled again.

• Holding our focus, and • Remaining patient.

What we saw were the masses (the herd) selling their stocks at every step along the way and buying bonds no matter how expensive they became.

And Gold has been turned into a fear index mechanism, and many believe this will all end badly.

A Sadly Recurring Truth The difficult part of my job is watching those who have chosen to participate in the end of the world Part XXVII, Paragraph 6, Item 2(iii) and who have in fact found it to be tough.

Those who have chosen to try very hard to stay focused on moving ahead and around or through difficulties have quite literally found the other side of the investment mountain...and a future which has likely never been more opportunityladen.

I keep asking how many “end of the world” scenarios do folks need to experience before they see fact from fiction.

Mike Williams is President of Genesis Asset Management in Manhattan, NY

”

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HNW MAGAZINE SEPT/OCT 2012

HEAT SCOTLAND

Turning Up The H.E.A.T. Launching the High-growth Entrepreneurial Action Team “We were delighted to host the first HEAT (High-growth Entrepreneurial Action Team) event created

by High Net World HNW Magazine – www.hnwmagazine.co.uk – in our office on Wednesday 19th September. An interesting group of delegates from different business backgrounds, connected by the shared aspiration to build successful, innovative new businesses, came together. We had a range of speakers, useful discussions, and shared experiences about all the usual issues of product differentiation, expanding internationally, recruiting and retaining the best people and access to finance.”

“HEAT will now be rolled out across the UK, and all those entrepreneurs who attended found it a very worthwhile day. I am sure that they would happily recommend it to anyone considering the forthcoming London, Manchester and Dublin events.”

Sandy Finlayson, Senior Partner, MBM Commercial

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HEAT SCOTLAND

HNW MAGAZINE SEPT/OCT 2012

The HEAT Concept There’s a hugely valuable segment of the entrepreneurial market know by a variety of different names; “the gazelles”, “nextstagers”, and “high-growth businesses”.

These are not eager-minded pre-launch hopefuls. They are companies who have begun to establish themselves in their respective markets, and while they differ by industry sector, time in business, employee numbers and financial turnover, they have a number of common traits, including: • Existing revenue streams • Existing client bases • Financial solvency • Scalable products or services • True UK-wide and/or international growth potential • High levels of frustration at real and perceived barriers to growth • The commitment to address barriers to growth through the HEAT Scotland programme.

Over the next two issues HNW will be reporting back on the inaugural HEAT event in Scotland as we move toward 2013 and scheduled launches in three other major UK cities.

HEAT & The Harvard Business School The HEAT anagram can be credited to the Harvard Business School who developed the concept in the mid-1990’s to move beyond the proliferation of start-up market resources in the US at the time, and onto the next-stage entrepreneurial market.

This market segment is vastly underserviced in the UK by comparison to the number of initial support programmes, grants and other incentives aimed at startups.

It’s almost like we take the training wheels off the bicycle too early and thus business survival rates in the UK often make for uncomfortable reading. Government data shows one in five businesses fail within the first two years. Within three years, three out of ten have gone under, and thereafter less than half are still in business after five years.

Little wonder that Angels and VCs guard their pounds and pence so diligently.

Equally, the importance of a dedicated programme like HEAT to help safeguard that next stage of company growth arrives as a crucial and necessary element of the UK business life cycle.

The HNW HEAT Scotland programme selected the leaders of 20 high-growth entrepreneurial businesses for the launch event. You can see a list of these companies starting on Page 6 of this issue.

Company attendees were required to be the leaders and/or majority shareholders of their respective businesses in order to take part. They were also asked to respond to a pre-event survey identifying out those issues they saw as barriers to growth, in order that the speakers and mentors on the day could structure their talks accordingly.

The abstract of these responses broke down into five key categories, including: • Marketing, Sales & Conversion • Funding, Support & Transition • New Markets & Internationalisation • Outgrown Existing Advisers • Staffing & Training (You can find the research abstract on Page 11 of this issue) The HNW HEAT Scotland Speakers Programme * Introduction from Ed Emerson, HNW Magazine Ltd * Panel Discussion: Key Issues Impacting High-Growth with Steven Moffat/Huan, Robin Mehta/Union Technology and Ray McLennan/Angels Den * Stephen Park Brown, NVT Group - Growth Barriers

* Sandy Finlayson/MBM Commercial and Stephen Paterson/HW Corporate Finance, Structures for Growth * Olga Kozlova, Heriot-Watt University, Converge Challenge findings * Tom Walls, Ciqual, Paths to Next-Stage Funding * Dr Stuart MacKenzie, University of Strathclyde, Key Lessons in Entrepreneurialism * Ivor Tiefenbrun, Linn Products, Key Speaker Ray McLennan, Angels Den I got involved in Angel’s Den because I had made some angel investments and was asked to do so by its founder, Bill Morrow.

That was about five years ago. He collared me at an event and said: “I think you would be good for Angel’s Den because of what you have done”.

The entrepreneurial process truly started for Ray at the age of 17 when he informed his family that he wasn’t going to university. My father’s response was to eventually take my breakfast away one morning, saying: “If you are not paying, you are not staying”. So I told him, “OK then, I’ll show you”.

He joined the Army and got picked to go to Sandhurst, spending a few years in Germany. “The abridged version is that I came back from Germany and thought the beer here was rubbish, so I started importing German beer into Scotland,”

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HEAT SCOTLAND

HNW MAGAZINE SEPT/OCT 2012

Steven Moffat, Huan “I’ve started 19 companies and have bootstrapped them all,” says Steven. “Some of them have done well and some of them have done better. I am looking forward to getting to know a little bit more about you guys, finding out about your businesses and maybe doing some good today.”

Technology arrived in Steven’s life one Christmas at the age of 12, and became a game-changer. “I got my first 48k Spectrum and was soon able to programme games and sell tapes at school. The Internet was just beginning back then and I remember sitting in the office late at night surfing the web’s first jpegs and tables.”

says Ray. “I just went to the brewery and told them I have lots of outlets, get me some beer. That was kind of the start of the process. I ended up importing wine, various other things, got involved in restaurants and ended up with twelve of them in Ireland.”

“You have to remember that Ireland at the time was a bit of a backwater. So imagine going into Dublin, and getting the equivalent of a free lease on Princes Street - two years rent free! Now multiply that three times over on very good sites while the economy starts to boom. Suddenly everybody wants to buy the leases from me.

“Maybe it was luck. Heck, I was advised many, many times not to go into Ireland, not to put any money into Ireland, but when you’re young you just go ahead and do it anyway. I made more money

out of the leases than actually trading through the restaurants.

“Don’t let me fool you. There were some gut-wrenching moments. On the fourth restaurant, one of the investors let me down. It was a lot of money.

He called right in the middle of the refurbishment process saying he wanted to renegotiate the whole deal. You could hear the workers and machinery in the background. It was three days before they were all due to be paid. It was going to go pear-shaped. That stuff happens all the time. But you find a way through.

“So I’ve been involved in Angel’s Den now for about two years looking after Scotland and parts of Ireland and the North East.

Angel’s Den has about 5,000 high net worth individuals who invest on a regular basis.”

That knowledge led him to conceive HUAN. co.uk, under which he has won many awards. The web design business grew into a profit-sharing model, attracting talented people and focusing on skills development.

(You can read more about Steven in the exclusive HNW interview in the May/June issue at www.hnwmagazine.co.uk).

Robin Mehta, Union Technology “I currently run Union Technology and started my first business six years ago when I was 23. I recently, in fact last year, sold that business on to the Union Group where I am currently running the technology, physical and software within the group. The Union is Scotland’s largest advertising group. I have also, off the back of that, invested in a couple of other companies. I have experience with Angel’s Den as well.

Growth, Cash & Staffing One of the trickiest questions for high growth businesses is managing cash during growth spurts alongside associated recruitment costs. Mike Octigan of Gecko New Media asks: “There’s a nearto-unavoidable time it takes to bed in the new recruits and get them up to speed.

That’s the strain point, managing cash flow through that period. What’s the view on best practice for this?”

Moffat: “Manage the cash and make the ends meet when it is tough! When you have saved some money, do something good with it. You’re not here just for disposable cash. If that’s your motivation you’ll find you plateau quite quickly. For me it’s more the step change from being a seven man outfit to becoming a 16 person team. There’s a huge learning curve to make that jump.

“When I am in a growth cycle, I always put

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HNW MAGAZINE SEPT/OCT 2012

HEAT SCOTLAND

Emerson: “Let’s take the agency sector as an example; you staff up when you get a couple of big new clients. Then a big client goes away and you have staff superfluous to need. More business development leads to another growth spurt and upheaval and you end up in a cycle as the income, the cash, sporadically dovetails into staff and costs. Is anyone seeing this?”

every penny back into the business, always in a growth cycle.

Octigan: “Yes, but that is kind of my point - that it’s going into the business. But it’s making sure that the team gets back up to profitability. You have two things here; the actual capacity on one side and the capability on the other. I always thought the capacity was decided by the capability, or how long it takes to get that capability up to scratch with the team.”

Moffat: “OK, I deal with efficiency. And I always make each granular cog as efficient as I can – the interactions, engagements, process integration - because as you start to stack people up, those cogs and connections can get rough very quickly. When the cogs are fit together well, efficiently, you take care of the base problem and growth is much, much easier.

Moffat: “I feel exactly your pain; the plateaus and momentum. I think it’s about having the confidence in that momentum.

And it’s very hard to make that decision, to have the confidence to jump upwards, knowing that in three months’ time if it doesn’t happen you will have to lay people off. But the key word here is ‘momentum’ and believing in yourself. If it has happened so far, then why not have the self-confidence to keep it happening.

Perhaps beyond the capacity and capability issues it’s that action of bringing in the business that usually falls off.

“Can I just add onto the end of that? One of the key things that I did was diversify my income streams to flatten out my spikes earlier on. I looked for something of interest alongside my main business that fit, but didn’t rely on the same parts of the world to be income generators. A little bit of diversification in your income streamlines can flatten out the spikes and also give you that protection as the world shifts around.”

Sales: My Values Are Better Than Yours Emerson: How do you convince your clients that your service is better than everyone else’s? Or should we be trying to do that to win more business?

McLennan: “Has anybody heard of Simon Sinek’s TED (Technology, Entertainment, Design) presentation Start With Why? The premise is that people don’t care what we do until we care why we do it.

“I was speaking at an event about the Legal Services Act. There’s a lot of stress in the sector just now. Anyway, I’m a member of an organization called Buy One Give One. Basically, if you’re an author then wherever you sell a book, you plant a tree. That sort of thing. If you’re a restaurant owner, when you sell a meal, someone in the Third World gets fed.

“At this event, I talked to lawyers and on their seats there was an envelope and it said ‘Please don’t open until Raymond tells you’. Anyway, I gave the talk, spoke about why I was getting involved and so on. And then at the end I instructed them to open the envelope, inside was a certificate and it said: ‘Thank you for coming today. As a result of you attending, 27 children in Peru have access to schooling for a month’.

There were two bins by the door and I said, as an aside, ‘Next month we are going to either give schooling in Kenya or we are going to give schooling in Mozambique’.

If they wanted it to be Kenya, they should put their envelope in the bin on the left. If they wanted it to be Mozambique, they should put their envelope in the bin on the right.

“As they left someone dropped a tenner into one of the bins and then another guy dropped in 20 quid. And at the end of it, there was about £300 in the two bins. I had more response to that than to anything else that day and it actually led to quite a few bits of business. It wasn’t meant to be a marketing thing, but it kind of turned out that way.

“Think about this story when you’re talking about finding clients and convincing them that your service is better. When you have two identical businesses with no real USP’s then what makes you stand out is that thing that’s slightly different. And it may have much more to do with your values than what your business actually does.”

You can read the rest of the HEAT Scotland launch discussion in the November/ December issue of HNW Magazine…

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MBM Commercial is an award-winning niche commercial legal firm which has a focus on working with investors, entrepreneurs and high growth companies.

Contact Us For further details about MBM Commercial LLP, please contact: Edinburgh Office 5th Floor, 125 Princes Street, Edinburgh EH2 4AD T.

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HNW’S DIGITAL LENS

HNW MAGAZINE SEPT/OCT 2012

The top 10 strategic technology trends for 2013 include: Mobile Device Battles Gartner predicts that by 2013 mobile phones will overtake PCs as the most common Web access device worldwide and that by 2015 over 80 percent of the handsets sold in mature markets will be smartphones.

Mobile Applications and HTML5 The market for tools to create consumer and enterprise facing apps is complex with well over 100 potential tools vendors. Currently, Gartner separates mobile development tools into several categories. For the next few years, no single tool will be optimal for all types of mobile application so expect to employ several.

Personal Cloud The personal cloud will gradually replace the PC as the location where individuals keep their personal content, access their services and personal preferences and centre their digital lives. It will be the glue that connects the web of devices they choose to use during different aspects of their daily lives.

Enterprise App Stores Enterprises face a complex app store future as some vendors will limit their stores to specific devices and types of apps forcing the enterprise to deal with multiple stores, multiple payment processes and multiple sets of licensing terms. By 2014, Gartner believes that many organizations will deliver mobile applications to workers through private application stores.

The Internet of Things The Internet of Things (IoT) is a concept that describes how the Internet will expand as physical items such as consumer devices and physical assets are connected to the Internet. Key elements of the IoT which are being embedded in a variety of mobile devices include embedded sensors, image recognition technologies and NFC payment.

Hybrid IT and Cloud Computing As staffs have been asked to do more with less, IT departments must play multiple roles in coordinating IT-related activities, and cloud computing is now pushing that change to another level. A recently conducted Gartner IT services survey revealed that the internal cloud services brokerage (CSB) role is emerging as IT organizations realize that they have a responsibility to help improve the provisioning and consumption of inherently distributed, heterogeneous and often complex cloud services for their internal users and external business partners.

Strategic Big Data Big Data is moving from a focus on individual projects to an influence on enterprises’ strategic information architecture. Dealing with data volume, variety, velocity and complexity is forcing changes to many traditional approaches. This realization is leading organizations to abandon the concept of a single enterprise data warehouse containing all information needed for decisions.

Actionable Analytics Analytics is increasingly delivered to users at the point of action and in context. With the improvement of performance and costs, IT leaders can afford to perform analytics and simulation for every action taken in the business. The mobile client linked to cloud-based analytic engines and big data repositories potentially enables use of optimization and simulation everywhere and every time.

In Memory Computing In memory computing (IMC) can also provide transformational opportunities. The execution of certaintypes of hours-long batch processes can be squeezed into minutes or even seconds. Millions of events can be scanned in a matter of a few tens of millisecond to detect correlations and patterns pointing at emerging opportunities and threats “as things happen.”

Integrated Ecosystems The market is undergoing a shift to more integrated systems and ecosystems and away from loosely coupled heterogeneous approaches.

Driving this trend is the user desire for lower cost, simplicity, and more assured security. Driving the trend for vendors the ability to have more control of the solution stack and obtain greater margin in the sale as well as offer a complete solution stack in a controlled environment, but without the need to provide any actual hardware.

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WAW

HNW MAGAZINE SEPT/OCT 2012

What Angels Want in professional fees to research the different forms of grant assistance which are available for businesses and to identify the particular types which may be applicable to your business.

As grant assistance is provided by publicly accountable bodies it is not “free” but usually comes with specific conditions, including: • The number of jobs to be created • Capital investment • Technology development • Geographical location, or •A combination of all of these.

External Finance WHILE raising finance for start-up and early stage business has never been more challenging a good business will always win through in the end.

Perversely, this is probably a good time to start a new business as it imposes strict financial discipline from which the business will benefit when the economy eventually starts to improve.

Once a company has exhausted all internal sources of finance it must then look for external sources, recognising that there is almost always a cost attached.

External finance takes three principal forms, namely: • Grant assistance • Debt finance in all its many forms, and • Equity Finance.

Grant Assistance Grant Assistance takes many different forms with many different strings attached and the first question to ask is whether you can afford the cost of “free” money. It may take weeks or months of endeavour and a substantial investment

26

The grant conditions generally apply for a period of years after the date of the award - typically five years - with claw back provisions.

Proof of concept grants, SMART awards, RSE Fellowships, Framework 7 grants, Technology Strategy Board grants, Regional Selective Assistance and the numerous other types of grant assistance available can be absolutely invaluable to struggling young companies.

Subsidy Junkies However, it is essential to balance the prospect of “free money” with the time taken to obtain the grant, the amount of professional fees incurred in obtaining the grant and the opportunity cost associated with the delay and uncertainty.

Many small companies become “subsidy junkies”. While appropriate forms of grant assistance may be an integral part of the early stage funding ladder, every company which wishes to enter a real growth trajectory should aspire to leave subsidised funding mechanisms behind, recognising that its long-term success and sustainability is ultimately dependent upon its ability to generate cash from operations without public sector subsidy.

Debt Finance Having looked at every available opportunity for “free” finance and grants the next step is to look at debt. It should however be borne in mind that the provider of debt finance is looking at your ability both to service the interest payments and other charges and to pay back the debt in the agreed timescale.

Therefore this option is unlikely to be appropriate for pre-revenue businesses which, by definition, are not generating any cash to service the debt. .

The various forms of debt may be broadly categorised as follows:-

Asset Finance Hire Purchase - You acquire possession of the asset at the outset, make regular repayments and title to the asset passes to you with the final payment.

Lease - You acquire possession of the asset at the outset and make regular repayments but you never acquire title to the asset although you may go on to a “secondary” period of much lower repayments after the primary period has expired.

Finance or Operating Lease - The asset represented by a finance lease will appear as an asset in your Balance Sheet and so will the liability for repayments.

With an Operating Lease on the other hand repayments are simply shown in the Profit and Loss Account and the asset and liability are not reflected on the Balance Sheet. An Operating Lease is typically for minor equipment such as the photocopier for repayments.

Maintenance Agreement - If a piece of “mission critical” equipment is financed in this way you should bear in mind that you retain the liability for repayment, even if it breaks down. You should therefore think about insurance and

WEN

HNW MAGAZINE SEPT/OCT 2012

What Entrepreneurs Need maintenance agreements to cover those eventualities.

Overdraft - Historically, the overdraft has been the simplest and quickest way to obtain finance from a Bank. Companies should have “forward visibility” on cash flow for twelve months in order to avoid a qualified audit certificate. It is therefore common practice to ask the Bank for a “Letter of Comfort” confirming that it is not their intention to withdraw the overdraft before the annual review provided there is no breach of covenant.

Security is typically in the form a normal floating charge over all of the assets of the company.

Cash Flow Finance – This type of finance is also called factoring or invoice discounting. When you supply goods or services to your customer you generate the invoice which is passed to the Bank or their factoring company, and they immediately release a percentage of the invoice value (typically between 75 and 90%). They then accept responsibility for collecting payment from your customer and the balance is paid to you less their charges when they get payment. The facility may be offered on a recourse basis which means that if ever the debt goes bad you have to make good the shortfall or “without recourse” which means that the debt is insured although this will be significantly more expensive.

Cash flow finance can be a simple flexible way of financing a growing business but if sales decline cash can dry up very quickly. It is therefore prudent for any business using cash flow finance to build up a cash reserve to give it some protection against a fall in sales. The directors will also be asked to warrant that invoices are due and payable when they are submitted to avoid the temptations of “fresh air” invoicing.

Business Term Loan - The days of highly leveraged cash flow lending to finance acquisitions are gone, at least for the time being. That may not be a bad thing as over leverage and reckless lending were one of the main reasons for the financial crash. The repayments may either be “stepped” ie a fixed capital amount is paid off every year so that the

repayments reduce over time, calculated on the “annuity” basis so that there are fixed payments over the life of the loan or on an interest only basis with full repayment at the end of the loan. The loan will typically be secured by way of a fixed charge over a property or, if that is not available, some other form of security acceptable to the Bank who may also look for the loan to be written under the National Loan Guarantee Scheme.

Funding Advice

Loan Stock - Moving away from the banking system there are a number of providers of Loan Stock or “mezzanine” debt. Secured and Ranking behind the Company’s principal lenders, typically a clearing bank, or unsecured, it may be convertible giving the lender the right to participate in any increase in the value of the company and the interest rate will be priced according to the perceived risk.

The interest may be payable monthly or quarterly or rolled up which means that it is repayable on the maturity of the loan.

www.tricapital.co.uk

http://www.scottish-enterprise.com/fundyour-business/Scottish-Investment-Bank/ SIB-Equity-Funding/SCIF.aspx www.archangelsonline.com www.alidacapital.co.uk www.kelvincapital.com

www.chimaerabio.com www.scottishlifesciencesassociation.org.uk Sandy Finlayson, MBM Commercial Blog - http://www.mbmcommercial.co.uk/ mbms_blog

The Dangers of Leverage Following the dot.com boom and bust we went through a period of extraordinarily cheap and easy credit resulting in many businesses becoming over leveraged.

When a business is sold, it is typically sold on a “cash free/debt free” basis. This means that, even although the business may have an attractive headline price, the debt must be fully accounted for before there is any value attributable to shareholders.

Far too many businesses fall into the trap of believing they should borrow as heavily as possible in order to retain control of all of the equity. In reality however they are just giving control of their business to their creditors and putting their directors at risk personally if they agree to sign personal guarantees.

The right way to create shareholder value is to ensure that you have the right mix between debt and equity. The Greeks have found out that lesson the hard way – do not let the same thing happen to your business!

27

Interview: William Adam The New Face of Entrepreneurialism

by Bill Magee

Be ready to spin several plates in the air when you engage with global Scot William (Bill) Adam. It’s not that he loses track - not a beat is missed. It’s just there are so many thoughts bubbling away in this veteran entrepreneur’s mind.

TO be found at his main residence in Brussels, or the South of France or more likely his country retreat in the Netherlands, depending on the time of the year, at the tender age of 91 Adam is always on the lookout for his next strategic partnership or deal.

The former pupil of Edinburgh’s George Watson’s College is one of the principal founders of venture capital in postwar Europe, helping to transform it into a specialised investment and management profession. He is fluent in French, Spanish and Italian.

As a founder member and senior advisor of “Knowledge Economy Network” this eminent engineer (C.Eng, FIMechE), one-time European Commission (financing and innovation) adviser and European CEO of blue chip companies including Weir Group, Yale & Towne and Firestone Tyre & Rubber, is keen to introduce KEN to Scotland.

Adam has packed more into a personal portfolio than most of us youngsters could ever hope to aspire.

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In his earlier career Adam was Chief Engineer of the Anglo Argentine Iron Co in Buenos Aires. Adam has also been VicePresident-Europe of Jos. Schlitz Brewing Co, Milwaukee, USA, tasked with rescuing heavy investments in Spain and Belgium

at risk of liquidation. He achieved this in 3.5 years.

He then became MD of Scienta Holdings SA, a pioneer European venture capital company investing in new technologybased firms seeking to expand onto the European scale. During that time he rubbed shoulders with board members like Sir Sigmund Warburg, Jacob Rothschild and Hans Merkle the then president of Bosch. Then came along the CEO offers.

Adam, who has lectured at Harvard Business School on “Company Turnarounds”, was on one of his regular trips to the “old country” with his lovely

INTERVIEW

HNW MAGAZINE SEPT/OCT 2012

Dutch wife Trudy, when he gave a (Ed: it was unreported) keynote at Edinburgh’s newly-established Summerhall crosscultural/commercial hub, sited on the former Dick Vet premises. His message?

Q UK and particularly Scotland has enjoyed the reputation of world best education. Is this already history? And if so, which are the key bottlenecks of our education and training system?

That with very few exceptions Scotland plc is not pursuing vigorously enough high-quality tech-based activity, to the point where we are neglecting excellence and not giving the venture capitalists fraternity a real chance to develop their entry and exit strategies - with the danger that they are bypassing this country altogether.

WA: “Firstly, with very few exceptions we are not pursuing vigorously enough high quality and indeed we are neglecting excellence. As it is demonstrated by PISA tests aming children in the UK, we have to do better.

Coupled this with on the thorny question of “leadership” which he recently told the BBC’s Washington Correspondent Jonny Dymond that he has always insisted on “proper management training” and “straight talking” when problem solving from boardroom to shopfloor.

Bill Adam responded to a four-part Q&A on behalf of High Net World. It pulls no punches when discussing educational standards and business ethics and nurturing a young generation of entrepreneurs: Q As Senior Adviser to its board, could you briefly introduce KEN? WA: “Though with the Secretariat in Brussels KEN is a global network encouraging policy makers and stakeholders worldwide to develop and strengthen knowledge-based international competiveness.

We address select issues in four domains: higher education, Research & Development, innovation and entrepreneurship. Annual awards are granted for exceptional performance and productive policy implementation - this year Japan, TUBITAK (Turkish R&D agency), Denmark and US SBA. Scotland next?

KEN organises annual fora (forums) and several preparatory workshops in countries where it has partners, addressing VC schemes, networking with knowledge actors in diaspora, linking R&D support measures, the role of technology parks, university reforms, women in corporate decicion making..

Secondly, talented students are not receiving the extra attention due to them, and much of their potential goes wasted.

Thirdly, many university curricula are predominantly discipline focused often outdated in content. Instead of preparing young people for several professions they will follow in their future, we are preparing them for one single traditional profession.

And fourthly, which is the biggest paradox: a country that was the world’s largest empire has now turned inside, and its young generation enjoy less internationalism through education than most youngsters in Europe and elsewhere. Are we experiencing the return of a kind of subconscious “Splendid Isolationism” in the age of globalization?”

Q From your extensive experience in venture capital and as CEO of engineering firms, what kind of improvements can you suggest?

WA: “In VC terms Scotland is - together with the Swedes - is better than the rest of Europe, but still far behind the US - while they understood more than half-a-century ago that talent scouting, coaching and mentoring young entrepreneurs is critically important - in Europe we still expect commercial banks to get involved, even in the early stages, which is completely wrong.

Scottish Enterprise is doing a good job, but still VC investors would like to see more support in exit strategies, our entrepreneurs are often not ambitious enough and we lack fast growth companies (typical for the US).

The EU single market, with 500 million consumers, does offer a comparable example to the large US market, but it has to be targeted from the start which is often not the case. Without proper business volume it is difficult to be globally competitive.

Finally, unless the business environment regains its former foundation of integrity and ethical principles it will be difficult to achieve full economic recovery. Top management needs to respect business ethics imposing them vigorously at lower levels.

We cannot build a new, sustainable, knowledge economy with the current ethics of business ie success achieved by almost any means! We should not forget that the first book of Adam Smith on economics was really about ethical standards and that he rejected monopoly on moral grounds.

Q How could the proposed Scotland/UK/ Europe initiative help more economic collaboration and bilateral business develop?

WA: “The proposal is to use KEN-inspired “Venture Management Group” to assist investment in both directions, by coaching partners with direct knowledge on business culture and important connections on both sides (UK-Scotland, and NL-BE). In spite of their proximity there are specific features that potential partners need to know about each other in order to achieve optimal results.

When it comes to Scotland plc I am confident we can make a difference,” he promised.

Each KEN gathering adopts very specific recommendation(s) and the next one is in South Africa dealing with 21st century education challenges in support of knowledge economy. We are developing an Expertize Matrix allowing members to commercialise among themselves and beyond their internationally competitive knowledge.”

29

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FINANCE

HNW MAGAZINE SEPT/OCT 2012

Looking for Finance?

Look Internally.

As the year 2012 unfolded, with the on-going Euro crisis, a flat economy and a reduction in the availability of bank credit, financing has become more of a strategic priority for every business.

AND so we need to explore “internal” finance, as opposed to external finance options like grants, debt and equity.

But as there is always a cost attached to external finance it should be explored only after all internal financing options have been considered.

These include:Reduction of Debtors • If the Company has trade debtors of £750K averaging 90 days and reduces this to 60 days, it generates £250K of cash. As old debtors are generally riskier, controlling debtor days should be a strategic priority for every business.

Cost Reduction • Every business should review its costs monthly with comparisons both against budget and the previous year to identify any anomalies, negotiate improved terms with suppliers and reviewing all of its costs on an ongoing basis.

Reducing Liabilities • In a time of uncertainty, long-term liabilities such as leasehold liabilities and unsustainable levels of debt should be reduced or eliminated altogether. Landlords would far rather have a tenant in occupation looking after a property and making some contribution to the rent than be left with an empty property which is difficult to re-let.

Everybody wants “more for less”, the “good old days” have gone forever and this is the “new normal”.

“Clever” Contracts • It is more important than ever that long-term contracts should be negotiated as well as possible.

Rather than simply asking for payment on completion, everyone should be thinking about mobilisation or commissioning fees at the outset, interim payments, options for revenue sharing and early payment on completion.

Where Intellectual Property is involved, this will involve more complex discussions around exclusivity, ownership and territorial restrictions.

Supplier Relationships • Conventional wisdom at a “micro” level is that it is smart to “chisel” prices and stretch creditors as far as possible. At a “macro” level this reduces margins to unsustainable levels and slows down the circulation of cash in the economy with the overall result that everyone

loses. On the other hand, if one demands excellence of service from suppliers in exchange for fair and prompt payment this will improve supplier relationships, increase innovation in improved product and service delivery and foster an environment in which everyone wins.

Re-allocating Resources • As work patterns change increasingly frequently, flexible staffing arrangements are essential to ensure that employees are as productively engaged as possible and it is essential that a climate of goodwill and flexibility is maintained with all staff to ensure that the business can be run as efficiently as possible for the benefit of all concerned.

Innovation • Everybody wants “more for less”, the “good old days” have gone forever and this is the “new normal”.

Continuing innovation must therefore be central to the strategy of every business to meet constantly increasing customer expectations.

All too often these basic ideas are overlooked but none of them is difficult and, taken together, can transform the financial position and prospects of a business in a relatively short space of time.

Sandy Finlayson

31

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ECONOMY & INTERNATIONAL

HNW MAGAZINE SEPT/OCT 2012

International Focus on...

Give Me Greece,...or IT seems like only yesterday that we all worried only about Greece. We fretted over a country that has a global impact of roughly $350B annually, a number that is relatively small in today’s world, certainly from a global perspective.

However, I believe our history as a country expresses one thing: that challenge does not matter.

Then, we wrote, “Make no mistake, the next monster will be bigger, uglier and cost us more. Or at least the press will tell us that....”

• Freedom is price-less - thank the good Lord above for our military men and women.

Indeed, that monster is here. Google “fiscal cliff” and you will be amazed at how an item that was not even a reference when this year dawned is now completely baked into the global discussion.

I am pretty certain if I hear the reference “cliff” associated with any other element, I will be sick. Oh how I long for the days of the red ink diaries reporting that only Greece is going bust. Even though it’s still on the waiting list.

The Deal Here is the funny thing about “the cliff”.

It’s anything but a secret. My son Max is 11 years old and he knows about “the cliff”. So does the cabbie. Even the cash register staff at the local supermarket know about “the cliff”.

People who don’t even have to worry about “the cliff” know about it. But the simple reality is that we just need to pay it off. We need to increase revenues and yes, it is a total pipedream if we think social program costs will be managed in any way under this President.

You see, the grand experiment of America has proven many things. Here are a few:

• When hurdles arise, there have always been those who choose to sit it out, collect benefits and let others fix it.

That will never change.

The better news though is that this won’t change either: • In our history as a country, no matter the mountains thrown in front of us, no matter what we screw up along the way ourselves (and indeed we do), no matter President or politics, there have always been a larger number of citizens who choose to step up and build solutions.

• There have always been more who get the idea that “if it is going to cost more to have the great freedoms and the ability to build the life one chooses (good or bad) in this land, then get out of my way and let me create the platform from which we will gladly pay those additional costs....”

Isn’t it time we simply face that reality… and get on with it Mr. President?

My View Is This: Tell us what it costs, then get the hell

out of the way and let us build what is needed to create the profits which create the jobs which create the expanding tax base which builds the revenues to pay for the social programs.

With all due respect, getting in the way of something one has no concept of how to accomplish is indeed a fool’s game. And in the end, it only delays the bill paying requirements.

In the end, we all know who has to pay this debt off. The market knows, business knows, companies know, builders know, entrepreneurs know..... the only one’s who don’t are the politicians.

Let’s get on with it. The economy is doing better than almost anyone is giving credit, in spite of the garbage and the rhetoric we are carrying around.

The Bottom Line We are on the verge of maybe getting one more big shot at some major equity values--and I mean solid values and cheap prices.

However, once that passes--if it arrives--we will look back on this time years from now faced with only this feeling, “why didn’t I have confidence in the future...it was brighter than I thought it was.....”

Mike Williams is President of Genesis Asset Management in Manhattan, NY

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SALES & MARKETING

HNW MAGAZINE SEPT/OCT 2012

Sales & Marketing Performance The Double Funnel Benny Placido

“During the last 5 years, the average sales cycle has become 22% longer, typically with three more decision makers participating in the buying process.”

(Sirius Decisions)

What’s wrong with the traditional Sales Funnel?

WHILE it’s been around for many years the Sales Funnel has more recently lost a lot of relevance. The problem is that the buyer is different. More precisely the buying cycle has changed and large parts of it simply no longer involve any salespeople.

Now more than ever, marketing has a vital role to play before, during and after contact with the sales team.

“Although it varies greatly with product complexity and market maturity, today’s buyers might be anywhere from two-thirds to 90% of the way through their journey before they reach out to the vendor.”

(Lori Wizdo, Forrester Blogs) The B2B market has its own characteristics which define both the challenges faced by marketers and the strategies they subsequently decide to employ.

The Double Funnel However, there is a strategic evolution of the Sales Funnel process proposed

by Market Transformations called the “Double Funnel”, which is based on the following 7 principles:

As a result, the Sales Funnel on its own gives us an incomplete picture of what is really happening. What’s missing is marketing; how and when marketing is able to add value to the sales process.

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• Understanding your customers, pricing and competition • Building strong messaging and positioning

SALES & MARKETING

• Reviewing your website and visitor journey • Inbound marketing • Nurture marketing process • Converting leads into customers • Measurement and analysis The Double Funnel approach works because it recognises that marketing and sales are two parts of the same mechanism. A lot of qualified leads can and do slip through the cracks. This is because for reasons outside of your control, the majority of leads are simply not ready to buy.

HNW MAGAZINE SEPT/OCT 2012

sales and marketing goals becomes a more straightforward process. In the Double Funnel approach, qualifying a lead as “sales-ready” is not the job of marketing.

Today the role of marketing in B2B companies is to achieve set objectives like generating subscribers, webinar signups and ultimately new business enquiries. Similarly, nurturing leads and running campaigns are not tasks for sales.

The role of sales is to take opportunities through the sales cycle, qualifying and closing in order to meet their own set of objectives, namely sales targets.

2) Sales and Marketing Interface At some point there has to be a handover of leads, enquiries, or opportunities from marketing to sales. Sales and marketing should together define what is meant by a marketing qualified lead.

So What Happens Then?

The definition of a marketing qualified lead, as opposed to a sales qualified lead, needs a little explanation.

This approach allows for a process to recycle these leads back into the system, until such time as they are ready to buy.

A sales qualified lead is usually defined as a lead that meets the following ‘BANT’criteria:

The customer journey in the context of both sales and marketing activities is mapped out in stages, roles, responsibilities and actions. These are then defined and measured so that each part of the process is meaningful.

B: Budget – A budget has been agreed.

The whole point of the Double Funnel approach is to create a more complete and effective process for generating and managing leads. Getting this right takes a great deal of the strain out of the relationship between sales and marketing, and also encourages the right behaviour from both groups of people.

N: Need – A need has been established and agreed

With this in mind, here are 3 points worth emphasising: 1) Roles & Responsibilities Sales and marketing are two very different disciplines, performing very different roles within the business. When one team doesn’t understand the other’s role, there can be conflict.

Once roles and responsibilities are defined, any subsequent alignment of

A: Authority – Your contact has the authority to make a decision

T: Timescales – A timescale has been agreed for the sales cycle.

A marketing qualified lead need only meet one or two of the criteria, and then gets passed to sales. The point here is that sales is better equipped and better placed to verify most of this information, so why not let them do it?

Doing the handover at this stage means that sales can see much earlier which leads need fast-tracking and which need to be returned to marketing to be nurtured.

3) Measurement Traditionally, measuring the performance of sales is fairly straightforward, but not always the case with marketing. However, there are ways in which marketing can and should be measured.

Part of the Double Funnel approach is upfront benchmarking in order to be able to judge success or failure. For example, if improvement of brand recognition was a key objective, there would have to be measures showing where it presently stands in order to measure its improvement.

Context is also important. For example, solely measuring website visitors would be a mistake, because they can easily be driven with the use of keyword phrases that may or may not be relevant. This would result in a high bounce rate, so a combination of measures is needed to drive the right kind of behaviour.

Setting a target of “marketing qualified leads” is a good measure because it isn’t just about getting leads and enquiries - it’s also about making sure those leads and enquiries are relevant.

A side issue here is the use of measurements. Some marketing departments are measured on the number of visitors or the number of enquiries; sales teams are measured on sales, and often the two don’t meet in the middle.

This is a comprehensive look at a B2B marketing approach designed to generate more qualified leads and sales opportunities.

You can access more information at Market Transformations.

35

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INFOGRAPHIC

HNW MAGAZINE SEPT/OCT 2012

Social Media “You Are What You Tweet”

Andrew Bourke

FACEBOOK reports a current global audience of over 966 million (checkfacebook.com), YouTube has 4 billion views per day, Twitter boasts circa 500 million users with 340 million daily Tweets.

That’s a lot of voices, visuals and noise.

But while, as Harvard Law professor Jonathan Zittrain wrote, “The qualities that make Twitter seem insane and halfbaked are what makes it so powerful”, never forget that, “You are what you Tweet.”

Social media channels and engagement have rather quickly entwined themselves into our personal and working lives, and from a business perspective this can be a good thing, and it can be a bad thing.

Consider a few examples.

In Teggart vs Teletech UK Limited (2012), Teggart worked at a Call Centre.

He posted an obscene comment on Facebook ON HIS OWN FACEBOOK PAGE, about a female colleague and her alleged promiscuity.

The comment posted, named the company and was read by his friends, which included work colleagues. The named female did not have access to the page, but heard about it and asked for it to be removed. Teggart was offended by this and posted a

37

INFOGRAPHIC

HNW MAGAZINE SEPT/OCT 2012

“

The qualities that make Twitter seem insane and halfbaked are what makes it so powerful.

”

further lewd comment about the female colleague.

Teggart’s postings were then brought to the management attention. He was suspended and finally dismissed for Gross Misconduct, namely bringing the company into disrepute by naming it in a Facebook post and also for harassment of a fellow employee.

While the Employment Tribunal did not accept the argument that he had brought the company into disrepute, they did find for harassment as it had breached the company Dignity at Work policy. The dismissal was found to be fair.

In Talbot v Elsbury, (2011) Libel on Social Media as a High Court case, it shows that it is not limited to purely employees or Tribunals. Compensation and costs were awarded after one County Councilor made a Tweet containing a completely untrue allegation over another potential candidate.

Although the councilor later re-tweeted to state that his previous post was not true, this was not accepted and the case went to the High Court. Some £3000 plus costs later, the case was heard and settled.

This is all before we consider the painful issue of the Human Rights Act and Social Media.

In short, we have the right to free speech, but not to slander or libel.

And the business impact? Outside the loss of employees through termination, you now have potentially significant internal environmental and external market reputation issues to contend with.

So ask yourself: Do you have a Social Media policy? Do you want to monitor what goes on in and about your business?

If the first answer is “no”, then the second answer should most definitely be “yes”.

Andrew Bourke Absolutely HR

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CM

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CMY

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PRACTICAL BUSINESS

Practical Business HNW Magazine’s Practical Business section looks at key areas of business needs across legal, accountancy, marketing, finance, leadership, strategy, research and other areas of support. In this issue we look at; online strategy and the roadmap to sustainable digital programmes, the importance of time management and the debilitating rise & rise of work, the legal rules surrounding Twitter use and how to avoid the pitfalls, and perspectives from the Pension Desk on what you should be doing about your retirement and how to fix what you’ve avoided doing…like so many others out there.

ONLINE STRATEGY: 5 Step Roadmap to Sustainable Digital

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Successful online strategies are created when you have vision, culture, budget and a neutral voice for perspective.

This is for anyone who ever wondered why they’re always so busy and what it is they can do about it.

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ONLINE DIGITAL STRATEGY

HNW MAGAZINE SEPT/OCT 2012

The Sustainable 5-Step Digital Roadmap Joe Wozny

SUCCESSFUL online strategies are created when you have the following in place: • An articulated vision, business plan or list of business goals you wish to accomplish.

• The ability and culture to factually audit your existing online programs — and their performance • In general terms, a practical and clear idea of the human and budget resources available to allocate to any plans made so the planning process can make realistic recommendations.

• Highly recommended - access to a trusted, neutral source of information to help answer any questions that may arise around the online products and services you are considering. These are important to the success of any venture.

Step 1 - Frame the objectives and deliverables Define the specific goals, deliverables, project sponsors and team members your business wants to get from its online activities. This can be done in a one-page document often referred to as a “project scope.”

Step 2 — Assess your current environment Note and assess your current online channels and how these are performing in relation to your goals, costs and the time taken to maintain them. It’s often helpful to use analytics tools to understand how your organization is found online and who your customers are, as well as their current comments about your products and services.

Consider: Who are your advocates? Who is in your immediate community? Who

comprises your indirect community?

What is their opinion on your brand, products and services? How do they react to items you request from them?

Who are the influencers? Who are the followers?

Step 3 — Option mapping The channel options you review and eventually choose should be determined by how they can assist in furthering your business goals. For example, Facebook is a great channel to connect and engage with consumers, whereas LinkedIn is a great channel to connect and engage with business contacts.

Include discussion on how services from strategy decisions will be deployed and operated and examine worst-case scenarios to test how you would overcome adversity.

Step 5 – Recommendations and communications

Each channel will consume a portion of your budget and available resources.

You will need the ability to deliver meaningful content to your audience through the channel.

Document your strategy, the style for which would depend on your organisational culture. Try a onepage visual outlining actions you plan to take over time, key speaking points, and resource requirements – see figure above. Include a budget with estimated one-time and ongoing costs, and state your strategy assumptions so you can refer to these as you get measurable results, new information about your activities and the activities of your competition.

Step 4 — Collaborative review

The Final Word

Review this strategy within your organization with all your stakeholders.

Don’t stop what you are doing online today. Build on it.

43

LEGAL

HNW MAGAZINE SEPT/OCT 2012

Twitter and the Law: Legal Considerations

by Luke Scanlon

“A tweet that is indecent, obscene or menacing in character could result in a fine or a prison sentence of up to six months.”

DEBATES in parliament, home visits from the police and distressed celebrities all seem a little unclear as to what is and what is not acceptable by law on Twitter.

So what are the legal risks that apply, or potentially apply, to Twitter?

1) Defamatory Tweets Defamation law protects a person’s reputation. In England, the law of libel makes it an offence to communicate defamatory remarks where that communication takes some form of permanence (and in Scotland the general law of defamation has the same effect).

The test: If a tweet lowers a person’s standing “in the estimation of rightthinking members of society” it will breach the law of libel. This may occur where a tweet causes a person to be exposed to “hatred, ridicule, or contempt”, encourages exclusion of that person from society or imputes a lack of professional skill or efficiency.

2) Harassing Tweets UK law protects against harassment by means of the Protection from Harassment Act 1997. The legislation provides that “if a reasonable person in possession of the same information would think the course of conduct amounted to or involved harassment”, it is harassment.

The test: Tweets which the “reasonable person” would conclude cause alarm or distress may amount to harassment 3) Malicious Tweets Tweets made within the intention of damaging another’s business, goods or services through false statements, or which are reckless with the truth as to another’s business, goods or services

will offend the law against malicious falsehood.

The test: False tweets with the intent to injure another’s commercial interests, or recklessness as to the truth, will amount to malicious falsehood 4) Menacing Tweets A tweet that is grossly offensive or of an indecent, obscene or menacing character, will offend the Communications Act 2003. The crown court considered Paul Chambers’ tweet “... I am blowing the airport sky high…” to be menacing, however, the high court overturned its decision.

The test: If a tweet could create fear or apprehension in the minds of anyone who may reasonably be expected to see it the tweet could be considered a menace and an offence under the Communications Act. 5) Deceptive Tweets (and other misrepresentations) A tweet containing a false statement that induces another person to act on it

may offend laws against deceit and the making of misrepresentations.

Misleading commercial communications may offend either the Consumer Protection from Unfair Trading Regulations 2008, the Business Protection from Misleading Marketing Regulations 2008 and industry based advertising rules.

Untrue tweets in a commercial context can result in damages claims and prison sentences of up to two years.

The test: Is the tweet deceptive in nature or likely to deceive?

Twitter raises important issues about privacy, free speech, censorship and individual rights and responsibilities.

Of course, there is nothing stopping a person from self-incriminating themselves by tweets revealing illegal conduct such as the reports of a doctor on sick leave.

The balance struck by UK law will differ from that struck in other places.

Twitter users in both commercial and non-commercial contexts should understand this balance.

45

TIME MANAGEMENT

HNW MAGAZINE SEPT/OCT 2012

Practical Business The Rise & Rise of Work “For anyone who ever wondered why they’re always so busy and what they can do about it?”

SO, you’re busy, right? Again!

It never stops or lets up, even on holiday, or when you’re sick. You get back to work feeling as though you never left it and that much needed break was nothing like it.

“So who do you blame for this? Your boss? Your peers? Your clients and customers? Those lazy overpaid and in-experienced incompetents who report to you?”

These are all tempting choices but who are you kidding? Shouldn’t you be looking a bit closer to home…..at yourself?

Leaving aside those lazy so-and-so incompetents for a moment, how often do you stop the madness around yourself and reflect on where you truly are and how you are managing and leading?

If you make this a regular practice and not as Aristotle said, a mere disposition, then take a pat on the back.

However, if you’re like many of us we frequently lurch from one drama to the next on a whistle stop tour of back to back meetings with little or no time or opportunity to plan, prepare or even think about what we intend to do there.

Time Thieves Like many senior people we somehow lost along the way the capacity to

46

control or even have a major influence on our schedules.

“We are at the mercy of the many others who make claims on our most precious commodity – our time.”

They are the Time Thieves and they approach this in a dizzying number of ways: Dawn raids: when you arrive early to get a head start Night shifts: when you stay late to catch up at the end of the day Smash & grabs: when an appointment suddenly appears in the one free space you had left that day Ambushes: when you pass them in the corridor & they “want a brief word” Camping trips: when you’re at your own desk working on something & they take up residence until you stop to talk to them.

Sadly there are many more of these.

The level of innovation and creativity people employ in stealing your time and attention is shocking.

Spending time in meetings and on their needs will prevent you dealing with your own workload which is piling up as the Thieves ply their trade.

TIME MANAGEMENT

HNW MAGAZINE SEPT/OCT 2012

People Problems So, let’s turn back to the people in your team. Even if they aren’t lazy and incompetent, perhaps even able and inexperienced, didn’t you recruit them and promote them to those posts?

You will certainly have done so for most of them and have been managing them for some time. Therefore you will have had a major influence on their performance and development.

Why then might they not be sufficiently well developed and experienced to take on more of your workload then?

While you’re out at meetings or occupied by the time thieves it’s hard to give this the focus that it needs.

Developing your team should be one of your biggest priorities. So, how do you do that? By doing only two things: Changing your own habits Building capacity in your team Neither of these is easy of course or you’d have done it already. However, both are inordinately rewarding and beneficial.

They are also a far more sustainable way of working and are actually best tackled together.

Habits of Time Changing your own habits requires developing a more reflective approach.

And you need to begin by dropping the phoney heroics of constant fire fighting and problem solving.

“You need to distance yourself from playing the role of solution provider and instead be the director who puts others in front of the camera.”

Always taking things on yourself is both seductive and toxic and will eventually destroy or severely restrict your career prospects.

Of course it also has its moments and we all need a few war stories at times…just make sure you keep them in reserve and not at the front of your game.

The Man In The Mirror Turning now to your team, in Rob Kaplan’s excellent recent book “What to ask the person in the mirror” he suggests a clear formula based on some key questions to make you a more effective leader and reach your potential.

“

You need to distance yourself from playing the role of solution provider and instead be the director who puts others in front of the camera.

”

These are focused on eight areas:

1) VISION & PRIORITIES

If you know where you’re going, it’s easier to get there

2) MANAGING YOUR TIME

This should flow directly from your vision & key priorities

3) GIVING & GETTING FEEDBACK

Coach your people and seek coaching yourself

4) SUCCESSION PLANNING & DELEGATION

Own the challenge of developing successors

5) EVALUATION & ALIGNMENT

The courage to assess your organisation with a clean sheet of paper

6) THE LEADER AS ROLE MODEL

Communicating what you truly believe & value

7) REACHING YOUR POTENTIAL

Being true to yourself

8) BRINGING IT ALL TOGETHER

The practice of gaining perspective

There are important messages in ALL of the above areas.

However, if you can begin to adopt the first four then you will make great strides forward as a leader and really take back control.

If you can begin a practice of reflection and perspective then you’re far less likely to fall back into your old bad habits.

You’ll learn to stop the continual rise of work and return it to the levels where it should be done.

Willie Maltman

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THE PENSION DESK

HNW MAGAZINE SEPT/OCT 2012

Your Retirement: Pension Desk Perspective.

Business Class or Back of the Bus?

by Martin Cook, MC Accounting

CLEAR, concise and relevant information in relation to current and legacy pension arrangements.

Due to the transient nature of work patterns in the modern world, one estimate is that the average individual in the UK will have more than 4 different pension arrangements in place by the time they reach retirement.

Sound familiar?

“This obviously creates a problem. Given that many, perhaps the majority, of these people will have conflicting or even no ongoing retirement planning or investment advice how can they know that the funds and rights they have built up are in good hands?”

And equally important, are the investments still appropriate to their circumstances?

This author believes not.

Information from current schemes or providers arrives at different times of the year, if at all. And the format of that information will likely be different in every case and often incomprehensible to the non-professional.

There may be a number of issues with an existing retirement arrangement, not the least of which may be an archaic and multi-layered charging structure.

This might be the case where a plan was started several years ago and the

charging structure reflects the practices and cultures of that era and not the leaner, more transparent environment which providers are required to operate in today.

There is therefore a need for independently provided information so that individuals can receive guidance and make informed decisions regarding their retirement planning.

“After their home and possibly their business, the retirement funds already set aside will often be an individual’s greatest financial asset. It is unthinkable that we would let our homes or businesses simply fall into decay and yet that might just be what is happening to our retirement money whilst we remain blissfully unaware.”

Earlier this year the client obtained a free Pension Information Report via The Pension Desk.

According to the scheme providers, the fund value at the date of the report was around £55,000. Using their expected growth rate, this could be expected to rise to £122,500 by the client’s selected retirement age of 65 assuming contributions continued at current levels.

However, by moving to a lower cost modern arrangement from a different provider, applying the same assumed contribution pattern and growth rate produced a projected fund value at retirement of £150,000, some £27,500 higher even after transaction costs were taken into account!

Let’s consider a simple example where the provision of relevant information has given a real boost to a client’s expectations on retirement:

As a footnote, the client was advised to keep two other plans where they were, as their projected values could not be matched by a new arrangement.

EXAMPLE The client, a 50 year old self-employed male, had taken out a personal pension plan from a well known provider in the late 1980’s. Monthly contributions were subsequently invested in the pension company’s with-profits fund.

What To Do Next People often just do not know what they have. The Pension Information Reports are free of charge, carry no obligation, provide valuable information on your existing retirement arrangements, and measure these arrangements against the market.

The advisor who sold him this plan has long since retired and the client had neither sought nor received any advice relating to this arrangement since it was set up.

MARTIN COOK martin.cook@thepensiondesk.co.uk

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The High-Growth Entrepreneurial Action Team

DIATRIBE

HNW MAGAZINE SEPT/OCT 2012

Diatribe: Faith in the Banking Industry

A recent YouGov survey conducted on behalf of Duncan Lawrie Private Bank has revealed a groundswell of discontent amongst High Net Worth Individuals with a majority of respondents (70%)1 confirming that they have less faith in the UK banking industry than they had a year ago.

The poll was carried out by YouGov and Duncan Lawrie Private bank and the overall conclusion is that 71%1 viewed the industry as being dishonest. A separate survey suggested that no less than 79%2 believe that no amount of future regulation will immunise the sector from the shortcomings revealed by recent scandals.

Nor is it just the general lack of confidence in the high street banking system that is upsetting individual customers. It seems that its growing dependence on call centres and computerisation is proving particularly unpopular with no less than 76 %1 preferring a more traditional, personal relationship with an impartial bank manager when it comes to some or all of their accounts. Banks with split retail and investment functions were also popular.

With a fifth of respondents admitting that they are actively looking at possible alternatives2, Duncan Lawrie hopes that its survey will once again highlight the appeal of an independent private bank that still prides itself on traditional values and service with long term client satisfaction taking priority over the sort of sales target culture that appears to have embedded itself in high street banking.

References Report commissioned with YouGov between 14th and 16th August 2012 with a sample size of 1,008 UK HNWIs with over ÂŁ250,000 investable assets.

Data provided by Duncan Lawrie survey of 380 individuals earning more than £70,000 per annum in the UK. September 2012. Š Duncan Lawrie 2012 YouGov survey statistics2

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LINKING ENTREPRENEURS & INVESTORS UK-WIDE

HNW EVENTS & INITIATIVES 2013 The HEAT Scotland Programme 2013 The benchmark High-growth Entrepreneurial Action Team features groups of established entrepreneurs coming together to find specific solutions to common growth barriers.

The Money Discussions 2013 A series of round table discussions addressing individual and institutional investment issues with industry leading speakers.

The HEAT Manchester & HEAT London Programmes 2013 The High-growth Entrepreneurial Action Team initiatives continue with launches in Manchester and London in 2013, operating the same format of linking high growth established entrepreneurs with the best and most appropriate investors and professional advisers throughout the UK.

The HEAT Scotland 100 Publication & CD This unique initiative will be released in February 2013 comprising 100 next-stage entrepreneurs. This is an invitation only initiative where HNW is approaching specific companies on a limited basis to be involved.

For further information on any of the above initiatives please contact editorial@hnwscotland.co.uk

283 9

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