The MBET Experience

Due to my site being quite popular with comment spammers, I’ve got a new policy on comments. Everything has to be reviewed before its posted. Its a bit of a headache, but in the interest of keeping the site clean, I’m going to go that route for a while.

Also, if anyone knows any good spam blockers, please let me know.

Thanks!

Time for another Capstone update. After losing our lead in market share and profits last week, we needed to come back strong in Year 4. The results are in, and we had an awesome year. Our sales were up from $168 million in 2010 to over $230 million in 2011, while profits jumped from $4.1 million to $14.6 million – don’t I wish this were real life? These were the highest figures in the “industry”, and I am proud to say that Team Chester (that’s us) is also back in the lead in overall market share, capturing over 30% (our closest competitor is at 24%).

I don’t want to give away too much of our strategy, as there are still a few rounds to go and I’m sure the competition is looking for some “inside information”, but I think we are well positioned heading into the next few rounds.

So far, the game has been a lot of fun. One of the most interesting aspects has been trying to guess competitors next moves. They definitely have thrown us a few curveballs. We spent a lot of time this week playing out scenarios – what if Team A launches a new product in the High-Performance market? What if it comes out in the Size segment? How will that affect us? The game has certainly made me more aware of the need to analyze what your competitors are doing and how their actions may change our strategy. So far we seem to be handling things pretty well!!

This evening, James and I were torn away from our accounting assignment by a phone call from James’ wife. Our damsel in distress had the misfortunate of getting a flat tire on her way home from horseback riding lessons (note to all you city folks – a perk of living in KW is that you can take horseback riding classes).

In case any of you don’t know, here in Waterloo we are enjoying some of the coldest whether of the year. We are also getting a nice dump of snow, and when combined with the wind, changing a flat tire this evening was about as pleasant as finishing off our accounting assignment!!

The pictures below tell the story… and we managed to get things fixed up without a case of frostbite!! Just thought I’d share a bit of the “lighter” side of MBET!!

This is exciting. Try this link:

Google Search – Dan Donovan

Last summer, Google didn’t even know I existed, other than a few race times way down in the search results. Less than seven months after starting my blogs, a Google search now puts me at the top of the list. Fascinating.

I find this interesting because it comes back to the idea of a “Personal Brand.” I’m still refining my vision and brand, but slowly things are taking shape. It’s encouraging to see the visits to my website slowly going up, and fun to be on top of Google.

PS – I am still a long way from being a true Google “superstar”. Eric Sink shows up on Page 1 of Google with a simple search for “eric”, as he discusses in this post.

I’ll have to make showing up on Google’s first page with a search for “dan” my next goal!! 🙂

A few weeks ago, I introduced the Capstone business simulation game. This has been a very interesting experience. So far, in our pool, we are the only student-managed team (two teams are controlled by the computer) to not have needed an “emergency loan” to keep from running out of cash.

As I mentioned, we had a solid first year and were in the lead. We continued our success in the second year, and again were the leaders in overall market share and profitability. Year 3 was more challenging. Some of our earlier decisions caught up to us and we were short of capacity on a couple of our high margin lines, costing us money. We lost our leadership in market share (though were still second), and due to some high expenses, our profits were down significantly. However, we were still cash flow positive and should be well positioned for future years.

One of the cool things introduced to use this year was a “Total Quality Management” module. This allowed us to invest in initiatives that will reduce manufacturing and administrative costs in years to come. It was cool to play around with this and see what we can do.

Something I find interesting is how this game makes it seem so “easy” to manipulate the variables. Invest a little in promotion, and your awareness goes up. Invest in Six Sigma, and your manufacturing costs go down. In real life, it takes a lot more than just spending some money to make changes in an organization. It takes execution and a solid team. However, the game provides an interesting perspective on what levers management has to play with when making strategic decisions.

I just heard a great one from my friend Benjamin Bach.

“In 5 years, you’ll be exactly the same as you are now except for the books you read and people you met.” — Charlie Jones

The moral of the story: read more books and meet more people! This year, I’ve started keeping a list of “Books to Read” in Outlook, and have made a concerted effort to get out there and network! I can’t directly measure the ROI, but I know I have learned a lot and have opened a lot of doors.

Today, we have another Entre-Nous session. Our speaker is Joseph Fung, founder of Lewis Media.

One of the interesting things about Joseph’s story is that his company started off without a business plan or a product. They started off as two programmers, who did consulting work to pay the rent. The core philosophy, which they still follow, is “More fun = more good.” After a few months, their consulting experience led them to a product, WebAdmin. Fifty percent of the company’s revenues still come from consulting.

This relates back to an article I wrote a couple weeks ago, questioning whether business plans are really necessary. In classes, the process to starting a business that is most discussed goes something like this:

1. Come up with an idea
2. Research the market
3. Figure out how to create competitive advantage
4. Build a prototype to show off
5. Write a business plan
6. Raise capital
7. Sell product
8. Make a million dollars

However, it is easy to spend months (or years) finding the “right idea” in a “high growth market” with a “patented product”, then “perfecting your pitch”, “raising capital” and “getting to market”.

Personally, I much prefer the approach Joseph describes: “Jump off the cliff and make the parachute on the way down.” It is easy to delay getting started until you have the right product at the right time – in fact, I think many people wait forever. 🙂 But why wait until you have that perfect idea? Get going, get some customers, and as long as you stay afloat, eventually you’ll figure out something that works.

I think they might fail me out of MBET for this post. 🙂

I’m trying to remember if I have ever blogged about an Entre-Nous session. An Entre-Nous is a guest speaker session, where local entrepreneurs and business leaders visit our class and spend a couple hours sharing their stories and discussing their experiences.

On Thursday last week, we had Rick Baker of Baker Investment Group in to talk with us. Baker Investment Group is a holding company for a number of other companies that Rick is involved with. He has successfully built a number of energy companies, and now is working to pass on his knowledge and experience to local businesses in the KW area.

Rick opened his talk with the following six tips for success:

1. Develop your self-confidence.
2. Develop your creativity.
3. Develop your intuition.
4. Listen with a non-judgemental attitude.
5. Plan the work and work the plan.
6. Lead with revenue.

Of these items, two stand out with me. The first is: develop your self confidence. I think that having a belief in yourself is one of the most important things you need to be successful. How are you ever going to succeed if you don’t believe that you can do something? Having confidence that you can accomplish what you set out to do is fundamental to success.

The second item on the list that I liked was lead with revenue. One of the best things I have learned in the last couple years is that there is nothing like having customers and sales to build your business. There’s no better way to validate your business idea than having customers fork over cold, hard cash for your product or service.

Rick went on to share many of his tips and experiences, and we had some great discussions. He even shared a part of the unpublished book he has written based on his business experiences. In my opinion, it was one of the best Entre-Nous sessions that we have had this year, and I look forward to seeing more of Rick around CBET.

One of the cool things we’re doing this term is the Capstone Business Simulation game (www.capsim.com). Our teams each is tasked with managing a fictional company in the sensor industry. There are six teams in the class, and we are split into two industries. We are competing against two other teams, and two computer simulated teams.

In the game, we need to make decisions regarding R&D, sales and marketing, production, and finance. The R&D decisions are used to improve products or create new ones, sales and marketing sets advertising and sales budgets as well as product prices, production is used to manage production capacity and overtime (which impacts product margin), and finance is where we manage debt and raise capital.

Each week, we have to input our decisions for each of the areas. The system then simulates a year of customer purchases, and our results are calculated. Our team had the highest sales and profits after Year 1. The competition in the class makes things interesting!!

It is an interesting game, and certainly has a lot of benefit in terms of looking at all the decisions that go into making a company. Hopefully we’re able to keep our early lead over the next few weeks!

Yesterday we had a leadership training day with Angela Mondou, the founder of ICE Leadership. Angela has an interesting career, beginning with 9 years as a Logistics Officer with the Canadian Air Force, followed by a number of years in the high-tech sector at Nortel and most recently, Research in Motion. In addition to her training sessions, she has also written a book, Hit The Ground Leading (of which I have a copy, but have yet to read – so no book report from me).

The leadership day was interesting, but seemed focused more on giving us some project management tools than leadership. The day was a mix of lecturing and class discussion, as well as a number of scenarios we had to work through in teams. These scenarios were modelled after real-world problems, such as a cruise ship fire or new product launch. Our teams had to come up with solutions to the problems given to us in a fast-paced manner. This simulated many of the problems faced by businesses, where decisions must be made quickly and on-the-fly, without necessarily having all the facts.

The key takeaway was the ICE framework: Integrate, Communicate, Execute. Integration involves understanding the problem, the team, and what each person’s role is. Communication ensures that the people who “need to know” are informed of new information. Execution is where you finally get around to doing everything!

Overall, it was a worthwhile session. Here’s a couple of my key takeaways:

• Plan for the unplanned.
• Clear roles are essential, and create clarity in the organization.
• Use a 2nd-In-Command.
• Develop an “execution mindset”.

Now back to my regularly scheduled homework assignments…