You can’t beat a nerd

I recently heard that Google made a large investigation into what the common denominators of successful Googlers are. They supposedly looked at classical factors such as education, age and so on. The one factor that was most clearly correlated with success was if the employee had built computers from components in their youth. The combination of deep computer interest and the drive to actually get to it predicts success.

I think this theme is equally true for successful entrepreneurs; they are often passionate nerds in the areas they are involved in.

Blue bottle, a coffee rostery and coffee chain that makes the best coffee I’ve ever tasted is another example. The founder, James Freeman, is passionately interested in making the best coffee possible and they are true to their mission even if that means making some customers unhappy. Blue bottle only sells their coffee in whole beans, because unless you grind it just before you brew your coffee you will not get a great cup. It frustrates some customers short term, but is most likely a winning strategy long-term, proven by the ridiculously long lines at their coffee shops…

Another example is Patagonia that has been hugely successful in building an iconic brand by being true to its clearly communicated values. The founder Yvon Chouinards is a true outdoor nerd who understands the needs of the core customers Patagonia is selling to. In the book, “Let my people go surfing” he describes their history and philosophy. It is a great read and a very powerful marketing and brand building tool…

The power of the passionately interested nerd together with the growing trend of online courses for free is also starting to democratize the labor market. . You can find material from leading professors on almost any subject today, if you want to learn you can. Motivation is more important than ever and passion has always been the best motivator.

At least tech companies have realized that a self-taught programmer in any shape, form and origin many times beats the Ivy league educated counterpart and innovative methods are used to find the person with the best skills, not the one with the best resume…

Looking through the excellent interview series http://foundation.bz/, it is definitely a common denominator that the founders are passionately interested in the area they are pursuing. They have spent their 10.000 hours thinking and working on the issue.

I am betting on the nerds regardless if I am evaluating a company, where to buy coffee, a new potential colleague or new outdoor clothes…

Are you passionately solving the challenges of sustainable transport solutions?
Then we would like to hear from you!

/Jonas Landström

P.S After finishing the book about Patagonia I went to the closest outdoor store and kitted up, powerful marketing for sure… D.S

P.S 2 To read more about Google’s data driven people operations check out http://www.tlnt.com/2013/02/26/how-google-is-using-people-analytics-to-completely-reinvent-hr/ D.S 2

 

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The Founder – back in the driver’s seat

Something very healthy has happened on the Nordic start-up scene. And probably I’m just slow noticing, but it’s not until recently that I’ve realized the fact that Founders are taking back control of their creations. Probably I have been in too many board- and investors meetings where the well-being of Founders as well as companies has been at the mercy of capitalists rather than where it should be, with Founders and customers. The realization comes to me as I flip through the newly published hot-lists of Sweden’s tech companies. A healthy majority of them have the Founders as sole or major owners. Compare five to ten years back and I’m sure the cut was different. The move away from early stages by venture capital, the shake-out of non-performing funds has surely fuelled this transition. But even more importantly it’s most likely driven by emerging serial entrepreneurs and entrepreneurs who have lived in and learned from the US venture community where Founders keep a stronger grip of their companies. Couple this with society embracing the Founder and the entrepreneur, rather than the capitalist and we will see a new spring in Sweden and Europe. We’re simply maturing our start-up community. Our societal values are shifting to the benefit of the Founder, the risk-taker, the non-conformist, the entrepreneur, and the source of future social well-being. We’ll for sure see further careful and selective infusion of the limited venture capital which still is available, but instead of standing in front, venture capitalists will stand behind and be selected rather than select among the leading Founders. It’s finally spring.

/Johan

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Seeing is Believing

We are proud to introduce our first guest blogger, Del Lisk Vice President of Safety Services at our latest investment Drivecam Inc. He provides a great perspective on how Drivecam’s focus on safe drivers combined with Volvo’s commitment to safety technology will create even safer trucks on our roads. He also describes what a powerful ally the Drivecam solution can be for commercial drivers in the unfortunate event of an accident.

Have you ever heard someone say “it’s was the truck driver’s fault”?  Some may perceive that truck drivers cause more problems than the average driver.  But, in fact, nothing could be further from the truth.  At DriveCam, we have a unique perspective into what’s happening both inside and outside of the vehicle.  Our predictive analytics software uses sight and sound combined with real-time sensor data and event-driven video to help improve driver training and skill sets with the goal of preventing future collisions.  We’re working with industry pioneers, like Volvo, who are leading the charge in deploying driver safety tools that help make the world a safer place.

In many collisions or near-collisions involving commercial vehicles, the fault lies not with the professional driver, but with the non-professional driver.  However, without the benefit of DriveCam event-driven video, these collisions are often blamed on the truck driver.  Let’s look at two recent examples of how DriveCam was used to exonerate professional drivers:

  • A tanker truck hauling gasoline near Los Angeles approaches an intersection with a green light.  The tanker is traveling at the appropriate speed.  At the cross street to his right, a passenger car fails to notice the red light in his direction and continues into the intersection slamming into the tanker.  Witness reports were contradictory and the police cited the tanker driver for running a red light.  However, armed with DriveCam video, the fleet manager appeared in court and showed the video to the judge with clear evidence that the tanker driver had the green light.  The result:  the citation against the driver was dropped.  Importantly, the passenger car driver in this case had filed suit against the fleet owner for damages.  Once the video was presented and the tanker driver was exonerated, the passenger car driver was required to pay damages.
  • In San Diego a tractor trailer travels over the Coronado Bridge.  The tractor trailer is in the right lane when two Sports Utility Vehicles (SUV) speed by on the left.  The SUV in the front brakes suddenly, causing the second SUV to swerve into the right lane.  The tractor trailer driver responds quickly with braking.  However, due to its sheer size and weight, the tractor trailer driver was unable to stop in time and collided with the second SUV.  The second SUV, in turn, was pushed into the first SUV and all three vehicles were badly damaged.  Typically, it is the driver who hits from behind that is determined to be at fault.  In this case, DriveCam video was able to show that the SUV aggressively swerved into the right lane, causing the three-car collision.  As a result, the tractor trailer driver was held blameless.

Truck drivers have an incredibly difficult job of sharing the road with non-professional drivers who have no concept of the challenges of operating a large, heavy vehicle.  By combining DriveCam’s predictive data and insights into driver behavior with Volvo’s focus on pioneering safety technologies, together we’ll work to create a safer world with fewer collisions for professional and non-professional drivers alike.

/Del Lisk, Vice President of Safety Services, DriveCam, Inc

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Let’s build next generation Boards

In Sweden, we experience a surge of public CEO-dismissals. Board and owner opinions are more and more often aired openly and the trend is also consistent when we look at politics. These are all signs of broken corporate governance systems. Also the low average return of the venture capital asset class stems partly from the same issue. Lacking clear direction from strong owners, clarity on strategy and long term objectives, an empowered CEO and sufficient level of financial control, corporates will eventually fail.

To fix this we need to put more emphasis on board selection and evaluation. Our experience is that there is a strong correlation between a malfunctioning board and companies failing in execution. In focus therefore is the Chairman of the Board who should make sure the board fulfills its central tasks of governing the corporate strategy, making sure the right leadership is in place and that sufficient level of control is exercised. In addition and most importantly, the CoB must demand from owners a clear owner directive and a full mandate to execute on the directive. All too often, we experience owners mixing owner issues with board issues and operational items. In this category, we also find CoBs who only run owner’s errands and CEOs who expect the board or the owners to do his job. Getting the roles & responsibilities in place and building a platform of trust takes a CoB with strong integrity and a focus on creating shareholder value as well as on empowering the organisation and the CEO.

In our effort to succeed as an investor, we are strengthening our board recruiting process. On our wish list is CoBs with high integrity. CoBs who foster a culture of being open, inspired, well-prepared and driven by value creation. We wish for board members who are curious, bring knowledge to the table, dare to air a differing opinion and are prepared to really dig in and understand the business. We will be less enthusiastic about ‘yea’-sayers and representatives who only protect a specific owner’s interest or are there for the sheer purpose of being on a board. Let’s build the next generation boards. Boards who work with dedication, insight and courage to challenge known truths and traditions.

/Johan

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On recruiting – the perfect blend

Just like superior blends are beating single malts [my take, single malts are soon out of fashion] a great investment manager is about a blend of character, style and experience. If I could blend my own IM I would choose a diverse background where each experience adds one or several distinctive flavors. If all experience is gained within one castle the IM would not have developed the complexity and breadth needed to be successful on the market because each organisation has strengths as well as weaknesses which inherently will be built into the IM’s style. Getting different points of reference typically accelerate IM maturing.

Back to the blend; I would start by picking an IM having lived with a boot strapped start-up and cheap investors. Understanding from day one that customers pay salaries and coffee machines build a true respect for money and even more importantly for customers. To boost this flavor I would add experience from commodity sales. Figuring out how to differentiate when the product is pretty standard fascinates me and is a true success factor even for companies with a short-term competitive product advantage. Because we all know this advantage will eventually end. In addition hard sales cases proves to what extent the IM has a deal desire and is a closer. Simply put – will the IM shout the loudest when the customer makes his pick at the shelf? To add base flavor I would go for solid analytical and structural qualities. I would make sure they can be applied by the IM in real world structured problem solving by involving a panel of colleagues to get a taste of the IM problem solving qualities.

To stand out in the crowd, the IM needs a distinct style, typically gained over years of maturing for the role. It takes boldness to develop style, to dare to stand out. With that typically comes the boldness to challenge. This is what I’m after. Too many fall for the temptation to accept what others say. We’ve all seen them in the board rooms; the people who nod yes and expect someone else to actually read the material. Or buy a single malt because it’s a trend. That’s not what we look for in an IM. Instead we need an IM who is bold enough to challenge existing truths. Doing this from a fact driven, analytical perspective makes up for a great blend. To successfully blend in, this style must be combined with the creativity to create solutions. No one benefits from an IM who just poses problems. We’re looking for progress, not stand still.

To make it perfect, you need a dash of something else. Something that will surprise you and make the IM stick in your mind and taste. In my liking this is something adding contrast to the base flavors, something that vaccinates from being too perfect. Something that will drive other’s interest in the IM, making them remember and come back, getting a bit addicted. So what might it be? Well, you tell me.

/Johan

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Value added investing

The last two months we have been running the last miles in closing a new very exciting investment. The days have been packed with due diligence-activities, deal structuring and negotiations. Just like any regular venture capital deal. This intense but pretty standardized process you can read about in any book on venture investing. Being a corporate we also add another process to the game. I thought I’d spend a few words on what’s specific for us when assessing an investment.

You are aware our investment strategy stands on two legs – return on the specific investment and contribution to Volvo Group growth. Assessing the latter is a challenging process but also key to making true value added investments, where both parties gain more than just capital and ownership. This is where we as a corporate investor can make significant difference. During the investment process we assess the commercial potential of cooperating between Volvo and the company. As Volvo Venture’s focus is companies who already have services or products on the market the investment hypothesis typically builds on the idea of establishing joint commercial activities and packaging of service or product with vehicle as a first step. Second, we typically look at some level of technical integration to make the offer even more valuable for customers. So, assessing this potential of an investment means we engage our sales and distribution channels in Europe, Americas and Asia to decide where we start, which business model we use and how we split revenues. Typically this is done through a series of workshops both with and without the company we’re investing in. This is a very thorough process to build a solid, mutual business case and investment platform. Significant value is often uncovered for both parties through the process and after. This is what we mean when we say we contribute to accelerated growth for both parties. This is value added corporate investing.

/Johan

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Asset utilisation as an investment theme #2

As a commercial asset owner (commercial asset being identified as e.g. a truck, bus, gen-set or construction equipment) you need to master your financials and business case. Less you own it for pure pleasure, few do.., it’s there to make money. Being on top of your planning helps but what about unplanned stops? How do you make sure to minimize the time out of service if unplanned stop occurs? Before answering how, let’s conclude the severity of the issue. As an example, in an average case, a break down of a truck takes the truck out of service for 4 days. What’s worrying is that less than 20% of the time is spent on actually fixing the truck.

This kind of reminds me of a project I did as a consultant. We were tasked with reducing lead time in the Order to Delivery process of a manufacturing facility. Assessing the assembly process we realized we could save only minutes, still the challenge was to cut out days out of the process. So we hit the administration process and wow were we surprised. It seemed years had been spent fine tuning the assembly but few had walked through the information flow leading to the assembly instruction. By straightening out and cutting waste out of the information flow from order to assembly instruction we could take a week out a process where actual assembly time of a truck was less then a working day.

Could the same thing be real for a service event? Could it be so that the effectiveness of the information flow is as important to the total service time than actual work on the vehicle? Studying the results generated by Volvo in cooperation with Decisiv lead us to not only believe, but be sure of this. Check out how Decisiv help adresses the issue at http://www.decisiv.com. Do you have more ideas on how to deliver a superior service experience, drop us a note.
Johan Carlsson

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