The day began with a keynote from Duncan Logan, Founder and CEO of RocketSpace, a San Francisco based incubator.  He kicked off his dialogue with a controversial thought: “If your parents can type and you don’t know how to code, then your family is moving backwards.”  He went on to quote Marc Andreesen of legendary VC firm Andreesen Horowitz, that “software is eating the world”, emphasizing the importance of technology in today’s business environment.  Another of Mr. Logan’s observations was that, like Malcolm Gladwell’s Outliers, visionaries are the product of their environments, and putting entrepreneur’s in an environment of success is what creates profitable outcomes for their startups.  We didn’t have time for him to answer the question on whether Chicago is on or behind the curve to become one of these technology entrepreneurship clusters, but our hope is that with recent developments including 1871 and TechStars Chicago, we are well on our way.

Padma Warrior, the following keynote speaker, provided a sort of rebuttal to Mr. Logan’s assertion that corporations struggle to innovate.  As the CTO andStrategy Officer at Cisco, her focus is on observing market transitions and overseeing the innovation strategy.  Ms. Warrior uses the process-driven nature of a large company to create structure around their approach to innovation.  This seemingly paradoxical approach has led Cisco to define three main channels of sourcing innovation: building, buying, and partnering.  By focusing on sourcing next-generation solutions, then integrating them into their offerings, Cisco hopes to avoid the unfortunate fate that has caused the downfall of many technology giants of yesteryear: obsolescence.

Of the afternoon sessions, I opted into “Coaching & Capital: Trends in Startup Funding” and “On the Horizon: Managing Methods for Innovation”.  Coaching & Capital covered some of the pros and cons of funding options available to early-stage companies (angel, VC, banks, and crowdfunding).  The concepts discussed were fairly high-level, including the implications of each funding method as they relate to control, relocation, liquidity, etc.  Moreso than the content, the personalities and perspectives represented on this panel made for an interesting discussion on the nature of funding a technology startup.

On the Horizon was a free-form discussion on how to create an institutionalized and actionable innovation process. Key takeaways included empathy with customers, understanding the three layers of innovation management (trade, cross-functional, and organizational), and adding constraints/simplifying to force creativity.

Overall, the conference provided access to extraordinary people, interesting discussions, and great networking opportunities for MBAs and aspiring technologists.  Hopefully we will bump into you at the next one!

TED has grown so popular since that initial conference that local “TEDx” programs have sprung up in municipalities dedicated to bringing a TED-like experience to their local public.   The AGA team attended Chicago’s very own TEDx conference on Saturday, February 23^rd at the Northwestern University School of Law.

The theme of the day, contrast, was evident as soon as one read the speakers list.  In true TED style, the event included an eclectic group of speakers, each one an expert in their own right.  For example, there was Bril Barrett, who has turned his love of teaching tap dancing into a commitment to helping at-risk youth in the Lawndale and Englewood communities.   Other speakers included Glenn Kelman, CEO of Redfin, who gave an engaging presentation regarding the convergence of software and traditional companies.  The final presentation of the day was a graduation ceremony for Victor Saad.  In place of an MBA, Saad put together his own post-graduate learning program, titled the Leap Year Project, consisting of 12 internship/apprenticeship experiences over the course of 2012.  Through the Leap Year Project, he connected dreamers all over the world trying to make a difference in 2012.

While all the presentations were interesting and informative, there was one which especially appealed to us.  Chinwe Onyeagoro, a Harvard grad and former McKinsey consultant, gave a talk on inefficient markets, specifically in regards to small business financing.  Ms. Onyeagoro found that most small business owners did not understand the variety of alternative financing options available to them, and that most only pursue traditional debt financing.  Couple this with the fact that small businesses suffer from a disappointingly high loan rejection rate (50% for companies $1-$5 million in revenue, compared to 2% for business with $25+ million in revenue) and you have the very definition of an inefficient market.  To face these market inefficiencies, Ms. Onyeagoro co-founded Fundwell, a company dedicated to helping small businesses meet their financing needs.  Through a simple online interface, Fundwell provides expert funding recommendations and introductions connecting business owners with up to 3 funders.

As a whole, the day was a success.  We heard from some very successful, intelligent, and exciting individuals and learned about finance, tab dance, and everything in between.  If you would like to get involved in TEDxWindyCity, or attend the next event, visit their website at TEDxWindyCity.com.

Entrepreneurs are by and large successful because they have the unique ability to identify disequilibrium within the marketplace.  This ability, while vital for their success, often makes entrepreneurs prone to distraction as they are always searching for and evaluating new opportunities.  Although there may be tremendous opportunity in some of these potential ventures, it is important that entrepreneurial CEO’s choose the right ones to pursue –especially as commitment to a new business opportunity may consume hundreds or thousands of hours.

So how exactly should one go about determining the correct opportunity to pursue?  Before deciding to take the plunge and dedicate themselves to a new line of business and a new company, entrepreneurs should take a step back and look at the industry, the company, and themselves.  At the very minimum, the following three criteria should be met in order for a CEO to realistically consider pursuing a new business.

1. Passion.  In order to be successful and remain committed to the venture, entrepreneurs must have a deep-rooted and genuine passion for the industry, product, and company vision.
2. Industry Experience.  It is difficult to start any business with limited industry experience.  Combine that with the fact that one will have another business to run, and the odds of successfully starting a business in an unknown industry go down significantly.  Industry experience is a must for any auxiliary business venture.
3. Product Differentiator.  There is little reason to get involved in a new venture if one is simply producing a commodity.  With the other business obligations that entrepreneurial CEO’s already hold, it is necessary to remain patient until a truly innovative and differentiated product or service opportunity presents itself.

These three are by no means the only criteria for evaluating a new business opportunity.  However, we have found through experience that they work as a great litmus test for evaluating new business opportunities.  If you are evaluating a new venture and all of these criteria are not met, you may want to consider sticking to one CEO title for the time being.

This past December, our team went out to Nacional 27 to celebrate a year of hard work and company growth with a few good drinks, some great friends, and of course salsa lessons.  After a few minutes, Bob was the clear favorite on the dance floor…rumor has it he will be putting in an application to Dancing with the Stars next season.

Afterwards, the team recovered their strength with a delicious tapas dinner.  While everyone had a great time, it was a bit of a bittersweet moment for AGA.  We had to say goodbye to a tremendous teammate and friend, Jake Heinz, who is now pursuing a career in software development.  We also welcomed our newest intern, Jeff Hruska.

As our team at AGA continues to grow and develop, we are looking forward to the New Year and all the challenges, growth, and salsa dancing that it is sure to bring.

The first factor to focus on to increase employee engagement is Autonomy. Autonomy has to do with a person’s desire to be self-directed in the workplace. Traditional management ideas disagree with the concept of employee autonomy, but work well when it comes to simple employee compliance. However, if you want employees to be engaged, then facilitating an environment of autonomy is shown to be successful. For example, in one software development firm, the employees are given one day a quarter to work on their own independent projects. One might think that this amount of freedom would result in minimal work actually being accomplished, when in fact, these quarterly sessions have led to software fixes and ideas for entirely new products.

Mastery, the second factor in employee satisfaction and engagement, deals with a person’s natural desire to get better at something. If you look hard enough, you can find examples of this everywhere you go. Many people participate in organized sports leagues on the weekends, while others improve their skill with a musical instrument. Although people aren’t always paid for those activities, they do them because they want to improve, and because they enjoy doing them.

The final factor, or motive, is the Purpose motive. The best organizations in the world know that having an underlying purpose for their business that transcends the boundaries of profit, improves employee engagement. Research shows that having a transcendent purpose can help attract better talent, and also motivate employees.

Key takeaways:
• Focus on more hands-off styles of management
• Give employees opportunities to improve their skillsets and creativity
• Hire people that are moved by the vision of the organization

As in classic entrepreneurial theory, high-growth firms are driven by a central vision that defines the strategy, attracts complementary talent, and forms the basis of the value proposition.  Therefore, Strategy & Vision is the guiding light at the top of AGA’s Building Blocks.

Critical to growth is the ability to innovate within your organization and differentiate your offerings in the marketplace.  While the Vision of your company should never change, the best companies find creative ways to realize their goals and outfox the competition.  In this way, Innovation & Differentiation forms the middle tier of the pyramid, where day-to-day execution translates into support of the overarching strategy.

The foundation of sustainable growth is structure in each of your business’ core functional areas.  Your ability to scale is directly tied to the efficiency of the processes that support your delivery.  Process and Structure in each of the five key functional areas are the cornerstones of a high-growth enterprise.

As an entrepreneur, your focus must be on the top two layers of the pyramid, championing the Vision and constantly evaluating how to deliver greater value through Innovation & Differentiation.  If you’re wondering how to get your leadership team out of the minutia of running your business, browse our case studies to see how AGA has been able to implement structure to help entrepreneurs elevate and lead their organizations from the top of the pyramid.

For many entrepreneurial organizations, price is often the deciding factor in determining how to approach a solution to an issue. While accounting software packages are very cost-effective, they are not an all-in-one solution. They should only be implemented by someone with a comprehensive knowledge of the software, the company, and accounting. If this baseline of qualifications is not met, the organization can run into more costly problems down the line.

As with any major decision, bringing on a part-time or full-time internal accounting resource or using a firm that specializes in accounting, as with everything else, should be done with due diligence. A good accountant or accounting firm can be an invaluable resource, but their strengths lie with transactional services, not growth. Typically their resources aren’t suited to offering decision support or strategic direction.

Below are some preliminary questions that you can begin asking as you search for a solution:

1. What is your current internal accounting and finance competency level?
2. Is your organization growing to the point where Excel is no longer able to meet all of your internal financial needs?
3. Are your most pressing needs on the transactional level, or is the lack of long-term financial strategy and direction your primary issue?

If your organization is experiencing rapid growth but doesn’t have access to an experienced finance person, then an external perspective might be able to shine some light on where your current issues are coming from. Also, they should be able to provide a roadmap for the best solutions to take to ensure continued safe growth.

To read more about the rise of accounting software usage and its impact on the accounting services market, click here.

Adopters of Blue Ocean Strategy attempt to differentiate themselves from the competition by pursuing unconventional business models and developing innovative products. Standard techniques for dealing with existing industry competition typically rely on one of two concepts: the business can either develop a product or service at a lower cost; or create a differentiated offering and then charge a premium. Since these two strategies increase competition within the current market, they “bloody the waters”, and thus are referred to as “Red Ocean Strategy”. By comparison, Blue Ocean Strategy refers to the creation of market space without competition, which will be clear, blue, and filled with opportunity. Refer to the chart below for a quick comparison of Red and Blue Ocean Strategy:

What does this mean for you do you ask? Even if you don’t have the financial legroom to completely rework your offerings to match the Blue Ocean process, there are simple takeaways that business owners from all industries will find useful:

• Increase value and lower cost by removing aspects of your product or service that are not often recognized by your customers
• Minimize competitive risk through innovation
• Maximize opportunities for growth by creating and capturing previously nonexistent demand

If you are interested in learning more about Blue Ocean Strategy, check out the highly reviewed book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, by W.Chan Kim and Renee Mauborgne.