How many times have you heard that the current pandemic crisis is also an opportunity? People are repeating the old John F. Kennedy quote about the Chinese word that meant both danger and opportunity. I have now seen dozens of business plans for mobile apps to get COVID-19 under control, a new tool to work remotely, enabling e-healthcare and many other similar ones. They are probably important things, but if you want to build a longer-term sustainable business during a crisis, you must go beyond the ‘obvious’.

It is important to have a concrete need, when you want to build a new product or business but, in reality, it is not so simple. When you read that people want to buy a lot of toilet paper and cans of tuna during a crisis, it can be a good business to go to sell them immediately – if you happen to have them. But it doesn’t mean that you should start building a long-term toilet paper and tuna business from scratch. Furthermore, it may also be a brand and credibility risk to jump on a bandwagon and chase a short-term trend linked to COVID-19, unless you actually have a valuable contribution that isn’t a repurposed afterthought. But an innovation could be, how to make the logistics for these and other products better, or how to guarantee the availability of basic items in all situations or help people to manage their needs better so that they don’t panic.

When the Internet became mainstream in the late 1990’s, many people wanted to start a dotcom business. When 3G came, many parties started developing mobile Internet services. When Apple opened the App Store, people started to make mobile apps. And when blockchain became well-known with bitcoin, people wanted to be bitcoin investors and build blockchain services.

But how many were actually successful? Very few it seems, but at the same time, those were important turning points for many new products and businesses. It is also highlighted that the winners are not necessarily those who go digging for gold in a new area, but who facilitate something new for these areas and people. Think of what Levi Strauss, Wells Fargo and Domingo Ghirardelli did during the California gold rush.

This is a very difficult time for many businesses and entrepreneurs. We will see in the future how high a price we will have paid for the effect of lockdowns in the economy and businesses, as well as indirectly in the lives of people, their health and long-term wellbeing. This is also the time to plan new things and start to implement them, but you must go beyond the daily demand to build something sustainable.

This lockdown period has changed the behavior of people. People have learned to work remotely, order online, use e-health services, study online, handle online meetings, sign and confirm things digitally, agree on a mortgage and home buying digitally, host social after-work sessions and many other things. And there are a lot of much less obvious changes in the market and behavior of people. When you now want to build a longer-term successful business, focus on the projected changes in the market and people, not today’s short-term demands.

It is important to remember that it‘s not just about building new services you believe will have demand in the future. But it might be that you can facilitate a platform, enable development or offer some fundamental components for those services. For example, consumer business is always hard to predict, let alone who is able to make a version that is a big success. But if you can build a component that all those new consumer services like to use, it might be a better bet. It is said, you should first focus to be #1 in your own potential market, no matter how small that market may be, if you have any hope of becoming #1 globally.

Doing things digitally online is now the first layer of most new services. What could be the next step? Data is becoming more important and now governments also want to track your location and health data. This probably raises more fundamental questions about data management and ownership models, when the crisis is over. Or if office work is now done more remotely and with online tools, could we at the same time automate them more? Or if we teach people online, can we also have AI solutions to handle more personal teaching, when a teacher cannot handle all one-to-one questions. Or if people start to make more virtual communities, how to handle trust and ‘hidden-hierarchies’ that exist in all important communities and clubs. Just to highlight some potential trends.

This is a difficult time for many people. Planning and building something new is important not only to create for a future lifestyle or business but also for mental stimulation. It is fundamental to focus on hope and the future. In many businesses and professions, it is also mandatory to focus on new things, if the old models have collapsed. But please, go beyond the obvious. If you see dozens or thousands of other people trying to promote a new idea or business, forget it. Take your time, and try to see and analyze, what is fundamentally behind those obvious phenomena and what value you can create for the long term.

The article first appeared on Disruptive.Asia.

Cash flow management one of the most important management tools for any startup or SME. Especially, it is important in special situations, like the current COVID-19 crisis. There is no miracles, how you get enough money, but at least you must know all the time, how much money you have and how much you will have in the next few weeks or months. it gives to control on the business and time to find solutions.

Grow VC Group together with Startup Commons (its portfolio company) organized a webinar to learn basics about the cash flow management. Jouko Ahvenainen, a serial-entrepreneur, who has seen several external or internal crisis in growth companies talked about tools and practices to predict and manage the company cash flow. The session has many practical tips and models to manage cash flow and also handle cash flow problems. It also reminds, the management team must work with the cash flow, it is not something finance team only does.

​You can watch the whole webinar on this YouTube Link. You can also download the presentation below.

You can also find more about Startup Commons' material that is now free for entrepreneurs here.

A friend recommended that I read an article, how McKinsey Destroyed the Middle Class. It basically summarizes how management consultants and elite business school MBAs had taken a bigger role in many companies, making middle management less important and placing ordinary people to execute simple tasks. The article also emphasizes the political aspect, and why liberals are skeptical about former McKinsey consultant and ex-Presidential candidate, Pete Buttigieg. 

But I think the story is more complex and we can already see transitions in other directions. Management consultants have often created puritanical processes and focus in many companies. But those companies have also become very vulnerable to any changes occurring inside or outside the company. More and more startups challenge them by changing the rules of business, but changes in software and the more important role of developers is also changing this top-down thinking.

We can see how consumerization has spread to companies. Employees use their own tools and software to do work more effectively than the top-down processes and legacy IT systems would do. Some innovative companies, like Supercell, have created models of more independent teams where this is possible. And in Silicon Valley, companies have already become frustrated with the traditional top down model in B2B sales where you can easily spend months or years and millions of dollars to get a corporate deal.

Open source and cloud companies offer software components and services for free or for a very low price and employees can start to use them almost independently. They can sometimes submit those small costs with their normal business expenses and no formal decisions are needed. Software developers, in particular, have felt it very difficult working with legacy IT systems and slow-moving processes when better and more effective solutions are coming to market all the time.

There is a link between elite management consulting principles and people who just start to use tools independently, or developers that make better solutions independently from open source components. The latter group are challenging the power and top down thinking of top management and inflexible models to create things. They feel, they want to make things better and use their own brains to make them better. Some could say this is part of a counterattack of the middle class.

Of course, things are not always so simple. Some visionary people in top management are happy to see this. They can even encourage lower level people to use their own brains and make things more effective and better. But there are also people in the management teams that don’t like this kind of development. They can see it challenges their position, or even worse, they cannot use projects in the traditional way to promote their own career paths inside the organization by taking credit.

I was able to participate in an interesting project of a military organization where they looked for new and more dynamic models to operate, especially in the gray area between a war and peace; Ukraine’s crisis was an example of this. The project included models where local members of the military can organize things bottom up, when something unexpected happens rapidly, and to use their daily tools like mobile phones and messaging services to organize things, yet still keep them in control. It was a very good example, how the use of everyday devices and software have empowered many more people to do things independently. The biggest challenge for the project was that the traditional big-dollar military suppliers and career officers didn’t feel they get much value from it themselves.

I see more examples of this in my daily businesses, for example,

• Prifina is developing solutions where people can manage and use their personal data to challenge the dominance of big data giants. Prifina alone has more than 11,000 developers interested in the project and also make open source components from volunteer work to enable this. There are also other communities and activities in the same field.
• Robocorp enables the use of open source software and cloud services to make RPA solutions. They have created a new job category called Software Robot Developers, basically any talented software developer can start to implement and offer software robots to handle all kinds of daily tasks. This is very different from top down models where consultants identify processes and then hire IT consultants to implement RPA solutions with expensive software licenses.
• Many distributed models, like distributed ledger or distributed AI, are looking for models where independent people and smaller companies can work as an equal partner inside a network, not where a big company makes the rules that impact subcontractors, too.

​We are seeing the dominance of the management and process consultants getting weaker. Of course, things don’t happen overnight, but we have seen the turning point. The political impact can be more complex to predict. And then there are also more complex cases like Uber in the Atlantic article, where there is literally no corporate hierarchy through which drivers can rise up to join management. One can argue it is really an example for top down control, but at the same time it offers more independent work for many people to drive and make money as they wish. In business we see many nuances of these models, politicians today prefer to see things as black or white.

The article first appeared on Distruptive.Asia.