www.viewpoint.net.nz - NZ Transport, Aviation, Logistics & Supply Chain Blog

Agoge is the 28th Fastest Growing Company

Last Thursday agoge received a place in the Deloitte Fast 50. This is a competition to establish the 50 fastest growing companies in New Zealand. Well after I duffed the speech and we went out to dinner to celebrate, I got to reflecting on what got us there. Here are some of my less than insightful observations:

My Team - The average age of my team is 30 and I am privileged to have the people I have. We are growing and learning and trying things together. We have an incredible culture, a heap of fun and seek to live "people matter" in everything we do. As Tim Finn says in his song "We had no idea, that it couldn't be done. And we needed to find, a like minded someone" I have found those someones in my team. The lesson: People are more important than anything else!

A lucky idea? - I had (and still do) have a heap of business ideas. I choose to launch under Logistics Personnel because it was the idea that I thought offered the quickest growth and good cashflow. A heap of the other ideas would have been a disaster. I did it after taking a week off work and surveying potential customers, researching the market size, blah blah. The lesson: Choose the right idea, an idea that will actually sell.

Cashflow - I started the company with around $60k cash and we have grown the business to almost $10m in annual revenues in 3 years. We could not have done it without strong cashflow. Seth Godin had a post the other day that gave 10 secrets of the marketing process. "#1. Don't run out of money. It always takes longer and costs more than you expect to spread your idea. You can budget for it or you can fail." - He's right and I often use the saying "Profit is a concept, cash is a fact".

We have had extended periods of making losses in the past as we invested in the future. We could only do this because we have strong cashflow. We work hard on rapid debt collection (65% in 17 days) based on the principal that the money belongs to us once it is billed. It sounds a little arrogant but a heap of small business just let other companies use them as a bank. We are not a bank! The lesson: You must have strong cashflow! You will only run out of cash once.

It is genuinely a privilege to be in the Fast 50. I am not sure we will make it next year, getting 200% growth year on year gets more and more difficult as you get more and more millions in revenue. I am not too worried if we don't but I know one thing for certain, we will have a heap of fun trying.

Auckland and Tauranga ports in merger talks

Talks of a merger between Auckland and Tauranga ports as reported in the NZ Herald bring mixed emotions for me.

"A merger would have major implications for all New Zealand ports, particularly in the North Island. The companies acknowledged there would be competition issues."

You think? And what happens after they have the largest market share, will they start behaving like Auckland and Wellington airports who make a disproportionate amount of money for the capital invested.

Tauranga, the country's No 2 container operator, set up the country's first inland port, Metroport, in June 1999 in South Auckland and it had been siphoning off Ports of Auckland business. ... With Tauranga's predatory tactics a constant threat, the pressure came on for Auckland to seek more of its business from the rural export hinterland south of Taupo.

Tauranga's Metroport was a classic example of a small company using guerrilla warfare to take on the big company and succeeding! Auckland then replicated it in lower North Island. If I were Auckland merging would be a great idea. I get back the volume I lost.

And finally two questions the Herald didn't answer. Practically how do a listed company, and a delisted company (owed by councils) effectively merge? Also I find the timing very interesting as Jon Mason has just left.

All that said. If they do merge it would be no different that any other big company with branches in various locations. It will also be interesting to watch the impact on Transport and Rail volumes.

Failing 90% of the time

I read an interesting Scott Adams post today. In it he waxes lyrically for what feels like a day about all of his successes. Finally towards the end of what appears to be self-inflated dribble, he writes "To put all of this in context, and before you start to vomit at my bragging, I must confess that I fail miserably about ten times for every one success. (That's an accurate estimate. I've literally kept score.) But interestingly, the failures always involved activities that seemed entirely feasible. I was completely qualified for all of the things that failed."

He fails 90% of the time. Interestingly enough failing 90% of the time is only an issue if your goals are set to low. If you have huge goals and only get 10% of them, you become a huge success.

If you have small goals and only get 10% of them what do you get?

Customer Expectations

How often do NZ Businesses and sales people deliver a completely different service to the customers expectation. Check out these images. (Hat tip to Mark Q)

 

 

Being 'Green' can pay dividends

The size and scale of Wal-Mart continues to blow my mind. Check out this news snippet as they seek to cut packaging costs.

Wal-Mart plans to cut packaging 5%. The initiative is projected to reduce carbon dioxide emissions by 667,000 tonnes, equal to taking 213,000 trucks off the road annually and save 67m US gallons of diesel. The 5% packaging cuts will also generate US$ 3.4 billion in savings for Wal-Mart.

Think about it, they will take a fleet of trucks larger than size of NZ's entire transport industry off the road. Given however that a huge proportion of these trucks will be in places like China. I am sure they will be deployed somewhere else.

Being green can save significant dollars, particularly if you are the size of Wal-Mart!

Ten reasons why people come and go

The 10 most common reasons people look for a new job, in order of importance, were:

1 – Seeking new challenges
2 – Lack of career progression
3 – Poor management
4 – Salary
5 – Lack of training or development opportunities
6 – Seeking to specialise in a particular field
7 – Travel time too great
8 – Poor work/life balance
9 – Office politics
10 – Too much stress

The 10 most important considerations when taking a new job, in order of importance, were:

1 – The company's vision, values and culture
2 – Job security
3 – Project-based learning or formal training
4 – Work/life balance
5 – Engagement with the work undertaken
6 – Salary
7 – Hours of work
8 – Closeness to where you live
9 – Benefits
10 – Holiday allocation

This survey was conducted by Hays NZ and surveyed 450 people. I suggest that their candidate base skews the result somewhat, but interesting nonetheless.

Killing the entrepreneurial spirit

Few successful start-ups become great companies, in large part because they respond to the growth and success in the wrong way. They grow exponentially and attract a team of people that love growth and have an entrepreneurial spirit. After a while the lack of planning and systems and good hiring of some systematic people means the company can turn into a very disorganised company. The response is often to bring in veteran managers to rein in the mess.

“They create order out of the chaos, but the also kill the entrepreneurial spirit. Members of the founding  team begin to grumble, 'This isn’t fun anymore. I used to be able to just get things done. Now I have to fill out these stupid forms and follow these stupid rules. Worst of all, I have to spend a horrendous amount of time in useless meetings.' The creative magic begins to wane as some of the most innovative people leave, disgusted by the bureaucracy and hierarchy. The exciting start-up transforms into just another company, with nothing special to recommend it. The cancer of mediocrity begins to grow in earnest.”

Most companies build their rules and processes to manage the small percentage of wrong people, which in turn drives the right people away. Getting the entrepreneurial spirit back it would seem means you need to give more freedom to your people.

Agree, disagree, have a question? - Post a comment now.