Three essentials of self-steering

As we mentioned earlier prof. Jan De Visch held an interesting lecture about self steering, at the event of february 8, organized by the Argonauts and Unizo, and sponsored by Participium.

This is what we learned from prof. Jan De Visch.

There are three essentials of self steering

1. Organize around the customer and organize around the customer’s value streams. The client will dictate your organization.
2. Grow in how your organization develops its internal cooperation. Everyone has two jobs: the main task and the task to cooperate with others. Developing job 2 is key for the future success.
3. In search of the operating model that fits best with the DNA of your organization. This is the canvas Jan De Visch has developed to illustrate the strengths and focus points of all of the new working models. There is no one size fits all … every organization has to look for its own way of working (together).

Download Jan De Visch’ presentation (in Dutch)

Participium in the media

Earlier this week, we wrote about the article Computable.be posted on the new role of Paul Indekeu as CEO of Participium. Other business and tech news channel followed the example of Computable.be. Read the article

The news and knowledge platform for Flemish entrepreneurs dVO De Vlaamse Ondernemer focussed on the financial aspect of the changes, with Paul increasing his contribution to 500.000 euros and the possible growth this can bring along. Read the article

And even abroad the changes at Participium didn’t go unnoticed. Business and technology website Dutch IT channel dedicated a page length article to the internal changes at Participium. Read the article

 

Serial entrepreneur Paul Indekeu on board of Participium for growth

Paul Indekeu joins Jan Lagast in the Board of Directors of company builder Participium and of all its participations. Lagast has successfully started up the organization and found an experienced colleague in Indekeu, who will help support the further growth.

Last week Participium completed a series of operations at the notary through which Paul Indekeu joins founder Jan Lagast in the board of Participium and of all companies in which it participates. Paul Indekeu joined Participium as a co-investor about a year ago. In the meantime, he has increased his contribution to 500.000 euros and was appointed managing director in Participium and its participations. Founder Jan Lagast remains chairman of the Board of Directors.

Jan = from 0 to 1, Paul = from 1 to …

Indekeu and Lagast are passionate entrepreneurs. Both started their own company early in their careers, long before the word start-up existed. In contrast to the classic start-up and VC world, they both believe in return over the medium term. No matter how similar their vision and values ​​may be, their experience and expertise is very complementary. Where Jan, a visionary, is very strong in coming up with ideas and giving them shape – from 0 to 1 – Paul Indekeu is very strong in realizing growth. He brought SoftCell at the end of last century in just 10 years from 3 to 150 employees and at the beginning of this century he was the man behind the success story of Compex. When he started there, it was a Flemish SME with 50 engineers. A few years later, it had 150 employees in 4 countries, and was subsequently noticed by Siemens. Now Indekeu will help realize growth at Participium.

Industry 4.0, GDPR, self-management and blockchain

Participium has so far created three groups of companies:

• The first group works under the Forte brand. Forte helps technological and industrial companies to become even more relevant now that Industry 4.0 shatters their existing value chain. Forte has, among other things, an advisory branch specializing in ‘customer intimacy’, a training center for industrial sales & marketing, and a staffing company for project sales engineers and B2B marketing managers.
• Then there is the branch IDlegcy. IDlegcy helps companies to correctly deal with the digital identity of customers and employees – even after their death. One of the companies in this branch has its own proprietary technology (patent pending) using blockchain to ensure that online accounts are correctly closed upon death. IDlegcy is now working on an app to fully comply with GDPR obligations.
• The third branch is Funky & C °, consultancy and IT implementation support that helps companies team managers and project managers to provide the information they need to be able to deal with new organizational forms such as self-management. FunkyTime NV is the creator of tools in this branch. The last legal entity FunkyTeam NV will be established shortly for the advisory services.

In 2018 we will focus on realizing growth in these companies. Meanwhile, Indekeu and Lagast take the time to look for a new investors, faithful to the name ‘Participium’ and the logo ‘+ = x’ which implies that with some extra people, a few extra investors and a few extra projects a nice multiplier can be realized for the human and financial capital of the company.

Marginal cost of SaaS is not near-to-zero

I just happened to see a post on LinkedIn referring to a strategic advisor’s page on SaaS strategy. The picture wants to focus the reader on stimulating growth to outpass the operational fixed costs of a start-up in SaaS. I agree that one has to ensure the turnover gets bigger than the operational costs. Not arguing that part of the picture at all. But … the same picture shows the biggest lie in the SaaS industry. The marginal cost is NOT near to zero. And that is really bad news.

The first months are all about servicing the customer to keep them

Let’s redesign the above picture to a graph that is closer to reality. Often, SaaS companies will offer their software as a service for free for a while. You can plan that part, and estimate the cost for developing and marketing the offering. That’s the guaranteed cash burn. That’s why you attract investors in the first place. The issue is, customers will not stay if you do not spend time with them. You have to help them capture the value from your offering, and that costs a lot of time. Huge amounts of time, in comparison to the price you are planning to charge for the software in the future. Marginal cost at that point is far from zero. It’s probably the unexpected and biggest cash burner for months in a row. That’s really bad news.

 

 

From a certain moment in time, you will decide that you have had enough of the free users, and want to start charging money. Of course, you will loose some users, but hey, you also gain money from the others, so why bother, because the biggest challenge in the planning is to estimate the turn-over for the coming months. Again, you do not want to loose clients, and by now you will have learned that these clients need services too. Be sure though, that the clients will also be needing much and much more services than you expected in the beginning. Do not forget, they are now paying for the offered SaaS, and you do not want to loose the scarce clients you have convinced to stay with you until this point in the history of your start-up. So be sure, again, the marginal cost will be huge, and much more than anticipated.

Result: the lie about marginal costs puts break-even beyond expectations

There is a way to cope with the marginal cost: include it in the financial plan from day one. Or, even better, sell customer value services to the clients, and add the SaaS subscription as a plus. That way, your client services generate a real gross margin, and your SaaS increases the repetitive character of the generated margin per client.

Yes, this is the business model that is Participium’s favorite. And no, it is not easy. As is no business model that ever leaves the academic books, and is put to the test in real life.

My search for participation and a self-steering organizational structure

Today, prof. Jan De Visch has given me the opportunity to tell my own story. My 50 years of searching. Searching for the right company structure to make people love their work. It has not been an easy search. Today, it seems bon ton to dislike Taylor and classic company hierarchies, but that was not the case when I started my business experience.

Over the years, I have been working on many of the levels of maturity that are described by Frederic Laloux in his book “reinventing organizations”. Red — the maturity level of the medieval lord who is the dominant boss of a group of power seekers — is great when you need a high quality and a high control over a very small team. Great for fast start-up, yet weak for scaling-up. That’s when the “amber” level can be much more successful. In amber, everyone has a rank because he or she got to that rank. Great for creating large churches and armies, but not great for output-driven organizations. We tried some of that by allocating people to a rank, but soon we discovered there were more ranks than people. Orange works better for knowledge workers, since that level rewards people for their merits. This is thé level for Industry 3.0 companies in which bosses design the organization and have workers do the job that was designed for them. Not a great system for knowledge work, though. The boss cannot be everywhere controlling everyone’s work. We experimented with ‘green’, by introducing co-ownership and having people feel they own part of the business. That worked much better. We had our people take responsibilities over the client’s results and take team responsibilities over the long term. But, when times were bad or changes were needed, this level of maturity stalls the company. So, I almost went back to “red” out of frustration, until I read about the color “teal”. And that’s where I felt back on track. This is the organizational concept that we are now looking into. And that’s why the journey organized by the Argonauts is so important for us.

Self-steering looks promising, but we are not there yet. We have a lot to discover, learn, and try. But what I already learned, is that there is no text-book always-right model for company organization. I also discovered self-steering is more wrongly than rightly understood. Self-steering is about getting and taking responsibility. It has nothing to do with ‘go as you please’. Although there is no daily boss or chief in a self-steering organization, for everyone from cleaning lady to general manager, there are much more people to take into account and ask for their opinion than ever before.

Capital increase for Participium

Today Paul Indekeu en Jan Lagast went to visit a notary, in order to increase their share in Participium CVBA. With that transaction they become main shareholders in Participium. More importantly today’s capital increase confirms that both Paul and Jan have great faith in the future of Participium.

What happened today is more than a financial transaction. It is a symbolic act to show that Participium is on the right track and that Paul and Jan know that Participium’s purpose ‘make more people love their work’ is worthwhile.

Self-steering, teal, holocracy, fluid organization, … what model fits your organization best?

What model is the best fit with your (future) organization? We can’t tell. There is no one size fits all organizations solution. You have to discover your own model. The good news is, that you can get inspired by various existing models to design the self-steering approach that might be the best match with the DNA of your organization.

Getting a quick overview of the existing models and getting a much better understanding of their ins and outs, is why you would have to participate in the open session on self-steering on Thursday February 8, 2018. It’s an initiative of The Argonauts and Unizo, supported by Participium.

More info and registration

Program

• Thursday February 8, 18.30h: welcome
• Jan De Visch: introduction
• Jan Lagast: my personal entrepreneurial adventure towards self-steering
• Jan De Visch: existing models and their ins and outs

Data

• Location: De Serre, Lange Gasthuisstraat 29-31, 2000 Antwerp
• Fee: €50 (VAT excl)
• Dutch spoken
• Limited to 60 participants

Speakers

• Prof. Jan De Visch, Flanders Business School
• Jan Lagast, Managing Partner Participium

Partners

• The Argonauts
• Unizo
• Participium
• Vivaldis Interim
• Flanders Business School

 

Successful event on tax shelter for start-ups

April 27th Jan Lagast was invited as a guest speaker at Mazars for an info session on tax shelter for start-ups. The info session focused on (future) private investors who want to invest in young promising companies and fully enjoy the tax benefits the Belgium government provides.

It was a convivial meeting in the former living room of baron Braun on the top floor of the renowned UCO tower in Ghent, where the accountancy department of Mazars has its offices.

Based on his vast expertise in tax & accountancy Peter De Vos (Mazars) gave a clear explanation on the legal and the financial aspects of the tax shelter. Later Jan Lagast gave – from his first-hand experience as company builder with Participium – advice on how to inquire whether or not a company is worth your investment.

Afterwards, the public of (future) investors seemed very positive about what they had learned that night.

Luc Colebunders and Jan Lagast ready for road show “investing from the comfort of your couch”

Luc and Jan are ready for the series of events under the heading “Investing from the comfort of your couch”. The content is all set:

• The difference between capital investment and stake investment
• The possibilities offered by the current legislative framework
• What you should pay attention to when you study concrete proposals
• What are the factors that make a company successful?

The first events have already been scheduled

• 14/4 at Participium in Zottegem
• 19/5 in the new co-working space in Knokke
• 26/5 in Ghent in a former church that, thanks to crowdfunding, was converted into a meeting center

“We are going to build companies” (Trends)

Journalist Benny Debruyne articulated it perfectly in his article on Participium in Trends of 7 April 2016: “We are going to build companies”. That is exactly what Participium wants to do: create a business, create a lean start-up company around it, let that company quickly do business with its first customers and then achieve years of growth with a solid capital injection. The role of Participium is not that of an investor, but that of an inventor, entrepreneur and manager.

Francis Dams (left on the photo) is a lecturer at the University of Antwerp, and made Participium realize that, for the early stage, they need a typical entrepreneur such as Jan Lagast (partner at Forte, center of the photo) with a lean team. The years of growth on the other hand are best supported by an experienced manager such as Herman Demarbaix (former top director in the petroleum sector, right on the photo).

Every company gets its own manager, also known by Participium as business leader. They call it that way because they want that person to focus on generating business and coaching the team to develop that business and to take good care of customers. The business leaders of Participium are typically 45+ people who are tired of the corporate environment and yet do not want to take the risk to develop their own company alone. Participium offers them a team consisting of a visionary inventor, a financial planner, a business analyst and a back-office operations manager. Each of them providing support services. They also find a company that has traction in the market already, so they don’t have to (re) invent the wheel themselves. They will find a team that searches together for the capital they need in order for that first nucleus to grow into a beautiful pan-European growth company.

Many financial parties answer “team-team-team” to the question “what do you think are the three most important success factors for the future of a company”. The bringing of this very team is the strength of Participium. Special thanks to Jo Libeer for this reminder.

Click here and read the full article Benny Debryne wrote about Participium in Trends of April 7, 2016.