I remember starting the MACE course almost four months ago, without knowing what to expect. Today, when I look back, I can confidently say that I learnt a lot already. Managing a creative business module, not only enriched me with new knowledge, but also changed my perspective on business and creative industries in general. As an artist, I never put much attention to business, I thought that it belongs to a different world than mine. Now, my perspective has changed, I became more curious and open to new ideas and realities. I am not the only one who noticed the change. My partner commented ‘business is growing in you’, while I was trying to unravel the business model of one of the healthy fast-food companies. That wouldn’t even cross my mind four months ago. Today, I will summarise and reflect on my journey.
We started off with Business models. I didn’t know what a business model was and how to create one. Business model canvas it is a tool that helps to define how the business operates ‘business model describes the rationale of how an organisation creates, delivers and captures value’ (Osterwalder and Pigneur, 2010, p.14). I created a canvas for my sisters’ flower room. It was interesting to analyse how her company can generate revenue, what values they can offer to their customers, as well as look for potential innovations. Business model canvas is a simple way to turn your ideas into business and find out if they are viable. Another tool that helped me achieve better understanding of value preposition and customer segment was ‘Jobs to be done’ theory that focuses on our target customers choices ‘in a way that no amount of data ever could, because it gets at the causal driver behind a purchase’ (Christensen et.all., 2016,p.56). It focuses on creating the product or service that will ‘do the job’ for our customers and therefore make them return.
Another methodology that focuses on the feedback of the customers is lean start- up that I learnt in New Venture Development class. The Lean start-up approach is a technique that teaches a totally new approach to managing the business and argues that anyone is capable of running a start- up, as long as they follow the right process. ’ At its heart, a start-up is a catalyst that transforms ideas into products. As customers interact with those products, they generate feedback and data’ (Ries, E.2011, p.75). Lean start-up approach ‘reverses’ the procedure of traditional ‘linear’ way of developing a product and investigates the customer needs at the begging of the process using build-measure-learn feedback loop. I found it extremely important while looking for the start-up idea. At the back of my head I had the CB Insights report introduced to us during the class by Janja Song (2018). The most common reason why start-ups fail was the fact that there was no demand for what the companies where offering! I couldn’t quite believe that, but having that knowledge now, I feel more prepare for my future projects.
Meanwhile, I found Intellectual Property essential for my artistic practice. During two sessions, I learnt how to protect my rights and how to respect the work of other artists. According to the information, I found on the Government website, IP is a legal form of protection of tangible ideas. There were many things applied to IP that I did not know about. Firstly, I had no idea that the minute I put my work on social media I give away my rights. Thankfully, Naomi Korn gave us the solution to that problem. Creative Commons is the organisation that supports global movement of sharing and collaboration. CC provides free copyright licences to everyone who wishes to share their work to the public. Another solution is to upload the work on my website and share a direct link on social media. Thanks to that approach my work will be protected. To play music in the public space for teaching and performing I need the PPL and PRS licence. I can purchase it directly from the website and make sure I use it legally.
Moving forward in the learning process, I found “branding” the most difficult task so far. I never looked at myself as a brand, but I realised that as a freelance dancer I really should have put more attention to it. I looked at brands from the business and personal perspective and I realised that both are incredibly similar. According to David McNally and Karl D. Speak (2009) brand is a perception or emotion that others experience while developing the relationship with us, personally or with the company. Therefore, as freelance dancer, I represent my own brand. When it comes to brand positioning ‘Choosing the proper frame is important because it dictates the types of associations that will function as points of parity and points of difference’ (Keller,K. et.all.,2002,p.4). Through the branding exercise I established frame of reference, POPs and PODs and business mantra for me as a choreographer and teacher. Even though I am not sure about my future yet, I am confident to apply that knowledge to any potential business or interviews.
I loved Advertising exercise, I enjoyed working on a 30 second TV commercial with my classmate Jonas. We went through advertising development process in over one hour! From background analysis, determination of marketing and advertising objective, target audience identification and identification of core message (Robinson, 2018). What I enjoyed the most was brainstorming and the fact that we had to be creative and make our decisions quickly. In all that chaos, we had to remember that the objective of a good advertisement is to satisfy the client and to persuade the consumer (Yeshin, T.2006)
As a part of strategy learning, we were introduced to the business strategy game. I was in the group with Aman and Mustafa, two lovely people. Together, we owed and managed the footwear company and deepen our knowledge in strategy. In the beginning, we had no idea what to do as the BSG guide was extremely hard to understand, but slowly we unravelled the secrets of the game. Our first strategy was a plan to produce high quality shoes. In order to achieve that, we bought robots in North America and increased models and superior materials. We focused only on the branded production. Our ploy strategy was to outbid the celebrities in year 14 and do not let our competitors get the customer appeal. It brought positive results as we were able to increase the prices of shoes. Unfortunately, the ploy strategy turned against us and brought a negative effect in later years, we spent too much money on influencers such as well-known celebrities! In years 11 to 14 we were growing steadily, with increased growth in year 14 to year 17. In year 17, we made too many changes that affected us negatively. Loans we took, purchase of space and equipment in three markets negatively affected our credit rating. Even though, in the year 14, we found out that we can sell our inventory, we decided not to do it because it affected our EPS and ROE. At the end of the game we were bankrupt. Our strategy did not pay off because we were contradicting ourselves in the decisions we made. Aiming for high quality shoes, we ended up increasing our superior materials. We could not afford buying more as we had no cash in hand. Swapping people for machines decreased our productivity. We pivoted too many times and made chaotic decisions. I mentioned in my blog about concept of deliberate and the emergent strategy firstly introduced by Mintzberg and McHugh (1985) presented in the ‘Strategy: Theory and Practice’ by Clegg et al. Deliberate strategy focuses on following an initial plan, approached after scanning the environment. Emergent strategy arises during the interaction with the environment and doesn’t follow strict rules. The emergent strategy has not paid off, main problem was taking too much risk and not finding balance between the two. However, we have not realised that at the time and, as a result, we went bankrupt. Even though, we destroyed our company, we stayed together as a team and tried to work out the plan to save our company.
I am not sure that Simon Hulme, who taught us Entrepreneurial Finance, would be proud of our achievement. Contradictorily, thanks to BSG I was able to understand better the meaning of financial statements and KPIs. EPS is a net profit after tax divided by number of shares, ROE is a net profit divided by the average amount of shareholder’ equity investment. When we bought robots, we used Depreciation as ‘an accounting method of allocating the cost of an asset over an appropriate period of time.’(Hulme, S.2015). Moreover, I realised that cashflow is an important indicator of a business profitability, however can be misguiding as ‘cash coming into the business from other sources, such as capital injections, or loan drawdowns; or alternatively from delaying payment to suppliers and the tax office.’ (Hulme, S.2016). Up until the year 17, our cashflow was good and we were sure that our business was prospering well. However, we omitted an important fact, big part of our money came from the loans!
When we started our classes back in September, our course director Janja Song was constantly talking about ‘connecting the dots’. Now I understand how all of the elements of managing a business connect together and how important it is to pay attention to all. In the first semester I learnt a lot of theory, but putting it into practice made it more logical for me. Moreover, working in many different groups made me realise that managing is not only about the business, but also the relationship I develop with others. I look forward to the second semester and implementing that knowledge into our start-up!
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Ries, E (2011). The lean start-up: How constant innovation creates radically successful business. London: Portfolio Penguin.
Robinson, H. (2018) ‘Advertising’ [Power Point Presentation]. BS7703: Managing a Creative Business. Available at: https://canvas.kingston.ac.uk/courses/9278/pages/week-9-advertising [Accessed: 17/12/2018].
Song, J. (2018) ‘New Venture Development’ [Power Point Presentation]. BS7703: Managing a Creative Business. Available at: https://canvas.kingston.ac.uk/courses/9278/pages/week-2-new-venture-development [Accessed 8/12/2018]
Yeshin, T. (2006) Advertising. London: Thomson Learning