Over the last few months many people have asked me “Why Xuviate?”
The question looks straight-forward and begs for a simple answer.
Trying to find an answer, however, shows that we are actually talking about three completely distinct questions:
- Why leave an established company for a start-up?
- How will Xuviate change the world?
- What is the meaning of Xuviate?
Now that we are finally finding some semblance of normalcy in Xuviate (as far as this is possible in a start-up), I would like to take the time and share the real answers behind all three questions.
But first: Who is Xuviate?
Xuviate is a new start-up business I have co-founded with my long-term business colleague and friend Mathias Tölken. It has its roots in work started almost 5 years ago at Space Age Technologies when we started asking “what is next for the SME IT industry?”
1. Why Leave an Established Company for a Start-Up?
At Space Age Technologies I had (almost) everything. A stable salary, an incredible group of talented people that would jump through the fire for me (as their Managing Director) and an enviable reputation in an industry that is known for shoddy service. With my second child on the way, life seemed good.
And yet I still left the security of Space Age Technologies behind me to start something new. On 1 September 2015 Cyberlogic, a very successful Cape Town based MSP, purchased a majority share of Space Age Technologies. Apart from a strong strategic relationship and deep affinity for everything Space Age, Mathias and I are now free to pursue whatever we like.
Xuviate, including us two founders, has a total staff complement of 4. I wash the dishes (albeit less than everybody else), don’t have an official title and generally have to be prepared to do everything necessary to make the business successful. We have no paying clients, carry quite a large monthly overhead and don’t earn personal salaries.
In short, we face quite a bit of risk and uncertainty in our professional lives.
And I absolutely love every moment of it. I feel free, energised and passionate about our mission … and more importantly, ready to take on the world. Every day feels like a new day.
Why did I do it? I have 5 reasons:
1. There Should Only Be One Business Model!
Over the course of the last 5 years we have spent increasing amounts of time focusing on the “Next Big Thing” for IT, which is to find solutions for eliminating the business IT divide in SMEs and turning IT into a strategic differentiator.
Although exhilarating, the problem with this quest was that our core business was still operating as a services business. And although we for a long time believed we could run what amounted to two different
business models at the same time, it turned out that this is really a bad idea for multiple reasons:
- Quality and later profitability suffers due to lack of focus
- Employees are confused about what they should focus on
- Speed of execution is severely compromised as it is not easy to continuously switch hats between different requirements
- Obtaining external funding is difficult as investors require focus
Since we were not focusing on any of the two models we found ourselves increasingly under pressure and we simply had no choice than to separate the two companies or risk losing both.
2. The Product vs Service Question
In essence Space Age is in the business of selling time of highly skilled IT people.
In a services business such as this, growth is closely linked to the number of employees and the quality of service they provide to their clients.
Xuviate on the other hand is a product-business. The entire company works together to deliver one or more closely related products to clients anywhere in the world.
In a product business such as Xuviate, growth is closely linked to the ingenuity of employees and their ability to build and support universal solutions to shared customer pains.
Both business approaches have their strengths and their weaknesses.
Many believe that engineers should work in product companies. For Mathias and I that certainly rings true.
Over the history of Space Age we have proven time and again that we are innovators. But since Space Age was, at its core, a services business, we never properly developed the necessary competencies to make a success out of a product business. And as soon as the going got tough we stopped our innovative products to refocus on services … and we did this again and again.
At Xuviate we will not have to make these trade-off decisions anymore.
3. Linear vs Exponential Business Model
All around us we see small companies growing like crazy. Many of these companies die fast.
Space Age on the other hand grows more steadily and predictably. At one stage it provided job-security to almost 70 people.
While for most people the Space Age business model will sound like what successful businesses should do, it started feeling like a trap to some (myself included) who were aspiring to follow an exponential business model.
Wikipedia contrasts linear (red), cubic (blue) and exponential (green) business models over time.
Over a long enough time the exponential business model will always win over the linear model. If the exponential business manages to survive that long, that is.
Xuviate has aspirations to become an exponential business!
There is a huge amount of risk with any exponential business model, but the potential reward and excitement along the way more than makes up for the loss in stability …
At least that is the theory.
4. Be at the Forefront of the Industry
Engineers want to create or be associated with something new… ideally every day. As soon as a problem seems solved at a conceptual level, they feel an urge to move on to the next big problem.
Mathias and I are engineers. And we need big problems to solve!
When Space Age didn’t present us with big enough problems to solve, we went out to find new ones. This is how we laid the seeds for Xuviate 5 years ago when we attended a course in Israel by the Goldratt Foundation teaching us about Thinking Processes. Here we asked ourselves the simple (or perhaps not so simple!) question of:
What is Wrong with the SME IT industry?
A very important question indeed. But is this really a question that an IT MSP such as Space Age has the resources to ask? In hindsight perhaps not… but Xuviate, who will build its business model on answering big questions now gives us the license to innovate …
14 years ago Space Age Technologies became one of the first true SME MSPs in the world. We evangelised the virtues of the MSP business model in South Africa. And we built innovative software that allowed us to offer cutting-edge services, often long before anyone else.
With this history we know we can innovate and lead from the front. Now we are ready to do it all again, but this time with the benefit of foreknowledge of all the challenges ahead.
We can be engineers again!
5. A Change Is as Good as a Holiday
The last reason is very personal.
Space Age Technologies was the first real work I ever had. I gave my life to the company for 21 years.
I strongly believed that employee retention is absolutely critical to sustained success. At one stage I even laid down the vision for creating a “100 year enduring company”.
And then I started having doubts. Last year I summarised my evolving thoughts about this topic in a post on LinkedIn titled long-term employment vs growth.
Little did I realise that I was also referring to myself when writing the article.
Now that I have exited Space Age I notice a different spring to my step. I wake up early again. I absolutely enjoy all the (many) challenges thrown at me on a daily basis.
Even if it was not for the other 4 reasons, my personal need to do something different was so huge that I could not have done anything else than moving on.
2. How Will Xuviate Impact the World?
Our mission is to
Unlock the true potential of IT in SMEs
and we do this by offering
effective on-the-job training to SME IT leaders anywhere.
To understand how this would “make a dent in the universe” as Steve Jobs has said, we need to take a few steps back and understand the bigger picture.
First something about myself: I consider myself a techno-optimist as defined by The Technological Citizen. What this means is that I strongly believe that “more technology” is the answer to virtually all of the big problems the world currently faces: hunger, poverty, health, access to clean water, education, shelter and so many more.
The book Abundance: The future is better than you think is introduced as follows:
We will soon be able to meet and exceed the basic needs of every man, woman and child on the planet. Abundance for all is within our grasp.
This bold, contrarian view, backed up by exhaustive research, introduces our near-term future, where exponentially growing technologies and three other powerful forces are conspiring to better the lives of billions. An antidote to pessimism by tech entrepreneur turned philanthropist, Peter H. Diamandis and award-winning science writer Steven Kotler.
I couldn’t agree more and want this future for the world. Unfortunately, however, it is not a given that we will realise this vision and the authors make it very clear that we all need to work together to overcome quite a few challenges on the way.
As long-time IT practitioners in SMEs we are very aware of what we believe to be both one of the largest threats to the vision, but also one of its greatest opportunities: and that is the role SMEs will have to play in achieving this vision. The Edinburgh-Group makes it clear how important SMEs are to the global economy:
SMEs, by number, dominate the world business stage. Although precise, up-to-date data are difficult to obtain, estimates suggest that more than 95% of enterprises across the world are SMEs, accounting for approximately 60% of private sector employment.
What people in the IT industry have known for a long time is now becoming common knowledge amongst leaders of all organisations: Technology is a key driver for enabling business growth.
The McKinsey Centre for Business Technology introduces their 2011 research Perspectives on Digital Business with the following words:
Technology, and its impact on business strategy continues to rise in importance on CEO agendas. “Digital business” has become the mantra of many top teams as they seek competitive advantages in a world of fast moving technological change.
Given the size of the world-wide SME sector and the rising opportunities presented by employing technology to differentiate, it should thus follow that SMEs will have the biggest role to play in the future to come.
Unfortunately this is presently very unlikely.
What we experience are huge advances from large organisations (think Google, Amazon and Microsoft) and rapidly increasing activity from start-ups. Many SMEs, however, struggle to get to grips with technology in their business, as highlighted in our own research we presented a few years ago on the business IT divide in SMEs.
Even Space Age Technologies, with all its IT competencies, did not manage to innovate and evolve to a new business model while still focusing on the current model. Continuous business model transformation is an essential skill for any modern organisations.
So, given this backdrop, imagine the following two scenarios:
SMEs fail to leverage IT and many are replaced by smaller, technology-savvy competitors
What would happen to job security? What happens if an Uber-type company with a new business model disrupts health-care? Education? Financial Services? Various Professional Services categories? The industry you are working in?
This is the doom and gloom scenario. Let’s now imagine the opposite scenario.
SMEs learn how to leverage IT for accelerated business success
How many of today’s problems can be solved? How many lives can be touched? How will employees of SMEs feel about their jobs when they know they truly make a difference?
Xuviate has made it its mission to prevent the “doom and gloom” scenario and to make the bright future scenario a reality.
3. What Is the Meaning of Xuviate?
The name Xuviate has its origins in the verb exuviate, which the online Oxford Dictionary defines as:
In bringing about the “bright future” scenario envisioned in the previous section we have to realise that there is one role in an organisation that will have an outsized effect on whether we are successful in achieving our vision or fail miserably.
The IT leader. Or, more correctly, the IT leaders.
Unfortunately, however, these individuals face so many challenges in their current jobs that it seems all but impossible that they will become the leaders we really need.
And one of the biggest challenges IT leaders in SMEs have to overcome is inertia. What has made them successful in the past is often not what is required for making them successful in the future. In a presentation introducing Xuviate I have highlighted 4 limiting beliefs and what needs to be done to overcome them:
- All leaders need to learn that IT in a business refers to so much more than just the IT function (which is usually limited to the IT infrastructure)
- IT leaders should stop positioning themselves as Trusted Advisors and instead strive to establish management processes others can trust.
- IT leaders should stop wanting to be responsible for everything IT in their business and instead subscribe to a collaborative leadership model
- IT leaders should stop running after “big bang projects” and start focusing on establishing the “soft competencies” required to be successful leaders
And this is where everything comes together. In order to make SMEs successful in the technology-enabled vision I highlighted, IT leaders have to exuviate what they know and go through quite a few personal and business paradigm changes to become the leaders they need to be.
Many IT leaders have been ready to embark on such a journey for the better part of a decade. Unfortunately there were just no good solutions to help them get there.
Fortunately Xuviate is here now to support IT leaders. One step at a time!
As you can imagine there is so much more to write on all of these topics. And this is exactly what we plan to do on a regular basis as we lead SMEs and their IT leaders from
Business Technology Management.
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