'Spain is a hotbed of creativity and design'
Published on: 13 Aug 2013 10:16 CET
Simon Gifford is a business consultant with over 30 years of global experience, including ten years as a senior global partner with Deloitte Consulting.
Gifford now runs his own consulting firm, Genesis, as well as lecturing at Madrid’s prestigious IE Business School.
Recently Gifford and co-founder Victor de la Torre also launched a new online coaching platform for entrepreneurs.
The Local spoke to Gifford about that platform and asked for his views on the state of entrepreneurship in Spain.
What motivated you to start a web-based entrepreneurship coaching platform?
For the last 30 years or so, I have been very focused on strategy and decision-making consulting, mainly with large corporates.
Recently, I have become interested in the question of how to bring big style consulting to small business, because it’s clear the model of the big firms doesn't work for small operators.
Partners in big firms, for example, will ask $3,000 to $4,000 a day for their services and even junior consultants are charging $600 to $700 a day. And that’s out of reach for small or even medium-sized businesses, let alone new ventures.
But assistance can be critical for start-ups given that maybe five or more of every ten such businesses fail, whether because of lack of time, or knowledge or financial resources.
So I and one of my students at IE, who has deep experience of running IT projects, have developed Mashuari, an online platform for new ventures and early-stage business.
How does the platform work?
Mashauri is a four-step system based on best practice entrepreneurial thinking, and our tag line is: Rebuilding the world economy. One entrepreneur at a time!
It takes founders of a business through all the crucial steps from a concept to reaching a stable business.
Along the way, entrepreneurs learn to carry out tasks including formulating their business model, identifying and speaking to customers, planning financially, testing their model and obtaining funding. An investor-ready business plan is one of the outputs of the process.
Importantly, the system also provides real life mentors with business experience who interact with the venture and are able to challenge and push the entrepreneur.
How do you make money?
For the first concept phase of the project, we charge €20 ($26), and then a monthly subscription fee of €95 ($126) for the other three phases of the project.
However, we are currently offering early users a free first phase and a reduced price for after that as we continue to co-create the system with those early customers.
In terms of how long people need to use the service for, that depends on individual requirements.
The answer clearly depends on the venture and the time you allocate to the start-up. Some people do this part time, others jump in full time. Some have knowledge of the tools and methods, others learn as they go along.
How does the future of the business look?
We also help organizations find funding so we are looking into getting investors involved in the business.
They will identify businesses that are ahead of the curve and are looking for funding and maybe even give guidance to those businesses in how to source and negotiate that early funding.
Those investors will be able to access our start-ups which, via Mashauri, have already come through a tried and tested system and so are more investor-ready than others who have not had the benefit of this experience.
Spain is often criticized for lacking entrepreneurial spirit. What's your view?
The rate of entrepreneurship is lower here than many similar economies, and there are a number of well-researched explanations for that.
First, entrepreneurship is not really taught in schools here.
Also, failure is frowned upon in Spain whereas in the US, failure is seen as an important part of the learning curve.
Something like 80 percent of Spanish University students wish to find a job in a large corporate or the public sector. The equivalent number in the US is less than 50 percent.
But there is a bit of a groundswell building here.
The business school IE (in Madrid) and IESE (part of the University of Navarre) both have built good entrepreneurial courses into their Masters of Business Administration.
Then there is the Telefónica offshoot Wayra which is doing a great job helping start-up technology businesses.
However, they only have capacity for a very small number — probably 1 percent of all potential applicants.
I would like to think that Mashauri, as a scalable online business, can really help the other 99 percent as well!
In that way we are complementary to the accelerators or incubators as organizations such as Wayra are known — and we even have a system within Mashauri that supports these organizations manage their portfolio of ventures.
What is the current state of play after the introduction of Spain’s new entrepreneur law in June?
I think the government has their heart in the right place. They recognize that small businesses are critical to the economy and for employment growth – which is the key to rebuilding this economy.
Furthermore, new ventures are a critical source of innovation and new ideas.
However, they also recognize that we need some newer easy models to launch a business that does not tie the entrepreneur up in red tape and punitive tax bills before they have even made their first sale.
Our company, for example, is domiciled in the UK. That’s because registering a business there costs £15 ($20) and takes 15 minutes.
In Spain it takes €3,000 and a lot longer. It’s a bureaucratic nightmare.
So the new law is a step in the right direction, but these wheels grind very slowly.
It’s one thing to change the laws but you've got a whole lot of government workers and business systems built around them who may need time to change and it’s not going to happen very quickly.
Combined with a relative low level of venture capital and angel investors – this is not the easiest place to start your business.
Finally, what can Spain offer to start-ups?
Spain still holds some major positives. There is a huge hotbed of creativity and design and a lot can be built on that platform of competencies.
There are also lots of people with great skills and frankly it’s an inexpensive market right now because of the unemployment problem.
It’s sad to have to say that, but that does not mean we should not use that competitive advantage to start creating something special.
Tourism is also very strong here, and there have to be a lot of great opportunities there, especially when using technology to unlock that potential.
I know the hotel industry does not like organizations like Airbnb — but we believe it is better to use efficient web-based technologies and stimulate tourism in general.
For technology-based companies in general, including web-based businesses such as Mashauri which are potentially global in reach, Spain is as good a place as any to start up.
And if you can tap into inexpensive talent here, then maybe that can even compensate for some of the additional bureaucracy costs.
There are opportunities in Spain without a doubt.