Review of 2018

03 January 2019

The nice thing about being more than one year into your new business is it gives you a comparison point. This time last year, I was publishing my one year review, so it’s only reasonable to do that again.

I promised myself I would be painfully honest about how things are going at all stages. A lot of people jump out of PAYE into being self-employed and as part of their marketing strategy pump out messages of how great everything is going, I’m just not that fella. Honesty is the best policy in my book.

So 2018 was very very hard. Starting the year with a clear view of the direction we were heading, we committed a lot of time and resource to building online tools to simplify the technology supply chain, and successfully got some of those off the ground, but at the cost of revenue to the business which clearly is a problem if you don’t have infinite cash. I think they call this learning the hard way. After taking an 80% pay cut to do this, and investing a large chunk of my personal assets, I realised this wasn’t a good strategy.

In late 2017, we launched the Embedded Directory, which is a great idea - with a commercial model which was designed to be fair to the industry. Clients search for suppliers to help them with their IT projects, across a number of registered suppliers who pay a small referral fee if they win the project. The issue we clearly didn’t grasp however is from “search” to “Embedded get paid” there is a 12 month lag, and quite quickly I realised I needed to focus on other things that generated more immediate cash.

Consulting was clearly the answer – helping clients achieve value from their IT relationships, be they IT Procurement to Suppliers, or IT Channel to Vendors – and this was my saviour this year. Some nice consulting clients engaging in interesting projects where you can tangibly improve the bottom line through better IT Supply Chain relationships is a great way to pay the bills. Note to self, never lose the time to do engagements such as this – it’s the only way keep fresh in terms of skills.

Armed with a bit of cash flow, we used our spare time (evenings/weekends) to look at other revenue streams. For most of the year we have been developing a proposition which tries to improve and automate some of the key challenges of the 3 Tier supply chain (shown above). The Directory aims to improve the relationship between Client and Channel, and we are well through proof of concept for what will be known as “Embedded Online” which intends to improve the relationship between The Channel and Vendor.

The Online portal is initially a communications process, using Natural Language Processing to identify and classify the plethora of IT content there is on the web to help people stay abreast of key industry changes. The sheer process of designing and building this has been excellent fun, training bots to read and understand fairly complex technology content into “job family”, “industry trend” and “industry sector”; as well as obviously Vendor and Geography. The intention, once launched, is that a sector focused Marketing person who is interested in the latest content on a specific tech trend will have it delivered to their Inbox in digest form, once per week, on a cost effective subscription model – with no sponsored or ad based content or bias.

Beyond the pure revenue generation stuff, I have personally all found a lot of satisfaction in creating and engaging with relevant networks. The launch of the South Hants IT networking group has been greatly rewarding, now up to over 100 members and a hopefully over 30 people to our first event of 2019 in two weeks. I have also volunteered for the committee of the CIPS South of England branch, which is a whole new world of Procurement understanding that I know from decades on the Supply side of the equation, but seeing from the Buying side. Poacher turned Gamekeeper cliché-fest.

I am still convinced there is a lot of improvement to be had in the relationships between Clients, The Channel and Vendors in the UK Technology industry. Be that improving IT Procurement, IT Vendor Management, Channel Management or IT Sales, understanding the full picture gives us a unique ability to support our clients with their commercial or operational Technology relationships.

2018 was hard work. However on a pure financial basis, year over year, we made 5x the amount of profit on 2x the amount of revenue. Cash flow was the issue, but I’ve learnt that lesson now, so am maintaining a better reserve position for the future. And I probably need to start paying us all properly soon!

2019 however looks better. From a decent foundation, and with the Directory now starting to generate some cash, I’m hopeful that a better balance of Consulting and online revenues will give us a spring board to expand substantially. I’m personally looking for a decent consulting gig that gives me something to properly get my teeth into for the year, so if anyone has any IT relationship issues they want to discuss please reach out. Similarly, if the Directory interests you from Client or Supplier end, or the Online service is of interest in the future let me know and I’ll keep you abreast of announcements.

Happy New Year from all of us at Embedded.

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