I Once had ‘proper’ jobs, working for well-known companies. When I went to dinner parties, people used to say “ahh, it must be great working for SAAB or MUTV or Bentley” or whoever…
And to some degree it was. It felt good to be able to tell friends what I was going on a SAAB Winter Driving Trip to Lapland because I knew that this was a ‘money can’t buy’ opportunity and it felt good to work for a known brand.
But...I also knew deep down that the success of a brand had little to do with me and my efforts.
And I wanted to find out what I was capable of...
I had an itch and my first foray in startups was in 1999 with Manchester United TV, when I finally dared to leave the comfort of ‘Corporate Land’.
So what I have I learnt and what can I share to make life better for those craziest enough to take the plunge..?
1 Cash Is King!
If I had to give one tip and only one...it would be to spend wisely, like it’s your own money! I’ve seen way too many startups behaving like the cat’s got the cream, before they've figured out how to make money themselves!
I’m old enough to remember the dotcom boom when startups such as Boo.com were raising crazy sums of money for businesses that had never made any money (and never did) and then set about blowing it on fancy salaries and first class travel!
2 You Are The Company You Keep
People make great businesses.
Not tech or clever TV ads. Surround yourself with the smartest people you possibly can. Your core team is crucial to gaining the trust and confidence of investors. What’s their track record and how will the team help to increase your chances of success? Have they had previous successful exits?
Even in the early stages of the business, think about setting up an Advisory Board and try to tempt experienced, talented people to join in, even if their time with you is limited.
3 Go With The Market Not Your Hunch
Entrepreneurs have a tendency to go with their gut. Well, hunches won’t crack it with seasoned investors. You’ll need to demonstrate that your idea can be executed and will make money (repeatedly).
4 MVPs Are A Wonderful Thing
Fortunately, MVPs mean that you can test your concept without it costing you a fortune.
Successful examples are Airbnb and Innocent, where the founders famously put up a sign to say ‘should we give up our day jobs to sell smoothies’ and people voted yes or no.
5 Find A Niche
A killer of many budding startups is the exorbitant cost of marketing. So it helps if you can find a niche where you create more ‘noise’ without spending a fortune as you build the brand.
I helped to do just this at ingenie, a car insurance brand for young drivers. The business sold for more than £100M within 3 years despite spending less than £1M on marketing.
6 Stay Lean!
I have always believed that offices and ‘Head Offices’ in particular, are hugely wasteful. I visited a car manufacturer’s UK office recently and was blown away by the number of company cars in the car park! Surely these would be better off out there providing real customers with test drives?
People also waste time at the ‘water cooler’ and decisive action gets lost in unnecessary, extended meetings.
7 Avoid Snake Oil Salesmen
What’s the toughest hire to make? In my book, it’s the sales team.
They are naturally good talkers and it’s hard to know if they’ll knuckle down and bring in sales. You’ll need to invest in their training either way and this can drain resources as well as affect the top line if you get it wrong.
Find good ones and treasure them!
8 Investors Must Fit In Too
It’s tempting to go for the first investors who show interest in your dream business. This is a mistake. Would you buy the first flat you see?
9 Protect What You Have
The reality is that many people are drawn to the ‘sexier’ side of startups - the dash to raise cash from investors or the first ad that you run.
It’s important to give attention to the ‘boring stuff’ like protecting your IP. You’ve worked hard and you don't want someone passing off your product, at least not without a fight!
10 Cash Is King!
Did I mention that money is precious and to spend as little as you can?!
The world is littered with what would have been great businesses, but they simply ran out of cash. Don’t you and your startup be a Boo.com! Spend as little as you can and spend it like it’s your own cash....
Good fortune! (You make your own luck).
26th May 2020