If you’re thinking about starting a startup here are some top tips
Every entrepreneur has heroes that they aim to emulate, people that challenge them in some manner. For me, this is a combination of mentors, fellow entrepreneurs and those that have already walked the walk and become incredibly successful business people. My biggest heroes are people such as Sean Ellis, superstar growth hacker; Elon Musk, the ultimate world-changing entrepreneur who founded and is now leading the charge at Tesla; Tim Ferris, the ‘4-hour-everything’ man who is the best self-promoter on the planet; and of course my mum.
But one thing that all these people have in common is that they started from nothing, and built their brands, companies and empires from hard work and a real passion for what they do. So for all those aspiring entrepreneurs out there, myself included, don’t ever forget that being at the start of the race is the only predictable thing in startups. The rest is up to hard work, karma and a lot of good luck.
My story, although nowhere near as exciting as those people’s above (yet!!) is I started a business when I was 20 as the first company in the UK selling organic cotton streetwear into the extreme sports market. If I might say so myself we were doing pretty well, but along came the 2008 crisis and our access to credit for production vanished in a puff of smoke. That hurt.
Then I moved into selling heating products that you could control from your smartphone as a regional distributor and made decent cash. We went from zero to £1,000,000 in sales in 12 months. This was pretty amazing and got me hooked on technology, but it was not scratching my itch and as a distributor, the value was in the product.
Then, on my MBA I met my ex-business partner and we started a great business in the real estate and technology business. We were making real inroads into the market, but founder fallout came around the corner and I decided to move on and pursue another path. This one was not for me.
So now I am working with the amazing HubbleHQ (a platform helping founders and startups find beautiful office spaces in London) and a few other startups helping them find growth. I love working on and manufacturing growth. And whilst I do this, I am beginning startup number 4. So some might say that I have a decent amount of experience in startups, and I am going to share this knowledge with you all. I want you to be great founders, and hopefully my heroes in time.
So here are my top 20 tips for starting a business. You can choose whether or not I have the credentials, but I don’t fear failure and view any I have as important steps in my learning that ultimately get me closer to success.
1 – Make sure you love what you are trying to do
Passion is incredibly important for all those starting businesses, as it’s the only thing that will get you through the bad times – and there will be many. Coffee, better-halves and teammates only get you so far.
You have to enjoy what you are trying to do, and have a drive and passion for making it work. Without this don’t ever start. So ask yourself what do you do when you are on your own time, what do you turn to when you have a spare afternoon. That is the space your business needs to occupy.
2 – Find the right co-founders
This is one of the most important things that I have learned has been in business with some great people, and some not so great. You have to choose to start a business with someone that you know, not personally as such, but that you can identify with. If you are poles apart from one another then you will struggle to socialise and find anything to talk about other than work.
Gaping Void accurately says that ‘business is merely socialising with a purpose’.
If you cannot socialise there is no business. Get this right from the beginning and everything else becomes that much easier. So take a little extra time, and get to know those people that you are thinking of starting with. Founders for life….
Note that I am a social, collaborative animal and would not really entertain the idea of going alone. It does not strike me as that much fun. But some might choose to do this, in which case you can ignore my point #1 – so long as you like yourself.
3 – Ensure a fair equity split
If you do choose to start with founders make sure that you are all happy with the equity split. You need to ensure open discussions and get all those niggles out in the open VERY early on. I have made this mistake, and I tell you from personal experience it is not sustainable. If all of you don’t think it is fair it will fail.
4 – BUILD YOUR Network
Ok, so this is a generic point and one that I know you all know. But do you really do it. Do you go out of your comfort zone and network with people that you don’t know. Your network will make or break you, and therefore you need to ensure you surround yourself with amazing people that challenge you.
Now you can do this online, or in-person – I would suggest a combination of both. You need in-person connections as they are the ones that are perhaps more likely to challenge and support you in those early days, perhaps even becoming investors or founders. But don’t forget to build your online network, as these are the people that will help you spread your message when the time is right.
One thing to note is that your network should be made up of people that can add real value to you. Just because you have 500 friends on LinkedIn does mean you are networked. So don’t aimlessly network as it wastes the one thing you don’t have much of; time.
So join Meetup and go meet up with some new and exciting people.
5 – Are you solving a real problem?
This is a big one, and one that I think many people forget when starting a business. Don’t get suckered into listening to your mum too much as she will say everything is a great idea.
On the flip side to this many people, especially those that think they are smart, will tell you its a really bad idea, quickly highlighting 10 reasons why it won’t work. Ignore them too.
Really investigate it, look at the market and ask people that you don’t know. Basically don’t ever pitch your idea at this stage and await confirmation of its awesomeness. Instead, get into a conversation and talk around the business, trying to identify if they highlight the same problem that you have identified. Only in this unsolicited manner can you get better feedback about the validity of your idea.
6 – DO YOUR Market research
This is a massive one. And I think that a lot of companies fail to do this, which amazes me. If you don’t know the landscape then how can you be expected to compete. This could be a whole blog post itself, so I will keep it short. These are the things that I would be looking at:
- industry size and direction of growth/constriction (no point making clothes for pet giraffes when only a handful of people own giraffes).
- government regulation
- competitive landscape (who else is in the space potentially competing for your customers’ attention)
- search landscape (what is going on in search engines, who is winning the search war)
- you are ultimately looking for a nook, a cranny, a niche, an opportunity to exploit and get a foot in the door
7 – DON’T FORGET Business planning
This is obvious, and one that I know some might disagree with because of the way business has fundamentally shifted over the last 5 years. I have come from both a traditional MBA background and also a more agile experimental approach to business, so I get both. Agile is important when it comes to product and marketing development but you have to go through the process of building your vision, systematically. It makes you answer questions that are hard and you will certainly need this if you want investment. The main titles I would focus on are:
- Your Solution
- Marketing Strategy
- Market Positioning
- Product Strategy and Roadmap
- Business Model (summary of finances)
8 – Financial planning
Again this is something that you need to get to grips with early on. One of the functions of a business is to create wealth for its shareholders (and you are one of them). So you have to be able to at least communicate how you plan to make money, and what your expenditures are until you get there. Early on you can keep these basic because you don’t want to get too detailed at this stage. But personally, I think that it is dangerous to start a business without any concept of monetisation. You should include at a minimum:
- Statement of income (12 months)
- Statement of cashflows (12 months)
- Balance sheet (12 months)
Disclaimer – I know that some will disagree with me on this one because it could be argued that in high growth tech startups this is almost impossible/pointless.
9 – Start the journey
So this is one of the things that I learned from one of my previous business partners, as he used to say to me
“Logan, just start the bl*&dy journey!!”
I think this is a really solid piece of advice because unless you can commit to beginning you will never get anywhere. Start small, and don’t expect to change the world overnight. Your product will not be perfect, your marketing message will not be ‘on point’ but that does not matter. Just starting the journey will make you prioritise the things that really do matter to your business and none of the fluff that comes with it.
10 – Talk to your EARLY customers
Tushar, co-founder and CEO here at HubbleHQ says,
“talk to your customers, then talk to them some more, then some more…. forever. Your business dies when you stop talking to your customers”
You have an idea. You have spoken to some people before you began, and now you have started the journey. Great stuff. But now you have to talk to your customers or those that are interacting with your brand. Ask them for feedback, how could you make it better. What is it that is missing? Your customers are the best business advisors you could ever have… and they’re free. So use them.
11 – Get to 100 customers using/buying your product before scaling
This is an important point. Do things that don’t scale, build products that do. Getting to your first 100 customers is very very hard, and something that will require your entire being. Until you get there, and you have people regularly returning to use or buy your product DON’T scale. If you spend money pushing a company that has not gotten to that elusive product/market fit we all talk about then you are going to fail. Simple.
Stay below the radar work with your customers to make your product better for them. Once they love it, then you can scale.
12 – Get agile
Wow, how business has changed over the last 10 years, primarily due to the influence of technology. Technology products used to be created using the Waterfall Methodology, which entailed building and releasing very big things over months and sometimes years! This, in turn, meant taking some very big assumptions as given, with no testing.
These days many companies are using Agile Methodologies aka Lean Development and are releasing tiny assumptions about what users want every day. This results in smaller incremental changes, smaller failures, and allows you to test these core assumptions more quickly. Don’t bet your business on one assumption, test it. As I like to say
“Think big and release small”.
This is the same for business and marketing strategies because as you learn more about your customers your strategies should be changing with them. As agile marketing becomes more prolific the need to get fast and experimental in your approach is ever more important.
13 – Build a great company culture
Who wants to come to a horrible place to work? Not me. Culture does not mean offering free head massages or letting people bring their dogs to work (although these are great things). Culture can be defined as the ideas, customs, and social behaviour of a particular group of people or society.
The culture in your business should be set early on as it will help your entire team make decisions. Are you a sales organisation that is based on financial reward and profit, or are you a customer focussed business where rewards are based on customer satisfaction scores? Either way, you need to define this early.
14 – Ensure a flat organisation
Now there are times for a company to be heavily hierarchical. These are predominantly where low skilled workers are given routine jobs to fulfil and there is a system of management to ensure efficiency and safety. Ford Motors or perhaps McDonald’s might be examples of this.
However, we live in a knowledge economy and it’s about solving problems which is a team sport. Highly intelligent people need autonomy and freedom to fail in order to find the solutions. My suggestion is to make responsibilities clear but keep the CEO on the same level as those answering the phones. Besides, those answering the phones are more important to the customers and are arguably more important than the CEO. My point being that everyone has a serious responsibility to others in the business, so stay flat.
15 – Find the right office space to remain creative
Where you work makes a huge difference in how you feel and how creative you are. Gone are the days of individual boxes, isolating people and stifling creativity. Instead, great businesses understand how creative, fun spaces can inspire a team to make magic… every day. So make sure that your office space reflects who you are as a business.
If you’re looking for office space in London then you are on the right website.
16 – Hire people from a diverse range of backgrounds
If you surround yourself with people that are the same as you and agree with you then you are going to get blindsided. Trust me. It’s so important that you hire people that come from a range of backgrounds and cultures, whether its startups and corporations or introverts and extroverts. The broader your team, the more likely you are to spot that opportunity or avoid that risk that you individually cannot see.
17 – Read a lot, and then some more
I think that this point almost follows on from that above. The broader your set of opinions and influences the better your decisions are likely to be. I hear a lot of founders talking about not having enough time to read. However, I manage to read about 1-2 hours a day, and I am as busy as the rest of you. Find a time that works for you, and stick to it. For me, it’s on the tube, simple.
Also, one more thing. Don’t just read the same kind of book. Much like point 15 above, your reading list should be diverse and include an array of opinions on business, startups, management, philosophy, economics, religion, anthropology and politics to name a few.
To quote Tushar again, “stop reading books on how to start a business and start one”.
I think this clearly shows the understanding of entrepreneurs that learning is nothing without action. They are intelligent, diverse and large-minded, but they also understand the value of action.
Here is a solid list of business books but be mindful that you should be reading outside of pure business.
18 – Give more than you take
I believe in Karma. If you are good to others the universe will be kind in return. And the same goes for business. If you are the person that is always going the extra mile to help people, connect people and offer advice you are going to get it all back. Believe it or not, your reputation precedes you more than you might know it. Focus on being interested in others, and giving all you can to help and you will be amazed how far that wave will take you. In the words of the great Dalai Lama;
“Be kind whenever possible, it is always possible”.
19 – Create an organisation that is constantly learning
Ok, this is one of my favourite concepts. Learning is something that we all did at school right? But it should not stop at school. Create an organisation that is focussed on learning and you will create an organisation that can move with the dynamic business landscape we all compete in. If you are standing still then you will be too slow.
I believe that the role of marketing is to manage change, both internal and external the company. The company has to be able to experiment, deal with failure, deal with updates to Google’s algorithm, pounce on a new channel that works, create content that is responsive to the social landscape (Oreo’s dunk in the dark is a perfect example) and keep your team players up to date and on point. I think that this can only come from setting processes that enable teams to learn from the customers, from one another and from external ‘thought leaders’. It’s your job to never hire for skill but for aptitude, as skill gets outdated but a passion for learning does not.
20 – Have fun
Finally, have fun. Too many startups and companies are dead and therefore mediocre at best. Empower your teams to have fun, laugh at and with one another (and yourself). If you take yourself too seriously the best talent will leave you for somewhere that is simply more fun. Money never replaces happiness, and even if you do fail at least you will have had some laughs along the way.
If I have missed anything, you don’t agree or have something to add please let me know.