HOW TO BUILD A BUSINESS
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ab o u t R a j
m one the growing bread of entrepreneurs in the UK who built a business right after graduating from university. I’m the founder of Kwiqq - Social Networking Platform and Anderstand - Web Design and build. Recently I have been active in the helping others developing their own business through Make Your Mark and launching SUE (Sussex University Entrepreneurs). For my eﬀorts with Kwiqq I won BusinessWeek’s Europe’s Young Entrepreneur (2007), Observer / Courvoisier’s Future 500 (2008) and ﬁnalist of Sussex Entrepreneur of the year (2008). My personal ambition is to get more university graduates to start their own
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businesses or think as an entrepreneur. The last few weeks I have been getting a huge number of enquiries from budding entrepreneurs for advice on how to build a business. Although I’m not sure if there are any rules or best practices in entrepreneurship, there are a few things which I have learnt from developing Kwiqq. Blog was ﬁrst featured on the Kwiqq Blog.
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SUE - Sussex University Entrepreneurs
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Shout about your Ideas / Marketing I get fairly confused when people make me sign NDAs (Non Disclosure Agreements) or feel that if they tell their idea, it will be stolen. There is very tiny chance that someone will steal your idea and implement it as well as you could. Rule of thumb: people only copy ideas once the product or service is successful. Hence talk about it, tell all your friends and family, maybe they might know someone who could help you out. Make presentations, videos and images of your idea upload them to SlideShare, YouTube / Vimeo and Flickr / Facebook. In general marketing is something many entrepreneurs put on the back burner, the sentiment is to come back to it when things are ready. My advise is to prepare your marketing as you develop your business. This way you don’t have to develop it at a later stage. If you feel marketing is not your strength get a PR company on board, again this needs to be done early on. The later you leave it the less eﬀective the campaign would be. My advice is to ﬁnd people at networking events, social networks etc who you could bring in or outsource to. Think how would you ﬁnance getting these people onboard for atleast one year. My advice is not to think beyond that, as you never know how quickly your business would develop. Apart from the professionals in your team, you also need a support network. During the early stages of a business things can be a little disheartening and you need someone to speak to just to get you thinking about something other than your business. This could be your partner or perhaps your friend circle. educate you but inspire you. When i was starting up I spent 1/4th my time reading, you would often ﬁnd me at Borders reading the latest book on business, sipping Starbucks and then back home to read a blog. Often a good friend of mine Jon Markwell and I use to exchange links, very valuable to exchange these free resources amongst your colleagues.
Most entrepreneurs fail because they give up Most startups don’t make it because they give up. As a company founder you need to be positive, even if the idea is ﬂawed you need to ﬁnd ways of improving it and maintaining the momentum. You are an inspiration to investors, partners, employees etc they are putting in resources because they trust you. So you need to give most events a positive spin and develop your idea. Giving up is not an option !
Networking Business networking events are held in most cities of the world, where business people come together and speak openly about their business. If you are a bedroom geek thinking ‘I will do that once my product is out of stealth mode’ then my friend you are mistaken. You need to start networking before you have an idea for your product. Often networking can stimulate new ideas just by listening to others. It also helps to market your product and opens door to partnerships. Real life networking can’t be replaced by online networking, even if its a skype video chat. So unfortunately Mr Bedroom geek you will need to step into the real world and get out there !
No man is an island Most people have an idea and feel they can shoulder the load of developing the business. Although in reality any good business needs atleast two people. In my experience your founding team’s skills needs to tick all these boxes: sales, marketing, legal, accounting/ﬁnance and operation/product development. Its rare to ﬁnd someone who has all these skills and carry out all the tasks.
Pick up skills as you go When you start a business you have to be the sales person, marketer, designer, accountant etc. Most people starting business, after few years of work experience, wouldn’t have the skills to undertake some of these tasks. The only way is to overcome this is to learn, my recommendation is to read as many blogs and books on start-ups as possible. They not only
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Get trained Like most skills in life like sports, professional or academic requires training. Getting trained in entrepreneurship is tricky as there is so much to cover. Saying that you can identify things you are perhaps not very strong at. Once you have identiﬁed these get in touch with your local Business Link or Enterprise Gateway Service to keep you informed via email on seminars. Most government organisations have free seminars at knock oﬀ prices to get budding entrepreneurs trained. I suggest you attend these and sign up to your local organisation’s newsletter. for. It is even harder to convince investors given the current economic climate. Fundamentally investors love numbers so if you came with a proposition like, I have 1000 users on my website in my town, each paying $10/month and proﬁt of $3/ user/month. Now the investor thinks, if I put in some money to replicate this in 100 cities the company would make $300,000. The decision becomes simpler and your venture gets funded ! Having just genaralised the ‘advertisement as a revenue model’ I must also point out that there are exceptions to the above. Especially if you are building an innovative advertising platform. Ad platforms is not the sames as sticking banners all around the website. Look at Google adverts they are an innovative, undistrating and simple way of advertising. Other sites like Facebook, Twitter etc are still searching for similar revenue streams. So its not that easy but if you crack it, sky is the limit ! built a company supplying SaaS (Software as a Service) using client’s projects as a way to fund the development. This way of building a product or a company is often referred to as Boot-strapping.
It also helps to market your product and opens door to partnerships. Real life networking can’t be replaced by online networking, even if its a skype video chat. So unfortunately Mr Bedroom geek you will need to step into the real world and get out there !
Starting business with a friend. No !! I have heard several horror stories on going into business with friends and I have one of my own. Its great if you become friends through business, although the other way round generally has a tragic ending. Last thing you want is your business to go pear shaped based on the relationship with you business partners. Ideal way to ﬁnd a business partner is through your business contact book (if you have one) or through networking events. Keep the relationship professional but friendly and you will go a long way.
Take less risks and reduce spending Early stage of the business its all about keeping the costs low. Your strategy should be to do things yourself but don’t compromise on quality. Pay for things which will guarantee a high ROI (Return on Investment). If there is something you are not particularly good at, outsource it or bring someone onboard. For instance if you can’t build a website don’t try and hack together a HTML site. Websites are now considered as face of the company, its your branding, bread and butter hence don’t take chances. The odds of you following all the accessibility and design correctly are tiny. You might as well get a designer on the case, they won’t cost you the world but will ensure you present yourself well.
Business Model NOT EQUAL Advertisement revenue This point is specially relavant to media company startups, who building a business on getting as many users onboard as possible, hoping to monetisation through advertisement. Whilst I like the business model and several businesses like Facebook, YouTube etc have executed with success, its not an easy one to get investment
Boot strapping to product Building a product which can be provided by channels to a segment of the market is a tried and tested way of building a successful business. Generally to develop a product an upfront cash injection is required, typically investors are very useful at this stage. Many companies especially started by founders with no business track record, ﬁnd it extremely hard to raise cash. Your best bet is to work out a way to generate cash, typically by providing a service like consulting, save some money and then develop your products on the side. Many companies like 37 signals
SUE - Sussex University Entrepreneurs
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Business is all about Karma Karma (dictionary deﬁnition): The eﬀects of a person’s actions that determine his destiny in his next incarnation. If someone told me this three years back I wouldn’t have taken it seriously. Karma is all about giving without expecting much in return, which in turn brings good fortune. Over the last few years I have noticed: the more free stuﬀ one gives, the more people enjoy it and then become their evangelists. These people eﬀectly become their personal marketers. So when starting a business try and give away things. The more you give the more you will get.
Finally JFDI (Just F Do it) You won’t know how successful you will be unless you actually jump into it, so why not try. What’s the worst that can happen ? If you are passionate about building a business you will succeed eventually. If you fail the ﬁrst time try again, apparently ﬁrst time entrepreneurs only have 18% chance of succeeding, although next time you start a business the chances increase to 30%.