It used to be that failing in business was a potentially catastrophic black mark in the UK – essentially the end of your career. But over the last decade attitudes have changed, driven by a more American view that it is better to have tried and not succeeded than to not to have bothered at all. There are a thousand and one reasons that a venture might fail, many outside your control, and as long as you learn lessons you can bounce back stronger.
This more relaxed attitude to failure is reflected in the growth of startups in the UK. Rather than leave university and go and work in corporate Britain, setting up on your own is a viable choice – if it doesn’t work you can always try the 9 to 5 in a few years time. And as the Seth Godin quote goes, “If failure isn’t an option, neither is success.”
But if the stigma of failure has been removed it brings another big question – when do you give up on your idea/business? Do you shut up shop at the first signs of trouble or soldier on when all chances of success are gone? That was the topic of an entertaining discussion at last week’s Pitch and Mix in Cambridge, which got me thinking about the whole topic.
It is easy to look at businesses or individuals where it would have been easy to give up when they hit the first roadblock. Harvard made Mark Zuckerberg take down the first version of Facebook and nearly expelled him – but he learnt from the experience and moved on. In Cambridge, ARM was essentially created within Acorn as Intel wouldn’t sell the computer manufacturer the chips they needed. The business pivoted and is now a multi-billion dollar world leader.
What came out from the discussion were two main ways of helping you to know when you’ve really failed and it is time to give up.
Firstly, set realistic objectives and goals for your company/project, with a timeframe attached. It shouldn’t be a hundred page business plan that controls your life but an idea of what success looks like and the time it should take to get there. Whether as simple as “we need to have made our first sale in 18 months” or more complex, use it as a guide to when to stop. If you get to 18 months and there’s no sign of a customer then you should probably give up, but if you’re negotiating with a couple, then extend your timeframe. Build a plan to get to your objectives – what needs to happen for you to make that sale/launch the project within your timeframe.
Secondly, get independent advice. Everyone involved in startups must have passion – if you aren’t enthusiastic about the idea you won’t put in the hours to make it work. However perspective is more difficult – you are simply too close to the coalface to provide an objective view of reality. So find yourself an independent mentor, who understands your business and what you are trying to do and give you advice and perspective on the way forward.
More businesses fail than succeed, but don’t take it personally, learn and move on. And marry passion with perspective to work out when to throw in the towel and start again.
Turning your brilliant idea into a world-beating product requires a lot of things – drive, commitment, flexibility and often a large slice of luck. But one element it can’t really do without is money – whether to develop prototypes, employ staff or simply pay your own bills.
Finding funding has never been easy, but the range of potential sources does seem to be growing. As well as traditional sources such as VCs, banks, angels and friends and family, there are a range of government grants and multiple competitions that can potentially help startups take a step forward. I’m not saying this necessarily makes gaining investment easy, but it does give more options.
And another option that is expanding rapidly is crowdfunding – sharing your idea with the world and getting them to back it before you start the expensive business of actually producing anything. If you don’t attract the pre-orders then it should probably act as a wake-up call – are you producing the right product that people actually want?
There’s been a run of successful, over-subscribed launches on sites like KickStarter. The company behind the Pebble smart watch raised over $10m and will start shipping real products this month. On a smaller scale, projects like photography book I Drink Lead Paint hit its target of £10,000, unleashing the thoughts and images of Mr Flibble onto the world. And B2B versions like Funding Circle have attracted government backing, making £20m available to British businesses over the next 12-24 months.
With growth like this, it is no wonder that Deloitte predicts that crowdfunding will double in 2013, raising £1.9 billion globally this year. Not huge in the scheme of overall investment, but potentially opening up funding options to smaller scale projects in a simple way.
But, with more and more projects out there looking for crowdfunding, how do entrepreneurs get people to view what they are doing – and potentially part with their cash? Kickstarter’s own stats show that just over 40% of projects hit their funding targets, showing it isn’t as simple as launching and waiting for the money to roll in.
This is where an enormous opportunity arises for the marketing and PR industries to get involved. Crowdfunding projects need marketing in the same way as any other product, identifying target audiences and demonstrating the benefits your new wonder widget brings to them. And then you’ve got to reach them, using both social and traditional media to identify the influencers that are likely to help you spread the word and convincing them and the world at large. Obviously the downside is that projects don’t tend to have any ready cash, but for anyone brave enough to go for payment by results the business is out there. At a time when the PR industry is suffering financially, creating smart, all-in-one services that help you get crowdfunding or launch your new iPhone app are just what it needs to be developing to recapture growth and build relationships with the next generation of smart businesses.
Technology has the potential to deliver immense benefits to society in areas in diverse as healthcare, education and transport. The first Idea Transform weekend, held in Cambridge in April, aimed to unlock this potential, providing the skills and mentoring to turn ideas into reality.
So what’s been happening in the last three months? To find out Idea Transform held a meet up last week to give the chance for projects to discuss their process, and attendees to catch up. As an added bonus, Nic Lawrence of Light Blue Optics shared his thoughts on the startup experience and what lessons he’d learnt over the last eight years. Be hungry, keep learning, ask questions (both of yourself and other people) and build an outstanding team and culture if you want to succeed.
Two of the winning teams, Sim-Prints and Imvoto provided an update on progress, while Michele Mattioni talked about his project to link local food producers with their local buyers, which he pitched at Idea Transform and has been working on subsequently.
Sim-Prints uses a combination of finger-print biometrics and mobile phones to enable healthcare workers to collect and check patient information in the developing world. Winners of both the overall and healthcare prizes at the Idea Transform event the project has moved forward and is currently looking to create a prototype, while continuing to talk to both investors and foundations/NGOs to fund next steps. It has also made important decisions about structure, adopting the social enterprise model and abandoning the idea of patenting its technology, instead focusing on the delivery of the system.
Mobile learning provider Imvoto has also used the lessons learnt at Idea Transform to refine its project. Imvoto allows teachers to set maths questions for pupils to answer on mobile devices, enabling them to monitor attainment quickly and easily. In response to feedback from mentors, Imvoto has introduced adaptive testing to the product – meaning that future questions are made either harder or easier depending on a pupil’s answers as well as completely rewriting the teacher module. Following initial testing Imvoto is looking to launch a full beta programme in September.
So three months after Idea Transform, the good news is that most of the winning projects – and several that never made it past the pitch stage at the weekend are both still going strong and seem to be well on-track to help turn their promise into reality. Watch this space for more updates as they develop………..
An unashamed plug this week for Idea Transform, an event I’m helping organise between 20-22 April 2012 (so just a week’s time, depending on when you read this).
Essentially Idea Transform aims to support people with bright ideas that use technology to benefit society in general – whether in the fields of healthcare, education, environment or the community.
While technology has lowered the barriers to turning ideas into reality, the majority of potential projects still come unstuck along the way – either because they are missing a crucial skillset or lack the mentoring support to help overcome inevitable hurdles.
Idea Transform will help these ideas through a combination of events and ongoing mentoring. The first weekend bootcamp event (20-22 April, Cambridge Judge Business School, tickets at www.ideatransform.org) will bring together those with ideas and people with business, development, marketing and creative skills to help them. People pitch their ideas on Friday evening, teams form and then work on ideas over the course of the weekend, before a high profile judging session on Sunday evening. Winners get the opportunity to develop their ideas through mentoring, support and the chance to potentially pitch for funding from the Cambridge Angels.
And for anyone worried that it will just be a weekend of hard work, there will be the chance to network, have fun, listen to high profile speakers and get advice from a team of experienced mentors. We’ve already heard about a whole range of ideas, from mobile health tracking using biometric technology to mobile and experimental maths learning to mapping the disused rail network so we can put it to better use, and there are bound to be many more pitched on the evening itself.
It promises to be an exhilarating, exciting and enjoyable experience – take a look at www.ideatransform.org and I hope to see you there.
- Owlstone, Raspberry Pi and Pneumacare join keynote speaker line-up! (ideatransform.org)
There’s a continual complaint that the UK simply doesn’t produce the numbers of heavyweight tech companies that the US spawns. And looking around, the pattern seems to be true – for every ARM, Sage or CSR in the UK, you could name a dozen similar size companies in the US.
While some of this is gap is obviously down to relative population sizes are there any other factors holding back UK entrepreneurs? This was one of the issues discussed at last week’s Enterprise Tuesday event in Cambridge by an entertaining group of speakers, including company founders and Cambridge Angels, Sherry Coutu, Andy Richards, Robert Sansom and David Gill, managing director of the St John’s Innovation Centre.
The key factor is the ability to scale – the UK creates exactly the same number of startups, per capita, as the US – but only half of them successfully scale up compared to their US rivals. There are plenty of reasons for this – from an inbuilt British fear of change to an inability to cross the chasm
and appeal to the mass market. It seems that for too many UK companies the choice between scaling themselves or selling out is weighted towards the exit option. While this releases investment capital back into the system and gives entrepreneurs the chance to begin again, it has created (in the words of a US VC quoted by Andy Richards) an industrial veal farm in Cambridge, with prized startups nurtured and pampered ready for the inevitable early death/exit.
The UK in general, and Cambridge in particular, has shown that it can grow dominant tech companies, so now is the time for the government and tech ecosystem to encourage entrepreneurs to take a step back, aim higher than an early exit and build businesses that can scale. Given the UK has the ideas we need to move from farming veal calves to growing some bulls……….
Last Saturday I was down at the London Startup Weekend, helping to mentor participants and hone their raw ideas into (hopefully) winning projects. Having been one of the organisers of the Cambridge Startup Weekend earlier in the year it was good to be see the event from another side (with a lot more sleep).
Firstly, a quick explanation of what the Startup Weekend concept entails. Essentially it is a 56 hour event that brings together people with ideas and skills to create some sort of application, product or business idea over the course of the weekend. People pitch their ideas on Friday evening, everyone votes on those they’d like to work on, groups form and they then frantically develop their projects ahead of judging on Sunday evening. The role of mentors is to provide encouragement, advice and occasionally a reality check.
Having now been to two Startup Weekends what conclusions have I come to? Here are five points that stood out for me:
Firstly the energy and enthusiasm of the participants never ceases to amaze me. These are people who believe in what they are doing, enjoying the experience and learning while they do it. While their current ideas might not make it, these are the entrepreneurs of the (near) future, which is heartening to see.
The range of ideas from both events was staggering, covering apps and websites from all sectors. I’d say there were more ‘physical’ services amongst the groups I talked to in London (such as lunch deliveries and pamper boxes for pregnant women/mothers), which is an interesting development from the normal software based businesses.
Scale – the Cambridge and London events were light years apart in size. Cambridge had around 110 participants, and London 200+. Due to space constraints London was split across two sites (Ravensbourne College next to the O2 Arena and Club Workspace in Clerkenwell). Obviously this meant more mixing between different groups in Cambridge (where everyone was in one, smaller space) and I think this benefited ideas development and networking. However I’m sure the Sunday evening judging and party brought everyone back together in London.
Hearteningly everyone realised they need marketing. Rather than thinking that the world will come flocking to their door, London participants factored in the need to identify and reach target audiences, with many considering quite sophisticated marketing approaches. London companies seemed to be ahead of Cambridge in this area.
The mix of people. As I said I didn’t talk to all 200 people in London but they seemed to be a bit more of a homogenous bunch in terms of age and where they were based. Cambridge participants seemed to have travelled further (such as from Finland) and spanned the age groups from twenty something to fifty year olds.
But all in all these differences are part of the appeal of Startup Weekends – everyone is different. So, if you’re interested in new ideas I’d urge you to sign up and go along to one as soon as you can – it is a great use of a weekend.
In an increasingly virtual world it is easy for inventors and start-ups to forget about the importance of good physical product design, and treat it as an afterthought or the packaging for the clever stuff.
And yet I think people have never been more discerning about the whole design of a product, demanding not just that it looks good but that it is intuitive to use and simple to understand. My 3 year old son quickly grasped how to navigate round my iPhone, leading to some unplanned phone calls, but providing a good example for designers to aim at. And the tools are now here that marry product design with innovation, through CAD/CAM systems and photo realistic rendering that creates stunning visual representations of a great idea.
So it is good to see James Dyson, a man who has shown the power of innovative product design to disrupt traditional markets (whether vacuum cleaners or hand dryers) putting his money where his mouth is with his own student design award. Built on a simple premise – design something that solves a problem – it runs in 18 countries and the UK winners have just been announced. What impresses me is a combination of the breadth of the ideas – from a portable room divider for hospitals to a bike seat designed to be more comfortable for women, and their real simplicity. These are products that can be easily understood and used without reading a 100 page manual or undergoing special training. And it looks like a competition worth winning – the global victor (announced on 8th November) is in line to win £10k and gain a real foot up on the ladder towards getting their idea into production.
While it is all well and good for the likes of David Cameron to push for the UK to create the next Facebook, it is vital that we don’t neglect the creation of physical products that are well-designed and fit a market need. After all, one of the key reasons that Apple has become the most valuable company on the planet is through good design across its entire product range. So I think the next generation of start-ups need to heed Dyson’s advice and design something that solves a problem rather than expecting customers to grapple with advanced, but user-unfriendly technology. Make it simple and they will buy.
- Engineers always do the business, Lord Sugar | James Dyson (guardian.co.uk)
- Dyson’s new product still shrouded in mystery (guardian.co.uk)
- Product designer gives patients privacy in hospital (telegraph.co.uk)
- Student inventors battle it out for Dyson award (telegraph.co.uk)