Everyone makes mistakes, but as a small business it’s how you over come hurdles that can be the difference between success and failure.
“You get knocked down seven times? You stand up eight,” says Paul Smith, co-founder of Newcastle-based startup accelerator Ignite.
Paul is no stranger to taking a change of direction, and has had his fair share of new starts. He left his degree in astrophysics in the first year to work in radio. From there he joined a startup as a copywriter, and then went on to test the strength of online communities by ‘Twitchiking’ around the world in 30 days, relying only on the goodwill of strangers he connected with on Twitter. The resulting book was a “(very) modest best seller”.
At Ignite 100 he specialises in supporting early-stage technology teams with business plans involve building platforms and services for the web, cloud and mobile. Mentoring, in the words of one of his own alumni, “smart people who are stupid enough to think they can do it, but smart enough to try”.
Working with and around startups for seven years has given him a varied insight into what works, what doesn’t, and what hurdles small businesses can put in their own way in the first year. Here, he’s shared the most common he’s come across.
Don’t rush, take the time to get it right
“There’s an interesting contradiction in the industry now – there is so much experience and experience shared online and at events, but because the barriers to entry are so low, start-ups jump into developing ideas without doing the fundamentals, like customer conversations and validation.”
Don’t forget your customers, understand their needs not yours
“The most common mistake in the first year is asking the wrong questions. Most founders will bias any customer research by revealing their solution, instead of concentrating on the customer’s problems.
“For example, a key mistake I made was over-relying on beta-testers before launching a platform. After a time they stop acting like real-world users and customers – they have exclusive access and insight so they don’t act like normal people. It’s hard to make a call, but you need to cycle through testers.”
Don’t be rigid in your business plan
“I work with a company called Hassle.com – they’re an amazing team that help people find a trusted cleaner in 60 seconds, and manage that relationship and payment online. But they originally launched as a marketplace called Teddle that helped consumers find any professional offering a service that charged by the hour – tutors, hairdressers, gardeners, fitness trainers etc.
“The problem was their service had no focus; nobody was using it because consumers didn’t know what the brand stood for.
“The team was running out of money and a month from shutting down. But they looked at the data and saw that above all other services, people were trying to use their marketplace to find cleaners.
They relaunched within a month, focused on that one vertical, branded to Hassle.com and have never looked back – they’re now the biggest online platform for cleaners in the UK and Europe.”
Don’t do it alone but choose the right support
“I think it’s vital that the people supporting you at an early stage can do so with context. They understand the pains and trials of developing a product and validating assumptions in the real world. You need people supporting you who you can relate when things get hard – and they always get hard.
“There is a shortage of consistent coaching for early-stage teams; venture capitalists and investment angels will mostly only offer a one-off hit in the time it takes to drink a coffee; there’s an increasing trend of “consultants” offering their services for sweat equity that offer little value.
“Some teams need access to regular, no-strings advice and support but it doesn’t really exist at the moment – it’s something we’re trying to do something about at Ignite.”
Founded in 2011 by Colin Willis (Hotspur Capital), Jon Bradford (Techstars) and Paul Smith, Ignite 100 was originally planned to be a one-off, three month accelerator programme. Instead, Newcastle’s appetite for technology and collaboration saw Ignite grow into an independent co-working space and venue.
Now with operations in London and New York, Ignite operates one of Europe’s top accelerator programmes as well as one of the largest venues dedicated to early-stage technology start-ups. To find out more visit: http://ignite.io
What mistakes have helped build your business? Let us know in the comments or via Twitter @HiscoxUK.