Tag Archives: startup

Startup Incubator Best practice

What do people need from an incubator when starting a business ?

Over the last six years I have visited, be a participant of and worked in an startup Incubator. So I have had the opportunity to see it from all sides. The one thing I learnt very early on was it’s not about the physical space. Those with the most colourful, innovative decor or largest wall hanging tended to be the worst. Those that I liked focused on a few important things, so lets consider them in the right order:

Business Networking

The opportunity to network and be associated with a network is the most important factor. Entrepreneurs that do well network, it provides co-founders, investors, customers and the most importantly great staff. So having this provided on a plate to you, when starting out, is the golden egg which your business should be incubated in.

Mentoring

Most people who run incubators have never started or run a business, so having a mentor is very important in creating perspective, inspiration and raw guidance. The mentor and mentee should be trained to understand the expectations placed on the each other. The selection of the mentor should be based on the stage of the business, business sector and the location of the entrepreneur. Having more than one mentor should also be encouraged.

Flexible Space

It’s important that formal meeting space, serendipitous meetings and water cooler moments are all facilitated within the incubator. The majority of business people today expect to meet in a cafe or open space but a closed space is also needed for formal meetings. The hot desking should have great wifi.

Friendly Support

Having people who can support you when things don’t go as expected is important. The ability to ask someone who can sign post you to additional support, grants, loans and people is so important when starting out, pivoting and trying to bootstrap your business. When selecting an incubator, do the staff seam helpful and knowledgeable.

Skills Development Events

In the process of starting a business most people learn new skills naturally, but don’t know it and need reminded of the distance covered. Some people need organised session whereby they develop skills and knowledge which will be needed in the future, next month/year. The majority of incubators will have a speaker series to support this.

Funding Support

Most people don’t need that much, if you are outside London, the costs of living is less. If the office is free then it’s just some living expenses and then some Stuff to move the business forward. However access to finance at various stages is important to scale businesses and the staff should be able to support you in this endeavour.

Free or Discounted Stuff

Most businesses need a tool bag of stuff which can help them more forward their business. This may include websites, accounting software, payment solutions, discounted travel, …etc. Its also helpful if the incubator can recommend software solutions for you, saving you the research space and money.

 

The important factors in starting a business are sometimes softer that you think. Its not always Money, Staff and 1000 sq ft office space. It may just be a cup of tea with someone who has done it before and has a story to tell.

Top 10 Enterprise Movies of All TIme

During the Christmas holiday I got asked to name my top ten films and as always its hard to bring it down to just ten, but then I thought about what have these movies teaches me about business or enterprise.

So here goes…

Stardust (2007)

“having a dream, passion and a little determination is all you need”

Our hero needs to track down a fallen star, living in a small village in Kent, he heads over the local boundary wall only to find its a magically world. Its a great movie and Robert De Niro plays a cross dressing captain is just a surreal part.

Its the story of EVERY entrepreneur I have ever meet, they have a dream, some passion and didn’t really know what the end game would be, but they were determined to see it through. We celebrate those that succeed but we should encourage everyone to have a go, as these people create wealth, innovation and more importantly experience.

Godfather (1972+)

“Pivoting an established business is extremely hard, so do it early on”

Michael tries to change the business activities of his family business and even with all his wealth and influence he fails.

I have seen this so many times in my career. Motorola was the greatest mobile phone manufacturer in the world, developing first generation phones (1G) and then Nokia started developing 2G phones and Motorola never really got into the digital game. Then Samsung took the 3G market with bigger screens and apps and Apple is the current power house with 4G phones. This is not even a pivot its an upgrade to me and you, but these businesses can not do it, so learn early on in your business and get it right. It may be your only chance.

Star Wars (1977+)

“The small business has more opportunities than the larger “death star” businesses, however its in the execution”

Lean methodology is key to setting off but for today’s business small is best. Think of Arm or Superdry which are amazing companies who outsource or create business models which mean they don’t employ thousands of people installed in the “death star”. Get yourself an Millennium Falcon and just keep the hyper drive working.

Apocalypse now (1979)

“Know your enemy better than yourself”

I just love this movie, its about a journey that we all take, a physical and mental one. Each journey changes us and that change is inconceivable at the start.

The best line in the movie being “I love the smell of napalm in the morning” which alway reminds me on the business mantra “Eat a toad every morning”. This is a Mark Twain saying and aims to get you doing the worst job first every day, then the day can only get better.

This analysis of your enemy and then eventual destruction of them is a very common business theme, however the real message is that by learning their strengths and especially their weaknesses we can become better entrepreneurs. Its sometimes hard to learn other people’s weaknesses but certainly we should identify our own and seek the support they need.

Avanti (1972)

“In every business there is value”

Jack Lemmon did some great films, such as “Some like it hot” but this one is my favourite, bit of a romcom set in Italy. The comedy is just excellent and the settings are just breath taking. The story line is that Jack Lemmon must go to the Italian island of Ischia to claim the body of his millionaire father, only to find his father took more than the local spa each day.

It really shows how cultures clash and that different business methods may seem odd or just outdated, yet just taking the time to understand the culture and the business methods allows you to then extract the true value. We are very keen to adopt new technology and business methods without understanding the processes and methods which have worked for thousands of years.

Pulp Fiction (1994)

“Sometimes you need someone else to help you”

Everyone should spend time with hitmen who have a penchant for philosophical discussions, especially around the foody topic of Hamburgers. However when they get into trouble its Mr Wolf they turn to.

Every entrepreneur should have Mr Wolf, “I solve problems” who they can call on. This may be a mentor, a consultant or advisor who can come in and just sort out the issue. Everyone has a skills gap in one area, a thing that bugs them or they just can’t get their head around. You have to have one of these “Mr Wolf” people who can come in and solve it. Your’ll never look back.

Hairspray (2007)

“You don’t have to ever grow your business”

Everyone loves a musical, a man playing a dame and a dance off. Its the secret ingredient for a great movie. Mr Wilbur Turnblad has been running his joke shop for a lifetime and yet he is still enjoying every day of it. Making it bigger will take the real fun out of it and also create a set of issues which he doesn’t want to present to his family. So small is beautiful in this case for him.

The incredibles (2004)

“Family businesses are stronger”

Mr. Incredible and Elastigirl never worked together as superheroes until they have to protect the family. Each family has a different super power which enhances the whole team to beat off Syndrome. This is true for every team, everyone have something to offer, sometimes mundane is the most important skill to have. (e.g a good cup of tea when sailing in a force 10 gale is just awesome)

The best quote from the movie is “Everyone can be super. And when everyone’s super, no one will be.” which shows we need everyone to be different otherwise we have nothing special.

Avatar (2009)

“Go in prepared”

You can have the best trained soldiers, biggest guns and latest technology and you still may lose the fight. Sometimes its more about the hearts and minds which win the battle, so you need to prepare these to fulfil your goal. Just don’t forget it.

The Wolf of Wall Street (2013)

SELL SELL SELL

This movie shows you can create a business which is solely focused on sales and there are still a large number of these around, the modern day call centre is an example. However the loyalty you get from looking after you staff is a major mantra for this movie.

The number one thing you have to do in a business is sell, no matter what business it is, a Charity, Religion, Social Enterprise or PLC. You have to get people to part with their cash on a regular basis to ensure you are solvent.

Also it shows that the name of your business is everything “Stratton Oakmont”. These people travelled across on the Mayflower and thus can be trusted.

Hopefully you have enjoyed hearing my top 10 enterprise movies.

6 Stages of the Startup

When we work with start-ups its important to provide an assessment on their journey within the startup lifecycle. Understanding where a startup is in their lifecycle allows us to assess their progress, providing mentoring to the founders and also provide a vision. The startup lifecycle is made of 6 stages of development, where each stage is made up of levels of substages, allowing for more granular assessment which helps pinpoint the main drivers of progress at each stage.

1) Discovery (or Pre-Seed)

Goal: This phase is all about discovering and validating whether you are solving a meaningful problem and whether anybody would “hypothetically” be interested in their solution.
Milestones: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.
Management Team : Founder(s)
Funding Requirements : £500 – £5,000 (always depends on the business type and technology requirements)
Business Development Milestones : Validated Problem and potential solution
Typical Funding Resources : Cash
Average Valuation : Nil (Typical Technology Start-up)
Time: 3-6 months (average for all types)

 

2) Seed

Goal: Development of a minimum viable product which can be shown to potential customers, sponsors and customers.
Milestones: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.
Management Team : (Core team) Founders, co-Founders, Mentor,
Business Development Milestones : Letters of intent or some preliminary relationships
Funding Requirements : (Seed Capital) £10,000 – £50,000
Typical Funding Sources : Friends and Family financing round, first mentors & advisors come on board
Average Valuation : £10,000 – £100,000
Time: 5-12 months (average for all types)

3) Validation

Goal: The Startup is looking to get early validation that people are interested in purchasing their product through orders or pre-orders with deposits.
Milestones : refinement of core features, initial user growth, metrics and analytics implementation, start-up funding, first key hires, pivots (if necessary), first paying customers, product market fit.
Management Team : (Entrepreneurial Lieutenants) At least one real manager, Founders, Mentors and Advisors
Funding Requirements : (Startup Capital) £100,000 – £300,000
Typical Funding Resources : Business Angels, Grants,
Business Development Milestones : Paying Customers
Average Valuation : £1m
Time: 9 months – 1 year

4) Established / Efficiency

Goal: The company refines the business model and improves the efficiency of their customer acquisition process. The business should be able to efficiently acquire customers in order to avoid scaling with in-effective processes.
Milestones: value proposition refined, user experienced overhauled, conversion funnel optimized, viral growth achieved, repeatable sales process and/or scalable customer acquisition channels found.
Management Team : (Risk takers) At least three real managers, Founders, Mentors and Advisors
Funding Requirements : (Venture Capital) £300,000 – £500,000
Typical Funding Resources : Venture Capital
Business Development Milestones : Profitable customers, Strategic Partners
Average Valuation : £3m
Time: 1 – 3 years

5) Scale

Goal: Startups step on the marketing drive and drives global growth very aggressively.
Milestones: massive customer acquisition, back-end scalability improvements, experienced executive team formed, process implementation, establishment of departments.
Management Team : Executive Board, Management Board, External Advisors
Funding Requirements : £1.2m – £5m
Typical Funding Resources : (Bridge Funding)
Business Development Milestones : Historical results against plan, Focused Business Plan, Strong Processes and Controls,
Average Valuation : £3-15m
Time: 3-5 years (average for all types)

 

6) Sustain

Goal: Develop a portfolio of customers and products, either based on one technology or a set.
Milestones: diversification of customers and revenue streams, agile product teams, public and investor relations
Management Team : Executive Board, Management Board, External Advisors, Product Teams
Funding Requirements : (IPO) Large A Round
Typical Funding Resources : IPO
Business Development Milestones : Multiple Revenue Streams,
Average Valuation : £10-30m

Who should be in your entrepreneurial team

Business is about working with other people, it’s about trading with these ‘other’ people for mutual benefit. The successful entrepreneur knows their strengths and more importantly their weaknesses.  It is these lesser properties that they develop a team around them who can compliment and strengthen their abilities. So who do you need?

Every Entrepreneur has to sell and has to learn the trade, but sometimes sales can be more account management, telesales, people management which entrepreneurs tend to lack certain skills in maturing. Sales generate revenue, profit and growth in a business and therefore you need proactive people who can promote the business and generate interest and sales. It may be necessary to look at different business models which incorporate your style of sales, from franchising, selling to trade or on-line merchant. However the further you are away from the customer the less you may make in profit.

The financial management of the business is important in the development of the business, understanding and communicating this to the shareholders, banks and suppliers is a major success factor. There are two skills within finance which the entrepreneur should source, one is bookkeeping the other financial planning and reporting. Bookkeeping is easily outsourced on an hourly or part time basis. Financial planning and reporting is normally where entrepreneurs need help and it here you should bring in someone who can act as a part time financial director. They will be the big gun you can bring out to demonstrate the finances of the business are in very good hands.

Someone has to manage the operations of the business, they are in charge of making stuff, they are the person who gets given the order from the customer and then deliver the products. This may include manufacturing, purchasing, warehousing and logistics. This role is the heart of the business, they make the money, create the value and ultimately the reputation of the business. If they fail, the business will.

The nature of business means we have to protect our business interests with legal documents and enforce our position with legal action. The closer your legal adviser is to your business the easier it will be to ensure you are protected. The relationship you have with this person is important in developing an on-going business relationship and not just ‘calling you in to sort out my rubbish’ attitude. The general rule in the legal world is the fees reflect the depth of the hole the client is in. So no hole means smaller fees.

Every entrepreneur should have a mentor, someone who has done this before, can provide advice based on knowledge. This person is someone you can turn to, you can ask for advice and when things go wrong can help reflect and learn your failures, ensuring your next opportunity is a even greater success.

Finally, the one person which your business could not survive without:  The Customer. This person is an important part of the team, they buy into your business every time they purchase your product. They will offer advice, feedback and recommendations which will be free of consult fees, future contracts or telling what they think you want to hear. Use this amazing group to develop your business and treat them as part of your team.

Now go out and find your team!

Why you should be an Entrepreneur in 2011

Everyone needs to be enterprising, everyone should have the ability to look at the problems around them and think of amazing ways of making the situation into a opportunity, taking advantage of the situation. You must and have to do this for your benefit, for those around you and those you care about.

When we all think about enterprising people we think about entrepreneurs, famous people like Alan Sugar, Donald Trump and Richard Branson. These people started from nothing and built billion dollar empires spanning the globe. They command respect in their ability to think outside the box, make things around them happen, have a brilliant vision which we can buy into and all admire.

Entrepreneurs are motivated by many things, for some its financial wealth, having authority, providing social good, commanding a business empire or just being able to do what they love. However, this motive drives them to get up every day and make the world around them a better place, a place where we can coexist.

They are just like you, and you need to find what is your entrepreneurial motivation, why are you going to get up every morning and make that difference? How will this motivation be so strong that you will have the courage to keep your businesses moving forward while others would have updated their CV, looked on the internet job sites and asked their friends if they know of any vacancies.

Finding the real motivation is the main reason the majority of people don’t start a business, it’s the single largest reason why you should start a business.

No one in the UK has ever been put to death for having a business failure.

So why do you think you will be the first, why do you think having the experience of starting a business, finding new contacts, building professional relationships with people across the world and learning diverse skills from budgeting, marketing and people management will result in you being worst off?

Starting a business and becoming an entrepreneur will make you a better person

96% of businesses in the UK are small business, with less than 10 people, (99% have less than 50) so if you fail you can become a valued employee in another small business, having developed those skills which every SME business in the UK is looking for.

Having ‘started a business’ on your CV will be attractive to employers.

The experience you develop as an entrepreneur will help you develop your other business ideas, which you will be able to take further. This means when you are ready to start thinking about a new idea, based on hard knowledge, based on real industrial experience, based on the best education the world has to offer, real world experience. Just remember you can’t read about experience you have to do it.

So just do It!