Why work for someone else when you can make your own dream come true? The appeal of starting your own business is clear: work on something you’re passionate about and, if successful, potentially bank a couple of million pounds in the process.
Yet, for every Raspberry Pi, Skyscanner or Huddle, there are plenty more that don’t succeed. A report from the RSA Group suggested at least half of new businesses don’t survive past five years, and three-quarters of venture-backed firms don’t return investor capital, according to Harvard Business School research.
That doesn’t stop thousands of people from trying each year, though. “Tech entrepreneurs are entering one of the most exciting industries around,” said Marko Balabanovic, innovation director at government-backed startup supporter Digital Catapult. “In 2014, 581,173 businesses registered with Companies House, while 98% of digital companies analysed in Tech City UK’s recent report were small businesses. This also means competition is frenzied and it takes a lot of determination to bring products or services to market. No road to success is smooth – there will be hurdles, but they can be overcome.”
“At least half of new businesses don’t survive past five years.”
You’ll need a good idea, the skills and wherewithal to make it happen, and plenty of luck. To make the road to startup success a little easier to traverse, we asked several leading British tech entrepreneurs to share their advice. Here’s what it takes to find success – from those who have made it.
1. Know who’s in charge
Going into business with friends or former colleagues is fraught with risk, not least if there’s no clear hierarchy. Even Google co-founders Sergey Brin and Larry Page brought in Eric Schmidt to take over the day-to-day running of the company, before Page took the reins back in 2011.
Divide power, said Sara Murray, co-founder and CEO of home-care tech firm Buddi, arguing that 50-50 partnerships “don’t work”. She added: “Make it 51-49, because one day you’ll need the extra vote.”
Make sure the chain of command is clear, both internally and legally. “Seek legal advice from the start and have a clean structure,” said Serge Didenko, co-founder of modular smartwatch startup Blocks. “Don’t obsess over details, but try to find a lawyer friend or a firm that can help you structure correctly.”
2. Start early
Got a great idea? Don’t sit on it. “Start today,” said Buddi’s Murray. “It takes around eight years for a business to become bankable. Don’t wait for a better idea – get started today.”
Blocks’ Didenko agrees. “Just do it,” he said. “It’s all about starting hands-on. If you wait for everything to be perfect, you’re never going to start. The perfect idea will come to you when you’re working on another idea. The perfect co-founder will come when you’ve already started working on it. Start doing something and then refine it.”
And that means starting young – if that’s still possible. “Do it early,” said Debbie Wosskow, founder of Love Home Swap, the travel home-swapping site. “Starting my first business at 25 meant I had nothing to lose.”
3. Find the right people
Surrounding yourself with the right people is critical. It’s not only staff who have to buy into your company’s philosophy, but outsiders too. “Take the time to assemble a really top-flight team: top-flight investors and top-flight customers and partners,” said Pilgrim Beart, founder of smart-home firm AlertMe and Internet of Things company 1248, among others. “Getting to success usually takes longer than you think, and there’ll be plenty of challenges along the way, so choose your fellow travellers carefully.”
Co-founder and president of collaboration-software firm Huddle, Alastair Mitchell, said finding the right staff is the “classic struggle” for startups. “You need a team of people who can deliver the expertise, and who are the top of their field, whether it’s development, sales or marketing,” he said. “A truly successful team should also be full of founders, of people who when they do something will do it better than you could, rather than doing what they’re told. It’s really exceptional, but it makes the difference between an okay business and a great business.”
What does he look for when hiring? “People who think big, who are motivated and who have the entrepreneurial instinct,” Mitchell said. “In my questioning, I’m looking for almost the rough edges – the things on their résumé that look different or reveal an inner drive.”
The company culture your staff create can be the difference between success and failure, added Jon Reynolds, co-founder and CEO of the virtual-keyboard firm SwiftKey. “One of the most important things I’ve learned along the way is the impact of the people that you surround yourself with and the company culture that you cultivate together,” he said. “From the beginning, we’ve found that investing in great people is one of the best ways to grow the company and increase our chances of success.”
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