The egg might be unique, but the bird will be familiar…
Single Focus Example:
Wayne Edy - Innov8 Shoes (shoes were his thing)
Multi-Focus Example:
Jamie Siminoff - Ring Doorbells (the side project of a side project)
Bill Gross - IdeaLab (150 companies created since 1996)
Loose Control Example:
Richard Branson - Virgin Group (200+ different companies)
Tight Control Example:
James Dyson - Dyson Products (no shareholders)
The journey from idea to successful business is different every time, and there is no right answer, but there are always lessons that can be learnt and things that can be anticipated ahead of time.
Some entrepreneurs work on a single idea, pouring all their passion, money and life into it, whilst others hedge their bets on a few. Others still spend all their time on so many ideas none get the attention they need to hatch. It’s a spectrum and you need to find where you’re comfortable.
If you have an idea ready to hatch and leave the nest, do you keep a tight control over it (like Dyson) or do you set it free to investors, licensees or other manufacturers to develop and pursue? Again a personal choice, sometimes the lone inventor can become too close to their egg to let others help, condemning their chick to never realising it’s full potential.
For me, I like to work on several ideas at once, if you only have one idea there is a risk of thinking it’s the greatest thing ever. However you need to have lots of worthy ideas to pursue which is hard for some people and the resources to pursue several at once, but you go back and forth, sometimes working on lots, sometimes on one. I also like to release some and keep others close to me, but again that’s a personal choice dependent on which I like the most. Throughout your entrepreneurial journey you’ll face lots of difficult decisions, should I let others in on this idea or not, should I chuck this idea or not, is this any good or not, should I leave this or try and launch it etc…? There’s no right answer but thinking of it in terms of an egg and bird metaphor I’ve found can make difficult uncomfortable decisions a little easier to handle. Good luck in your adventures!
Starting a business
(and the business of starting)
Introductory Story…
Years ago whilst I was working on another new business (Mountain Trike) with some good friends I spent much of my time driving up and down the country visiting customers and on one of these big journeys I started to notice something changing on the large trucks and lorries I saw on the road. Saving fuel seemed to be becoming more important than it had been, environmental considerations were on the rise and heavy good vehicles are particularly bad at fuel efficiency.
What I noticed was a large variety of new products all aiming to improve the fuel efficiency of trucks and trailers started to appear. Curve fibreglass ‘side-skirts’ reduced turbulent airflow underneath the trailer, ‘humped’ trailers more closely resembled tear drop profiles, various attachments and modifications all claimed fuel saving improvements. It was an exciting time for innovation in this space.
But what I noticed was there were very few offerings for older trailers and yet the science behind the majority of these ideas seemed quite straightforward. Fitting side skirts to a lorry blocks the undersides of trailers and streamlines the flow saving fuel (in the EU barrier side bars were a safety legislation for years but in the US most trailers had completely open sides).
My idea: Could I fit a stiff rigid material onto the safety bars to streamline the airflow without the big expense and weight of a full fibreglass replacement?
It turns out, yes I could, and after cold calling a local lorry company to ask if I could modify their trailers for a product trial I had a number of vehicles on the road testing the idea. Getting reliable results however was difficult, the vehicles did different routes with different routes and as the savings were never going to be huge, it was hard to pin down what had caused different values.
(Pretty pictures. No idea if they were right or not, but they certainly helped communicate the idea)
Now I had a decision to make, do I continue pushing my idea onto smaller companies and pick up a few sales here and there, although the performance data is speculative and it’s going to take me ages to convince each owner. Or do I swing for a home run and target a big customer with the potential for hundreds or thousands of sales? As a small team (just myself) it seemed most efficient to go for a big customer who could either make or break this idea rather than have me waste months or years even trying to discover if this idea had any legs. The goal is to find out as quickly as possible if this is a waste of time or not.
So after a few more cold calls I landed two wonderful meetings, the first with the transport Director at Sainsburys who was super supportive and even lent me a vehicle to conduct some scientific trials at the MIRA testing ground. The second was another great meeting with the transport director of M&S who revealed an interesting issue I hadn’t thought of… basically even if it did work it was unlikely they would be able to use me as I was too small a company for them to trade with. It’s too much of a financial risk for them.
The testing was expensive, although I was able to find a small testing grant to cover some of the costs, but the results seemed good:
3% fuel saving, no bullsh*t, confirmed by scientists.
Which for an HGV like this could be a fuel saving of around £2,000 a year, meaning a payback of just a couple months. Sadly however no one wanted the product.
[If by any chance an HGV transport manager is reading this and would like to fit a product like this to their vehicles, do get in touch and I’ll let you know how you can do it. It’s definitely something you could do yourself!]
What did I learn from this experience?
Start small (cheaply & quickly).
Always try to get meetings with your first potential customers before you’ve spent any money. Spend as little as possible and move as quickly as you can to get validation that the idea is wanted by someone.
Swing for the fences!
It takes the same amount of time to have a conversation to persuade someone to buy 1 as it does to persuade someone to buy 100. Not for everything, but something like this, if it makes sense to buy 1 why would it not make sense to buy 100? So save time and rather than speaking to 100 people to make 100 sales, speak to the 1 person who can make 100.
If they say no, you’ll also get faster confirmation of what’s wrong and thank goodness you didn’t spend any money yet.
Be aware of other people’s work schedules
I started speaking to the large supermarkets in July, but the story went something like this… they couldn’t meet that month and August is the start of their busy build up period before Christmas, so really the best time to chat would be in the new year, but then John should really be in that meeting with us and he’s not free till February which is when Terry is busy, so let’s get a date in April? Great. Yes we’re keen to help, we’ll help you with some testing, but we can’t do that now… how about June? But lets do this quickly otherwise it’ll be August again and that’s Christmas… and so on and so on. Just because my diary is empty, doesn’t mean anyone else’s is. Things can take much longer than you think.
Small grants and support is often available
I had some very friendly conversations with small business support groups, people who have been given funding to help in specific circumstances, if you need money for buying equipment talk to that person, money for staff hiring talk to these people and so on. The situation might have changed now, but over the last 15 years it’s been very easy to find little pots (£500 - £5,000) here and there to help you. Usually as a percentage of your cost (ie. if you spend £1,000 and we’ll give you a grant of £500).
Cold calling large companies
If you phone the switch board and ask to speak to So-and-so Transport Director (or anyone senior) you’ll get no where. These switchboard people are trained to fend off time wasters and if I really knew this person I’d know their direct number. But ask to speak to their PA and you get straight through, leave your message with the PA and you know they’ll hear it.
Just because your product is good, doesn’t mean anyone wants it.
The product worked but not quite enough for anyone to take a risk on a one man band with no track record in this industry. The Product-Market fit wasn’t quite right yet. Which is a shame because 12 years on and most trucks are still not modified in this way, think how much fuel we could have saved in that time.
Try, try and try again
Remember failure is inevitable, failure is unavoidable, but failure is only a problem if it means you can’t get back up afterwards and try again. That’s why I love the side-project, limiting your risk and not “betting the farm” on the first idea you have.
In the world of support and advice for entrepreneurs and especially in software startups in Silicon Valley, changing the idea of your business is often called a ‘pivot’.
It’s basically re-branding a failure, makes it sound more deliberate and more positive.
Since my aerodynamic modification business, and after a pivot from trucks to vans (a 12% fuel saving achieved there) I’ve tried a number of other ideas… a bus company, pivoting to ticketed coaches running late night shuttles to the big city clubs of Bristol. A drone technology business that has pivoted through a dozen different offerings and is now predominately focused on autonomous robotics… the list goes on and on.
The important thing is not to drink your own Kool-Aid too soon.
Success in business is about predicting the future and the future is always a range of possibilities. No one can know the future, so all we can do is hunt for clues and patterns that hint at which possibilities are more likely than others.
“History doesn’t repeat itself, but it does rhyme”
- Mark Twain.
Anyone can guess and be lucky, but if you want to do this consistently for the long term, I believe you need to be three things:
1. Open
Open-minded and receptive to the data in front of you, supportive or critical.
2. Nimble
Quick to act, quick to respond and quick to change. Relish uncertainty and enjoy the hardship.
3. Humble
Expect failure, take it well and be respectful in success, luck is always a part of any success.
Arrogance is one of the worst traits because there is no hope of learning. An arrogant person never sees their mistake till it is too late to do anything and even then, they’ll likely blame everyone else. We all make mistakes, even the pros…
“Homebase [acquisition by Wesfarmers] was undoubtedly the most disastrous retail acquisition in the UK ever” caused largely by arrogance. Sacking all the senior management team and 160 middle managers was not a good start and led the Austrialian DIY giant to loose $1Billion in less than a year.
Stay humble.
“Success consists of going from failure to failure without loss of enthusiasm.”
- Winston Churchill
Things to consider when starting any new business.
You don’t need to know everything before you start.
Simply by reading this, you have more information already than I did when I started. That’s the wonderful thing about business, a little common sense and the courage to start is all you need. If you can play the game long enough you’ll pick up everything else you need on the way. So keep things simple, cheap and learn on the job.
Or find someone to help you!
In this podcast, they interview Nancy Twine, who had an idea for a shampoo made of all natural ingredients, but she knew nothing about what she needed. So she paid someone to help her write a business plan, then paid someone else to help her think of a product name, someone else to handle all her PR and advertising and finally found a contract chemist and manufacturer who could make it all for her and a deal with a retailer to sell it for her. She’s just sold $40m worth of it.
Can you do it as a side project?
I love side projects (or as the Americans say, a side-hustle or side-gig) and apparently 44 million Americans have some sort of money making side project as well.
These should not be get rich quick schemes. Any get rich quick scheme is a scam somewhere or just a simple waste of your time.
A good side project should be either passion projects where you’re making things for yourself or your friends (Twitter, Cards Against Humanity, Under Armour, Instagram), fixes to problems that make your mainstream activities easier (Slack, WeWork), or experiments with startup ideas before you risk jumping into them full time (Innocent Drinks, AirBnB).
Keeping things on the side takes some of the financial pressure off, if it doesn’t work you’re not going to miss a rent payment, so you can be much more ruthless if it isn’t working. Kill it and start a new one.
The biggest criticisms I see about why entrepreneurs should avoid side projects and jump straight in full time are either from Investors, who obviously want your full attention on the thing they are invested in. Or this lack of pressure means things just won’t get done. Whilst this might be the case of many people, I’ve never met an entrepreneur who is not self-motivated and driven to action.
If the lack of pressure means you’re simply not motivated to do the work, then don’t go any further, this is not the path for you.
Do you actually need a registered business (ltd or llc)?
I’ve met many people who have made something they are excited about and wish to start selling it as a business. Or more commonly haven’t actually made anything yet, but are still excited to start selling it as a business. So the obvious next step is to register a limited liability business to do that. You can do this online in a matter of minutes.
But Stop!!
Why are you registering a business (remember 60% of businesses in the UK are unregistered)? Registering a ‘proper’ limited liability registered buisness gives yourself legal responsibilities which might need accountants or lawyers, all this can get expensive when you don’t even know if you’ll be able to sell what you’re making.
Slow down, there are no rules that say you must be a registered business to sell anything. It’s true some companies may only deal with suppliers who are registered businesses, but those same companies will probably have other rules like you need a £1m turnover as well, so there’s no rush.
Make sure your idea makes financial sense before you burden yourself with a whole load of extra admin work unnecessarily.
Old people are more successful.
Despite what you might think, the average age for the most successful entrepreneurs just starting is 45.
The reasons are probably obvious, the older you are, the more knowledge, experience, money and connections you have.
The reasons why so many young people are in the ‘startup headlines’ is probably two fold; the first is that it’s a more interesting headline. The roller coaster startup journey of an 18 yr old college drop out is far more gripping than that of a well prepared and well funded 45 yr old. The second is probably because young people have less to loss, less to risk. There’s no house or child payments to make, no reliable salary to forgo, no partner to disappoint if things don’t go to plan…
Don’t beat yourself up if you’ve not left school to start a billion dollar business before your 21st birthday. Your chances of success improve with age.
It doesn’t have to be an app.
If I set a class of students a challenge of thinking of something new. Almost doesn’t matter what it is, unless I really push them to do otherwise, half the class will think of apps.
Yes some great business are based on apps. But 99% of the business world is not. So you don’t need to stop everything and learn to code. Much better to spend your time working on being more creative and how to work better with other people.
200,000 new apps are released each month, to the 5 million already available, but only 10 are used each day. Feels like a marathon to me.
Get out of Thoughtland (quick)
Thoughtland is a nice concept from Alberto Savoia (ex-director of engineering at Google) that aligns completely with what I’ve seen as well. Thoughtland is where all ideas live until they have been tested in the real world. In Thoughtland anything is possible, your idea, no matter how bad, can be a great success and you’ll be rich and successful in no time at all.
“After digging up for autopsy a lot of product corpses that failed despite extensive market research, I identified a recurring and problematic pattern: most of the so-called market research for those products was not done in the actual market, but a fictional environment I call Thoughtland. Thoughtland is an imaginary place where every potential new product begins life as a simple, pure, abstract idea…
If an idea spends too much time in Thoughtland, it gets wrapped in a fuzzy ball of unsubstantiated off-the-cuff judgements, beliefs, preferences and predictions.”
All of these unsubstantiated opinions skew your judgement and can cause you to make foolish / expensive decisions. Avoid making these simple mistakes and collect real data, in the real world.
The goal is not to win, but to play for as long as possible.
Harmful Entrepreneur Expressions and Metaphors…
It is often said by famous entrepreneurs like Reid Hoffman that starting a business is like “jumping off a cliff and building the plane on your way down”.
I hate it. For me this is a horrible and harmful metaphor. One whose only purpose is to glorify the false idol that is the silicon valley ‘rock star entrepreneur’ who can achieve the impossible whilst also shaming us normal people for not being as awesome as them…
A much more accurate and helpful metaphor would be like a person “running into the sea and learning to swim as they go”.
A challenge for sure, but not impossible. The smart entrepreneur chooses the shallow part of the beach first, where the water is calmest, where ideas can be tested and the impact of failures limited. Only when they build confidence do they go deeper. A good entrepreneur can learn quickly and move deeper sooner, but only an idiot dives off the cliff with only a prayer.