Archives for posts with tag: Start-up

Working in, or for, a small business is fun. How much fun, I never knew until I was much older.

With a small business, if you’re involved in a non-technical role – in other words you’re on the business side, including sales and marketing – you get to do lots of different things. The variety is great, at least it is for me. You also get to do these lots of things relatively well, rather than spectacularly well in one niche area. You can be part-finder, part-minder and part-grinder if you want.

As your small business becomes more successful and grows, you find yourself doing fewer things, and you need to do those fewer things better. It becomes a medium-sized business.

When I did my Master’s degree in Business Administration a hundred years ago, there were courses on offer in running a small business. I had never worked in a small business, nor had anyone in my immediately family. We weren’t particularly entrepreneurial, we had worked for large organisations. Consequently I had little or no interest in finding out about how a small business worked.

It’s ironic how over time I’ve migrated from working for large companies to working for, with and running small companies.

I subscribe to a lot of newsletters and blogs. A few of them I even get around to reading too. One in particular focuses on start-ups.

If you’re in a start-up, you should read this chap’s stuff. He’s memorably called Tomasz Tunguz and he’s a VC investor in software-as-a-service companies with a firm called Redpoint.

One particular post that sticks in the mind is called: Which To Prioritize – Churn or Growth? The answer, in case you didn’t have time to read his article, depends on your maturity as a business, but for early stage start-ups it’s churn. The one thing you need to establish as a start-up is product-market fit. You want to demonstrate how difficult your early customers think life would be without your product, which is why they’re all staying around. The stickier it is, the better your long-term prospects.

Tom – I don’t know him personally but I suspect he prefers to be addressed as such – offers many more reasons why churn is what you focus on instead of growth. For me it boils down to the business model. If you’re in an annuity-based business, founded on recurring revenues, then the more customers you can retain and renew, the greater your revenue starting-point is at the first of the year, before you’ve even begun to win new bookings.

I was walking past a sign the other day. It said ‘Stressed is desserts backwards.’

Have there ever been truer words, in more than one sense?

It got me thinking about other types of palindrome-type anagrams. A start-up is the reverse of upstart, if you’ll allow me the license of a rogue hyphen. Yet, strangely enough, this is exactly what a start-up needs to be in order to taste lasting success.

A start-up has to do things differently, approach the market in a different way, and offer a new way of doing things. It has to disrupt the status quo, the accepted, established way of doing things, and become the new accepted, established way of doing things. it’s the new kid on the block. In short, it has to be the upstart.

I guess this is why you sometimes hear start-ups referred to as upstarts.

There’s an old adage that nothing happens in a company until somebody sells something. In fact, it’s also true of you, when you’re trying to sell yourself or your idea.

I do a bit of work as a mentor in the technology sector and so I come into contact with quite a few very early stage companies. In the tech sector in Ireland there is plenty of support, guidance and funding for building your software product. Once you’ve built your product, and you have to start selling it, in other words commercialising your idea, the funding is not so forthcoming.

This is a problem, because many of the people who have the idea for and develop their software product also have a lack of knowledge and confidence when it comes to selling it. Start-up companies can avail of a few meetings with sales and marketing mentors like me, but that’s nowhere near enough. They either need to start full-time selling themselves or else find the funds to get someone with the expertise to do their business development. They don’t have the money to do that, and the business development specialist is probably not going to work for free, or even equity, if they can’t see the promise of steady sales. Which brings it back to the fledgling business owners, who have to do the work themselves.

Start-ups have to start, but if they’re not capable of starting, then the money already invested in them, by them or others, is wasted. We need to train our entrepreneurs to sell, or else fund the sales expansion efforts and increase their chances of turning their idea into a functioning, growing business.