The March speaker event of the New Entrepreneurs Foundation took place on Thursday 21st March, the day after The Chancellor’s budget statement. The speaker panel of Sir Charles Dunstone, founder of The Carphone Warehouse, Sir John Parker, Chairman of Anglo American and Oliver Pawle, Chairman at Korn Ferry Whitehead Mann and Founder and Chairman of The New Entrepreneurs Foundations was facilitated by author and journalist Mike Southon.
The panel’s reaction to the budget covered a wide range of topics but Sir Charles Dunstone set the tone by advising young entrepreneurs that they really shouldn’t worry about the details of budgets. His advice was to ‘get on with building your business’, translate the playing field you are given and go ahead and ‘just do it’. His view was that recessions are the best time to start businesses for three reasons:
Sir John Parker was more optimistic that this budget was more encouraging for the Economy and that the infrastructure investments would help more traditional manufacturing industries such as the motor car and aerospace industries. He was pleased to see that these industries are making a comeback in the UK and are important for growth as they create many new jobs.
Oliver Pawle felt that the Chancellor had little room or money to manoeuvre and most of his measures will have to be through managing inflation. He thought that the EIS and the extended SEIS scheme would encourage more private investors to invest in start-ups as they benefit from significant tax advantages.
The panel were asked for their views and advice on the ‘dos and don’ts’ of starting your own business. In summary their advice was:
The panel fielded questions from the audience ranging from how to get a mentor to NEF’s plans for regional expansion. The evening ended with one ‘gem’ from each panellist and the facilitator:
“Remember that everyone wakes up and comes to work wanting to do a good job. If they fail, don’t blame them, blame yourself” (Sir Charles Dunstone)
“Manage your time because if you can’t do that, you can’t do anything else” (Sir John Parker)
“Persevere – If you fail, keep trying” (Oliver Pawle)
“Money does not make you happy, but it makes misery so much more bearable” (Mike Southon)
Last night at Google Campus we learnt about “Marketing your Start Up”. Dispensing their wisdom and top tips we had 3 seasoned marketers:
Malcolm Bell, Co-founder & CEO, Zaggora
Sarah Wood, Co-founder & COO, Unruly
Some trends emerged: they had all created success through non-traditional means (i.e. no press releases, mail shots) and by adding their original twists to the well-known methods of social and digital marketing.
Secondly, with Malcolm’s investment banking background, Sarah’s PHD in American History and Toby’s training in computer science and brief stint as a graduate recruiter, they typified the saying that entrepreneurs come in all shapes and sizes.
So what are the secrets to their success?
· Forget the myth that creating great content will automatically go viral. It won’t. You normally have to pay to distribute it. Take Kony 2012 as an example. This was not an overnight success. The organisers had spent years connecting with the right people to ensure mass distribution.
· People need to see an advert/brand 6 or 7 times before they buy. We see about 7 thousand adverts a day. To cut through this you must create great content which produces a high emotional reaction and psychological arousal. This could be emotional (moving, uplifting, nostalgic); cognitive (knowledge, confusion, surprise); primitive (fight, flight, sex). Altruism also still remains highly effective.
· Email marketing campaigns do not work for acquiring customers. It can be a useful tool for maintaining your customers’ interest as long as it is engaging and fresh content
· Freemium is a great way to build customers in B2C businesses, but much less effective in B2B businesses. Giving away products and getting people to post real reviews on Facebook was partly responsible for Zaggora’s staggering success in its first year.
· As a new business you will have to go through a pain barrier of high bounce rates and low ROI. Large e-businesses (e.g. Amazon, ebay) have 30% conversion rates because of the quality of their traffic. This takes time to build.
· Choose your marketing channel based on how you’ve articulated the problem you’re addressing and what response you want. Do you want Facebook posts? Referrals? Their details? Etc.
· Ultimately, the best marketing tool is your product. Customer satisfaction is the biggest driver. Get your product right, treat your customers well and you can’t go far wrong.
And finally we asked these 3 entrepreneurs for one piece of advice:
· “If you’re thinking you need to fire someone it’s probably too late. Trust your gut and go with it. As your own boss you don’t have time to sit and ponder” (Toby)
· “Advice is over rated. Don’t wait for it. No one knows your business as well as you” (Sarah)
· “You have to fail to learn. Embrace failure. And make notes.” (Malcolm)
Last night NEF candidates, alumni, friends and supporters gathered at Google Campus to hear war stories and words of encouragement from four entrepreneurs who have, at many stages in their careers, turned crisis into opportunity. They were:
Shahbaz Ali, CEO, TARMIN
Jenny Campbell, CEO, YourCash
Charlie Osmond, Co-founder of FreshMinds Group
Eze Vidra, Head of Google Campus
These panellists shared very personal examples of crises with our audience. The examples ranged from the harrowing story of being forced into liquidating his company by an investor, to the everyday trials and tribulations of running a company: having to fire people, losing people, investors pulling out, products breaking or being cancelled at the eleventh hour.
The themes which emerged were ones which have been highlighted throughout the year: the importance of leadership, resilience and self-awareness. Get good people around you as they are the ones who will go to war with you and stand by you in crisis; when you’re going through hell, keep going; learn from your mistakes.
And a couple of other pearls of wisdom…
A couple of books were mentioned by the speakers which helped them greatly. They were…
The Lean StartUp, Eric Reis
The Start-up of you, Reid Hoffman
The Pursuit of Perfect, Tal Ben-Shahar
Oh. And Merry Christmas from NEF!
Last week we had our monthly speaker event with Brent Hoberman (www.profounderscapital.com) , Lord Young of Graffham (www.startuploans.co.uk/) and Stephen Welton (www.businessgrowthfund.co.uk) discussing the topic of “Funding Your Venture”. The high profile line-up drew a large proportion of the NEF network: our current cohort, Alumni and representatives from host companies and our sponsors.
It was humbling to hear that even the most seasoned investors can get it wrong. Who could forget Lord Young’s story of balancing whether to invest in an online wine company, or an online auction company. Thinking that the conventional, sensible and credible option was the wine company he turned down a 7% stake in the other… which turned out to be none other than.. EBAY… Lesson learnt: “credible does not equal conventional”
Questions came thick and fast… How do I fund my venture? What kind of investor should I target? When should I go for investment? How much should I go for? What equity will I have to give up?
Here are some top tips from our panel…
1. Perfect your elevator pitch. If you can’t articulate your idea within a crisp, clear 5 minute pitch then you have not clarified your proposition enough, and people will switch off.
2. Don’t take it personally if an investor says no. Always ask why and get feedback.
3. It’s not just about the money. It’s about finding someone who can help you grow your business. So find someone who shares your vision and will be able to help you grow it.
4. Divide + conquer. Consider taking on more than one investor which can leave you more flexible
5. Research your investor. Realise that taking on an investor can be emotional; you are selling part of your ‘baby’. Make sure you know who you are partnering with. Do they support your vision? Can they open the right doors? Are they there in a crisis helping? Or do they sack the CEO? Do they support your vision? Do you get on with them? Finding an investor is arguably as important as finding a partner!
6. If you don’t understand it, don’t sign it. Beware the ratchet clauses in investor term sheets!
7. Get a mentor. This should be someone who understands your vision but is not a frustrated entrepreneur and someone who will only speak when spoken to. Aim for maximum 2-3 hours a month with your mentor
8. If you want money, ask for advice. And if you want advice, ask for money. Talk to investors long before you need the money. Raising money is hardest when you are desperate or running out of cash. And ask for more than you need. Companies which are haemorrhaging money or asking for too little make investors nervous.
9. Consider alternative investments e.g. equity swaps. But be certain there’s no conflict of interest and that you are sure of the investor’s intentions
10. And… as always… Follow your gut
To see photos of the event have a look here:
Last night we kicked off our monthly speaker series programme for 2012/13 with a discussion tackling the hot topic of “Entrepreneurship in the UK”.
On the panel we had Oliver Pawle, NEF Co-founder and Chairman of Korn/Ferry Whitehead Mann’s Board Services Practice; Lord Davies of Abersoch CBE, NEF co-founder and Chairman of Corsair Capital, Joe Cohen, founder & CEO of Seatwave and Michael Hayman, Co-founder of Seven Hills PR and co-founder of StartUp Britain.
They talked about what it’s like being an entrepreneur in the UK at the moment, role models, and industries ready for disruption. What advice did these established business leaders and inspiring entrepreneurs have to share with the audience of New Entrepreneurs, Alumni, host companies and corporate sponsors? The result was a call to arms, a war cry for the Class of 2013 to rise up and save the UK economy…
LEAD THE REVOLUTION
We are witnessing a renaissance in business. We are living in an age of increasing internationalisation and transparency. VC markets are beginning to shifty subtly. There is a new core of Business Angels emerging from the City. Increasingly, investors want to offer advice and mentorship, not just a cheque. With SEIS and the fixed interest and equity markets not looking as attractive, some people are choosing to invest in small businesses. There is a rising groundswell in support of starting your own company. This is the time to be an entrepreneur.
BE A ‘CONTRARIAN’
Think for yourself and follow your instincts. Take risks. Be Brave. Maintain your sense of disruption. Dissatisfaction is the greatest driver for innovation. Never be satisfied.
Entrepreneurs go through a series of “near-death” experiences. Sir Richard Branson is the standard bearer for success in the UK, but think of all the “failures” he has had. You will have to lead your team through incredibly difficult times. Keep going. The harder you work, the luckier you get. Be open about mistakes but don’t focus on what’s going wrong. It’s not over until the administrator takes your keys. Don’t die. STAY ALIVE.
Last week we launched the NEF programme for 2012/13. After an intensive 3 day workshop with sessions on knowing yourself, how to get the most out of your work placement and the importance of personal branding, the new Class of 2013 had the chance to meet five NEF Alumni.
They asked them what they learnt, what they might have done differently and how NEF is going to help them build successful businesses going forward.
Their words of wisdom are summarised in 10 Top Tips below.
Meet our Alumni www.newentrepreneursfoundation.co.uk/our-alumni
Meet our Class of 2013 http://www.newentrepreneursfoundation.co.uk/our-class-of-2013
Sometimes life hits you in the head with a brick. Don’t give up.
– Steve Jobs
It has taken me three years to write about this.
On the 24th April 2008 two policemen turned up to my house. Half asleep, I stumbled downstairs to hear my mother sobbing in the background. They had come to deliver some bad news.