Humble Thoughts

My Alternative Startup Britain Advice

Recently I did a talk in Cambridge about my views on starting a business. Now I really am an apprentice in this area with no business startup track record to talk of yet. But I have made a point of working for many startups over the years as part of my apprenticeship training and also read, listened, contemplated and right now I’m putting my money where my mouth is.

The launch of Startup Britain felt pretty good to me. I love people getting behind entrepreneurship, following their dreams and trying to make the world a better place. But then I looked at their site http://www.startupbritain.org/.  In my opinion the advice was surprisingly old school, unpragmatic and, well, lazy. I was surprised to see the advice on the homepage didn’t have a single mention of customers. I have a rule, I’m only allowed to moan about something if I try and make the situation better. So I gave a talk in Cambridge last week, I’m chatting to some of the Startup Britain founders and now its time to put my thoughts online.

1. Debunk the great idea myth

We all hope that we’ll get that eureka moment and a flash of inspiration gives us an idea worth millions. But thats just us being human and lazy. The reality is its very rarely an idea that makes a business successful but instead the execution. Execution takes longer and is harder work than having ideas so we tend to sit back thinking “When I have that great idea I’ll do X”. Most of the biggest businesses in the world didn’t invent their space, they didn’t have massively innovative ideas they just did it better than the other guys. Just look at Facebook, Ryan Air, Pizza Express. They all jumped into market spaces that had some well known competition and executed better. Facebook just created a better social network than MySpace, Ryan Air came to budget airlines copied the Southern Aurlines and Easyjet model and just executed really well.  Pizza Express definately didn’t have the idea for Italian/Pizza chains. They just did a damn good job of a resturauant in one place, it got popular and they took it from there.

Look at some of our most successful entrepreneurs. Richard Branson made his initial fortune in music with a record label. He didn’t have big bang ideas here he just added a little creativity to a tired industry, the artists liked it, he hustled, worked hard, risked a lot and finally succeeded. He then did a similar thing with Virgin Atlantic. Identifying a tired industry that needed a dash of creativity, fun and better execution. Again it took a ton of risk, hustle, charm and hard work to actually create the successful business.

So pragmatism, creativity, charm and hard work create successful businesses not big ideas!

2. Don’t write a business plan it will suck

Plans are guesses and the type of 3 year projections you are meant to make in business plans are just going to be plain wrong for a startup. Within mature businesses you can make these projections with a degree of accuracy and there may be lots of money riding on the plans so the hard work pays off but for startups, no, no, no, its a waste of time.

Instead get out from behind your computer screen and test the market. Connect with potential customers understand what they would pay for, understand what people love and hate about the competition, and then create something quickly. Its hard getting feedback at an early stage because most people will just say “that sounds interesting”, “oh cool, I’d use that” etc. But what you need is cash feedback because until they’ve paid for it you can’t be sure. So spend less time guessing where your business may be in 3 years time and build your product quickly and cheaply and test it on early adopters. Richard Branson tested the market before he’d had his idea for the Virgin Atlantic business. He couldn’t get a flight for the right price so he chartered a plane and sold all the seats. He got in front of customer, made them pay and proved the market without having to buy a plane, writing a business plan or having a logo designed. If you want to understand more about this then take a look at the Lean startup and Customer development movements. Its all about getting to market quickly and evolving your ideas based on customer feedback. When you need to get your business model down on paper try The Business Model Canvas. Its designed to make sense at a glance, be easily changeable (your plans will change) and easy to communicate, something that a traditional business plan doesn’t achieve.

The biggest argument I here against these ideas is that they work fine for low capital business like software products and professional services but not for capital intensive businesses. Well I don’t fully agree with this either. You need to get creative. The Virgin Atlantic example is great here. Most people would agree running a transatlantic airline is capital intensive but chartering a plane and selling the tickets is much less so. I have recently come across a great lean example in the restaurant space called The Truffle Pig. Its a popup restaurant that uses someone else’s venue somewhere in Suffolk every couple of months. What a fantastically pragmatic way of testing the market, getting feedback, building a brand without splashing the cash on a building, refit and permanent staff. Its a fantastic example of a minimal viable product. So if you think creatively even capital intensive businesses can create minimal viable products on a shoestring.

But some businesses need to grow quickly and why not take £3 million in funding to get you there so you can out grow and out execute the competition? Well if you have that option then perhaps its worth thinking about. But in general I’ve seen funding make businesses slower to get in front of customers and that means slower the get the feedback that results in getting the product right. By embracing constraints you will generally engage customers more quickly, build simpler products and services (people love simple) and spend your time on customers instead of investors. Surely thats going to build a better business. Sure, if you have customers, have a validated business model and want to scale more quickly then I think there is a strong argument for taking investment.

3. They Say “Get a logo” and I say “Don’t bother”

There’s just so much to do with your startup to make sure you offer a decent product/service to those early adopters. They don’t give a damn about your logo. Take a look at one of my favourite web design sites http://siteinspire.net and notice how many of these beautiful designs don’t have a logo. Sure a god logo is nice to have but its not essential and maybe later you’ll have tike for the “nice to have’s”

Rework

My single favourite resource which underpins my philosophy behind career, starting a business and running a business is Rework by the guys at 37 Signals. This book will literally take you a couple of hours to read and could save you months of work. With gems like “Underdo the competition”, “A kick-ass half is better than a half-ass whole”, “Inspirastion is perishable” and “Embrace constraints” this book really hits you in the face with a simple, fun, pragmatic alternative to the way most of us think and work.

Useful resources mentioned in this articles

Customer development
Lean startup
The Business Model Canvas
Rework

About the Author

After 10 years coding, architecting and managment in crazy startup environments Steve decided to start writing in the 3rd person and building his own businesses to try and make the world a better place. With heady ambitions for flumes to be the best place to track and analyse conversations online Steve is getting close to a minimal viable product. He’s really trying hard to follow the lean startup and rework principles.