Do I need money to build a business ?

I often see this question asked in forums, and here is a “lean” NO answer that hopefully will help to keep startup costs down.

1. You need a great idea to solve a problem that everyone else just moans about.
2. You need a lean way to get to your marketplace and prove people are willing to pay for the thing you have created. The internet now provides many and varied tools to use, of course the skill is in navigating the huge choice and selecting which work best for you.
3. You need to take your learning from your mistakes on board, and be willing both to share your depth of knowledge and be agile in changing direction when you need to.
4. Good ethics take time to acquire, and need to be shown off through actions, as well as claimed through words. Look at those in or near your marketplace with a strong reputation. What do they do? How could you do that?
5. You can start basic marketing using social media for not very much at all. If you can find a “good crowd” who will guide you, occasionally rap you over the knuckles, and point you towards good practice, you can start telling the world what you do, and why people should work with you. You are aiming to build your brand so people absolutely know what you do, and you spring to mind immediately when they are in conversation with others as their “go to solution” for whatever the problem is.
6. By using “social sales” techniques, you can avoid the hard sell that everyone dreads, especially in UK market places. This means engaging in dialogue, trying to find out where the other person is going, and whether you can help, either directly or through your network. You won’t sell a lot in one to one dialogue, you are aiming mainly to build relationships and earn the right to be recommended.
7. You need to be able to explain to potential partners clearly, concisely and persuasively why your idea works, thinking about how they win from working with you, so that you can build a team who can help you bring your idea to fruition.
8. You need to solve a problem more cost effectively than the others in your marketplace, and do so in a sustainable, systematic and long term way, perhaps completely redefining how people approach solutions to particular problems.
9. You need to be able to tell large numbers of people in one go, building a credible and ethical brand that others believe in. Your aim is to be someone your audiences look to for thought leadership and innovation in your area of expertise.
10. By this point you should have a working business, having made many difficult decisions and changes of course along the way. If you now feel you can grow your business further, only now is the time to look for investment money. Match investment to clear objectives about how and why you will grow your business, who you need to bring in to do so, and on what terms. By now, you will have proved your resourcefulness to any potential investor, and they will have far fewer fears about investing their own hard earned money in you.

Voila ! Ten easy to say but hard to do steps, taking you towards innovation and enterprise !

And you might be surprised at the success stories coming from people borrowing quite small amounts eg on credit card to start their business. Bill Gates famously started Microsoft in a garage in the garden.

Yes, building a business takes time and effort, but then time is money after all !!

Can Entrepreneurs be “Educated” ?

This question is one that CEOs across the globe ask themselves with increasing frequency. And perhaps something VCs and early stage entrepreneurs also need to ask themselves. Later on, some entrepreneurs begin to admit they could have used some good “early stage advice”.

Why does this continue to be the case?

Looking at their nature, entrepreneurs are often maverick, wilful, impatient, willing to cut corners, leaders rather than followers. Willing to break rules and remake them, upset people and apologise, chase impossible dreams, rather than suffer the inadequacy and bureaucracy often inherent in rules laid down by others. Willing to innovate first and achieve solid consistency second.

In the corporate world run by CEOs, this behaviour is a world away from the 9-5 obedience that many lower level managers seek, often to “make their life easier”, and offering the easy comfort and stability that consistency allows.

But entrepreneurialism is increasingly a behaviour that CEOs know they need, to meet challenges in the world of constant innovation and rapid product life cycles.

In the startup world, this type of dynamic behaviour can work, indeed is necessary to drive progress, but also has high risk probabilities of failure if left in isolation and without support. Why is this?

But first we must ask can “entrepreneurs” subjugate their nature and instincts to be “educated”, and find a balance between maverick belief and steady nurtured growth. And why is this beneficial for all concerned?

Firstly we need to de-construct some terminology. While no one objects to terms such as life long learning, or business growth, “education” is seen to be something we do before we start work. Such rigid distinctions are ones we grow up with, and which too often persist insidiously and counter-productively well into and through adult life.

But actually the learning principals of business growth and education are one and the same. “Education” is also a component one of the eight success factors for entrepreneurs, using a short cut term here, Creativity.

And here we need to examine what we mean by creativity, because creativity can come from different sources.

Let’s take the example of Michelangelo.

Did he come up with revolutionary art forms, and be a multi-skilled sculptor, painter architect and engineer, without taking advice from those who had gone before him, or indeed even his peers of the day? And then taking each discipline the next step?

Whilst the great book “The Agony and the Ecstasy” can only be an assessment of how MicehlAngelo came by his skills, it’s certainly believable, and was extensively researched as to the historic components about the people involved, the places visited, and the developments and progress made.

And there are lessons here for CEOs and entrepreneurs alike. Successive popes and mentors employed MichelAngelo, and found him to be stubborn, wilful, but at the same time brilliant, because he refused to subjugate his principles to theirs. From the entrepreneur perspective, the popes and mentors were often inconstant masters, prone to changing their mind and being awkward. But their benefactoral largesse and resources often helped MichelAngelo grow, learn and develop his skills still further.

This is a clear illustration of what can happen if even the most brilliant of innovators allows themselves access to and influence by the learning available from the “giants that went before”. Of course not everyone is Michelangelo, but by how much would business growth be improved if entrepreneurs adopted his principles regarding his own growth?

For the entrepreneur, there is a clear risk to quality if business lessons from the past are not learned, regardless of how innovative new products might be. This lack of “preparation” is all too visible to those VCs and angels who are experienced in business, and a disincentive for them to get involved if they know they have someone who still needs to acquire “nuanced business skills”.

So how does the above challenge some modern fallacies, that have become accepted in 2013 as “just the way it is” ?

Entrepreneurs are given the idea, sometimes even from VC soundbites, that they must have the drive to build their business themselves. And that is all well and good.

Unless that translates into, “and you shouldn’t ever take advice from others” while building a startup. Or that “a good team can’t build a better product” than the entrepreneur on his or her own.

Of equal horror are some stories about VCs who insist on doing things “their way”. This is also a situation which bodes badly for future success.

Only once they have built their first successful startup do entrepreneurs begin to talk retrospectively about a need in the early stages for “good business advice”. And we really owe it to ourselves to explore this belated wisdom and establish common components that we can all adopt on our own growth paths.

With the full benefit of hindsight, some entrepreneurs even champion the need for support for startups, whilst still acknowledging the challenge of how this can be provided affordably and effectively, promoting growth not hindering it.

Yes, in this limited article, we have only looked at one component of being an entrepreneur.

But these and other factors regularly suggest that, yes, entrepreneurs can be educated, and that they would improve their prospects of success considerably by adopting a life long learning and listening approach to building and growing start up businesses.

Feedback is welcome !!

The Pain of Growth

Modern life today demands instant rewards and ease of use. If things aren’t easy to use, they are discarded, tossed to one side.

Contrast this with building a business.

It takes years to master the disciplines of marketing and sales, and sometimes longer to find a product that fires our enthusiasm, that we can package successfully, where we understand the benefits for the different types of customer we may seek to find, and where we can put product in front of customers.

If we “succeed” on the first step, then we have to run teams, master information technology, manage cash flow, understand accounting.

Some of us recognise a need to value and harness our customer databases and build niche knowledge sets.

None of these are trivial exercises, so why should we expect instant success ?

No, it takes hard work, determination and a desire to win that borders on the obssessional, and at least requires we get in touch with our “survival” instinct.

Is this bad news ? Hardly ! We just need a degree of patience, and the attitude that there are skills to learn, we are going to learn them, and we’re not giving up.

But don’t expect it to be easy !!

Peter Jones
Opportunity Creator – Blue Oyster Business Growth

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