6 January 2012

Marketing

Starting A Business: Start-up or Let-down?

At the beginning of December, I came into contact with Linda Cheung, Founder of CubeSocial- a fantastic UK startup which allows businesses to run social media accounts in a super-organised, dynamic way. It’s awesome, and I think it’s going to really take off this year. There are squillions of startups that pop onto the digital radar all the time, but what I think works for Cube Social is that it genuinely fills a gap in the market, and it’s ran by people who have business pedigrees most of us will only ever dream about.

But, worry not! You don’t need to have the business acumen of Lord Sugar or Mary Portas to start your own company. If you look at the majority of successful startups, they were conceived by tech wizards who came up with some world-reordering idea. The big thing that propelled them into the stratosphere is that they managed capture the attention of a sympathetic venture capitalist. (Buffer App are arguably going through this phase at the moment and are on the verge of explosion- check them out)

In order for startups to evolve into full-blown companies, there are a lot of variables that influence their development and ultimate success. Here are some helpful tips for starting up on solid ground.

The People

People who are passionate about their field (“geeks”) tend to stick together. That’s why high ranking university lecturers tend to accept job offers based on the people they will be working with, rather than the salary or establishment itself. Nobody wants to work with Billy No Mates. (He does make a great cup of tea, though) By the same token, students with a real passion for their field tend to follow thought-leaders, which means that very quickly certain locations become centres par excellence for a particular industry. This brings us onto…

Location

In his entertaining speech entitled “How American Are Startups?” Paul Graham explains how startups tend to fair better in liveable cities, as opposed to highly commercialised and competitive metropolises. That’s partly down to the fact that there is more space for the startup to make its mark, but also due to the more relaxed vibe which geeky entrepreneurs seem to appreciate more. By the same token, venture capitalists will tend to escape the big smoke as soon as they’ve built up their empires, leaving all that stress of city living to their minions. Therefore, it’s more likely that startups will come across the kind of investors they’re looking for in smaller, community-centred cities, which generally have a better standard of living.

Financing

Quite rightly, governments want enterprises to take off and flourish, so offering small businesses funding seems like a good idea. However, the difference between government funding and finding an investor is that the latter will have infinitely more contacts and experience to help a startup grow, and since it is their money on the line, they’re likely to give the startup a lot more attention. Of course, government funding does have its advantages, but you have to consider whether you just need a cash injection or the experience and expertise of an established business person as well.

Good sources for finding angel investors/funding opportunities include:

Prince's Trust

Angel's Den

Grow VC

Go4Funding

Inc Magazine

Angel Investment Network

I’m interested to hear from people who are currently setting up their own business or have a story to tell about their experience with attracting investors. Let’s connect via Twitter, Facebook, and LinkedIn.

By Adam Cowlishaw