Sainsbury Management Fellow, George Fowkes runs The Clear
Alternative, which provides interim director expertise to clean
technology companies to catalyse their start-up and growth phases.
George's early career was in new product development for Cambridge
technical consultancy Sagentia, and management consultancy at A.T.
Kearney. Conversations with investors while raising finance for The
CarbonNeutral Company in 2001 gave him the idea for a company that
would bring commercial and project skills to clean tech ventures,
to accelerate their development. This became The Clear Alternative
in 2006.
Before I start I wanted to add to
Chirag's post by nominating David Hansson, the founder of
software company 37Signals, as the international grandmaster of
'CARD'. And in fact most things about getting a business started. I
think he has written a book but his speech at
Stanford boils his whole philosophy down into one irreverent
hour that you can laugh along to on your way to work.
If I had to summarise the very best of what I've seen in the
past 12 years of getting ventures started for people, it would be
the following:
Find a complementary partner
Most people think that the expression 'better to own a share of
something than 100% of nothing' came about from raising
money. That may be true, but it's even more relevant right at
the beginning. To get any new organisation started is such a
huge amount of work, requiring so many judgement calls and such a
very wide range of skills, that even an engineer with an MBA cannot
do it on their own. You can't be world class at everything,
and it's lonely flying completely solo.
If I think of the half dozen really successful serial
entrepreneurs that I've met - the people who have built and
successfully sold more than one business - almost without exception
they work with a business partner. That partner doesn't just
fill a skills gap with their co-entrepreneur, they also fill what
I'll call a 'character gap', as follows.
Everyone has a number of aspects of the business that they can't
help preferring. It could be sales. Or the
numbers. Or building the team. It's very difficult
indeed for an individual not to give these preference - it's part
of their character - so stuff gets missed. The partner has an
innate preference for different aspects of the organisation.
Their first thought on Monday morning is quite different to their
co-partner. And so most of the bases get covered.
That's why you see sales people paired up in business with
accountants, marketeers with ops people,
Myers-Briggs introverts with extroverts, and so on.
So my point would be to find someone who's quite different to
you that you can trust implicitly and make them a significant
partner in the business. And even (especially) if you're
married to them, sign an agreement that at least covers what
happens if things don't work out.
Touch the market early and often
With the very rare exception that essentially comes down to
luck, it is not possible to bring a successful new product or
service to market without first exposing it to the target
market. To compete against better-resourced incumbents your
product or service has to not just work, but fit the way its users
look for, assess, buy and use the thing.
For the product itself we need to bring the alpha and beta-test
principle common in software development to our own business
idea. How to do this depends largely on the nature of the
product, but everybody should be able to find their own versions of
customer and competitor interviews, pitching the concept to
friendly contacts in the target market prior to development,
lending prototypes to prospective customers, offering 'no-regrets'
deals for early buyers and so on, as the feedback from this user
experience is essential. The next proof point is the one where
customers actually part with their cash for the product.
Hansson is right that this cannot come too soon and, in general,
almost any way to bring early revenue into the business (that does
not distract from the main development effort) is a good idea.
Closely linked to this, especially in B2B markets, is that your
product can only be successful in the context of the buying
patterns in the target market. Every market has its
idiosyncratic way in which solutions are sought and evaluated,
buying decisions made, price and delivery negotiated. And if
you're not compatible with the time of year, use of OJEU, 'Plan A',
Environment Agency regs, contract management or other trivial
necessity you won't sell any product to that sector. The
least costly way to master an industry's buying patterns that I
have seen is to get an industry veteran on the board.
Have a plan
It is true that no plan survives first contact with the enemy,
but keeping a plan (i.e. a list of milestones/targets and dates,
with associated responsibilities and costs) updated on a regular
basis confers many benefits. First, putting the plan together
forces you to think about priorities and risk. What's got to
go right, and cheap ways to stop things going wrong. Second,
it's a fantastic communication tool. With a plan everyone can
see where the effort has to go. Scope creep -
possible the worst enemy of the pre-revenue business - is easier to
keep at bay. And finally, it enforces realism. Not all
milestones will be met. The insights from 'why not' and 'by how
much' make achieving future targets more likely. And
achieving targets is an essential skill to keep investors putting
money into a business. So put together a plan and keep it
with you. If you have to keep changing it, at least you're
learning!
None of this covers
seed funding, getting an office, or marketing, recruiting and
financing on the cheap, which will have to wait for another day. Or
be picked up by another blogger.
