I have spoken to lots and lots of people with ideas.
We are all very creative and want to build things, great companies, houses, projects and families.
I think one of the major reason more people don’t start companies is “The Fear”. It’s the fear that things will go wrong, they will lose what they have worked so hard for.
It has never been easier to start a company, we live in a gently regulated country that makes starting up a business quite simple, we have some of the best “angel” investment schemes in the world (from a tax perspective) and the internet has changed everything.
You don’t need to be physically in a market to serve it well, you can be thousands of miles away from your customers and it still works.
This gives you the freedom to choose where to live and not have to be based in major metropolitan areas. I lived in the North of Scotland when I started Diet Chef, apart from the slightly ropey cell phone reception it worked.
But I was under no illusion that my market wasn’t the Highlands of Scotland, but the rest of the UK. The distribution networks (whether online or physical) support movement of goods and services to where they are most likely to be consumed. New marketing channels (Amazon for authors, online for retailers, marketplaces for services) make distribution so much easier than it used to be.
OK I accept it is more risky than working for someone else, but the personal and financial rewards are also much higher.
I happened to stay in Citizen M in New York recently you can read my review on Tripadvisor.
The world is moving more and more to a division of convenience and luxury. Luxury is all about an undiscovered experience, extra information, facilities or gems. Convenience is all about making it simple.
Hotels are horribly complex organisations, labour intensive and hard to use as a consumer. Citizen M really changes all this. It isn’t a box, its all the things you need as a traveller:
- A clean, functional and uniform room
- Good access
- Quick service
All these things are pretty much prerequisites for a business traveller but by being a new startup Citizen M can just do these things better than most. Their locations seen to good but not amazing, their service in New York was outstanding, but it has only opened a few months ago.
Checking in to London Bankside wasn’t quite the same as the zippy New York service – but it was close for London!
So if you are staying anywhere that Citizen M runs a hotel – stay there!!
I love technology and marketing of technology products is unique. It’s not about mass market, but getting the influencers to buy your product and be “in the know”
A great example of this is Tesla who are producing an eye watering priced car (especially in the UK) to really fund the next level of development. If their is a big enough market for this price of car, you can help fund the R&D, infrastructure etc to make a more mainstream vehicle.
Apple and a number of other tech brands use this to seed the market and create a sense of desire that drives consumer adoption. It is no different to luxury brands that product a “discounter” product that is not the same as the one sold through their own channel but drives awareness of the brand.
This type of product marketing is fascinating but also full of potholes along the way. It is trying to control supply and demand but also create a huge amount of excitement for the product. Price pays an important part in this and certainly online I have found that most products sell more when you reduce the price, but controlling demand is more difficult.
There was a fascinating article today in the FT about Naked Wines potentially stopping taking angel commitments from its customers (it funds wine growing through a sort of savings plan for consumers) due to demand. Either this is a great example of an internet based business using crowdlending to fund its working capital cycle or a great example of marketstall tactics to create a sense of scarcity.
Seriously consider it within your online business.
I was speaking and participating in last night’s Supper Club in Glasgow on Sales & Revenue Growth.
I shared lots of experiences of how it is really hard to create a real “product” not just a service trying to pretend it’s a product. I also talked a lot about listening to customers. At Diet Chef we are founded on the principle of listening to customers (that doesn’t mean we don’t add our own opinion).
It reminded me of one of the very important aspects of Diet Chef’s principles – writing it down.
My co-founder Andrew wrote lots of the issues, challenges and successes down in a blog. It was only internally available and was very useful as I lived 150 miles away from the ‘action’ when Diet Chef was based.
This allowed me to read feedback, thought and challenges and for Andrew he was able to spent time distilling some of the issues onto a piece paper.
So, although a lot of the content that I write on this blog is read by others – it is really for me – not anyone else – sorry!
Being in Silicon Valley again after a few years away reminded me of the danger of taking business models from the US and transferring them to the UK.
Most US VC’s want to invest in things that are going to be big – and put money to work that supports this (their funds are usually quite large). They do this by betting early on success and following every round of investment of successful companies. It’s a great strategy but one that doesn’t particularly translate well to the UK (and Scotland especially)
The reason why it works is that there is a large wall of money that just isn’t available in the UK unless you are a absolute success (when you usually don’t need the money!)
But one of the cardinal sins I see is copying the “let’s grow users” and worry about monetisation later strategies.
Again this works very well in the US – only if you can prove that having large user bases can be monetised later (think Google, Facebook, Twitter). In general the market lead you are going to generate is worth sacrificing the short term reliance on revenue, but they are just deferring the day they are going to focus on revenue – and the growth better be HUGE!
The worse trap to get caught in is not focusing on revenue and not growing users – which I have seen quite a lot. You can’t be stuck in this path.
Also raising money isn’t always the sign of a successful company – in fact there are hundreds of companies that have raised large amounts of capital and then failed. Reading The Hard Things About Hard Things isn’t a bad introduction to this strategy
If you are based in the unique ecosystem of Silicon Valley then good for you – thinking about revenue later is a luxury of your location and access to capital. For the rest of us, let’s work out if anyone wants our product and the best way to do this is to charge for it!
This is not my line, by the Jeff Bezos, founder of Amazon.
It’s a great and simple concept. Think about what the customer wants and make sure that they get it.
If you grew up in the Hospitality business like me, the customer is always right (no matter what people say) and feedback is essential to working out what they want.
Of course, you need to distill the information that you get to make sure you don’t go off in the wrong direction, but that’s what you are paid for.
Amazon hasn’t just revolutionised books, Amazon Payments, Amazon Prime, Amazon Web Services and many more technologies have come out of this retailer (Market Cap $141B).
I would highly recommend you read the Amazon shareholder letters, they are a source of many gems for e-commerce and beyond.