In January 2018, we became a tech startup. Before that we’d simply been a business, but that was SO 2017. And we definitely *embraced* the culture (hey, if you’re in, you’re in, right?!). We relocated to a startup hub, we learned a whole new language around hustle, pitching & angel investors, and we decided we were going to get seed funding. This was all very awesome. And let’s be honest — we had a LOT of fun.
Six short months later it all unravelled spectacularly.
It’s now 12 months on — and it’s time to break the silence (it’s a LONG time since the last blog post!). We’re still here — in fact we’re doing better than ever. But I’m not sure we’d do it exactly the same if we did it again — and this little post contains some of the reasons why — hope it helps!!
1) You have to sell stuff
Yep, we were so caught up in being a startup, generating ideas, chasing investment, etc etc that we TOTALLY FORGOT THAT WE WERE ALSO A BUSINESS, AND BUSINESSES SELL STUFF. This is hopefully obvious to you, the reader. But if not — with no time or energy going into sales, there aren’t any sales. And unless you’ve already secured investment or have cash reserves — with no sales, you run out of cash. And no amount of startup buzz will make that a good situation 😐
Ironically — it was pretty easy to fix. We stopped ‘being a startup’, focused on selling what we already had — and funnily enough the bank balance stabilised. #economics
2) Pursuing investment takes up more time than you think
This was a major contributor to the sales amnesia above. Basically, once you head down the investment route — it can easily become a full-time occupation. Which means that unless you have someone else to actually run your business — that’s not going to fly!
I think that’s all that needs to be said on that one 🙂
3) (on the other hand) “Bootstrapping is cool..”
Those were Henry @ Fishburner’s exact words, and still his most memorable advice… Unfortunately it was advice we received WAY too late. Specifically, on the day we realised the investment we’d been pursuing wasn’t going to work out and we had no Plan B.
Of course it’s now an idea that has a groundswell of popularity. And there’s a huge debate out there on it’s merits vs ‘traditional’ startup funding — a debate which, to be honest, I don’t feel qualified to enter.
SO all I’m going to say is this:
It was the smart choice for us (we were fortunate in that we already income from our existing business we could leverage), in this phase, and might be for you as well — so don’t dismiss it altogether amongst all the noise…
4) Startup communities are a bit like living in The Matrix
They’re kindof real, but then again, they’re kindof not…
Which of course can be both good and bad. Surrounding yourself with like-minded organisations doing the same thing as you is a great source of community and inspiration. It also sparks creativity through collaboration and watching the more successful members of the community succeed can be a real incentive to work harder and up your game!
ON the other hand — because EVERYONE around you is doing the same thing, ‘being a startup’ can somehow become an end in itself.
Also — because all your peers are seemingly spending all their time working on their ideas, taking insane risks with their livelihoods in order to turn their dreams into reality — this somehow becomes ‘normal’ i.e all the checks and balances of actually normal business practice disappear.
‘Seemingly’ was an important word there — another thing we found out WAY too late was that the really smart startups weren’t taking anywhere near as much risk as it appeared they were. The REALLY smart startups (think Staybil) had secured (often very creatively) finance for each stage of their journey BEFORE they commenced that stage. And if things hadn’t worked out, they had planned EXIT POINTS.
Basically — they had a plan — NOONE had told us about this 😳
Us — we just went for it.
No exit points, no pre-secured finance, just hope and a heroic sense of risking all.
Cos that seemed normal…
5) Startup is a phase not a destination
And one final thought — this one from a visit to The Entourage. Someone was describing the business growth model — and it suddenly hit me:
being a startup is a phase — you’re meant to graduate from it and become a real company.
This is the essence of where we had gone wrong. We had SO identified with being a cool tech startup that we’d forgotten the journey we had set out on — to build a company that made a difference.
The 12 month perspective..
Of course I could equally have written a blog on all the GREAT lessons we learned from going into crazy startup mode. And the truth is, we ARE still here, we ARE doing better than ever, and who knows what part going crazy startup played in that.
But it was a roller coaster of a ride — I actually ended up physically unwell. And it doesn’t just impact you, it impacts the people around you — most of whom are innocent bystanders. None of which is worth the buzz.
SO if only for the sake of your team and your nearest & dearest:
- Have a plan
- Have a plan that includes where the money is coming from (!)
- Have some exit points
- Remember hope is *not* a strategy
- DON’T FORGET TO SELL STUFF!!