Ever wanted to become a master of your own destiny, or got a killer idea that you know would sell? You’ll want to startup then – here’s now to embark in a changing landscape…
Being your own boss, making the big calls, realising a crazy dream – building your own startup can be the thing you’ve been looking for your whole life, but the stakes can be as high as the rewards. So, RISING asked business coach Carl Reader, who has started up his own group of firms, to reveal the new rules of startup:
1. Most Of Us Are Thinking About Startup If you’re seriously considering starting a business or have done so already, then you’re in the majority, says Carl Reader: ‘We have got record numbers of people starting a business. A survey by World Options showed that 68% of men were either dreaming of starting a business or actually in the process of starting one.’ He points out that the public perception of business as big corporates is misleading, with only 7000 companies bigger than small and medium enterprise (SME) size (in the UK, at least). ‘That’s out of 5.5 million businesses. It sets the scene that business is actually really accessible. This is a real stat: 99% of business are either self-employed individuals or only employ up to nine people.’
When automation kicks in the human touch is the only thing that will differentiate us
2. AI Elevates The Human Touch There’s a lot of scary talk around about everyone’s jobs being taken over by machines in ten years, which may be making you think about your own startup a bit harder. Reader agrees that artificial intelligence and machine learning are going to change the whole idea of employment and business, but he says humans still have our ‘secret sauce’. ’We need to shift our thinking – it’s always either been business to business or business to consumer, actually now it’s H to H: human to human.’
Rather than following the ideas of The E-Myth Revisited by Michael E Gerber, which prioritised systems over people, Reader says social media has revolutionised business. ‘As a society we have shifted and become far more social – we are more connected, so the playing field has been levelled – you will be able to reach out to your ideal customer and research exactly who they are. My belief now is that you need extraordinary systems but also extraordinary people, just to survive. Whether we are dealing with an individual from the poorest household or the highest flying exec, we are dealing with a person – and as automation kicks in then the human touch is the only thing that will differentiate us.’
3. Unicorns Are Rare For A Reason In business, we’re used to seeing a tech startup realise a brilliant idea, but not really monetise it, just collect data and anticipate a massive payday sometime in the future – don’t be fooled into thinking this is a solid model, says Reader. ‘One of the things that I am seeing is a level of ego and desire to set up a tech-only business that is almost set out from the outset to lose money – they are known as unicorns and lots of people are trying it. But the reality is that 99.999% of business will never get to that stage no matter who the founders are, no matter what money is put in – you’ve got to be extremely lucky for that to happen.’
When it comes to running a successful startup the fundamentals of business haven’t changed: ‘Business is really simple. It’s about two key things: getting customers and keeping customers. And if you can make those customers profitable, then you’re laughing.’
4. Doing Business Virtually Is Fine If the idea of needing permanent offices and a centralised team is holding you back from starting a business, then you needn’t worry, because the whole infrastructure behind business is becoming increasingly virtual. ‘Some of the biggest and best businesses are run extremely lean, sometime even without offices. The trend is to run a business virtually – borders are no longer an issue so team members can be in different time zones, having meetings on Skype, and the suppliers won’t necessarily meet the companies. That’s a big shift.’ Reader points out that WhatsApp only had 55 employees when Facebook bought it for $16 billion.
5. Don’t Make Enemies In the early days of a business, when survival is at stake, it’s all too easy to boil everything down to competition and profit – but that’s a mistake, says Reader. Every business has a range of stakeholders, from the owners, directors and employees, to the customers, but this also includes the community and the industry you’re in. ‘When you have a misalignment with what you do and the stakeholders, the risk that you run is falling into a situation where you disregard stakeholders, customers and processes – you can be overly competitive and profit focussed, which can create a lot of enemies.’
Reader says high-profile examples of tech companies with bad press can often be traced to this misalignment. ‘Where culture and the stakeholders have not been considered in the early days, and where if you have a single-minded vision of technology and sales, as opposed to looking at the business holistically, you can have a real issue – the press aren’t on your side and the odds are stacked against you.’
6. Plan, Do And Review Following your gut instincts can be a good call in business – but only if they’re actually right, which makes it a high-risk strategy. ‘One of the common traps that business owners fall into, often in the early days of the business, is that decisions are led by passion and gut feeling. Entrepreneurs tend to be bigger picture thinkers, optimists and day dreamers – that dream is required but you need to dream, you need to plan, you need to do and you need to review,’ says Reader. ‘The planning needs a bit more of a reality check, the doing needs a shift from daydreaming to grafting, and the reviewing needs a sharp analytical mind to identify what’s gone on, what’s not working and tweak it where needed.’
7. Data Is Key But It’s Not Everything In order to analyse effectively you need data – but don’t rely on it exclusively. ‘The data doesn’t tell every story. It tells you what’s happened but not what’s happening; the data tells you the end result but not necessarily all aspects of the process. You need to have an analytical view on it, but not be too anal about it,’ recommends Reader.
Business is about finding purpose – about finding a channel for your passion and enthusiasm
8. Walk The Walk The most important thing you can do as a startup leader is walk the walk, says Reader. ‘When you scale a business one of the things you need to consider is the leadership model. The company needs to be led by someone who is going to walk the walk, who is prepared to wear out the shoe leather and make the phone calls. Leadership is very simply about doing what’s right and what the business requires, not what’s easy and what you personally desire.’
If you want your teams to embody your company culture then it’s up to you to show what that is, rather than referring them to guidelines. ‘Culture comes from the top and it’s not about brand guidelines, or what you say you do, your values and the mission statement you put up on the wall – it’s about how the leaders of the business actually perform.’
9. Really Commit To It As the man who has set up a multi-million turnover group of business, Reader agrees that the cliches about starting your business are pretty much accurate: ‘The best thing about running a business is that you choose which 18 hours a day to work; or starting a business is choosing to work 80 hours a week to avoid working 40 hours. Entrepreneurship has been glorified by Dragons Den and The Apprentice so that people think that it’s aspirational, and that’s great, I love that because my personal mission is to help as many people set up in business themselves – however I don’t want anyone to be under any illusion that it’s easy,’ he says.
The fact is that if you run your own business, you need to be your own boss and be far harder than any boss you’ve ever worked for. But Reader says the grind is far more rewarding than just numbers on a balance sheet. ‘It’s about finding purpose, about finding a channel for your passion and enthusiasm. It’s like building lego – once you’ve built something then you build something else, and there’s no escaping that. Personally I never see myself retiring. Once you find that purpose and a business that can channel that purpose, it becomes something so much bigger than just yourself.’
WHAT NEXT? Ready to write a business plan? Then watch Carl Reader explain why it’s not a box-ticking exercise to please the banks, and deliver his top tips…
For more check out Carl Reader’s book The Startup Coach