Entrepreneurs from a wide variety of business sectors delved into shared challenges at a recent round table event arranged by Propeller PR.
The evening brought together founders of businesses ranging from media and advertising agencies to ecommerce and payments services for an event chaired by Propeller CEO Martin Loat. While the guests face challenges unique to their sectors, they have also experienced problems common to entrepreneurs and fledgling businesses.
The Round Table attendees included CEO of Judo Payments Dennis Jones; founding partner of Atomic London Nick Fox; CEO and founder of Volume Global Chris Sykes; co-founder of Naked Communications Will Collin; founder and CEO of Infinitum Group Nick Bampton; founder of Worth Capital London Matthew Cushman; founder and CEO of Car Throttle Adnan Ebrahim; founder of MyShowcase Nancy Cruickshank; founder of Dynamic Procurement Julian Young; founder of GlobalWebIndex Tom Smith; co-founder of The7Stars Jenny Biggam and Propeller director of content Branwell Johnson.
- Keeping The Energy And Culture Of A Start-Up
Entrepreneurs all attribute early business growth to the focus and energy surrounding a start-up and having ‘skin in the game’. However, maintaining that momentum is harder as businesses scale up and add more staff and business locations.
The culture that originally fueled the ‘can-do’ attitude and differentiation needs to be retained. But there is a balance to be found between keeping a transparent, open culture and the need for confidentiality regarding sensitive business discussions if a company is to grow.
“We want an honest and open culture and to hear the voices of our teams. We never want our people to hear from the outside first what has happened regarding the company.”
Jenny Biggam, co-founder, The7Stars
Several of the entrepreneurs said that they still conduct all final job interviews, while others try to delegate to spread the culture.
Cohesiveness can be maintained by introducing new recruits to the origins of the business and explaining its purpose and core ‘DNA’. This can be much more than a dry exercise – one guest recounted how at one company the two founders took batches of new recruits on a mini-bus tour of various key London locations in the company’s history, including its first office. This helped new employees bond together and feel closer to the company.
However, obsession with culture should not over-ride clear business goals and a path to growth.
“I interview everyone. No-one comes on-board unless they get past me. Comfort with ambiguity is also part of our ever-evolving culture.”
Dennis Jones, founder of Judo Payments
- How To Take Advantage of New Opportunities
Growing companies need to consider overseas expansion. Several of the round table attendees are reviewing the right approach for overseas growth, particularly in the United States.
Partnering with an existing company or agency already in-situ is one method and has the value that they already know the market. This requires trust in the partner business and faith that it holds to the same high values and standards as your own.
An alternative is to export one of the trusted existing team. They will know the business – the challenge for them is to learn about the local market at speed
Ultimately, there is no substitute for the founders to be heavily involved at the start of expansion. No-one else can match their passion, knowledge of the product and conviction of success – all vital ingredients to persuade clients or new investors
“A third of our traffic is from the US and we need a face to face sell to make our business effective. It’s likely that I am going to be spending a lot of my time in New York.”
Adnan Ebrahim, founder and CEO of Carthrottle
It is also important to respect the local culture and to be aware of local employment laws – employers and employees’ rights differ from region to region. Also do not underestimate the difficulty of building business in the US, where it is size and scale that grabs attention. As one entrepreneur said: “It can be hard to take business to the US – it is bloody challenging!”
- Equity – To Offer Or Not To Offer
Founders will have to consider sharing equity at some point as a means of recruiting high calibre talent, incentivising the team or attracting investment. Every circumstance is different, and VC-backed companies may take a different approach to self-funded businesses.
Founders will have to decide when they trust a senior employee enough to hand them “a piece of my company”. While some businesses will offer stock options as part of the sign up package, it is prudent to assess performance over a decent period of time and remove under-performing individuals before any vesting.
“People know you have equity and they will want it. It’s obvious but the more you dilute the ownership the less you have and the more minority shareholders you have.”
Will Collin, co-founder and former joint owner, Naked Communications
Founders may find potential or existing senior people demand a share of equity and they will have to weigh up the value of the person to the organisation versus any future disruption that may be caused by the wrong decision.
Equity may need to be offered when expanding overseas as an incentive for country or regional managers. Maintaining a presence in several territories may seem challenging but the upside can be a stronger valuation for a company when it is time to cash-in.
Conclusion
Entrepreneurs need to be hands-on to drive the business forward but to scale up they need to recognise that they will have to delegate responsibility. To expand, they will need a cohort of trusted senior managers with complementary skills who can maintain the culture and who buy into the vision of the company.
