It’s accelerator season again and applications are being accepted for mentoring from TechStars London, Oxygen Accelerator, Dotforge and more. Lots of entrepreneurs and investors see accelerators as a vital part of starting a tech company – but are they really for everybody and do you really need to attend one?
Most UK startup accelerators work in the same way: they’re three-month programmes for your startup that feel a bit like going back to school.
Simon Jenner, CEO of Oxygen Accelerator, the accelerator I attended, explains: “Launching a startup is hard work. All an accelerator does is concentrates that hard work and surrounds founders with people who have vested interests in making their startups succeed. Entrepreneurs who like being challenged will exceed all their expectations and thrive in an accelerator.”
Most startups enter an accelerator programme to get funding. All accelerators culminate in a demo day, where founders pitch their creations to a room full of investors, vying for any form of interest that could turn into a coffee, chat and maybe a nice, fat cheque.
But don’t join an accelerator for the money. The purpose of the small investment is to simply keep you alive for the three months of the programme.
Take a long hard look in the mirror. Decide if you want to put yourself through something like this. You better get used to having beans on toast for dinner or making big cheap meals that’ll last you all week. And say goodbye to spending a small fortune on a night out. You need to live cheaply and healthily and work as hard as possible.
Most accelerators are split into three phases:
1 Death by mentor: This is the most mentally grueling thing I’ve ever done. In less than two weeks I met more than 100 mentors for 30-minute one-to-one sessions. Some will tell you you’ll go bust in a week, others will be more positive. Take the criticism well and spot the trends.
2 Build, build, build: You can’t build anything during phase one, and you now have fewer than 10 weeks until demo day, so it’s time to launch, iterate, learn and repeat.
3 Sell, sell, sell: Time to segment your team, with one person focusing on building relationships with investors, and the rest trying to make the damn thing make money.
Deciding whether or not to go to an accelerator is down to you. On the plus side, accelerators put you and your business in an environment that will help it thrive, surrounded by experts who’ve been there. And there’s a chance you’ll secure investment.
On the downside, you will be criticised repeatedly, you won’t have a social life and it’s tough financially. For every Buffer, TaskRabbit or Dropbox there are probably more than 50 successful startups that didn’t graduate from accelerators, such as Facebook, Twitter and Huddle (and they’ve not done too badly).
If you think you’ll get value from an accelerator and know what you’ll face, you should at least apply for one – what’s the worst that could happen?
Three brief case studies. Three businesses that had to ‘wake up and smell the coffee’, or go bust! Knowing what to do is not the same as taking the necessary action.
To turn around their fortunes, three separate magazine publishers became obsessed with the triad of strategy, marketing and teams.
All the publishers had made their money from subscriptions and sales revenues. Both of these revenue streams fell by about 70% in 2009. The entire landscape of their very different markets and industries had changed.
The solution was to reinvent the businesses. One used its incredible database to run conferences; one contracted by 70% and only kept its premium high-value work while slashing costs; one reinvented itself by focusing on editorial and content relevant for a very specific age range.
All three businesses became more profitable than they were when they hit their respective brick walls.
The moral of the story: sometimes you have to reinvent yourself. There is no other choice. Death by a thousand cuts is not a pleasant way to die.
© Robert Craven, business coach and consultant, and author of Kick-Start Your Business and Grow Your Service Firm. Robert also runs The Directors’ Centre, which helps businesses to grow. Watch a five-minute video of Robert live at PSA London.
Ideas mean nothing unless you make them real. Real entrepreneurial ideas get turned into products and services and are sold to customers to make a difference. Yet, entrepreneurs are often not implementers, nor project managers. They’re often distracted by the next idea, development or new opportunity. Here are my 10 tips for entrepreneurs on how to become a better implementer…
Firstly, have clear goals. If you can’t tell everyone what you are doing, quickly and with passion, why would they care about it? If the picture you paint is of a future that makes the effort worthwhile, people will yearn for it and fight for it, with you.
There is the work that directly creates our idea and makes it real, and then there is the planning and administrative work. That indirect work is an ‘overhead’. Many entrepreneurs treat overhead tasks as something to do as you go. However, by doing them early you’ll save a lot of time later.
You’ll need some time to adapt and change on the journey. Work expands to fit the time available too, so be realistic when setting the goal. If there are critical dates you need to hit, those should be clear at this point, so expectations are properly set.
Look at the work one quarter at a time. Identify what would have had to have been delivered three months before the end date, six months before the end date and so on. By doing that your team can see what they’ll be building.
Now create monthly goals for the next two quarters and weekly goals for the first month or so. But do not go further. Great teams rely on the ability of everyone to plan their own work within the framework.
It’s now useful to plan forward and look at what could be done this week, this month and this quarter. This can show you where there are opportunities to win now and get ahead of the game.
If necessary – take a step back. Do some work on the project, deliver some elements of it and then look at where that takes you and how to plan further from there. Project planning should be no more than a few minutes each week, once the original plan is put in place.
In any project there will be times when you need specific essential materials or resources, so each week and month take a look ahead, check what resources you’re expecting to need and make sure they’re on track for delivery.
It’s important to recognise and reward incremental successes within the team. Let them know that it’s on track and going well. It will help ensure that this and every implementation easier.
In reality, every task in a project has probably been done before in a different context. The mistakes have been forgotten, making them easy to repeat, with shortcuts forgotten, too. This step is not for this time, it’s for next time. You’ll get quicker and can move on to the next idea ever faster.
Implementation brings your ideas to the world and when it’s done brilliantly it’s because of attention to detail and great planning. It builds on past experience and creates the foundations for future success. Brilliant products and remarkable companies implement brilliantly.
Operators and landlords will do their utmost to ensure they get the best possible deal from the start of a contract term. When you rent a traditional office space you’ll often be bound to an agreement for around three - five years. Therefore, if you sign up for services and facilities on a whim, it could affect your business for a very long time.
If you’re currently on the hunt for suitable premises or if you’re about to sign a contract, you could save some money by following these simple steps.
It may seem unethical to benefit from someone else’s misfortune, however, business is business and if it means you’ll get a better deal, don’t let morality take precedence over your decision. Businesses that have signed long-term lease agreements will often sublet if they have to downsize. According to Inc.com the average subletter will lease their property for 25% cheaper than the usual asking price.
Nowadays it’s not uncommon for businesses to share a lobby, reception area, kitchen and recreation room. Consider splitting the costs with another business to get a better space at a cheaper price. If you manage to find a business that works within your sector, but isn’t a direct competitor, you could also share clients and create an informal partnership.
You’ll be surprised by how many people sign contract agreements without checking the square footage. Don’t take the operator or landlord’s word or “approximate guess” as gospel. Measure the square footage of the space to see if it matches what’s stated on the contract. If it doesn’t, negotiate a better price.
This is especially important if you lock yourself into a long-term contract. Landlords will often add clauses to contracts that allow them to raise their prices with inflation. If you’ve signed a long-term contract agreement this could be difficult to get out of. Don’t sign anything unless you have a written agreement stating that rental prices will remain the same.
If you aren’t hiring the space off another business that’s subletting, make sure you have the option to sublet yourself in the future. If you want to downsize your business or move to a larger space, but still have to honour the contract agreement, it’s not worth paying the extra costs. Subletting will allow you to lease the space to other businesses so you won’t have to pay for an office that you aren’t using.
Serviced offices may seem more expensive, but if you only need premises on a short-term basis, there’s no better way to cut down costs. A serviced office comes with everything set up and ready-to-use, meaning you can move in and out without disrupting the flow of business. In addition, contracts are highly flexible and can last for as little as one month.
Renting office space is a scary concept and any wrong move or overlooked aspect of the contract could result in excessive fees. Thoroughly read the contract and ensure you understand all of the terms before you sign or pay the deposit.
© James Timpson, writing on behalf of Skyline Offices, London serviced office specialists. James is a freelance blogger, writer and wannabe-entrepreneur. You will find him at tech conferences throughout the UK and Europe.
There are many options for small businesses when setting up online. You need to work out exactly what you want from your web presence. Will it be generating sales or selling products or will it be a point of reference for customers?
Knowing what you want out of being online will help you narrow down the many choices you can take. If you are creating a website to be your online store you could consider getting a web design company to build you an ecommerce website. However, this is the most expensive route and options such as www.shopify.com and www.etsy.com offer a much cheaper online option.
A great way to get the word out about your business online is via social networks. Twitter and Facebook are the most obvious choices, however, also look at Pinterest and Google’s social network G+. By offering your social networks advice and content around your services or products, you can quickly start to grow your brand online. It can be a great way to get other people recommending your products or services.
If you decide to set up a website rather than using an ecommerce platform, keep it updated with news and fresh content. Don’t build and forget. So many small businesses online spend lots of time (and money) setting up a website, but then just leave it to stagnate. If you keep your website active, you will have a website that users and search engines will love.
A blog must also be kept active and updated. Another great way to spread the word of your brand is having a popular blog attached to your website or social networks. If you don’t think you can keep an updated blog (posting once a week at least), don’t set one up.
Who are your customers? If you already have an offline presence and know what works, carry that over to your online ventures. Target your customer base and be as courteous to customers and people as you would be in your offline customer interactions.
We see it all too frequently, businesses of all sizes getting into financial trouble and struggling to pay their suppliers, the taxman and their own staff. This can happen because the people running the business are so focused on their product or service or customers that they forget to take care of cashflow management, which is key to sustainable growth. Cash is the lifeblood of every enterprise, but although entrepreneurs want to make money, ironically, they sometimes forget about cash.
Recently we saw a marketing services business that made lots of sales and had great service delivery, but could not deliver its services at a profit and made so many mistakes with its invoices that it struggled to get paid, even when the customer was happy with the service. They were growing too quickly and could not manage the business they had become.
We live in strange economic times. Banks are not supporting businesses to anything like the degree the economy needs, while at the same time, too many businesses operate a culture of slow payment to their suppliers. This is a top-down problem. Too many of the largest UK companies pay slowly and this trickles down through the rest of the economy.
This means that you must take care of yourself and implement strong cashflow management in your business. Manage your outgoing payments, while getting everyone who owes you money to pay you as soon as possible.
Dealing with payables:
And reflect your cashflow management in a cashflow model, so you know where you stand all the time and can predict and negotiate bumps in the road ahead.
© Michael Austin, founder and managing director of Blue Dot Consulting, a firm of chartered accountants focused on small and new businesses in southwest London.