Early-stage businesses need to be careful to not get swept up in the sexy start-up scene.
The European start-up scene is thriving, full of bright young things trying to turn innovative ideas into real businesses.
But, increasingly I’m starting to feel that things are getting out of kilter: the start-up scene seems to have become more important than the actual building of successful businesses. There’s a fascination in being immersed in the start-up culture – people want to see and be seen – and this is getting in the way of actual work.
Don’t get me wrong, getting in front of the people who can help you along the journey is vital. But you see the same businesses at all the events and I can’t help thinking they’d be far better spending their time in developing what’s really important – the product. Start-ups don’t sell to each other; with a couple of notable exceptions, the events can be a little like hairdressers meeting up to cut each other’s’ hair.
Having an ecosystem can be valuable – there’s no doubt about that. As we’ve seen in several hubs across Europe, birds of a feather flock together and there are some really good things happening in London’s Tech City. But there’s too much focus on the geographical location.
There seems to be a growing number of competitions too – I could name at least a dozen in London alone. But no great company was ever built because it won an award.
Building a business is tough, really tough. There’s simply no substitute for hard work. It may not be obvious how to best spend your time. So, based on my own experience of creating successful businesses from scratch, here’s where I think entrepreneurs starting out should focus their efforts.
Firstly, invest blood, sweat and tears in developing a truly compelling product. This is absolutely crucial. If the product’s not right, the best network in the world won’t make it work. When we first created the Tradeshift platform, it took ten (incredibly intense) months. We had a team of talented, driven and hardworking developers committed to the project relying on about two hours a night – and that was just the start. The reason the number of businesses on the Tradeshift platform has grown so quickly is largely down to the time investment we made in the product from the start.
Secondly, get out there and sell the product. Don’t show it off to your peers at events: hit the phones and knock on doors from morning to night to sell it to the people who matter – potential customers. If you don’t have customers, you don’t have a business!
Thirdly, do it yourself. We’ve reached a point where entrepreneurs with a great idea almost automatically think ‘which incubator should I go to?’ Instead, get the experience yourself. Go to a start-up which has already made it and work there to see how it’s done. Incubators play a really important role in nurturing young companies, offering insight and a ready-made infrastructure in their early stages. But they also inoculate against failure which, though often unpleasant and always challenging, is really important. You shouldn’t fear it.
The innovation coming out of Europe is truly, truly amazing. But in order to convert that innovation into more thriving global businesses, I think we need to refocus a little. Being in a start-up’s not like being in the movies, so let’s not try to be movie stars. Let’s get to work – the rest will follow.